Even though Post has shown a 12% decline in their children’s cereal market as compared to one year earlier, in general, Post’s increase in their marketing expenditure over the past few years appear to show significant results, but let us analyze by numbers. The increases in marketing are spread between trade deals, advertising, and premiums. Consequent to those increases, let us measure from 1985 to 1990, that the share Post held in the children’s cereal market had dramatic increases from 35% to 41% over that period. (That share of the market does not reflect an increase in population over that period, thus making the actual number of sales that much larger, roughly 2-3%/year). Calculating the numbers (Total Market Sales * Post’s Share = Total Revenue) the following represents the yearly revenues = 1985 = $27.3 mil; 1986 = $28.7mil; 1987 = $28.9; 1988 = $36.1; 1989 = $44mil; 1990 = $48.79mil. Now, taking those numbers, we can get the amount spent yearly on Marketing as follows: 1985 = $7.371; 1986 = $7.462; 1987 = $8.38; 1988 = $11.55; 1989 = $16.28; 1990 = $17.07. Basically extrapolating this information, we can see that from 1985 to 1990, total revenues increased from $27.3mil to $48.79mil an increase of $21.49mil. Over that same period, our total marketing increased from $7.371 mil to $17.07mil, making the increases in the marketing budget worthwhile!
As it has been stated, it is difficult to pin point the exact reason for the success over the years. (This will become a factor a later time during this synopsis of Post) The increases of the marketing budget went from 27% of revenue in 1985; to 35% of revenue in 1990 (Estimated for 1990 and not including the additional 18% increase that management has designated for Jane Well’s to allocate). Both the increase in mar ...