Monday, January 15, 2007

 

Why advertising is secondary

Check out this chart from a recent issue of Advertising Age. It demonstrates the top ten restauarant chains in the U.S. in 2005 ranked by market share, and also lists their reported (and estimated) media expenditures.

The source of the media spend is typically "list price" for the media, so is probably inflated for nearly everyone on the list. But what's impressive is Starbucks - #6 on the list for overall market share, yet with less than 10% of the media spend.

John Moore at Brand Autopsy (a former Starbucks marketing executive) smartly points out that it's a focus on better products and better customer experience that allows them to continue to grow loyalty and market share without the associated media costs.

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