The Power of Marketing

18. Feb, 2009 View Comments

When times get tough, companies typically cut budget items with ROI that is hard to quantify. Line items like HR, training, PR, travel, and marketing are typical targets. If you’re thinking about cutting your marketing budget, think again about the power of marketing.

Microsoft comes to mind as a good example. It’s hard to name a Microsoft product that is absolutely stellar in it’s chosen area of expertise, yet Microsoft products lead the market in terms of sales and marketshare. Microsoft has some pretty incredible marketing. The recent commercials from Apple featuring “I’m a Mac, and I’m a PC” certainly are clever, but it’s hard to reverse years of mass market success.

Donald Trump is another great example, and one that might not be as familiar to people. Trump is a marketing machine. How do I know? Ask the average person what they know about Donald Trump and they will tell you that he’s a billionaire real estate tycoon, who has a hundred other successful endeavors. It’s a great story, and great marketing, but it’s not exactly the truth.

The Donald had every opportunity to be a successful real estate magnate. His father was very successful in real estate in New York, and Donald worked for his dad for many years. His father provided mentorship and capital; what better way to learn and breed success? Yet his real estate history is full of bankruptcies and troubles. Just yesterday the Trump casinos in Atlantic City (which he used to run) filed bankruptcy for the 3rd time. What Donald Trump is excellent at is marketing his name, and his name is his brand.

Take Trump Ice for example, a bottled water company that simply pays Donald Trump to use his name. Trump Hotel in Las Vegas is similar. A real estate developer pays Donald Trump a royalty to use his name, because his name on the building will increase the average sales price per unit in the development. This licensing model has made Trump over $500M. Because his name is on popular golf resorts and buildings, people think that he develops, runs, and owns those properties.

Programs like The Apprentice further promote the brand and the mystique.

People frequently debate the power and value of a brand. Here’s one case where a brand is worth at least half a billion dollars. Cashing checks because your name is on a building is a lot less hard work, and carries far less risk than actually being a real estate developer.

Posted by Bryan Menell http://austinstartup.com
Bryan is the founder and Editorial Director of AustinStartup.com, which launched in 2005. He is currently the Director of the Collaboratory at venture-funded Dachis Group. Bryan advises a handful of early stage companies and is a Managing Director of Capital Factory. To read more posts click here.
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  • Pamela Picard
    Microsoft gained name recognition and market share not by advertising but by strategically partnering with all leading computer makers; its software was built in. I doubt that there are many Austin start ups in a position to replicate this success.

    The "brand" of Donald Trump is more anomoly than marketing strategy. And even this "brand" was not bought overnight. Faced with dwindling sales and shrinking profits, few high tech entrepreneurs can quickly become famous for being famous.

    The key to weathering a severe down turn is to adjust your over-arching strategies to the current climate and stick with tactics that are measurable at the bottom line.
  • Great thoughts... but in the case of Microsoft, the internet marketing effort in particular could be significantly better. Their infrastructure is very old and you can't do some really basic things with it. Nonetheless, there are successful in some areas of internet marketing such as community building, outreach, forums, etc. which then reinforces purchase intent for future versions.

    It reinforces the point that marketing is much, much easier when you have a trusted brand at your disposal. But it also hides major problems that can be exposed when times are tough.
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