Figure 7-20 Example of three-year payout plan ($ millions)
Belch: Advertising and I IV. Objectives and I 7. Establishing Objectives I I © The McGraw-Hill
Promotion, Sixth Edition Budgeting for Integrated and Budgeting for the Companies, 2003
Marketing Promotional Program Communications Programs
Figure 7-21 How advertising and promotions budgets are set
The Nature of the Decision Process
• Managers develop overall marketing objectives for the brand.
• Financial projections are made on the basis of the objectives and forecasts.
• Advertising and promotions budgets are set on the basis of quantitative models and managerial judgment.
• The budget is presented to senior management, which approves and adjusts the budgets.
• The plan is implemented (changes are often made during implementation).
• The plan is evaluated by comparing the achieved results with objectives. Factors Affecting Budget Allocations
• The extent to which risk taking is encouraged and/or tolerated.
• Sophistication regarding the use of marketing information.
• Managerial judgment.
• Use of quantitative tools.
• Brand differentiation strategies.
• The strength of the creative message.
• Short- versus long-term focus.
• Top-down influences.
• Political sales force influences.
• Historical inertia.
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