Setting the Total Promotion Budget and Mix

We have looked at the steps in planning and sending communications to a target audience. But how does the company decide on the total promotion budget and its division among the major promotional tools to create the promotion mix? We now look at these questions.

Setting the Total Promotion Budget

One of the hardest marketing decisions facing a company is how much to spend on promotion. John Wanamaker, an American department store magnate, once said: 'J know that half of my advertising is wasted, but I don't know which half. I spent $2 million for advertising, and 1 don't know if that is half enough or twice too much.' It is not surprising, therefore, that industries and companies vary widely in how much they spend on promotion. Promotion spending may be 20-30 per cent of sales in the cosmetics industry and only 5-10 per cent in the industrial machinery industry. Within a given industry, both low and high spenders CM be found.

How does a company decide on its promotion budget? There are four common methods used to set the total budget for advertising: the affordable method, the percentage-of-sales method, the competitive-parity method and the objective-and-task method.''

Affordable Method

A common 'rule-of-thumb' used by many companies is the affordable method: they set the promotion budget at the level they think the company can afford. They start with total revenues, deduct operating expenses and capital outlays. and then devote some portion of the remaining funds to advertising.

Sales Promotion Budgeting

Feedback measurements for two brands

Unfortunately, this method of setting budgets completely ignores the effect of promotion on sales. It tends to place advertising last among spending priorities, even in situations where advertising is critical to the firm's success. It leads to an uncertain annual promotion budget, which makes long-range market planning difficult. Although the affordable method can result in overspending on advertising, it more often results in underspending.

Percentage-of-Sales Method

In the percentage-of-sales method, marketers set their promotion budget at a certain percentage of current or forecast sales. Or they budget a percentage of the sales price. Automotive companies usually budget a fixed percentage for promotion based on the planned car price. Fast-moving consumer goods companies usually set it at some percentage of current or anticipated sales.

The pereentage-of-sales method has advantages. It is simple to use and helps managers think about the relationship between promotion spending, selling price and profit per unit. The method supposedly creates competitive stability because competing firms tend to spend about the same percentage of their sales on promotion.

Despite these claimed advantages, however, there is little to justify the method. It wrongly views sales as the cause of promotion rather than as the result.'" The budget is based on availability of funds rather than on opportunities. It may prevent the increased spending sometimes needed to turn around falling sales. It fails to consider whether a higher or lower level of spending would be more profitable. Because the budget varies with year-to-year sales, long-range planning is difficult. Finally, the method does not provide any basis for choosing a specific percentage, except what has been done in the past or what competitors are doing.

Setting the promotion budget at a certain percentage of current or forecast sales or as a percentage of the sales price.

Competitive-Parity Method

Other companies use the competitive-parity- method, setting their promotion budgets to match competitors' outlays. They watch competitors' advertising or get industry promotion-spending estimates from publications or trade associations, and then set their budgets based on the industry average.

Two arguments support this method. First, competitors' budgets represent the collective wisdom of the industry. Second, spending what competitors spend helps prevent promotion wars. Unfortunately, neither argument is valid. There are no grounds for believing that the competition has a better idea of what a company should be spending on promotion than does the company itself, Companies differ greatly, in terms of market opportunities and profit margins, and each has its own special promotion needs. Finally, there is no evidence' that budgets based on competitive parity prevent promotion wars.

Objective-and-Task Method

The most logical budget-setting method is the objective-and-task method, whereby the company sets its promotion budget based on what it wants to accomplish with promotion.

The method entails:

  1. defining specific objectives;
  2. determining the tasks needed to achieve these objectives
  3. estimating the costs of performing these tasks.

The sum of these costs is the proposed promotion budget.

The objective-and-task method forces management to spell out its assumptions about the relationship between amount spent and promotion results, But it is also the most difficult method to use. Managers have to set sales and profit targets and then work back to what tasks must be performed to achieve desired goals. Often it is hard to figure out which specific tasks will achieve specific objectives. For example, suppose Sony wants 95 per cent awareness for its latest camcorder model during the six-month introductory period. What specific advertising messages and media schedules would Sony need in order to attain this objective? How much would these messages and media schedules cost? Sony management must consider such questions, even though they arc hard to answer. By comparing the campaign cost with expected profit gains, the financial viability of the promotions campaign can be determined.

The main advantage of this method is that it forces managers to define their communication objectives, to determine die extent to which each objective will be met using selected promotion tools and the financial implications of alternative communication programmes.

Setting the Promotion Mix

The company must divide the total promotion budget among the main promotion tools - advertising, personal selling, sales promotion and public relations. It may also have to decide just how much of its promotions will involve direct marketing. It must blend the promotion tools carefully into a co-ordinated promotion mix. Companies within the same industry differ greatly in how they design their promotion mixes. For example, Avon spends most of its promotion funds on personal selling and catalogue marketing, whereas Revlon spends heavily on consumer advertising. Electrolux sells most of its vacuum cleaners door to door, whereas Hoover relies more on advertising and promotion to retailers.

Companies are always looking for ways to improve promotion by replacing one promotion tool with another that will do the same job more economically.

Many companies have replaced a portion of their field sales activities with telephone sales and direct mail. Other companies have increased their sales promotion spending in relation to advertising to gain quicker sales.

Designing the promotion mix is even more complex when one tool must be used to promote another. Thus when British Airways decides to offer air miles for flying with the company (a sales promotion), it has to run ads to inform the public. When Lever Brothers uses a consumer advertising and sales promotion campaign to hack a new washing powder, it has to set aside money to promote this campaign to the resellers to win their support.

Many factors influence the marketer's choice of promotion tools. We now look at these factors.

The Nature of each Promotion Tool

Marketers have to understand the unique characteristics and the costs of each promotion tool in deciding the promotion mix. Let us examine each of the major tools.

ADVERTISING. The many forms of advertising make it hard to generalize about its unique qualities. However, several qualities can be noted:

  • Advertising can reach masses of geographically dispersed buyers at a low cost per exposure.
  • Because of advertising's public nature, consumers tend to view advertised products as standard and legitimate - buyers know that purchasing the product will be understood and accepted publicly.
  • Advertising enables the seller to repeat a message many times, and it lets the buyer receive and compare the messages of various competitors.
  • Large-scale advertising by a seller says something positive about the seller's size, popularity and success.
  • Advertising is also very expensive, allowing the company to dramatize its products through the artful use of print, sound and colour.
  • On the one hand, advertising can be used to build up a long-term image for a product (such as Coca-Cola ads). On the other hand, advertising can trigger quick sales (as when a department store advertises a weekend sale).
  • Advertising can reach masses of geographically spread-out buyers at a low cost per exposure.

Advertising also has some shortcomings:

  • Although it reaches many people quickly, advertising is impersonal and cannot be as persuasive as company salespeople.
  • Advertising is only able to carry on a one-way communication with the audience, and the audience does not feel that it has to pay attention or respond.
  • In addition, advertising can be very costly. Although some advertising forms, such as newspaper and radio advertising, can be done on smaller budgets, other forms, such as network TV advertising, require very large budgets.

PERSONAL SELLING

Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions and actions. Compared to advertising, personal selling has several unique qualities;

Food companies mounting such promotions because dinosaurs were ruled as not kosher. Moreover, they died 65 million years ago, so the rabbinical authorities decreed that they could never have existed as the world was created only 5,753 years ago.

It is difficult to decide whether the children themselves create the trends or simply follow them. Nevertheless, most promoters agree that promotions linked to current firm to 'strike the right note', while avoiding ven- crazes have a superior chance of success, so long turing too far into the delicate area of 'pester as they follow trends discriminatingly and ensure power'. Parents are all too familiar with pester that they do not conflict with the product. power — the child's demand for the latest craze, be it a food or toy, that has been hyped on television. Observers argue that, in the long run, it is the fun promotions that are educational and offer real value to target consumers which will build brand loyalty.

