Question

Name and describe the methods for determining a marketing budget.

Answer 1

Answer: There are several ways in which we can determine our marketing budget. Some of these are given below:

1. Percentage of revenues:

Under this method we usually  take a fixed percentage of our revenues and further allocating this amount for marketing. We will choose the percentage that works best for us.

2. Percentage of net sales:

This method determines our marketing budget as a fraction of our net sales. This method will take a lot of trial and error to find the percentage that works well for our company.

3. Industry specific:

Nowadays, industries have specific projections as to the amount they will need to spend on marketing . The best way to get these numbers is to find a firm that represents our industry and ask them to provide us with averages. We can then refine the actual costs.

4. Objective/task oriented

This is model that works by setting out goals, planning out the tasks and then estimating the cost for all of these tasks. It works greatly for firms who have a immense knowledge about measurements and information of their business processes.