Money Can't Buy You Market Share

Before about 2010, companies could spend their way to success in consumer and business-to-business markets. There was a direct correlation between marketing dollars spent to company’s sales and ultimately their share of market. Brands that outspent their competitors in advertising and promotion tended to be #1 and #2 in most industries.

Foreign-based companies like BMW, Dannon, SAP, and Perrier successfully penetrated the USA market, because they spent millions of dollars in marketing and advertising to American consumers. (Of course, these companies made terrific products with market-appropriate features and benefits.)

Today success is less about the quantity of marketing messages and more about the quality of the message and how it is received. 

American consumers have become more skeptical with one-way messages delivered in advertising and direct marketing. Marketing messages that are discovered, or delivered by trusted sources, are vastly more powerful. And these messages get amplified as people share them with their friends and followers.

Implications for Early-stage and Foreign-Based Companies

On the positive side, companies and brands can build sizable market shares without spending millions of dollars on advertising and marketing. They can impact American consumers and business decision makers with targeted, relevant, and valuable messaging and content delivered at the precise best time and place. However, it is difficult to understanding the American consumers and market dynamics, especially difficult for foreign-based companies.

An effective way that early stage and foreign-based companies can penetrate consumer and B2B markets is through co-working and networking environments. These facilities provide not only attractive workspaces but an ecosystem of resources and support.

 “Spark Labs members are part of a vibrant ecosystem of local tech communities and resources,” explains Christophe Garnier, Managing Director of Spark Labs NYC.

Local talent and advisors are essential resources for foreign-based companies to get traction in the USA. At Rocket Market Development, we help both International and early-stage companies with market intelligence and strategy. For example, one company with innovative technology and hundreds of clients in Europe struggled to get sales in the USA. Through RMD’s proprietary market mapping process, we’re identifying market segment opportunities, targeting customers, building Go-to-Market strategies, and helping with implementation.

So money only can’t buy market share for companies and brands. It takes deep understanding of consumers and local experts and resources to execute smart, marketing strategies.