Creating Brand Loyalty

One of the most successful kids' crazes in recent years has been dinosaurs - Dino stickers, Dino cups, Dino cards, Dino games, Dino crisps, Dino biscuits all stalked supermarket shelves. (Remember Ninja Turtles? Well, the story is very much the same, although parents were spared Ninja Turtle crisps and biscuits!) The Spielberg blockbuster Jurassic Park was partly responsible, but manufacturers and merchandisers have also deliberately focused upon kids' interest in the dinosaur itself - they learn about dinosaurs at school, how they lived and the mystery of their extinction. McDonald's, the restaurant chain, was one of the many big names which signed up for a themed promotion, where kids could collect all six of its Jurassic Park cups. McDonald's argues that 'children are very finicky and anything that is of the moment will interest them, ... this means you will have to be on top of the trends'. McDonald's, however, is a consistent investor in promotions, as reflected in its long-standing 'Happy Meals' offer for children. The challenge lies in maintaining the appeal of the offers, which calls for creativity in value creation.

Promotions for Children: Can Childish Things Build Sates arid Brand Loyally?

Many consumer-goods com panics consciously target their sales promotions at kids. They argue that it is great for building sales and loyalty. Manufacturers also agree that children are not easy targets. They are fickle, so it is crucial for the

Banking Up Promotions

Jacob's, a biscuit manufacturer, joined the dinosaur boom and successfully launched dinosaur biscuits throughout Europe. The biscuits were promoted on television and in cinemas, and the company also sponsored a dinosaur exhibition at London's Alexandra Park. Extensive back-up is often required to build awareness for the promotion as well as to maintain the momentum over its duration.

In the United Kingdom. Rayner Burgess invested in a mix of promotional tools for Crusha, its milk drink - PR, sales promotions and competitions in women's magazines and youth press, and samplings at the Milk Marketing Board and National Dairy Council roadshows around the country.

What Appeals to Children? T-shirts seem to be a big hit. Crusha offered T-shirts that changed design when worn, which reported a redemption of 250 per cent higher than any previous offer it promoted. Parents liked the product as it encouraged kids to drink milk. The promotion also added genuine value to the product - kids do not just want instant appeal with no substance. Walkers (crisps) offered Looney Tunes T-shirts, which also worked beeause they were made relevant and desirable by picking up one of the most popular characters within die Looney Tunes portfolio, the Tasmanian Devil, and positioning it as the Big Taz T. The T-shirt itself was promoted on design and quality. Even the colour was carefully chosen -kids prefer coloured T-shirts to white.

Experts suggest that other items like stickers and models retain popularity. If these also leak into the current crazes, they have a good chance of success. Although kids still prefer traditional items, practitioners draw attention to two main considerations when planning sales promotions for children. First, children are usually more comfortable with modern technology than their parents are. so the promoter must avoid patronizing them. Secondly, children enjoy the challenge of being required to make some effort (e.g. participate in competitions, or patiently collect tokens). Parents, on the other hand, may find it hard to summon the energy for such tasks, but can find the motivation if the effort is worth it (e.g. educational, enthuses the child) and offers genuine value. Thus, childish things can build sales and loyalty but it's not child's play.

  • It involves personal interaction between two or more people, so each person can observe the other's needs and characteristics and make quick adjustments.
  • Personal selling also allows all kinds of relationships to spring up, ranging from a matter-of-fact selling relationship to a deep personal friendship. The effective salesperson keeps the customer's interests at heart in order to build a long-term relationship.
  • Finally, with personal selling the buyer usually feels a greater need to listen and respond, even if the response is a polite 'no thank you'.

These unique qualities come at a cost, however. A sales force requires a longer-term commitment than does advertising - advertising can be turned on and off, but sales force size is harder to change. Personal selling is also the company's most expensive promotion tool, costing industrial companies an average of almost £200 per sales call.

SALES PROMOTION

Sales promotion includes a wide assortment of tools -coupons, contests, price reductions, premium offers, free goods and others - all of which have many unique qualities:

  • They attract consumer attention and provide information that may lead to a purchase.
  • They offer strong incentives to purchase by providing inducements or contributions that give additional value to consumers,
  • Moreover, sales promotions invite and reward quick response. Whereas advertising says 'buy our product', sales promotion offers incentives to consumers to 'buy it now'.

Companies use sales promotion tools to create a stronger and quicker response. Sales promotion can be used to dramatize product offers and to boost sagging sales. Sales promotion effects are usually short-lived, however, and are not effective in building long-run brand preference. To work, manufacturers must carefully plan the sales promotion campaign and offer target customers genuine value. Only then will they enhance perceived brand image, build sales and maintain customer loyalty.

Setting The Promotion Budget

Relative importance

Relative importance of promotion tools in consumer versus industrial markets

PUBLIC RELATIONS

Public relations or PR offers several unique qualities, It is all those activities that the organization does to communicate with target audiences which are not directly paid for.

  • PR is very believable: news stories, features and events seem more real and convincing to readers than ads do.
  • Public relations can reach many prospects who avoid salespeople and advertisements, since the message gets to the buyers as 'news' rather than as a sales-directed communication.
  • And, like advertising, PR can dramatize a company or product. The Body Shop is one of the few international companies that have used public relations as a more effective alternative to mass TV advertising-

Marketers tend to underage public relations or to use it as an afterthought. Yet a well-thought-out public relations campaign used with other promotion-mix elements can be very effective and economical.

DIRECT MARKETING

Although there are many forms of direct marketing -direct mail, telemarketing, electronic marketing, online marketing and others-they all share four distinctive characteristics.

  • Direct marketing is non-public as the message is normally addressed to a specific person.
  • Direct marketing is immediate and customized, so messages can be prepared quickly and tailored to appeal to specific customers.
  • Direct marketing is interactive: it allows a dialogue between the communicator and the consumer, and messages can be altered depending on the consumers?

Thus, direct marketing is well suited to highly targeted marketing efforts and to building one-to-one relationships.

Factors in Setting the Promotion Mix

Companies consider many factors when developing their promotion mixes; namely, the type of product/market, the use of a push or pull strategy, the buyer-readiness stage and the product life-cycle stage.

Setting Total Promotion Budget And Mix

Advertising, can play a dramatic role in industrial marketing, as shown in this classic McGraw-Hill ad.

TYPE OF PRODUCT/MARKET

The importance of different promotional tools varies between consumer and business markets (see Figure 18.5). Consumer-goods companies usually put more of their funds into advertising, followed by sales promotion, personal selling and then public relations. Advertising is relatively more important in consumer markets beeause there are a larger number of buyers, purchases tend to be routine, and emotions play a more important role in the purchase-decision process. In contrast, industrial-goods companies put most of their funds into personal selling, followed by sales promotion, advertising and public relations, In general, personal selling is used more heavily with expensive and risky goods, and in markets with fewer and larger sellers.

Although advertising is less important than sales Galls in business markets, it still plays an important role. Advertising can build product awareness and knowledge, develop sales leads and reassure buyers. Similarly, personal selling can add a lot to consumer goods marketing efforts, !t is simply not the case that 'salespeople put products on shelves and advertising takes them off. We 11-trained consumer-goods salespeople ean sign up more dealers to carry a particular brand, convince them to give more shelf space and urge them to use special displays and promotions.

PUSH VERSUS PULL STRATEGY

The promotional mix is influenced by whether the company ehooses a push or pull strategy. Figure 18.6 contrasts the two strategies. A push strategy involves 'pushing' the product through distribution channels to final consumers. The firm directs its marketing activities (primarily personal selling and trade promotion) towards channel members to induce them to carry the product and to promote it to final consumers. Using a pull strategy, the producer directs its marketing activities (primarily advertising and push strategy A promotion strategy tluit valla for using tlie safes farce and trade promotion to push the product through channels. Theproducer promotes the product to wholesalers, the wholesalers promote to retailers, and the retailers promote to consumers.

Pull strategy

A promotion strategy that calls for spending a lot on advertising arid consumer promotion to build up consumer demand. If the. strategy is successful, consumers will usk tlieir retailers for tlie product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.

Setting The Total Promotion Budget

Push versus pull promotion slratcgy

If the pull strategy is effective, consumers will then demand the product from channel members, which will in turn demand it from producers. Thus under a pull strategy, consumer demand 'pulls' the product through the channels.

Some small in dust rial-goods, companies use only push strategies; some direct-marketing companies use only pull. However, most large companies use some combination of both. For example, Lever Brothers uses mass-media advertising to pull consumers to its products and a large sales force and trade promotions to push its products through the channels.

