Deciding on the advertising budget: There are 5 specific factors to consider when setting the advertising budget 1. Push and Pull Strategies: The purpose of promotion is to motivate and persuade not only the ultimate consumers, but also to the intermediaries who are available involved in making available goods finally to consumers. Stage in the product life cycle: new products typically receive large advertising budgets to build awareness and to gain consumers trial. You could use a percentage of projected gross sales, percentage of past gross sales or per unit sales. Be original and creative with your messages.
Advertisers have to keep aside contingency funds that can be used to tackle unexpected market challenges. Thus an appeal or advertising appeal is any statement designed to motivate a person to action. How much would be the apportionment of the total advertisement expenses on each individual product or product group? The size of the marketing budget each year will be influenced by factors such as: The financial position of the business This is a fundamental issue. Take it this way like a company that is surrounded by competitors all the way round often needs to set its budget higher than those with a lower number of competitors. Maturity stage: At this stage advertisements must create differentiations in brand positioning through different perspectives such as benefits, applications, price etc. The marketing manager will have to decide whether to use push or pull strategy. While some advertisers may offer discounting, others will increase their prices if they feel their readership or viewership may peak during specific times or events.
In which many elements are involved including brand policy, pricing, distribution, sales representatives and advertising etc. In a nut-shell, the advertiser, to get the best results for the money spent and the efforts put in, should consider all the above nine factors that govern selection of a medium or media and media vehicle. Why do companies select different types of media for what may be perceived as similar messages? You can change the frequency of your ads but if you want your business to grow rapidly, advertise constantly. Advertising objectives are important for decision making and to have a point of reference or standard against which the results can be measured. Most newspapers are highly competitive cluttered media vehicles. Thus here it is the customer to wholesaler who is pulling the cord. Type of Message or Selling Appeal: The remarkable thing about advertising is that it can prompt people to buy a specific advertised product.
It is essential for the advertiser to identify the perspective customers as accurately as possible in order to select a medium that will carry an effective message to them most economically. Factors Influencing the Media Selection: The problem of selection of the best medium or media for a particular advertiser will vary greatly, depending on the particular situation, circumstances and different other factors in which a person is conducting individual business. Thus, there is no point in advertising a product if it is not available in these outlets where he normally buys. A simple, catchy and emotionally appealing advertising message is likely to land you customers. But if he still finds that his budget does not permit even that type of ad in the magazine, then the advertiser must turn to a medium in which he can get sufficient participation or a sufficient schedule of insertions to achieve an effective programme. And the marketing mix is referred to making plans for marketing a product.
Article shared by There is no perfect promotion mix. Profit margins: There is a consensus that when the profit margin is high so the advertising budget has to be high. To whom should we allocate the monies? Other non-promotional expenses include training, attending industry functions and trade shows and hiring consultants as needed to help out where your staff may not have the skills. A written advertising message is likely to get ignored if you do not show your customers what you are marketing. But remember, these days, your plan needs to do more than just align objectives to a budget handed down from management. Advertisers prefer the media vehicles with largest coverage for the amount spent. Regulations can affect the type of promotion used.
An Advertising Budget refers to the amount of money allocated towards advertising of a brand or product. The central premise of the advertising appeal or message is its promise of a benefit the product will render to the buyer. Interference includes any distractions receivers and senders face during the transmission of a message. The author is a Forbes contributor. Advertising is also important when a brand can offer unique physical benefits or features. Are certain areas too risky for investment? So the availability of funds must be considered in planning-and selection of media. Types of Media A print advertisement in a local publication may cost less than running an online advertisement with a popular, credible website.
If the objective is to make mass awareness, the firm may go in for advertising, sales promotion and public relation. The advertising message or appeal construction demands special skill and careful attention in the selection of media. The vehicles like radio, television, news-papers, magazines and cinema are of this kind; on the other hand, direct advertising and outdoor advertising are known for local coverage. Keep a close eye on international news and forecasts. Advertising Budget is the amount of money which can be or has to be spent on advertising of the product to promote it, reach the target consumers and make the sales chart go on the upper side and give reasonable profits to the company. The advertising budget decision is not a one-time responsibility because every year the firms have to formulate new objectives keeping pace with ever dynamic and changing market situations.
In this case the advertisers need not spend on buying media, time and space. In case of Organisational or business buyers, ads published in specialised trade publications and personal selling are more important; whereas, consumers are swayed by glossy advertisements endorsed by some celebrities. Advertising budgets are often thought of as huge expenditures with vague returns. It is one that involves inter vehicle and medium cost analysis and comparison. Thus, news-papers, television, radio and outdoor media are known for highest frequency while, magazine, screen, display and direct advertising the lowest.
The company prefers to use retailers to push the brand. Outdoor medium is considered the least credible. In this way, your brand will be able to set up its feet firmly in the market. That is, if the product has a certain personality or image, certain media may be appropriate to maintain or develop that image; whereas other media may tend to diminish or distort this personality or image. Regulations, competitors, and environmental factors.
New product introductions: Almost all believe that the introduction of a new product takes a great deal of additional money to break into the market. Barron, Advertising Media Planning pp. Advertising frequency: the number of repetitions that need to be made to put across the brand message to consumers has an important impact on the advertising budget. Type of product to be marketed: Advertising budget will be more for consumer items like textiles, cosmetics, soaps etc. The marketing budget sets out how much money is allocated to the marketing function and how it is intended to spend it. Retailers in turn will ask the wholesalers and the wholesalers to manufacturer.