assignment 8
zoewang
BudgetingthePlan-FinalRevision.pptxBudgeting Your Campaign
Determining how much you will have to spend and what you will spend it on
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Methods of Budget Generation
IMC Version
Determines the value of the customer & prospect to make intelligent marcom investments.
Legacy Version
Inherit a budget from the year previous with either a percentage addition or subtraction.
Fixed Amount Version
A predetermined amount is proscribed by a higher authority.
Source: Shultz & Schultz, “IMC: The Next Generation”
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MARCOM _ marketing communications
Assembling Budget Components
With the target audience firmly in mind, determine which communications vehicles will reach them efficiently:
Advertising
Direct Mail
Out-of-Home
Sales Promotion
Financial Incentives
Public Relations
Production
Agency fees
Endorsement fees
Slotting Allowances
Co-Op/Retailer fees
Miscellaneous
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Traditional Budgeting ‘Rules of Thumb’
Advertising/media buying generally accounts for between 50% - 75% of a total budget allowance
Advertising production & agency fees are usually included in total market spend
Allocation for Public Relations usually accounts for between 10% - 15% of total budget allowance
All other communication vehicles must fit in the remainder of the budget allocation
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Exception to the Budgeting Rules
A great idea that resonates with your target audience justifies throwing the budgeting ‘Rules of Thumb’ out the window!
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Madagascar!
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Madagascar!
1.5 million metro
cards
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Determining your marketing budget
As a general rule of thumb, marketing budgets can range from 1% to 5% of sales
Let’s use Baltimore market as an example:
Retail Unit Cost
$23.49
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Determining your marketing budget
Estimated sales
| Total Universe | Estimated Buyers | Purchase Frequency | Total Sales Revenues |
| Boys: 38,000 | 19,000 | 4X | $1,785,240 |
| Mothers: 128,000 | 64,000 | 4X | $6,013,440 |
| Total | 83,000 | 4X | $7,798,680 |
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Determining your marketing budget
Assumption: AcneFree budgets marketing costs at 5% of sales:
$7,798,680 X 5% = $389,934 Annual Budget
For the purpose of this exercise, we will not include agency fees, cost-of-goods, and other expenses
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Deciding on your objectives
What is it that you want to achieve?
Business Objective: SALES (83,000 units at full price)
Communications Objective: Awareness/Consideration
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Options for Budget Planning
50% or More Online
The majority of your investment must be in the digital world. This number includes your online ads (Google pay per click, Facebook, syndication sites, display), as well as all development costs related to your website and online sales program (servers, maintenance, upgrades, CRM) and all website content (photos, video, renderings, site maps, written descriptions).
A good place to begin within this 50% is to break it into these percentages:
If 50% of your marketing budget is $100,000:
• 50% toward advertising ($50,000)
• 25% toward web development/tools/CRM ($25,000)
• 25% toward content ($25,000)
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Budget Planning
12% to 20% Signage
Your signs are a direct reflection of your brand: Spend enough to keep them looking good. Consider your prospects behavior; driving, mass transportation and determine if this has value accordingly.
5% to 8% Events
Consider being at high trafficked events that relate to your consumer; farmer’s markets, concerts, art shows, sporting events and determine how to optimize attention and interest
2% to 6% Collateral
Your sales prospect may show temporary interest in reviewing information on paper, but they’d much rather have it instantly accessible and accurate on your website.
16%—Everything Else
This can go toward market research, direct mail, agency support—any number of items. This could be invested in is local radio or TV advertising if you have a large budget, $500 - $1 million
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Budget Planning
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Digital Budget
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Marketing on a Limited Budget
8 Powerful Ways to Market Your Business on a Limited Budget
Go guerilla. Guerilla marketing looks to leverage creativity, imagination and originality in place of a big budget.
Socialize on social media. ...
Create valuable content. ...
Contests and giveaways. ...
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Marketing on a Limited Budget
8 Powerful Ways to Market Your Business on a Limited Budget
Piggyback your partners. ...
Leverage scalable advertising channels. ...
Milk the media. ...
Help yourself by helping others.
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Budget
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The plan
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The plan
9.6%
58%
23%
9%
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