Advertising Budget & Research

Advertising Budget & Advertising Budget & ResearchResearch

Compiled By : Group 6 Ruchita, Tasneem, Pinal, Siddharth, Prasad & Murli

IntroductionIntroduction

Advertising Budget & ResearchAdvertising Budget involves the allocation of a

portion of the total marketing resources to the advertising function in a firm

Setting Advertising Budget is a time consuming activity which needs a fair amount of Managers time to analyze factors influencing Advertising Budget.

Advertising budgeting should be based on a careful analysis of the opportunity for advertising.

To make an efficient budget it is very important to conduct research on relevant factors.

Factors affecting Advertising Factors affecting Advertising BudgetBudget1. Stage in the product Life-cycle2. Cost Structure of the Company 3. Method of Advertising Budget4. Competition & Clutter5. Market Share6. Environmental Climate

Stage in Product Life-Cycle

1.Stage in Product Life-1.Stage in Product Life-CycleCycleAdvertising Budget is set considering in what

stage of life-cycle is product category. Amount of Budget may vary depending on

level of advertisement demanded by the product at particular stage of life-cycle.

The Advertising budget for a product vary in their cost effectiveness at different stages of the product life cycle.

Research on stages of PLC

Research on stages of PLCResearch on stages of PLCIn what stage of life-cycle is the

product category?What is the state of consumers

knowledge of product category?What market characteristics

support your stage of life-cycle evaluation?

Evaluation of PLC stage & identify, do they represent opportunities or problems?

Cost Structure of the Company

2. Cost Structure of the 2. Cost Structure of the CompanyCompanyThe Advertising Budget is a part

& proportionate replica of the Total Marketing Budget.

The total marketing budget is apportioned & a part thereof is Advertising Budget, usually a percentage share of total marketing budget is set aside as Advertising Budget.

Research on Cost Structure

Research on Cost Research on Cost StructureStructureWhat is the amount and

composition of the marketing budget & advertising budget?

Do we have the funds to support an effective marketing program?

Where are the funds coming from, and when will they be available?

Is the Advt. budget flexible enough to take care of sudden changes.

What is the proportion of marginal fund & actual fund of the budget?

Advertising Budget Method

3. Method of determining 3. Method of determining Advertising BudgetAdvertising Budget

The decisions on the amount to be spent are made by advertising managers in co-operation with advertising agency. Many companies resort to more than one method of determining the size of their advertising budgets.

The method selected determines the size of the budget & the size of the advertising budget can have an impact upon the composition of the advertising mix, hence it is of prime importance to select a proper method for Advertising Budget.

Percentage of Sales method Sales objective method Profit Maximization method Objective & Task Approach Competitors Parity Approach

Research on selection of method

Research on selection of Research on selection of methodmethodWhich Advt. budget method is most

suitable to the Company?Which method was used previously?How effective was the previous

budget?What were the problems faced in the

previously selected method of Advertising Budget?

What can be done to avoid any problems?

Competition & Clutter

4. Competition & clutter4. Competition & clutterIn order to increase revenue, media

outlets often include a large number of ads within a certain time, space or location. For instance, television programs may contain many ads inserted during the scheduled run-time of a program. A large number of advertisements create an environment of advertising clutter, which makes it difficult for viewers to recognize and remember particular advertisements. To break through the clutter advertisers it is important to differentiate from the clutter at the same time maintain or raise the standard.

Research on Competition & Clutter

Research on Competition & Research on Competition & Clutter Advertising Clutter Advertising Who are the competitors?What is the degree of

competition with them?What are the current ad

campaigns of competitorsAre competitors successful /

unsuccessful? Why?What can be done to differentiate

from the competition & clutter?

Is there is opportunity for another competitor? Why?

What are the anticipated retaliatory moves of competitors?

Can they neutralize different marketing programs we might develop?

Market Share

5.Market Share5.Market ShareOne of the convenient and enticing

advertising objective is market share.

It is very much important for a company to maintain or increase its market share.

Anything that induces new triers to buy the product & increases market share of the company is invaluable & is of vital importance.

Research on Market Share

Research on Market ShareResearch on Market ShareWhat is the size of market & what

will be the future hold?What is the current market share

of the Company?How to analyze the market?

(Aggregate/Segmented) basis?Can the market be meaningfully

segmented or broken into several homogeneous groups with in respect to “what they want” and “how they buy”?

Environmental Climate

6.Environmental Climate6.Environmental ClimateCompany should keep itself

updated with the current environmental climate, which could bring an opportunity for the product to increase the market share due to favorability of the environment.

Keeping oneself abreast of the environmental changes can also help in communicating with the target audience effectively.

Research on Environmental

Climate

Research on Environmental Research on Environmental ClimateClimateWhat are the relevant social trends?What are the current political trends?What are the latest technological trends?What are the relevant economic trends?How do you evaluate these trends? Do

they represent opportunities or problem?Can company capitalize on opportunities

arising from sudden changes in environmental climate?

How to create Low budget How to create Low budget Ads which are highly Ads which are highly

effective effective In order to be successful, your advertising must provide a consumer benefit or solve a problem.

That benefit or solution must be wanted by the consumer.

The product or service you are offering must be related directly to that benefit or solution.

The benefit or solution must be distinctly communicated through medial advertising. In other words, it should be clear, the message shouldn’t get lost in the ad.

Examples of Low Budgeted ads highly effective.

1. Apsara extra dark pencil2. Celebrating 60 years of Independence

3. Amul Butter4. Anti-smoking (public interest)

5. Red Bull

High budget Ad , highly High budget Ad , highly effectiveeffective

Airtel digital TV

Thank You, SirThank You, Sir

I would like to express my gratitude to Mr. Nishant Bhatt. This presentation could not have been possible without him, who notonly served as our faculty but also encouragedfor this challenging task in this academic program. He patiently guided me & my groupthrough the presentation process, neveraccepting less than my best efforts. I thank himon behalf of my group.

Thank You