National brands: Enough spending on “equity”?

Are national brand marketers spending too much on sales promotion with their retail partners, at the expense of long-term brand equity? Here’s my point of view:

It’s hard to separate this topic from the recent discussion about partnership (or lack thereof) between national brands and their biggest retail partners. (The last post centered on the conflict between Costco and Coca Cola.) While it’s easy to say that national brands have sacrificed long-term equity by cutting their marketing budgets, it’s also hard to argue that retail consolidation has forced serious rethinking of overall strategic spending.

Certainly the retail landscape was much more diffuse 25 years ago; power has become much more concentrated in the hands of companies like Walmart that were barely noticed in the early 80’s. (And at the same time there is far less concentration among a few media outlets, with many more choices for ad spending among cable networks, digital media, and so on.) So the national brands who intend to spend against “equity” need to deal with the reality that they must allocate more dollars than ever before to keep their key retail accounts happy.


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