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After
a year of squeezing information out of computer aided technology
users for the delectation of our readers, CAD
SPAGHETTI
recently turned the tables and invited you to complete a
web based survey on your own marketing expenditure.
Thanks
to the efforts of the 101 people who responded, here is
the first part of our report into the health of marketing
among suppliers to computer aided technology markets.
In this
issue we look at:
- the
percentage of turnover devoted to marketing
- where
marketing budgets are being spent
- how
marketing spend has changed in the last two years.
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Prize
Draw Winner!
We have a lucky winner of the juicy carrot offered to those
participating in this survey. Karen Gibson of Cadtek
will shortly be receiving her Palm Pilot M105 8MB. Cadtek
supply mechanical and electromechanical design solutions,
and have over 500 customers throughout the UK and USA. |
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Areas
of Responsibility
The
vast majority (95%) of our respondents had either shared
or sole responsibility for their companies' marketing activity.
The areas for which they had responsibility for were as
follows:
34% - one European country
30% - worldwide
12% - USA
11% - Europe, Middle East and Africa
10% - more than one European country
3% - other
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Our
Sample was made up of the following:
33%
software developers
25% VARs
8% hardware manufacturers
8% CAD/CAM or engineering service providers
6% distributors
6% dealers
4% 'consultants'
11% 'others'
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Pie
Sizes
Respondents
were asked what proportion of company turnover is devoted to marketing.
Chart 1 below shows the results, with 45% of our sample spending
between 2-5% on this function.
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Drawing conclusions
from this data is difficult due to the various factors that affect
the level of marketing spend, such as the length of time a company
has been operating in a particular market.
Activity
Breakdown
So where are
the marketing bucks being aimed? Respondents were asked what proportion
of their current marketing budget is spent on six activities;
direct marketing (targeted email, snail mail or telemarketing),
non-web advertising, market research, website and web advertising,
exhibitions/conferences, and public relations. The charts below
shows the range of proportions of overall marketing budget allocated
to each activity.
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there is no identifiable common share of the marketing budget allocated
to direct marketing; for example 15% spend between 6%-10% of their
overall marketing budget to this area, while a further 17% devote
more than 50%. |
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is more commonality on the proportions of the marketing budget spent
on advertising; half of our sample spend 10% or less on this activity. |
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three-quarters of suppliers spend 10% or less of their marketing
budget on market research. Our sample is likely to contain a high
number of established companies operating in mature markets with
a tendency to spend less on market research; the 7% who are spending
more than a quarter of their marketing budget on this area are more
likely to be those trying to break into an established market, or
launch into a new one. |
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potential for funding for web activity to come from IT budgets rather
than marketing makes this chart harder to interpret. Looking at
the upper levels of expenditure however is still revealing - 9%
of suppliers are spending over a quarter of their marketing budget
on web activity. |
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no commonly allocated share of the marketing budget stands out.
The same proportions of our sample spend 5% or less on exhibitions/seminars
as do those allocating 20%-25% to such events. |
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over half our sample spend 10% or less on PR activity.
Changing
Priorities
Have marketing
priorities changed in the last couple of years? We asked our sample
if the proportions spent on the six activities detailed above
had increased, decreased or stayed the same compared to two years
ago; chart 8 shows the results.
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Over three
quarters of suppliers allocate more of their marketing budget
to direct marketing now compared to two years ago, and 58% allocate
more to web activity.
Conclusion
At one level
this survey reveals what you'd expect from a broad cross section
of suppliers at different stages of market development, with
different marketing objectives. There is little consensus on
an 'appropriate' level to be spending on particular activities.
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Certain
trends can be picked up however. The majority of suppliers
are directing a smaller proportion of the marketing budget
at advertising and exhibitions/conferences compared to
two years ago. As you'd expect, the majority of suppliers
are investing more heavily in their Internet presence.
The fact that three-quarters are relying more heavily
on the power of direct marketing is significant for all
suppliers - the majority of your competitors are likely
to be devoting more resources to targeting the market
more precisely - how are you getting your message across?
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See
the March issue of CAD
SPAGHETTI
to find out how suppliers think their marketing budgets
and the activities they spend it on will change over the
next two years - plus the main anticipated marketing challenges.
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If you
want to target potential customers in worldwide markets, our sales
and marketing services can provide the solution. If you want
to uncover details of the strategies of your major competitors,
find out how competitor analysis
can help.
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