In recent years, consumer-goods companies have been decreasing the pull portions of their promotion mixes in favour of more push. There are a number of reasons behind this shift in promotion strategy. One is that mass-media campaigns have become more expensive and many companies in Europe, the United States and Japan have cut back due to recessionary pressures over the early 1990s. Many firms have also found advertising less effective in recent years. Companies are increasing their segmentation efforts and tailoring their marketing programmes more narrowly, making national advertising less suitable than localized retailer promotions. In these days of heavy brand extensions and me-too products, many companies are finding it difficult to feature meaningful product differentiations in advertising. Instead, they differentiate their brands through price reductions, premium offers, coupons and other promotions aimed at the trade.

The growing strength of retailers is also a key factor speeding the shift from pull to push. Big retail chains in Europe and the United States have greater access to product sales and profit information. They have the power to demand and get what they want from suppliers. And what they want is margin improvements -that is. more push. Mass advertising bypasses them on its way to the consumers, but push promotion benefits them directly. Consumer promotions give retailers an immediate sales boost and cash from trade allowances pads retailer profits. So, manufacturers arc compelled to use push promotions just to obtain good shelf space and advertising support from their retailers.

However, reckless use of push promotion leads to fierce price competition and a continual spiral of price slashing and margin erosion, leaving less money to invest in the product R & D, packaging and advertising" that is required to improve and maintain long-run consumer preference and loyalty. Robbing the advertising budget to pay for more sales promotion could mortgage a brand's long-term future

for short-term gains. While push strategies will remain important, particularly in packaged-goods marketing, companies that find the best mix between the two -consistent advertising to build long-run brand value and consumer preference and sales promotion to create short-run trade support and consumer excitement — are most likely to win the battle for loyal and satisfied customers.

BUYER-READINESS STAGE

The effects of the promotional tools vary for the different buyer-readiness stages. Advertising, along with public relations, plays the leading role in the awareness and knowledge stages, more important than that played by 'cold calls' from salespeople. Customer liking, preference and eonvie-tion are more affected by personal selling, which is closely followed by advertising. Finally, closing the sale is mostly done with sales calls and sales promotion. Clearly, advertising and public relations are the most cost effective at the early stages of the buyer decision process, while personal selling, given its high costs, should focus on the later stages of the customer buying process.

PRODUCT LIFE CYCLE STAGE

The effects of different promotion tools also vary with stages of the product life cycle. In the introduction stage, advertising and public relations are good for producing high awareness, and sales promotion is useful in getting early trial. Personal selling efforts must be geared to persuading the trade to carry the product. In the growth stage, advertising and public relations continue to be powerful influences, whereas sales promotion can be reduced because fewer incentives are needed. In the mature stage, sales promotion again becomes important relative to advertising. Buyers know the brands ant! advertising is needed only to remind them of the product. In the decline stage, advertising is kept at a reminder level, public relations is dropped and salespeople give the product only a little attention. Sales promotion, however, might continue at a high level in order to stimulate trade and prop up sales to customers.

The Changing Face of Marketing Communications

During the past few decades, companies around the world have perfected the art of mass marketing—selling highly standardized products to masses oi customers. In the process, they have developed effective mass-media advertising techniques to support their mass-marketing strategies. These companies routinely invest huge sums of money in the mass media, reaching tens of millions of customers with a single ad. However, as we move into the twenty-first century, marketing managers are facing some new marketing communications realities.

The Changing Communications Environment

Two major factors are changing the face of today's marketing communications. First, as mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programmes designed to build closer relationships with customers in more narrowly defined micro markets. Second, vast improvements in computer and information technology are speeding the movement towards segmented marketing. Today's information technology helps marketers to keep closer track of customer needs - more information is available about customers at the individual and household levels than ever before. New technologies also provide new communications avenues for reaching smaller customer segments with more tailored messages.

The shift from mass marketing to segmented marketing has had a dramatic impact on marketing communications. Just as mass marketing gave rise to a new generation of mass-media communications, so the shift towards one-to-one marketing is spawning a new generation of more specialized and highly targeted communications efforts.

Given this new communications environment, marketers must rethink the roles of various media and promotion-mix tools. Mass-media advertising has long dominated the promotion mixes of consumer-product companies. However, although television, magazines and other mass media remain very important, their dominance is declining. Market fragmentation has resulted in media fragmentation - in an explosion of more focused media that better match today's targeting strategies. For example, back in the 1970s and 1980s, in many developed countries, the three or four major TV networks attracted a majority of the nation's viewing audience. By the mid-1990s, that number had dropped significantly as cable television and satellite broadcasting systems offered advertisers dozens or even hundreds of alternative channels that reach smaller, specialized audiences. Similarly, there has been a proliferation of special-interest magazines in recent decades, reaching more focused audiences. Beyond these media channels, companies are making increased use of new, highly targeted media, ranging from video screens on supermarket shopping trolleys to CD-ROM catalogues, online computer services and Web sites on the Internet.

More generally, advertising appears to be giving way to other elements of the promotion mix. In the glory days of mass marketing, consumer-product companies, such as Heinz, P & G and Mars, spent the lion's share of their promotion budgets on mass-media communications. Today, media advertising captures a much reduced proportion of die total promotion spend.'4 The rest goes to various sales promotion activities, which can be focused more effectively on individual consumer and trade segments. In all, companies are doing less broadcasting and more narro-wcasting, relying on a richer variety of focused communication tools which allow them to reach their many and diverse target markets.

Integrated Marketing Communications

The recent shift from mass marketing to targeted marketing, and the corresponding use of a richer mixture of communication channels and promotion tools, poses a problem for marketers. Consumers are being exposed to a greater variety of marketing communications from and about the company from a broader array of sources. However, customers do not distinguish between message sources in the way marketers do. In the consumer's mind, advertising messages from different media such as television, magazines or online sourees blur into one. Messages delivered via different promotional approaches - such as advertising, personal selling, sales promotion, public relations or direct marketingall become part of a single overall message about the company. Conflicting messages from these different sources can result in confused company images and brand positions.

All too often, companies fail to integrate their various communications channels. The result is a hodgepodge of communications to consumers. Mass advertisements say one thing, a price promotion sends a different signal, a product label creates still another message, company sales literature says something altogether different and the company's Web site seems out of sync with everything else.

The problem is that these communications often come from different company sources. Advertising messages are planned and implemented by the advertising department or advertising agency. Persona! selling communications are developed by sales management. Other functional specialists are responsible for public relations, sales promotion, direct marketing, online sites and other forms of marketing communication. Moreover, members of various departments often differ in their views on how to split the promotion budget. The sales manager would rather hire a few more salespeople than spend £150,000 on a single television commercial. The public relations manager feels that he or she can do wonders with some money shifted from advertising to public relations.

In the past, no one person was responsible for thinking through the communication roles of the various promotion tools and co-ordinating the promotion mix. Today, however, more companies are adopting the concept of integrated marketing eonimunications (IMG). Under this concept, the company carefully integrates and co-ordinates its many communications channels - mass-media advertising, personal selling, sales promotion, public relations, direct marketing, packaging and others - to deliver a clear, consistent and compelling message about the organization and its products. It builds a strong brand identity in the marketplace by tying together and reinforcing all the company's positioning, images and messages across all its marketing communications venues. It means that your PR materials say the same thing as your direct mail campaign, and your advertising has the same "look and feel' as its Web site. When Japanese car maker Honda launched its new five-door Civic, the company used an integrated approach whereby its agencies were obliged to co-operate with each other to generate the same branding and visuals across its TV ads, direct marketing and sales promotion.

The company works out the roles that the various promotional tools will play and the extent to which each will be used. It carefully co-ordinates the promotional activities and the timing of when major campaigns take place. It keeps track of its promotional expenditures by product, promotional tool, product life-cycle stage and observed effect in order to improve future use of the promotionmix tools. Finally, to help implement its integrated marketing strategy, the company appoints a marketing communications director who has overall responsibility for the company's communications effort. To integrate its external communications effectively, the company must first integrate its internal communications activities.

Integrated marketing communications produces better communications consistency and greater sales impact. It places the responsibility in someone's hands - where none exisfed before - to unify the company's image as it is shaped by thousands of company activities. It leads to a total marketing communication strategy aimed at showing how the company and its products can help customers solve their problems.

Integrated marketing communications

The concept under which a company carefully integrates and co-ordinates its many communications channels to defers; r a clear, consistent, and compelling message about the organisation and its products.

