Stocks of Professional Marketers (Part 1)
Why is it that investors think about finance and technology, more than about marketing, when making decisions about stocks? Some of this misplaced bias may be due to accounting norms. Advertising is not treated as an investment by accountants, though the best campaigns may support stocks for decades! Expenses in servicing customers may even be disallowed as deductibles in some tax regimes. Even Human Resources Management professionals are not above advocating their professional roles, leaving marketing generally marginalized. Do investors take this function for granted because its contributions are intangible-at least on financial statements? Are stocks undervalued because brands are not part of such exercises?
Even state monopolies in essential goods and services need some marketing help, to say nothing of privately owned stocks! Neither the Pentagon nor NASA has any domestic competition, but they have still to win hearts and minds on Capitol Hill to achieve their essential objectives. Free enterprise, competition, and democratic respect for individual preferences, all depend on effective marketing for viability. Manufacturing plants will eventually come up, given the right material and knowledge resources, but who can set certain time lines for garnering and holding market shares? Financial equity is far more durable than consumer goodwill!
Parallels between War and Stocks
Del Monte may appear as a rather friendly and harmless company from the perspective of stocks, but it is a formidable foe of those who compete in branded foods for people and their pets! The company’s brands are just like the most protected military fortifications, but are dynamic and updated all the time to support the company’s stocks. What may not be superficially visible to investors who do not own these stocks is the powerhouse of marketing know-how that lies in the engine rooms of this marvelous enterprise. Stocks of Del Monte are as fortified as the best aircraft carrier on the high seas of today, in terms of financial returns. The company’s stocks will always be undervalued because the marketing function here is always on its toes.
Marketing in Del Monte is subtle, and can only be fully appreciated by those willing to read between lines of numbers. The company’s executives focus all spotlights on brands rather than on their own personae and internal processes. This only serves to enhance their competitive abilities, because other companies are not able to pin-point their counter attacks. Marketing campaigns from Del Monte are like sustained campaigns of shock and awe, except that they aim for customer minds, rather than cause any harm! Resources are deployed with such ferocity to find and hold customers that it may be appear extravagant and wasteful to untrained onlookers. However, the reality is that Del Monte practices gold standard marketing to add values to its stocks by the day.
How Branding Conveys Eternal Values to Stocks
Fast moving consumer goods and pharmaceuticals are famous for the most durable effects on consumer minds. Fashion and perfume are known for their transient natures, but even here, umbrella brands span generations of loyalty. Branding has a stereo effect on stocks. They create sources of perennial returns on the one hand, while not leaving any trails on financial disclosures on the other. Market share data by brand and geography are not matters of statutory reporting, yet they represent the most strategic elements of stocks for companies such as Del Monte. It is no exaggeration, in marketing terms, to say that this company’s stocks are nearly free gifts for discerning investors!
Stocks of Professional Marketers (Part 2)