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From: BARRETT@owl.ecil.iastate.edu (Marc Barrett)
Newsgroups: comp.sys.amiga
Subject: Advertizing Misconceptions
Message-ID: <13635@baldrick.udel.EDU>
Date: 12 Mar 90 13:56:15 GMT
Sender: mmdf@udel.EDU
Lines: 26


   My last message about advertizing may have a little harsh, and
a little unclear.  I will attempt to clarify some of what I said.

   Commodore apparently does not treat the costs of advertizing in
the correct way.  Most of the people on this list are also guilty
of this.  Most people takes the costs of advertizing out of the
total profits.  This is NOT how these costs should be treated.  The
costs of advertizing should be taken out of the total revenues, not
the total profits.

   When Commodore makes a motherboard for a computer system, for
instance, the costs of making the motherboard are not taken out
of the total profits, but out of the total revenues.  Any good
business person will tell you that the costs of advertizing
should be treated in exactly the same way as the costs of producing
a part for a computer.

   Since Commodore does not put the costs of advertizing in the
right perpective, they are guilty of not spending enough on
advertizing.  It is my sincere hope that the people in charge of
advertizing at Commodore will realize all of this, and allocate
more money for advertizing.  As a percentage of total revenues,
Commodore spends less than 2% of these revenues on advertizing.
Commodore can and should raise this to around 9%-11%, in line
with how much most successful companies spend on advertizing.