Continue reading here: Socially Responsible Marketing C omin uriica tion

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Readers' Questions

  • eemeli mikkola
    Which factors should be considered in the process of determining an advertising budget?
    17 days ago
    1. Marketing goals and objectives: Consider what you want to achieve with your advertising campaign, such as increasing brand awareness, driving sales, or promoting a new product. The advertising budget should align with these objectives.
    2. Industry and competition: Understand the competitive landscape in your industry and the advertising strategies of your competitors. This will help determine how much you need to spend to stand out and remain competitive.
    3. Target audience: Identify your target audience and determine how to effectively reach them. Different advertising channels and mediums have varying costs, so consider which mediums will reach your target audience most efficiently.
    4. Reach and frequency: Consider the reach and frequency needed to effectively reach your target audience. How often and how widely do you need to advertise to create the desired impact?
    5. Historical data: Review past advertising campaigns and their success rates. Analyze how much was spent, and what return on investment (ROI) was achieved. This information can guide your budget allocation for future campaigns.
    6. Advertising medium and platform costs: Different advertising mediums have varying costs, such as TV, radio, print, digital, or social media advertising. Understand the costs associated with each medium and choose the ones that align with your target audience and goals.
    7. Seasonality and market trends: Consider any seasonality or market trends that may impact the effectiveness and cost of advertising. For example, advertising during peak seasons or high-demand times may require a higher budget.
    8. Available resources: Assess your available resources, including internal marketing capabilities and the need for external assistance like advertising agencies or freelancers. These resources can affect the overall advertising budget.
    9. Overall marketing budget: Determine the overall marketing budget available for the advertising campaign. The advertising budget should fit within the larger marketing budget and be allocated accordingly.
    10. Cost of production: Factor in the cost of creating ad content, including design, copywriting, visual assets, and production quality. The complexity and quality of ad materials can impact the budget.
    11. Testing and experimentation: Allocate some budget for testing and experimenting with different advertising strategies, messages, or mediums. This allows for adjustment and optimization based on real-time data and insights.
    12. ROI and performance tracking: Consider how you will measure the success of your advertising campaign and calculate the return on investment. Allocate budget for tracking and analytics tools to monitor and analyze performance.
    13. By considering these factors, businesses can make informed decisions about their advertising budget and maximize the effectiveness of their campaigns.
    • bacco
      What are five marketing strategies that retailers spend half of their annual budget on?
      3 months ago
    • 1) Digital advertising and online marketing: As the majority of consumers are now active online, retailers allocate a significant portion of their budget to digital advertising, such as search engine marketing, display advertising, social media advertising, email marketing, and influencer partnerships. This enables them to reach a wide audience and target their ideal customers effectively. 2) Customer loyalty programs and retention: Retailers invest in loyalty programs and retention strategies to engage and retain their existing customers. This can include offering exclusive discounts, personalized offers, rewards points, special events, and personalized communication to build a long-term relationship with customers. 3) Visual merchandising and in-store experiences: Retailers spend on visual merchandising to create appealing in-store displays and layouts that attract customers and encourage them to make purchases. Additionally, they create unique in-store experiences, such as product demonstrations, interactive displays, or events, to engage shoppers and differentiate themselves from competitors. 4) Content marketing and storytelling: Retailers prioritize content marketing to engage customers and build brand awareness. This includes creating valuable and relevant content, such as blog posts, videos, social media content, and guides, that resonate with their target audience. By telling compelling brand stories, retailers build trust and loyalty while positioning themselves as industry experts. 5) Market research and consumer insights: Retailers allocate a significant portion of their budget towards conducting market research and gathering consumer insights. This involves conducting surveys, focus groups, data analysis, and competitor analysis to understand customer preferences, trends, and changing market dynamics. By staying updated on consumer behavior, retailers can better tailor their marketing strategies and product offerings.
      • dorotea dellucci
        Which steps should marketers follow when using the objectiveandtask method to determine a budget?
        6 months ago
        1. Define Objectives: Start by clearly defining your marketing objectives. These should be specific, measurable, attainable, relevant, and time-bound (SMART goals).
        2. Identify Tasks: Identify the specific tasks that you need to undertake to achieve your marketing objectives. This may include activities like content creation, social media campaigns, advertising, PR, events, etc.
        3. Determine Costs: Estimate the costs associated with each task. This could involve researching industry benchmarks, obtaining quotes from vendors or agencies, or analyzing past campaign costs.
        4. Allocate Budget: Allocate a portion of your marketing budget to each task based on the determined costs. This can be done by prioritizing tasks based on their importance, potential impact, and resource requirements.
        5. Set Milestones: Set milestones or checkpoints for your marketing campaigns to monitor progress. This will help in evaluating the effectiveness of your marketing expenditures and make adjustments if needed.
        6. Monitor and Evaluate: Continuously monitor the performance of your marketing campaigns and compare them against the set objectives. Evaluate the return on investment (ROI) to determine the efficiency and effectiveness of your budget allocation.
        7. Adjust and Optimize: Based on your evaluation, make necessary adjustments to your budget allocation. Optimize your marketing strategies by reallocating resources to high-performing campaigns and cutting back on low-performing ones.
        8. Repeat the Process: The objective and task method is an iterative process. Repeat these steps periodically, depending on your marketing planning cycle, to ensure that your budget allocation remains aligned with your objectives and tasks.
        9. Overall, the objective and task method provides a systematic approach to determining a budget that aligns with your marketing goals and ensures that resources are allocated effectively.
        • neftalem
          Which of the following is the most logical budgetsetting method?
          7 months ago
        • Without a specific context or information about the options provided, it is difficult to determine which of the following is the most logical budget setting method. The effectiveness and appropriateness of a budget setting method depend on various factors such as the goals, resources, and organizational structure of the situation in question. It is recommended to provide more details or specific options to give a more accurate answer.
          • ruby bracegirdle
            What percentage of a company’s profit is typically allocated for promotion?
            7 months ago
          • There is no fixed percentage for allocating a company's profit for promotion as it can vary significantly depending on the industry, company size, growth stage, and marketing strategies. Generally, smaller companies or startups may allocate a larger percentage of their profit for promotion to build brand awareness and attract customers. On the other hand, established companies may allocate a smaller percentage as they might focus more on maintaining brand presence and customer retention. It is also important to consider other factors like industry norms, competition, and specific business goals when determining the promotion budget.
            • harding
              How are promotional budgets normally determined?
              7 months ago
            • Promotional budgets are typically determined based on various factors, including:
              1. Objectives: The first step in determining a promotional budget is to define the marketing and promotional objectives. These objectives could be increasing brand awareness, launching new products, improving sales, or expanding market share.
              2. Past Performance: Historical data and performance of previous promotional activities can shed light on the effectiveness and return on investment (ROI) of different promotional strategies. This helps in allocating budgets based on the strategies that have proven successful in the past.
              3. Industry Standards: Analyzing industry benchmarks or average spend for promotional activities can provide a reference point for determining an appropriate budget. Companies often benchmark their spending against competitors or similar companies within the industry.
              4. Sales Forecast: Estimating or forecasting sales is another approach to determine the promotional budget. Companies may allocate a percentage of the projected sales as the promotional budget. This method ensures the budget is closely aligned with expected revenue.
              5. Available Resources: The budget also depends on the financial resources available to the company. Organizations with larger financial capabilities or higher profits may allocate a larger budget for promotional activities.
              6. Marketing Mix: The marketing mix, which includes product, price, place, and promotion, plays a crucial role in determining the promotional budget. The specific marketing strategies and the mix of marketing channels (such as advertising, public relations, social media, etc.) influence the allocation of funds to different promotional activities.
              7. Competitive Environment: The intensity of competition in the market can impact the promotional budget. Higher competition may require larger budgets to effectively promote and differentiate the company's products or services.
              8. Management Decisions: Ultimately, the promotional budget is determined by management decisions, taking into consideration all the above factors and aligning it with the overall company budget and corporate strategy.
              9. It's important to note that the process of determining promotional budgets may vary across industries, companies, and marketing strategies.
              • Abelardo Iadanza
                Which type of promotion is considered the most common?
                12 months ago
              • The most common type of promotion is marketing, which includes activities such as advertising, public relations, social media, email campaigns, and more.
                • Robert
                  Which type of promotional tool is nonpublic and interactive?
                  1 year ago
                • A private interactive promotional tool is one that is designed to be used by a limited group of consumers or stakeholders. Examples of private interactive promotional tools include webinars, virtual events, focus groups, surveys, and interactive contests.
                  • Demsas
                    What are the different methods of setting an advertising budget?
                    1 year ago
                    1. Affordability Method: This method focuses on the amount of money an organization is able to spend on advertising based on its financial resources.
                    2. Percentage of Sales Method: This method determines the amount of money to be allocated for advertising by figuring out a percentage of the total sales.
                    3. Competitive Parity Method: This method allocates similar amounts to competitors for advertising so that everyone has a fair chance of reaching potential customers.
                    4. Objective and Task Method: This method sets a specific budget for each marketing goal and assigns a budget to each task needed to accomplish the goal.
                    5. Incremental Budgeting Method: This method involves increasing the budget each year based on factors such as new products or services, increasing sales, and rising market share.
                    • Ralph Mayer
                      Which of the following is a weakness of direct marketing?
                      1 year ago
                    • The lack of personal interaction.
                      • MARJA
                        What is the most important factor to consider when developing the promotional mix for a product?
                        1 year ago
                      • The most important factor to consider when developing the promotional mix for a product is the target audience. Identifying the appropriate target audience is essential in determining the most effective approaches for attracting, communicating with, and influencing potential customers. It is important to consider the demographics, interests, values, and behaviors of the target audience when selecting and creating promotional strategies, since different strategies will be more effective for different types of customers. Additionally, marketers need to consider the product’s positioning, goals, brand image, and budget when developing the promotional mix.
                        • julia kekkonen
                          Which of the following is not one of the four basic options in the promotional mix?
                          1 year ago
                        • Reward Programs
                          • ronnie
                            How do marketers approach promotion costs?
                            1 year ago
                          • Marketers typically approach promotion costs in two main ways. First, they will consider the overall cost of the promotion relative to the expected return on investment. This includes looking at the cost of the promotion itself (e.g. advertising, media buys, etc.), as well as any additional costs associated with the promotion (e.g. discounts, contests, giveaways, etc.). Second, they will consider how the promotion costs can be allocated in order to maximize the effectiveness of the promotion. For example, marketers may decide to focus more resources on certain channels or audiences that are more likely to respond, or to allocate resources differently depending on the type of promotion.
                            • ali
