Advertising and brand management concept is BUDGET-Planing MBA

Budgeting is the activity of managing advertising. This is because without having proper planning pertaining advertising the firm is unable to make the level of investment on advertising .So, therefore advertising budget is a statement of expenditure on various advertising activities and of income generating from advertising in the same period.
Definition:
                “Budget is a plan for the company’s future advertising. It can make a useful contribution to a profitable operation
                                                                                Or
budget is not an exception to a general budget. It is a functional budget setting the goals & objective in terms of income and expenditure on advertising during a specific period.”
Factors influencing advertising budget allocation:

Marketing mix of company
Objectives to be attained
Sales forecast
Affordability
Type of the product
Quality as a campaign
Level of competition
Product life cycle
Coverage expectations ( no. of persons , area)
Age of the company
Size of the company
Product clause/cost
Competitive activities
Funds available
Preventing economic conditions
Approach towards advertising
  
Budgetary process:

Setting  objectives
Determining tasks to the performed to achieve objectives
Preparing adverting budget
Presentation & approval of budget
Execution & allocation or distribution of budget
Monitoring & control

Objectives:
      Increase in sales
      Introduction of new product
      Supporting ales force
      Improving dealer relation
      Building up good will
      Building up of brand preference
      Counting competition
      Dispelling the misunderstanding
      Convince the customer
Methods of formulating advertising budget:
      Percentage of sales method
      Unit of sales method
      Competitive parity method
      Objective or task
      Arbitrary allocation
      Affordable method
      Judgment method
      Increase over last year budget method
      Return on investment
Percentage of sales methods:
                Under this advertising budget I arrived by multiplying the value of post year sales or projected sales for the budget period with a predetermined percentage
                Advertising budget amount        past year sales or anticipated sales %   pre determined %
Unit of sales method:
                Under this method a specific  amount of rupees is allocated to the advertising  budget for each car as an advertising exp then the sum of advertising amount = 1000 ×  1000   =  1000000 /-
Competitive parity method:
                It I a traditional approach in which advertisers budget depends on how much the other competitors of similar product are going to spend on  activities.  It involves the collection of relevant data about competitors which requires a strong sales force to acquire the adequate data.
Objective or task method:
                The most desirable method of setting advertising budget is this method. It’s a goal oriented bid on identifying the tasks and the cost incurred for each and every activity.
                                                Establish advertising objective

                                                Determine specific tasks and activities

                                                Estimate cost associated with each and every activity

                                                Preparation of budget
Affordable method:
                Here the advertising budget os established as a pre-determined share of profit or financial resources.
Judgment method:
                In this advertising budget is decided by arbitrary thinking of same experienced managers of the company on the basis of their judgment

Return on investment method
It is entirely different from all other methods. It considers advertising expenditure as an investment rather than at routine revenue expenditure because it I also expected to give certain returns.   builds up an intangible asset like goodwill branding equity which has market value and can be sold of any stage.
                Advertising expenditure is one year generates sales for the future years also this method is a long run benefit able method.
Experimental approach:
                It is a statistical approach based on mathematical models. Here marketing manager best and experiments in one or more territorial s based on increased profit over the cost incurred from amount of advertising budget to the whole market the major drawback of this approach is very expensive and time taken.
Distribution of advertising budget:
                After the budget has been decided upon the next logical step I to distribute it on various products or media markets [segments & geographical tutorials etc]. the budget should have flexibility enough to accommodate the sudden changes excusing in the market competitive structure etc…

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