tag:blogger.com,1999:blog-7294165939647321702.post4984102452397774448..comments2024-03-28T13:45:43.362-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Ogilvy On AdvertisingSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7294165939647321702.post-23802211014764756152014-01-16T11:02:11.504-05:002014-01-16T11:02:11.504-05:00FYI - Berkshire used to have a stake in them in ei...FYI - Berkshire used to have a stake in them in either the 70's or 80's.Ankit Guptahttps://www.blogger.com/profile/02258415457971042051noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-15027468927747909742014-01-08T15:38:55.062-05:002014-01-08T15:38:55.062-05:00Hi Pradeep,
It's an interesting and perhaps c...Hi Pradeep,<br /><br />It's an interesting and perhaps counter-intuitive concept isn't it? I suspect it applies when there are scale effects. <br /><br />For example, if a store has double the traffic of another store, an incremental change (say, a better layout) that makes the average customer increase his spend by $1/visit would have a greater effect on sales in the higher traffic store, which may already be the more successful store. Also, you are spreading your spend here across more customers, so in addition to more revenue, your spend/customer is also lower, for a higher overall profit. Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-74164315975493188902014-01-07T01:42:20.345-05:002014-01-07T01:42:20.345-05:00Dear Saj,
This insight:
"One example of a u...Dear Saj,<br /><br />This insight:<br /><br />"One example of a useful tidbit I enjoyed from the book is that Ogilvy argues that the return on advertising spend on a product that's already successful is much higher than on advertising spend for a product that is not doing so hot. This concept reminded me of what a retail analyst once told me: a retail chain sees better returns when it spruces up one of its more successful stores versus one that is doing poorly."<br /><br />I am not able to understand the logic behind what Ogilvy and the retail analyst say. I am wondering 'Why should that be correct and when can that be the wrong advice? '<br /><br />PradeepPradeep Raghunathannoreply@blogger.com