The Importance Of The Marketing Budget

Budget management analysis is used by mangers as a tool and helps determine that all resources available are being used efficiently. The budgets are determined yearly and are based upon the previous year’s budget and variances. This paper will discuss specific strategies to manage budgets within forecast, compare five to seven expense results with budget expectations, describe possible reasons for variances, give strategies to keep results aligned with expectations, recommend three benchmarking techniques, and identify those that might improve budget accuracy, and justify the choices made.

For example interest rates, the cost of raw materials including fuel, the number of sales or orders that we make and in turn all of these rely on other factors. The best therefore that can be done when developing a budget is to look at all the factors that are likely to affect the budget and decide how to take account of each one. If there is a previous budget (last year or last month) then it is sensible to look at how this has been achieved or not as the case may be, and what factors affected the outcome. If we are looking at monthly budgets it might be a better comparison to look at the same month twelve months ago as well as the previous months. The more factors we take into consideration when estimating a budget, the more accurate our budget will be.

Another budgeting strategy is the objective/task method. Objective/task “considers advertising to be a marketing tool to help generate sales.” (Arens, page 294) I feel this method is a well planned out proposition. The steps include defining the objectives, determining strategy and estimating cost. The objective here is to increase the awareness of Southern Rice Company’s instant rice. Next, we will research and determine which ads, television or print, and media outlets to use. Measuring the results from these campaigns will determine whether or not they need to be revised. Based on this information, we can estimate the overall cost and then allocate the money in the marketing budget into each specially designed task. If we cannot afford some of the tasks, we can devote more of our budget to a task that will work in the most effective way. Objective/task is more accurate and flexible when it comes to budget allocation.

This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).

The manager must remember that the budget is completed with a goal in mind. All employees should be aware of the budget and how it ties to the ultimate goals or plans for that department (Walsh, 2016). This budget should have a strategy and effectively communicate the department goals. The manager should take the long-range plan to build the annual budget with this plan in mind (Finkler, 2017).

Now that you are in the growth stage, how should you adjust the amount of your budget for promotion, compared to the launch year?

A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.

* How to develop a new marketing plan so that it will be more cost-effective. (unnecessary marketing expenses will decrease by approximately $550 per year)

As a consequence of the president’s strategy to become profitable in two years, the senior vice president of sales and marketing and the vice president of advertising must formulate a marketing plan that will allow the company to achieve desired goals. This plan must take into consideration market segmentation, continuation of current marketing strategy, and sales promotions.

The third table is to outline some of the activities we might find at each stage of the marketing process; this is brief summary of the importance of the different stages.

Budget formulation and use are tools that guide many decision making strategies in business. The measures that are least effective could create an avalanche of catastrophic events that can negatively impact the decision making strategies. It is in the best interest of the pertinent parties to draft an operating budget based on a collective set of information relating to organizational vision and mission. Ineffective measures can be catastrophic based on the foundation for measures used in creating the budget. Among the many issues organizations face that relates to creating an effective operating budget results from poor

Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.

“It’s clearly a budget. It’s got a lot of numbers in it” (George W. Busch 2005). This definition of a budget can be supplemented using the Oxford dictionary, which states that a budget is an estimate of income and expenditures for a set period of time. Nowadays almost every business uses budgets and managers use them as a tool in order to set targets. In other words managers can, with the use of budgets, explain in a financial way what are the

Westwood, J., 2002, The Marketing Plan: A step-by-step Guide. 3rd ed., London, Kogan Page Limited, p

Marketing cost analysis is another important tool of marketing control. In recent years, business firms all over the world have experienced steep escalations in their marketing and distribution costs. They have found, to their dismay, that increased sales do not necessarily bring them increased profits. Containing marketing and distribution costs has