What Is A Marketing Budget

What Is A Marketing Budget?
Written By:
Sherry Ryan, Production Manager

Fall is gone. Winter is here. Is your marketing budget ready?
Developing and allocating a marketing budget does not have to be overwhelming. With some thought, research and analysis you can develop a marketing budget. Historically, marketing budgets have been set by:

What's available after all other budgets are set
Using a percentage of gross sales
Seeing what your competition spent
Looking at what was spent this year and adding a little or more recently, subtracting a lot. But what these methods lack is a program that utilizes your companies long-range objectives and develops strategies to attain these objectives.

Developing budgets based on desired results puts a dollar amount on each project. The total of all projects would then become the marketing budget. This process can be divided into 4 steps.

1. Develop achievable objectives. These are goals to be attained by the marketing strategy and action steps.

Example: Increase number of customers purchasing the new AB Widgets in one year

2. Establish the strategy for obtaining this objective. The strategy will state how you plan on attaining the objectives.

Example: To show the benefits of the new Widgets by promoting the ease of installation.

3. Implement action steps with dates. Here is where you determine how you will deliver your message to your audience. Will you use magazines and direct mail as in print advertising? Or use broadcast via television and radio?

Examples:
Select local media for ad placement beginning January 1
Develop quarterly Enewsletter to start March 2004
Start referral program by March 2004

4. Set a budget and tracking for each step based on a 12 month program. The budget will be based on the action steps necessary to reach your target market.

Examples:
Media Placement - $100,000
New Ad development - $10,000
Enewsletter - $5,000
Sales Referral Incentive Program - $7500
Public Relations - PR, Editor Meetings - $10,000

Barbeau Hutchings Advertising provides marketing budget planning for all our clients. We meet with the appropriate individuals to review and develop the objectives for specific product lines. Our agency then prepares a plan for achieving these objectives. Using our knowledge of your markets, we create strategies, action steps and set budgets tailored to your company. The plan may incorporate advertisements and media placement, direct mail, electronic newsletters, collateral materials, public relations, trade shows, seminars along with promotional items. Some plans will incorporate all areas while some may be limited to a public relations plan.You can call us at any time and we will be glad to help you establish your budget. We suggest that even if there is limited funds for marketing, you develop a marketing plan each year. Budgets are the road maps that help you stay on target throughout the year.