                              Which of the following promotional tools is used in the advertising element of the promotion mix?
                              1 year ago
                            • -Advertising -Public Relations -Direct Marketing -Sales Promotion -Personal Selling
                              • Topi
                                Which of the following promotion mix approaches involves?
                                1 year ago
                                1. Advertising
                                2. Personal Selling
                                3. Public Relations
                                4. Direct Marketing
                                5. Sales Promotion
                                6. Digital and Social Media Marketing
                                7. Event Marketing
                                8. Influencer Marketing
                                9. Content Marketing
                                • Alexander
                                  Which of the following is true of competitive parity?
                                  1 year ago
                                • Competitive parity is a marketing concept that states that a company should strive to match its competitors in terms of resources, services, and product offerings. It is based on the belief that a company will be more successful when it is at parity with its competitors.
                                  • CHRISTINE HERRMANN
                                    How has the view of sales promotions changed during the past decades?
                                    1 year ago
                                  • In the past, sales promotions were used as a tool to generate short-term sales and profits, usually with little thought given to their long-term impact. Over the past few decades, the view of sales promotions has shifted to focus more on their ability to build customer loyalty and drive long-term profits. Promotions have become more targeted and personalized, focusing on providing customers with exclusive deals and offers that are tailored to their buying habits and preferences. Companies are increasingly turning to digital channels like social media and mobile algorithms to deliver offers directly to customers, creating a more customized marketing experience.
                                    • THOMAS
                                      Which of these promotional elements has the highest costpercontact or exposure?
                                      1 year ago
                                    • Television advertising
                                      • sylvie
                                        How much to spend on advertising and sales promotion?
                                        1 year ago
                                      • This is a difficult question to answer as it depends on a variety of factors, including your budget, industry, target audience, and business goals. Generally, it's recommended to spend between 5-10% of revenue on advertising and sales promotion, but it's important to customize your spending to meet your business's specific needs.
                                        • annunziata
                                          What factors are used in the ruleofthumb methods to determine the communication budget?
                                          1 year ago
                                          1. Market size: This includes factors such as the size of the company, the size of the target market, and the size of the competitive marketplace.
                                          2. Target audience: Factors such as the size and type of the target audience, the type of product or service being promoted, and the media being used to reach the target audience should be taken into consideration when determining the budget.
                                          3. Media types: Different media types have different cost structures, so the type of media being used to communicate the message should be considered when calculating the budget.
                                          4. Message complexity: The complexity of the message that needs to be conveyed should be taken into account when setting the budget. A simple and straightforward message may require less budget than a complex message.
                                          5. Timing: The timing of when the message needs to be communicated should be taken into account when setting the budget. A message that needs to be communicated quickly may require a greater budget than one with a longer timeline.
                                          6. Goals: The goals of the communications program should be taken into account when setting the budget. A message that has a broad reach may require a larger budget than a message that is targeted to a specific audience.
                                          • lauri
                                            When using the competitive parity budgeting method the firm?
                                            1 year ago
                                          • The firm should set its advertising budget in proportion to its competitors' budgets, taking into account factors such as market share and existing brand strength. This ensures that the firm is not outspending its competitors, but is still able to maintain competitive levels of marketing and advertising.
                                            • MAY
                                              Which of the following describes the competitiveparity method?
                                              1 year ago
                                            • The competitive parity method is a budgeting technique that compares the marketing budgets of a company's competitors in order to determine the most appropriate budget for the company.
                                              • layla ross
                                                Which of the following is true of the competitiveparity method of setting an advertising budget?
                                                1 year ago
                                              • The competitive parity method of setting an advertising budget allocates a budget based on the amount that competitors are spending.
                                                • Uwe Pfeifer
                                                  Which statement is most likely true about the affordable method of setting an advertising budget?
                                                  1 year ago
                                                • The affordable method of setting an advertising budget typically involves determining the maximum amount that can be spent and then allocating that budget across different advertising channels.
                                                  • Mary
                                                    Which of the following is considered the best approach to promotion budgeting?
                                                    1 year ago
                                                  • There is no one-size-fits-all answer to this question as the best approach to promotion budgeting will depend on various factors such as the industry, target audience, marketing goals, and available resources. However, some commonly used and effective approaches to promotion budgeting include:
                                                    1. Percentage of Sales Method: This approach involves allocating a certain percentage of the sales revenue towards promotion. The percentage can vary based on factors such as industry norms, competition, and growth objectives.
                                                    2. Objective and Task Method: With this approach, the promotion budget is determined by the specific objectives and tasks that need to be accomplished. This involves identifying the marketing goals, analyzing the tasks required to achieve them, and estimating the costs associated with each task.
                                                    3. Competitive Parity Method: In this approach, the promotion budget is set based on the spending patterns of competitors. The idea is to allocate a similar budget to stay competitive in the market.
                                                    4. Affordable Method: This approach involves setting the promotion budget based on what the company can afford. It relies on allocating a fixed amount of funds that the company is comfortable investing in promotion activities.
                                                    5. It is important to note that a combination of these approaches may also be used depending on the specific circumstances and goals of the organization. The key is to carefully analyze the factors at play and choose the approach that aligns with the overall marketing strategy and objectives.
                                                    • janina
                                                      Which of the following is the best approach to promotion budgeting?
                                                      1 year ago
                                                    • A. Analytical Budgeting B. Zero-Based Budgeting C. Incremental Budgeting D. Strategic Budgeting A. Analytical Budgeting
                                                      • natsnet
                                                        Which method for setting the total promotion budget is the most difficult to use?
                                                        1 year ago
                                                      • The zero-based budgeting method is the most difficult to use for setting the total promotion budget. This method involves starting from a zero budget and then determining for each expense item how much should be allocated to it. This can be a time-consuming and difficult process, as all budget items must be weighed against each other in order to make sure that no amount is wasted.
                                                        • nina
                                                          What is Establishing the Total Promotional Budget?
                                                          1 year ago
                                                        • Establishing the Total Promotional Budget involves creating a budget to cover all promotional activities that are planned to be used during a specific period of time. This includes marketing campaigns, events, public relations initiatives, and other activities to help promote the business or organization. The budget should be tailored to meet the goals and objectives of the company or organization and should include a breakdown of each type of promotional activity and its cost. The budget should also take into consideration any variables that can affect the cost of the promotional activities, such as the economic climate, targeted audience, and the time frame for achieving the desired results.
                                                          • FRANZISKA ZIMMERMAN
                                                            How to settle budget in personal selling?
                                                            1 year ago
                                                          • When it comes to settling a budget in personal selling, it is important to understand your customer's needs and objectives. You should discuss the customer’s budget and try to negotiate a mutually beneficial solution. It is important to understand the customer’s capabilities and limitations, as well as their desired outcomes. Furthermore, you should strive to come to a settlement that will yield a quality solution with a mutually beneficial outcome.
                                                            • diamante
                                                              How a company determine their promotion bugdet?
                                                              1 year ago
                                                            • A company can determine their promotion budget by considering the costs associated with their desired promotional activities, their desired ROI or return on investment, their estimated sales or revenue after promotions, their overall budget, and their desired profit margins. Additionally, companies should consider the target audience for their promotional activities, the availability of promotional materials, and any potential discounts that their vendors may offer.
                                                              • ANNA BRANDT
                                                                What is the methods of setting the promotion bedget?
                                                                1 year ago
                                                              • The methods of setting the promotion budget can vary depending on the type of promotion and needs of the business. Generally, a business will need to consider factors such as the target audience, goals of the promotion, cost of the promotion, expected returns, and competitors' spending. Additionally, a business can decide to allocate a portion of their overall budget to promotion or set their promotion budget as a percentage of sales. For example, they can choose to spend 3% of their total revenue on promotional activities each year.
                                                                • Emmanuel
                                                                  Which of the following budget method ignores the effect of promotion on sales?
                                                                  1 year ago
                                                                • The budget method that ignores the effect of promotion on sales is the static budget method. This method assumes that the level of sales will remain constant regardless of any promotional activities.
                                                                  • sauli
                                                                    How do you establish total promotion budget?
                                                                    1 year ago
                                                                  • The total promotion budget is typically determined based on factors such as the company's overall marketing objectives, its past promotional activities, the target market size, current trends in the industry, competitive activity, and the cost of the various promotion channels. It is important to monitor the effectiveness of each promotion channel so the budget can be adjusted accordingly. Additionally, companies should be mindful of their overall marketing budget and ensure that the promotion budget does not exceed the allotted amount.
                                                                    • Leo
                                                                      Which budget setting method completely ignores the effects of promotion on sales?
                                                                      1 year ago
                                                                    • Incremental Budgeting
                                                                      • Austin
