When you’re drawing up your business’s marketing budget, there are a couple of must-haves that you’ll need for your calculations.
By Craig Falck for Africa Report
Photograph: © Wrangler | Dreamstime.com
A marketing budget is a structured plan on how you intend spending money that has been allocated to the marketing and promotion of your business enterprise. The amount given to spend on this key business sector will be predetermined at meetings beforehand; now it’s up to the marketing department to divide the money up into various sections.
The most important step in any marketing budget is to determine what marketing methods will be used. There are so many to choose from… television advertising, radio advertising, print media advertising, digital advertising, promotions, giveaways… the list is endless. If you’re a small company, the last thing that you will be looking at is expensive mediums such as television and radio advertising, so those fall away straight off the bat. For larger, nationwide enterprises, they will make use of these sorts of mediums as they offer customers coverage around the country. These would be right at the top as they cost the most. Now continue making your list of marketing tools that you plan on using…
Once your list is complete, you need to add the fees for the marketing if the function is being outsourced. If you have an in-house marketing team, you’re lucky and won’t have to pay them to do their job. If you don’t and you have to use an outside source, you’re going to be paying quite a lot in fees, so it’s important to factor these in early as you can’t cut corners – if they charge R1 million for the year, that’s what they charge.
Once you’ve made your list, you need to decide how much each medium or section will be allocated, using their percentage of the marketing campaign as well as average costs to help you. This will give you a good idea of where the most money is being spent, where you can cut costs by sourcing a cheaper supplier or lowering the tool’s importance, and increase a tool’s importance or the amount allocated to it. If you find that one method has done far better than expected in the year before, make it more important and allocate more of the budget towards its development and implementation in the marketing plan. It’s clear that consumers responded to it, so take advantage of that.
A marketing budget will show you how you’re spending the money that you’ve been given for marketing your enterprise. You can break it down to see exactly where the money is going, and this will help you to better utilise your marketing budget as you can adapt your plans and allocate the necessary funds to the right sections to get the best results.
