BUDGET

A budget is generally a list of all planned expenses and revenues. It is a plan for saving and spending. In other terms, a budget is an organizational plan stated in monetary terms.

The purpose of budgeting is to:

Provide a forecast of revenues and expenditures

Enable the actual financial operation of the business to be

measured against the forecast.+

KAILASH

ADVERTISING BUDGET
Advertising budget is primarily is an estimate of future advertising expenditure that will be used to implement managerial decisions to maintain profit results. Blue print of projected advertising plan of action.

Specific time Minimize the waste and maximize the utility of allocated money for various promotional activities.

KAILASH

WHY ADVERTISING BUDGET ?

Many companies are spending a lot of money on sales promotion than on media advertising. The budget allocation depends on number of factors including:

the campaign
the market competitive situation, and the brands stage in its life cycle.
KAILASH 3

FACTORS INFLUENCING THE ADVERTISING BUDGET ALLOCATION

MARKETING MIX OF THE COMPANY THE SALES FORECAST AFFORDABILITY THE PRODUCT LIFE CYCYLE QUALITY OF CAMPAIGN LEVEL OF COMPETITION THE BUDGETING CYCLE CONTINGENCY PLANNING TYPE OF PRODUCT
JYOTIKA 4

ADVERTISING BUDGETING APPROACHES

THE PERCENTAGE OF SALES METHOD
Based on previous year sales Estimated sales of current year Or, combination of two

UNIT OF SALES METHOD

--Set a fixed sum for each unit of product to be sold -- Useful in fields where the amount of product available is limited by outside factors --Based on what experience tells rather than an overall percentage of your gross sales.

JYOTIKA

 COMPETITIVE PARITY METHOD -- Establishes budget amount by matching the percentage sales expenditure of the competitors. -- It leads to stability at the market place by reducing marketing warfare. -- This minimizes unusual or unrealistic advertising expenses. OBJECTIVE TASK METHOD --Begin by setting specific marketing objectives and deciding on the tasks required to meet those objectives. ARBITRARY METHOD -- Budget is determined by manager on the basis of judgment, intuition or with out any rule. -- complete ignorance of advertising purpose.
KALYANI 6

 THE AFFORDABLE METHOD -- Known as all you can afford method. --This approach is common among small firms.
SALES RESPONSE AND DECAY METHOD
Based on assumption that the shape of advertising is known Determine the point of optimization point of sales ratio

Measure the incremental change in revenue at a given time relative to changes in advertising budget.

EXPERIMENTAL METHOD
Marketer conduct test and experiments in selected areas. Different advertising expenditure are for different markets.

KALYANI

 COMMUNICATION STAGE MODEL Step 1- Establish market share goal Step 2: Determine the market share Step 3: Determine the target market Step 4:Determine the % of market Step 5: Determine the GRP Step 6: Set Budget
PAY OUT PLANNING METHOD
Determine how much to spend Depends on the accuracy of the sales forecast over time. May not always be correct but used by mangers for guidance

KAVITA

Budgetary Process
Step 1 Preparation of budget Step 2 Presentation and approval of budget Step 3 Execution of the Budget

Step 4
Control of budget
KUNTAL 9

Budget Means planning the future expense.

so plan(Budget) your future and live

frugally(if it gives good to you)

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