Okay riddle me this why do big companies save on product but increase spending on marketing and admin?
I was reading though Blizzard-Activision financial statement and saw how they increased spending on both sales and marketing and admin by more than twice what they increased spending on product development.
This is coming Ib the wake of the flop on their newesr CoD game. The same thing is happening for Creative assenbly and the total war franchise. Way to much time spend on milking the product and not enough on making a good product.
It seem to be something that mostly happens when the companies think they cant grow anymore. They live on past glory while they slowly tank the product.
However this really seems like a bad strategy. We have seen that with games like BG3, but it also seem to be the goals with stratgies like content marketing.
Everything in the corporate world is about profit. These companies have studied the situation very closely, and if they believed that spending on better, or more expensive, ingredients would lead to an increase in profits, they wouldn’t hesitate to put the money into that direction.
What they have figured out is that money spent on marketing does more than just sell the specific product, it also builds and/or reinforces the overall brand. By creating a brand that consumers learn to trust, it helps them sell products that may be far removed from the actual advertised product.
For instance, Annhauser-Busch spends zillions on Miller Beer, but by reinforcing the brand through marketing/ advertising, if a staunch Miller consumer decides he wants to start buying a cheaper beer, or he wants to cut calories by switching to a Lite beer, he is more likely to stay within the A-B family of products before switching to a whole other brand.