This session is devoted to discussing the Dynamic Difference Model and how this should be used as the basis for all marketing strategy and budget processes.
I deem this to be a vitally important session for marketers in the current semi-recessionary climate.
I do not argue, as so many do, that brands must spend on advertising during recessions. I do, however, point out the problems that global brands will have in growing countries (BRICS) and suggest that the DDM be used for budgeting.
I also explain why budget setting using the 'case lot' approach (i.e. budgeting the same percentage of income for advertising as was used in the previous year - which most companies do) will lead to a self-fulfilling life cycle phenomenon for the brand.
Session 6 Clip 1:
I briefly explain how a company's accounts works from income to gross profits to nett profits and how the pressure is created on advertising because it is a cost item that is not painful to reduce in the short term (compared to staff or leases, etc).
I also explain the mindset of head-offices in regions that are under economic pressure - which disregard the growth opportunities in local regions.
How the mindset of a company becomes: The more we get away with spending less, the more we believe it is always possible.
Session 6 Clip 2:
Explains the Dynamic Difference Model which uses past Advertising Share and Market Share as basis for analysis.
Empirical studies show it works for bigger, established brands.
The basic strategic recommendations that result.
Session 6 Clip 3
Explanation of how to use the Dynamic Difference Model in the advertising budget process
Session 6 Clip 4
Case study of how we messed up a brand by not using the Dynamic Difference Analysis - we did the analysis after we messed up a growing brand, believeing it has reached the end of its life cycle.
