Low Marketing Budget Is Stifling Startups And Small Businesses

low marketing budget

J.K Rowling is the first author to become a billionaire by writing books. Her “Harry Porter” books were translated into 55 different languages in 200 countries and sold more than 450 million copies, reportedly. So what happened when J.K. Rowling wrote a novel (The Cuckoo’s Calling) and had it published under a different name (Robert Galbraith)? Nothing.

Despite the favourable reviews, “The Cuckoo’s Calling” was reported to have sold less than 1,000 copies. Then word got out that the book was actually written by J.K. Rowling and it almost immediately jumped to the top of the best-seller lists with 1.1 million copies sold in just a few months. What’s more important, the book or the author? What’s more important, the product or the brand?

One cannot compensate bad quality product with good advertisement for sustainable competitive advantage in today’s business. Consumers are too informed to be advertised into buying a bad product. I think we all believe this. Does good quality naturally lead to advertising, as people comment on the product? I took some months questioning owners of start-ups and small businesses in Ghana, and this is what i found out…


Marketing with Product Quality

In the larger marketing community, there are two sides of the argument. One side is focused on the product; believing that with a superior product, your marketing is as good as done. And there are pretty numerous examples around u; Red bull energy drink, Eddys pizza, iPhone, Nike, and many more. Virtually everyone tends to hold this belief. Why not? It’s logical that the best product markets itself, naturally.

This fits the facts we know. More than 70% of surveyed small-scale owners believed in this. And 45% of them were not involved in any form of paid advertisement. They believe that their products were good enough to guarantee referrals – for free.


The other side is focused on the brand; believing that people’s perception about your product is all that matters. I saw the same divide in my interactions with small business owners and startups in Ghana. The line isn’t clear cut but each one knows where he or she stands on the matter, if they’re pushed. Under 25% of the surveyed businesses had undertaken at least one form of paid advertising. Perhaps, this is the reason why they are not growing as expected, despite the quality products churned out year after year.

You may have a good product but your sales will only go up when people know about the product – and how good it is. You must reach out and tell them. Consumers don’t get to know about your products and how good it is, naturally. Perception is everything, really.

Samsung committed an astounding $14billion (5.4% of the company’s total revenue) to marketing, while budgets of Apple and Microsoft in 2013 stood at $1bn and $2.5billion respectively. You can see the level of importance Samsung puts on brand awareness across its consumers. And of course, the brand is a household name. According to Ad Age Datacenter, Coca-Cola spends $565 million on advertising in the US. The company’s reported annual advertising spending was $3.976 billion, $3.499 billion and $3.266 billion in 2015, 2014 and 2013, in a post by strategic management insight.

Start-ups must not forget to leave part of their small funds for marketing

Happy Partnership

Both advertising and production are very important and should be given equal attention if a business has to grow from the small corner to a nation-wide brand, and a global one, possibly. Advertising is seen as yielding short-term results but unsustainable in the long term. To survive and grow in the long term, you must as well pay attention to product and service quality. It is this that will develop customer loyalty for your business.

So if you want to become market leaders like Ecobank, Star Assurance and Kasapreko, you need to develop better products or services, then hire the best advertising agency you can find to communicate your superiority message.