Counting Money : Budget Planning

A subset of Marketing Budget

Advertising budget comes after Marketing budget

What is the launch plan ?

Product category The kind of product you plan to launch will also

influence the budget plans. For e.g. : FMCG category may need higher funds A B2B business may not

Kind of planning activity Launching a new product Re-launching a existing brand Extending the current product to new territory or

market

It is assumed that the MM has worked out all hisdetails on the product launch logistics

Get your marketing objective right Kind of market share you are planning to garner Must be quantifiable and measurable Define the period for attaining the market share

Know your target groups A complete profile Where and How can I reach him ? What media is he likely to be exposed Therefore what are the resources How do I maximize my reach

Geographical location and markets Budget will also depend on the type of markets

you plan to enter Competitive market – Higher spends to get

noticed and create an impact Budgets depend on media tools available in

those markets If its test market, market selection is crucial

How do you want to attack the market TV - prime medium BTL activity Incentives and Promotions Finally all revolves around your sales numbers

Creative can determine budget Strong idea and effective campaign - < money Impact V/s reach Centre Shock

Creative plays a key on how much to spend ?

Methods applied Affordable method Competitive spends method Historical spending method Percentage to Sales Objective task method Hunch or Gut feel

Affordable method Inaccurate Small Business apply this method Risky proposition

Competitive spends method Monitor the competitors spending How is the category spending Examine the trend of each of completion Accurate. Get to know the starting point

Historical method Affordable proposition for another brand History will tell the trend and growth and pattern Strong logic of earlier history Provide inflation Ignores changing market environment New product ?

% to sales method Commonly applied formulae High percentage for new product launch Varies from product to product 10 to 12 % on new products Initial spends high Support maintenance 6%

Objective task method Determine the no:of people to reach Building awareness set one budget Trials ( another level) Repeat Purchase ( Scale down) Cost of media and available media vehicle

Hunch or Gut feel Go by the pulse of the market Innovative product. Take a chance Me too… risky

Cash flow Work out the cash flow Negotiate competitive rates with media Define a clear credit policy Track your media plan. Pay your media partners n time