Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter Six Budgets - Coggle Diagram
Chapter Six
Budgets
How communications budget affect sales
Communication efforts influence sales; it aids in assessing the budget size. Sales response models illustrate this relationship.
Factors influencing sales: Prices, products line decisions and distribution strategy
Communication efforts may have both an immediate short-term and a long-term effect on sales and market share
communications budgeting methods
Marginal Analysis: Invest resources as long as extra expenses are compensated by higher extra returns
Inertia Budgeting Method: keep budgets constant year on year
Arbitrary budg. method is frequently used in smaller companies and business-to-business contexts.
Offensive strategy vs. Defensive Strategy. Brands with a higher SOM than SOV are called profit-taking brands. Brands with the opposite relation are invst. brands
Factors influencing budget
Crisis situation
Planning Gap, Contingencies
Organisational Characteristics, Economies of scale
Mrk. Share Obj.
Mrkt Potential
Mrkt. Size
Unexpected opportunities or threats in the market might change strategic plans and comm. budgets.
Contingency budgets: a reserve budget provided for financing quick management actions as necessary.
Budgeting for new brands or projects
Primary budgeting method for new product: objective-and-task method
Examine the industry advertising to sales ratio for the mrkt in which a brand is to be launched
Doubling the A/S ratio is considered a safe guideline for the first year of introduction
Quality of advertising depends on the creative work of advertising agencies and the media planning job of media agencies.