                                                                        How are promotion budgets set?
                                                                        1 year ago
                                                                      • Promotion budgets are typically set by a company's marketing department. They can be determined in a number of ways, such as by analyzing past data, researching trends in the marketplace, assessing competitor activities, or weighing potential ROI if the promotion is successful. Generally, budgets are set based on how much money is available and how much is needed to reach the company's desired goals.
                                                                        • valentino sagese
                                                                          How do companies decide on the promotion budget?
                                                                          1 year ago
                                                                        • Companies decide on promotion budgets based on a number of factors, including the size of their target audience, the goals of their marketing campaign, the type of promotion they are running, their overall marketing budget, and their return on investment goals. Companies should also factor in their competition—this helps them to determine how much they need to spend to stand out and make an impact.
                                                                          • Sabrina
                                                                            How to make promotional budget?
                                                                            1 year ago
                                                                            1. Determine the Goal: The first step to creating an effective promotional budget is to determine the goal of the promotion. Ask yourself what you are trying to achieve with the promotion and how much you are willing to spend to reach that goal.
                                                                            2. Research Your Target Audience: Once you’ve determined the goal of your promotional budget, it’s important to take the time to research your target audience. Learn more about who they are and where they spend their time.
                                                                            3. Establish a Budget: Once you’ve determined your goal and have a clear understanding of your target audience, it’s time to create a budget. Your budget should be based on the resources available to you and the potential ROI from the promotion.
                                                                            4. Monitor and Evaluate: Once the promotional budget is established, the final step is to monitor and evaluate it. Make sure the promotion is achieving the desired results and adjust the budget accordingly.
                                                                            • olli
                                                                              How to design a budget for promotion?
                                                                              1 year ago
                                                                              1. Determine the Goals: Before developing a budget, it’s important to know what you want to achieve with your promotion. You may want to increase sales, drive brand awareness, or engage with potential customers.
                                                                              2. Research Promotion Options: Once you know what you want to achieve, research the different promotion options. Consider potentially expensive options like paid advertising, but don’t forget about less costly options like social media marketing.
                                                                              3. Calculate Estimated Costs: Estimate the total cost of each promotion option you’re interested in. Include things like advertising costs, media buys, and creative costs.
                                                                              4. Create a Budget: Create a budget based on your estimates and the overall goal of your promotion. Consider allocating a certain percentage of your overall budget to each option and create a timeline for spending.
                                                                              5. Monitor and Evaluate Results: As your promotion progresses, track the results and evaluate the effectiveness. Make adjustments where necessary to ensure that you get the most out of your budget.
                                                                              • Yonatan
                                                                                How to prepare promotional budget?
                                                                                1 year ago
                                                                                1. Identify Your Goals: Before you begin creating a promotional budget, you need to decide what goals you want to achieve. Are you launching a new product or trying to increase brand awareness? Identifying the goals you want to achieve will help you decide the best type of promotional campaign for your budget.
                                                                                2. Analyze Your Audience: Defining your target audience is the next crucial step in creating a promotional budget. Analyzing who you want to target will help you decide which channels will be most suitable for your marketing message, and how much money you should allocate for each.
                                                                                3. Set a Reasonable Budget: Once you have an idea of your goals and target audience, you can start to decide how much you want to spend. Take into account your available budget and remember to leave some room for unexpected expenses.
                                                                                4. Plan Your Spend: Now is the time to break down your budget into different categories. Consider carefully how much you want to allocate to each channel, such as advertising, events, or influencer marketing.
                                                                                5. Track Your Results: Once your promotional campaign is up and running, it’s important to track the results. This will help you assess the success of the campaign and whether you need to adjust your spend in the future.
                                                                                • veijo paju
                                                                                  What are the methogs for total promotional budget?
                                                                                  1 year ago
                                                                                  1. Fixed Allocation Method: This method involves allocating a fixed budget for each of the promotional activities.
                                                                                  2. Competitive Parity Method: This method involves comparing the company’s promotional budget to that of its competitors and adjusting accordingly.
                                                                                  3. Objective-and-Task Method: This method involves first setting objectives and then allocating a budget to the activities necessary to meet them.
                                                                                  4. Trend Analysis Method: This method involves examining trends in the company’s promotional budget over time and making adjustments accordingly.
                                                                                  5. Flexible-Percentage Method: This method involves allocating a percentage of the sales revenue to promotional activities.
                                                                                  • MACY WATSON
                                                                                    What important factors to consider when making a budget for personal selling?
                                                                                    1 year ago
                                                                                    1. Estimate the costs of advertising and promotional materials.
                                                                                    2. Estimate the expenses of salespeople’s travel, meals, and accommodations.
                                                                                    3. Estimate the cost of any necessary software and other tools needed for sales.
                                                                                    4. Allow for the cost of developing customer databases.
                                                                                    5. Set aside a budget for sales events, trade shows, and other activities.
                                                                                    6. Consider any programs or discounts you will offer customers.
                                                                                    7. Outline the resources you will allocate for training salespeople.
                                                                                    8. Project the total cost of salary, benefits, and commissions for sales personnel.
                                                                                    9. Budget for research and development of new products and services.
                                                                                    10. Set aside a budget for customer service and post-sales follow ups.
                                                                                    • emmie
                                                                                      How does the promotional budget vary in relation to personal selling strategy?
                                                                                      1 year ago
                                                                                    • The promotional budget will vary depending on the chosen personal selling strategy. For example, if a company opts to use face-to-face selling, they may need to allocate a higher promotional budget to cover the cost of travel and potential sales reps' salaries. On the other hand, if they decide to use digital communication and social media, they may need to allocate more funds towards digital advertising and campaigns.
                                                                                      • alannah
                                                                                        What are the factors used in drawing promotional budget?
                                                                                        1 year ago
                                                                                        1. Size of the target audience: The size of the target audience should be taken into account when drawing a promotional budget. The larger the target audience, the larger the budget will need to be.
                                                                                        2. Goals: Determining what objectives need to be achieved with the promotional campaign is important for setting the budget.
                                                                                        3. Resources: Once the goal of the campaign has been established, the budget must be set in such a way that enough resources are available to achieve the desired results.
                                                                                        4. Type of Promotion: Different types of promotions require different amounts of resources and budget, so the type of promotion should be taken into account when drawing a budget.
                                                                                        5. Timing: Depending on when the campaign will be launched, budget considerations may change.
                                                                                        6. Media: Different media formats require different levels of investment.
                                                                                        7. Evaluation: It’s important to set aside resources to evaluate the success of the promotional campaign.
                                                                                        • liisi
                                                                                          Which promotion budget method ignores the effects of promotion on sales?
                                                                                          1 year ago
                                                                                        • Continuation-of-trend method
                                                                                          • Urho
                                                                                            How to prepare promotion budget?
                                                                                            1 year ago
                                                                                            1. Determine your goal: The first step in preparing a promotion budget is to clearly identify the specific goals for your promotional campaign. Your objectives should be clear, measurable, and aligned with your overall business goals.
                                                                                            2. Calculate the cost: The next step is to research and determine the cost associated with each promotional activity. This includes any production costs related to the creation of materials, such as print, video, or radio ads, as well as any advertising or marketing costs associated with getting the message out.
                                                                                            3. Prioritize activities: Once you have a handle on the cost of your promotional activities, you can then prioritize which activities are most important to achieving your goals and allocate a budget to each.
                                                                                            4. Set parameters: When setting a budget, you'll need to clearly define the parameters you wish to adhere to. This includes an overall budget, as well as parameters related to timing (such as the start and end date of the campaign) and geography (which markets or regions you want to reach).
                                                                                            5. Monitor and adjust: Finally, it's important to monitor your campaign to ensure that you remain on budget and adjust your activities as needed. Be sure to track your results and adjust your budget based on the performance of your campaign.
                                                                                            • eeva tervo
