This article in Bloomberg Businessweek ties in well with Chapter 4 and the discussion of IMC budgeting. Geico spent $935 million on advertising, three times its closest competitor. The result – Geico is now in second place next to State Farm in terms of auto insurance policies. Here is a website that shows the market share of each auto insurance company.
- Why has Geico gained market share? Is it only advertising or are there other reasons? Explain.
- If companies spend more on advertising than the competition, will it always result in a market share gain? Why or why not?
- What do you think is the relationship between ad spending and market share? Does the industry make a difference? Does the amount spent make a difference? Explain.
- What is the relationship between ad spending and ad content? Will strong ad spending create results regardless of ad content? Why or why not? Will strong content produce results even with low spending? Why or why not?