uisukii Wrote:"In general if a company invests a lot in advertising (if advertising is the driving force behind sales), the company's products are probably crap." Another case in point: Apple.
Good point but I don't think you've ever looked at Apple's 10-K. They actually spend way more on R&D compared to marketing.
Apple
Advertising and Marketing Expenses
2012 - $1.0 billion
2011 - $933 million
2010 - $691 million
R&D Expenses
2012 - $3.4 billion
2011 - $2.4 billion
2010 - $1.8 billion
In contrast with Rosetta Stone. *Disclaimer - it's not fair to compare a tech company to an educational based company but some people might be interested in what kind of ratios they spend on R&D and marketing. As already pointed out, Rosetta Stone plows most of their cash into advertising. They basically took a successful language teaching method (for Spanish) and then copied it for every language across the board. The problem is that the further you get from the Romance group of languages, the less effective the program becomes. For now, they don't seem to be interested in better developing those other languages and are still enjoying nice cash flows. Thus, the low R&D and high ad expenses and nobody cares right now.
I do believe that eventually the company will wise up to the fact that people who are not studying Spanish are not getting much from the product and bad word of mouth will force them to spend more attention in better developing other programs for languages other than the Romance group.
Rosetta Stone
Advertising and Marketing
2011 - 161.4 million
2010 - 130.8 million
2009 - 114.8 million
R&D
2011 - $24.2 million
2010 - $23.4 million
2009 - $26.2 million
Source: Apple and Rosetta Stone 10Ks
I imagine that Pimsleur has nearly the same expenses as Rosetta Stone, but that info is not publicly available.
Sorry I made so many edits to this post
Edited: 2012-12-10, 3:55 pm