The executives of your company met. They are organized in 3 regions: Americas (South & North), Europe, and Asia/rest of the world. For 2021, there is a limited amount of money that can be assigned to the Marketing Budget. Pick one of the regions, and justify why your region should be funded, instead of the others. If you want to increase your budget for new launches, please use the payback template and share what’s the payback for your investment in the comments.
As Disney company, I will pick Asia/the rest of the world region to receive the funding for the Marketing Budget in 2021. The first reason is the market growth potential. Asia and the rest of the world encompass many emerging markets, including countries with rapidly growing economies such as India, China, Southeast Asia nations, and parts of Africa and the Middle East. Disneyland is already in Shanghai and Japan; we could also build a Disneyland in India with Princess Jasmine. The second reason is that Asia has a larger population than the Americas and Europe combined.
Payback Period= Monthly Net Profit/Initial Investment
Therefore, payback is the monthly net profit of the new Disneyland in India/ the initial investment of building Disneyland.
LVMH believes that this funding should be primarily invested in the Asian region for the following reasons. Firstly, in 2021, Asia accounted for 42% of total revenue, making it the largest source of income, especially with the luxury markets in China and Southeast Asia experiencing rapid growth and continued strong purchasing power. Although China’s economy has not fully recovered to pre-pandemic levels, it is gradually showing signs of recovery, indicating significant future potential. Increased investment in Asia, particularly in China, is likely to yield higher returns in the coming years. Secondly, e-commerce and social media platforms in Asia play an increasingly important role in luxury consumption. By allocating the market budget in Asia, we can better leverage these platforms to attract younger consumers and enhance the brand’s online influence. Regarding whether the marketing investment is worthwhile, it should be considered from multiple aspects, such as CLV (Customer Lifetime Value). However, with economic recovery, both the number of customers and the spending of existing customers are expected to gradually increase, so the payback period will not be too long.
Allocating the marketing budget to the Americas region, especially North America, is strategically advantageous for NVIDIA, as the United States alone contributed approximately 44.3% of NVIDIA’s revenue, reflecting the region’s substantial demand for advanced technologies like AI, data centers, and gaming. With North America being a hub for technological innovation and home to enterprises heavily reliant on NVIDIA’s solutions for AI research, cloud computing, and visualization, intensified marketing efforts here could strengthen partnerships and expand market share in critical sectors. A $5 million investment in marketing is projected to yield a $10 million revenue increase within a six-month payback period, making the Americas a high-return choice for marketing allocation in this year.
Our company is Tesla. On Half of our company, I would like to choose Asia. Firstly, Asia, especially China, is experiencing rapid growth in EV adoption although China have competitive markets(strong competitors like BYD, XiaoPeng). To maintain our dominance, we need more funds . Then Asia already contributes significantly to Tesla’s global revenue, and increasing the marketing budget here can further accelerate growth.(China is the world’s largest market for EVs, accounting for over 50% of global EV sales.) Also.by focusing on Asia, Tesla can maximize revenue growth and achieve a faster return on marketing investments.
Speaking on behalf of Nestlé, we believe this marketing budget can be allocated to the Americas, due to the North and South regions reaching the highest revenues at 35% in 2021, compared to Europe and Asia/the rest of the world. The main reasons that we think Americas should be considered as a priority due to their strong brand recognition, well-developed distribution network, and major category (e.g. PetCare). As the world’s largest F&B company, maintaining our reputation is extremely significant, as well as the positive word-of-mouth from the consumers. Additionally, we have several strategies to implement our distribution network. For instance, IT investments, digital distribution warehouses, rail transportation, etc. The United States and Canada are the most important contributors. Last but not least, one of Nestlé’s dominant categories, PetCare is a vital revenue driver to help the North American region increase its total sales. Therefore, payback won’t be a big issue for Nestlé.
LVMH should direct its 2021 marketing budget to launch a truly unique product in the Americas: a luxury bracelet that combines elegance with personal safety. This exclusive bracelet is crafted to look stunning on the wrist while featuring a discreet safety tracking function, perfect for the modern consumer who values style and peace of mind. In one sleek design, it offers both luxury and security, appealing to high-end customers who prioritize both.
Why the Americas? The U.S. is a prime market for premium wearables that serve more than one purpose, especially as demand grows for fashionable tech that enhances personal safety. With a $3.5 million investment, we could execute a high-impact launch event, secure influential brand ambassadors, and run a targeted digital campaign to generate buzz and exclusivity. We project $15 million in preorder sales, with a quick payback period of around 1.3 years.
This safety-focused luxury bracelet sets LVMH apart as a forward-thinking brand that blends high fashion with meaningful functionality. It’s a strategic investment that not only promises revenue but also reinforces LVMH’s innovative edge and commitment to customers’ wellbeing in a key market.
For the Nestlé, we recommend allocating the marketing budget to Europe, which accounted for 20% of our net sales in 2023, demonstrating a strong, stable consumer base and high brand loyalty. Europe’s well-established infrastructure and commitment to sustainability align with Nestlé’s values, allowing us to strengthen our leadership in this key region. With rising demand for health and wellness products, investment here offers an accelerated payback period by capitalizing on high-margin opportunities and existing consumer trust.