Before talking about the requirements that must be fulfilled for making a successful marketing budget, one should have a good know how about the significance of marketing in any business venture. Whenever a business is expanding by increasing the number of products it is offering or by increasing its market share, it has to resort to marketing to let its consumers know about its moves. Marketing is mandatory for any business’s profitability and growth. People are always waiting for the new product but they won’t be able to know about it unless it is advertised in an effective manner. There are a number of ways to reach out to customers, but to decide on the most significant and effective depends upon the characteristics of the target market. After making a decision about the type of marketing that should be used to reach the customers, next step involves allocation of budget for this purpose. There are many things that need to be considered before making a marketing budget. Some are:
- Size of the business
- Growth stage
- Prospected future sales
The core question that needs to be answered while making a marketing budget is on what basis it should be prepared. Usually the marketing budget is calculated on the basis of future or projected sales, current sale or past sales. Sometimes marketing budget is prepared on the basis of seasonal sales that happen in the particular time of the year. So such budgets are adjusted according to the sales happening in that period of the year. After determining the basis on which budget has to be prepared, next question is about the percentage that will be allocated. The allocation of percentage is also dependent on the size of business and its revenues. The larger the business, broader will be its customer base and heavy budget will need to be allocated to reach the customers at various localities.
Here is preview of a Free Sample Quarterly Marketing Budget Template created using MS Excel,
Here is download link for this Quarterly Marketing Budget Template,
Preparation of marketing budget is a challenge in itself because it suggests what percentage of revenues will be allocated to this activity. Usually a marketing budget is prepared on annual basis but it should not be inflexible and rigid that cannot be tailored to the different situations throughout the year. Some companies prepare marketing budget quarterly because of heavy pressure by the consumers and other pressure groups. Although preparation of a marketing budget on quarterly basis is hectic as well as expensive but the costs should be compared with the revenues that this activity is bringing in for the business. By comparing the expenses with the number of customers gained and the business they have brought, a good analysis can be done as to the effectiveness of such plans.
Once the marketing budget has been designed, businesses should also evaluate the results of such plans. Evaluation leads to more effective and well planned strategy in future. The flaws and loopholes in the present budget can be addressed in the future to come up with a more enduring budget plan.