Methods to setting the total promotion budget
- 1. Name •Azizul Kader Sadee ID •171-016-0-415
- 3. Affordability Method This is, in real sense, not a method to set advertising budget. The method is based on the company’s capacity to spend. It is based on the notion that a company should spend on advertising as per its capacity. Company with a sound financial position spends more on advertising and vice versa.
- 4. Percentage of Sales Method It is a commonly used method to set advertising budget. In this method, the amount for advertising is decided on the basis of sales. Advertising budget is specific per cent of sales. The sales may be current, or anticipated. Sometimes, the past sales are also used as the base for deciding on ad budget
- 5. Competitive Parity Method Competition is one of the powerful factors affecting marketing performance. This method considers the competitors’ advertising activities and costs for setting advertising budget. The advertising budget is fixed on the basis of advertising strategy adopted by the competitors
- 6. Objective and Task Method This is the most appropriate ad budget method for any company. It is a scientific method to set advertising budget. The method considers company’s own environment and requirement. Objectives and task method guides the manager to develop his promotional budget by (1) Defining specific objectives, (2) Determining the task that must be performed to achieve them, (3) Estimating the costs of performing the task.