                                                                                              What are two ways of setting a promotional budget?
                                                                                              1 year ago
                                                                                              1. Percentage of Sales Method: This method involves allocating a certain percentage of sales revenue to your promotional budget. This percentage should be based on factors such as the size of your business, the competitive landscape, and your promotional goals.
                                                                                              2. Allocation of Profits Method: This method of setting a promotional budget involves allocating a certain percentage or portion of your profits to your promotional activities. This method works best for businesses who want to ensure that their promotional budget remains intact and secure, regardless of changing sales or economic conditions.
                                                                                              • simone
                                                                                                Does heavy sales promotion budget bring long term profit?
                                                                                                1 year ago
                                                                                              • It depends. Heavy sales promotion budgets can bring both short-term and long-term profits but it depends on how the budget is allocated. For instance, if the budget is used to create high quality content and build relationships with customers, it can bring more long-term returns due to increased brand recognition and customer loyalty. On the other hand, heavy discounting and promotions intended to bring in more sales in the short term can lead to profitability in the short-term but could lead to diminishing returns in the long-term.
                                                                                                • Anna
                                                                                                  What are the approach for setting promotion budget?
                                                                                                  1 year ago
                                                                                                  1. Objective and Task Method: This approach involves setting the promotional budget based on clearly defined objectives and tasks. The budget is allocated to each task in accordance with the importance of that task in meeting the objective.
                                                                                                  2. Percentage of Sales Method: This approach involves setting the promotional budget as a percentage of expected sales. The percentage is decided based on the amount of funds available, the level of competition, and the desired ROI.
                                                                                                  3. All-You-Can-Afford Method: This approach allocates funds to the promotional budget based on the amount the company can afford. This approach can be risky if the company does not have an accurate or realistic sense of how much they can actually afford.
                                                                                                  4. Market Share Method: This approach sets the promotional budget based on the current market share of the company compared to its competitors. This helps the company counter the competition’s campaigns in order to maintain or increase its existing market share.
                                                                                                  5. Competitive Parity Method: This approach sets the promotional budget matching the level of the competition. The company’s promotional budget is in line with that of their competitors, ensuring that no one company has an overwhelming advantage.
                                                                                                  • jerry
                                                                                                    How to make promotion budget?
                                                                                                    1 year ago
                                                                                                    1. Determine Your Goals: Before allocating money to your promotion budget, decide what you want to accomplish. For example, are you looking to increase brand recognition, reach a new audience, or drive more sales?
                                                                                                    2. Analyze the Situation: Look at your current budget and identify areas where you can reduce spend and reallocate those funds towards promotion. You should also consider any past promotion campaigns and how effective they were.
                                                                                                    3. Consider Your Options: There are numerous promotion strategies to consider, such as print advertising, online advertising, email marketing, sponsorships, public relations, and so on. Some strategies may require more money than others, so weigh your options carefully.
                                                                                                    4. Set Your Budget: Establish a budget for each promotion strategy you plan to execute. Keep in mind that you can always adjust the budget later if needed.
                                                                                                    5. Track Your Progress: Lastly, monitor your campaigns to ensure that your investments are paying off. If you find that a certain promotion isn’t working, you can easily divert your funds to something else.
                                                                                                    • Gary
                                                                                                      How budget can help for direct marketing and sales promotion ?
                                                                                                      1 year ago
                                                                                                    • Budgeting is an essential tool for direct marketing and sales promotion. It helps ensure that the resources available to a company are used effectively. A budget provides a plan for which marketing and sales tactics will be used and how much money will be allocated to each one. It ensures that the company has enough resources to carry out an effective direct marketing and sales promotion campaign. In addition, budgeting helps the company track performance, set goals, and measure return on investment. It also provides a basis for evaluating the effectiveness of different tactics and determining which ones to continue or discontinue.
                                                                                                      • marisa
                                                                                                        How is promotional budget prepared in the store?
                                                                                                        1 year ago
                                                                                                      • The promotional budget for a store is prepared by assessing the needs and goals of the business. This involves looking at factors such as the store's target audience, the types of promotions that have been successful in the past, and the store's current budget. The budget is then typically broken down into two parts—the amount of money that will be allocated to each promotion and the overall budget for the entire promotional campaign. Once the budget is determined, the store can begin to plan out various promotional activities, such as giveaways, special sales, and digital campaigns.
                                                                                                        • tapani
                                                                                                          How much % of total promotion spending is on advertising today?
                                                                                                          1 year ago
                                                                                                        • It depends on the specific company, as each company has its own unique breakdown of promotion spending and advertising budget.
                                                                                                          • aira
                                                                                                            How does a company decide on its promotion budget?
                                                                                                            1 year ago
                                                                                                          • A company typically decides on its promotion budget based on its overall marketing budget, the size of its target audience, the desired reach of the promotion, the desired frequency of promotion, and the cost of the promotional channels being utilized. Additionally, the company considers the return on investment (ROI) from previous promotions to determine the size of its promotion budget.
                                                                                                            • temesgen filmon
                                                                                                              What are the factors should be considered when setting thev total promotion budget and mix?
                                                                                                              1 year ago
                                                                                                              1. Market Share: The total promotion budget should be set based on the market share of the business. Businesses with larger market shares should allocate a larger budget to promotions.
                                                                                                              2. Brand Recognition: Promotions should be tailored to enhance brand recognition and reach new customers.
                                                                                                              3. Rate of Return: The budget should also be set based on the expected rate of return on the promotion.
                                                                                                              4. Brand Equity: Promotions should be designed to build brand equity and ensure long-term customer loyalty.
                                                                                                              5. Promotion Mix: The budget should be divided into various promotion elements such as digital marketing, television, radio, direct mail, and print media.
                                                                                                              6. Target Market: The budget should be set based on the target market and the promotional activities that have the best chance of reaching them.
                                                                                                              7. Geographic Considerations: The geographic reach of the promotions should also be taken into account when setting the budget.
                                                                                                              8. Objectives: The budget should be set based on the objectives of the promotion, such as increasing sales, generating leads, or raising brand awareness.
                                                                                                              9. Competition: The budget should also take into account the activities of the competition.
                                                                                                              10. Cost-Effectiveness: The budget should be set with an eye towards cost-effectiveness and maximizing the return on investment.
                                                                                                              • JULIANE
                                                                                                                What are the benefits of high promotion budget?
                                                                                                                1 year ago
                                                                                                              • The main benefits of a high promotional budget are increased brand awareness, more potential customers, increased sales, improved customer loyalty, and more word-of-mouth referrals. A high promotional budget allows businesses to leverage marketing channels such as television, radio, print, digital, and social media to reach the right people at the right moments. This, in turn, leads to higher visibility and more conversions. Additionally, since promotional efforts are conducted on an ongoing basis, businesses are able to build a strong reputation and gain trust from potential customers. Finally, more potential customers means more opportunities to expand the customer base, leading to long-term growth.
                                                                                                                • hugo
                                                                                                                  What factors should be considered when setting the total promotion budget and mix?
                                                                                                                  1 year ago
                                                                                                                  1. Market conditions and industry trends: Identifying current market conditions and industry trends can help inform your budget decisions. Understanding the competitive landscape, the demographic of the target market, and any other relevant factors can help you determine how much money to allocate for promotional activities.
                                                                                                                  2. Goals and objectives: Establishing specific goals and objectives for the promotional campaign will help guide your budget decisions. Consider the desired outcome, the desired return on investment, and any other intended results in order to determine the best allocation of resources.
                                                                                                                  3. Channel mix: Choosing the right mix of channels is essential to optimizing your promotional budget. Evaluate the cost effectiveness of different channels and consider how they align with your strategic objectives.
