Posted in Marketing and Strategy Terms, Total Reads: 2923
Definition: Marketing Budget
A Marketing Budget is Marketing Plan in terms of costs. Marketing Budget is an estimated amount of cost that will be required to promote products or services. Marketing Budget is generally part of a marketing plan and crucial part of the marketing process. It includes all promotional costs like advertising and public relations, employing staff, office costs and other expenses included for marketing. This budget is created to estimate the costs that are necessary for growing a business.
Most of the businesses have tough time in predicting promotional costs. Generally high budgets are kept when new products or services are launched in the market. Percentage method is used for predicting budget, i.e. budget is set according to percentage of sales or profit. It is critical resource for entire company because failure to properly estimating cost can lead to various problems.
Some statistics have stated that 85% of the small to mid size companies just operated on budget without any specific marketing plan. That’s why so many marketers are focused on tactically preparing marketing budget. Budgeting is a difficult process and many companies rely on their last year’s spend as a base in estimating the budget. Marketers also use ROI to prepare the appropriate budget.
Some research called advertising or marketing communications research is done prior estimating budget like-
• Industry and Market Research
• Competitor Analysis
• Marketing Audit
• Internal Marketing performance records
Knowledge of industry and market must be taken into account before developing budget. Internal Records are useful in estimating cost by calculating ROI of previous spends. So some research is quite helpful in predicting marketing budget.