                                                                                                                  4. Timing: Timing is another important factor to consider when setting the promotion budget and mix. Consider when promotional activities should be launched to maximize their impact and effectiveness.
                                                                                                                  5. Audience: Understanding the target audience is essential to making effective budget decisions. Take into account the demographic, psychographics, and purchasing habits of the target market to ensure the most effective promotion mix.
                                                                                                                  • Lucas Hertzog
                                                                                                                    How to draw a budget for promotional tools?
                                                                                                                    1 year ago
                                                                                                                    1. Identify the promotional tools that you intend to use. This could include print, television or radio advertisements, direct mail, email campaigns, social media marketing, and trade shows.
                                                                                                                    2. Research the cost for each promotional tool. Consider both the one-time setup costs as well as the ongoing costs for each.
                                                                                                                    3. Calculate the total cost for each promotional tool. Estimate the cost for any potential differences in time, such as increased costs for running an advertisement during prime time hours.
                                                                                                                    4. Set a budget for each promotional tool. Consider other factors, such as your expected return on investment (ROI).
                                                                                                                    5. Develop an overall budget that allocates funds to each promotional tool. This will help you keep track of how much you are spending on each activity and ensure that your efforts are within your budgetary limits.
                                                                                                                    6. Make adjustments to your budget as needed. Monitor the results of each promotional tool to assess its effectiveness and refine your budget accordingly.
                                                                                                                    • stephanie
                                                                                                                      How does the company determine its total promotional budget?
                                                                                                                      1 year ago
                                                                                                                    • The company typically determines its total promotional budget based on its overall marketing goals, available resources, projected return on investment, and past experience. They may also consider competitor budgets and industry standards. The budget typically includes the cost associated with each promotional activity, such as media campaigns, public relations efforts, trade show participation, and more.
                                                                                                                      • Samlad
                                                                                                                        How to decide on promotion budget?
                                                                                                                        1 year ago
                                                                                                                      • The amount allocated for a promotion budget should be determined by a number of factors, including the size of the target audience, the objectives of the campaign, and the type of promotion desired. The budget should also be based on an analysis of the potential return on investment (ROI). To calculate ROI, professionals typically look at the cost of the promotion versus the estimated sales and profits generated. Analyzing the current market and competitors can also help inform the decision-making process. Understanding the promotions other companies are running, as well as their success rates, can help to ensure that the proposed budget is appropriate for the desired results. In addition, it is important to consider the cost of any necessary personnel, such as marketing staff, advertising services, or third-party vendors. Once the budget has been determined, it should be monitored to ensure that it is being used efficiently and effectively.
                                                                                                                        • Jack
                                                                                                                          What is the setting of the total promotion budget and mix?
                                                                                                                          1 year ago
                                                                                                                        • The total promotion budget and mix will depend on the marketing objectives and strategies of the company. Factors such as the target market, sales goals, competition, and economic climate will all influence the size and type of promotions that a company chooses. The budget and mix should be tailored to meet the specific needs of the company, and should focus on creating a unified promotional plan that is in line with overall company goals.
                                                                                                                          • maria pia
                                                                                                                            How to set the total promotion budget?
                                                                                                                            1 year ago
                                                                                                                          • The total promotion budget should be determined based on the size of the company, the expected return on investment from the promotion, and the amount of money available to spend. The budget should also take into account the target audience of the promotion, the type of promotion being conducted, and the desired outcome. Additionally, any potential external factors that could affect the success of the promotion need to be taken into account. Finally, the budget should be set to accommodate any necessary changes or adjustments that may be necessary as the promotion evolves.
                                                                                                                            • suvi
                                                                                                                              Why budgeting for promotion?
                                                                                                                              1 year ago
                                                                                                                            • Budgeting for promotion is important because it allows businesses to track their marketing spending, ensure their promotional campaigns are effective and cost-efficient, and help them reach their desired audience. By budgeting for promotion, businesses can prevent overspending and ensure that their money is being used in the most effective way possible. Additionally, it allows them to measure their return on investment (ROI) and make informed decisions about future marketing and promotional activities.
                                                                                                                              • MELISSA
                                                                                                                                Why company budget focus on sales promotion?
                                                                                                                                1 year ago
                                                                                                                              • Company budgets typically focus on sales promotion because it is a key area for driving customer sales and loyalty. Sales promotions are a great way to incentivize customers to make purchasing decisions, encourage repeat purchases, and create brand loyalty. Sales promotions also give companies the ability to create short-term increases in sales and revenue, which can help them reach their short-term and long-term financial goals.
                                                                                                                                • laila
                                                                                                                                  Why total promotional budget is hardest marketing decision?
                                                                                                                                  1 year ago
                                                                                                                                • The total promotional budget is one of the hardest marketing decisions because it requires careful consideration of many factors such as the availability of resources, the intended target market, the competition in the market, the expected ROI, and the size of the business. It is important to determine the right balance of financial investment to achieve the desired results. Additionally, promotions must be tailored to the different needs of various target markets, which can be difficult to accomplish with limited resources. As such, marketing executives need to weigh all of the factors when making their decision and ensure that their total promotional budget is optimized for success.
                                                                                                                                  • Awet
                                                                                                                                    How a company made a promotion budget ?
                                                                                                                                    1 year ago
                                                                                                                                    1. Identify Goals and Priorities: Establish what the company wishes to achieve with its promotion budget. Identify key objectives and determine the desired return on investment (ROI).
                                                                                                                                    2. Analyze Data: Analyze previous promotional budgets and campaigns and collect relevant data on ROI.
                                                                                                                                    3. Determine Budget Allocation: Assess the amount of money needed for each campaign in order to achieve the desired ROI. Set realistic and achievable goals.
                                                                                                                                    4. Source Vendors: Find vendors and services that can help execute the campaigns within the set budget.
                                                                                                                                    5. Monitor and Adjust: Monitor results during and after campaigns and readjust the budget accordingly. Use analytics and feedback to help inform budget decisions.
                                                                                                                                    • Heike Kuester
                                                                                                                                      How much "retailer" "promotion" "budget" "percent"?
                                                                                                                                      1 year ago
                                                                                                                                    • There is no one-size-fits-all answer for this question as retailer promotion budgets vary by size, industry, and other factors. Generally, retailers will spend anywhere from 1-10% of their total sales on promotional activities.
                                                                                                                                      • Stella
                                                                                                                                        Which companies use the affordable method for promotions?
                                                                                                                                        1 year ago
                                                                                                                                        1. Amazon
                                                                                                                                        2. Groupon
                                                                                                                                        3. eBay
                                                                                                                                        4. Walmart
                                                                                                                                        5. Lyft
                                                                                                                                        6. Zappos
                                                                                                                                        7. T-Mobile
                                                                                                                                        8. Skype
                                                                                                                                        9. Coca-Cola
                                                                                                                                        10. Starbucks