Irrespective of whether you are a big corporation or a small start-up, your marketing efforts will determine how much your market grows. It is critical therefore to be prudent about where you put your marketing dollars. If the going is good, it’s important your consumers know about your deals and choose you over other products. When the going is tough, it’s going to be doubly tough to ask consumers to spend their scarce dollars on your offering. Marketing your product or service effectively is important at all times.
That said marketing teams in companies are never given a free hand regarding the marketing budget. They usually have to justify every dollar they ask for, and show results for the same. Increasingly companies are harnessing the power of the Internet’s networking platforms to reach out to customers. This however does not mean the power of print/radio and television has reduced in letting customers know about you. These options however are not cost effective for smaller players.
Answers to questions about customer, company and competition can give you a good idea at how to market and therefore the budget you need for it.
Who is your customer? What are his needs? How does your product/s help her? In terms of company you need to answer questions about where your company is right now. If it is young and growing, you probably need to create greater awareness and touch base with your prospective customers at various platforms.
A well-established company may need to let customers know about new offerings or promotions. Finally, you need to look about your competitive environment and see how you can convey to your customers that your offering has distinctive advantages over the others.
Marketing budgets can vary between 1-15% of sales. Laura Lake, marketing columnist advices 20% of a marketer’s time and money needs to be the marketing budget.
According to the CMO survey February 2012, the percentage of marketing budget of the total by economic sector was as follows:
Marketing Percentage of Firm Budget
If we look at the figures of marketing percentage of firm budgets by company sales revenue they look like this:
Company Sales Revenue
Apart for marketing, communications, research, licensing, collateral development, trade shows all fall under the ambit of budgeting.
It is important therefore to allocate the marketing budget based on current needs as well as market growth requirements. Periodical assessments that look at whether the budget spend is helping reach targets is important. Realignment of the budget can be done based on the results.
Companies are increasingly going digital in trying to understand what customers really want. The digital medium is currently less expensive, but more difficult to make an impact on. The results if used optimally are manifold.
The marketing budget’s relevance starts and ends with its meeting business objectives. Every marketer worth his salt needs to get more bang for every dollar of her budget that will increase her company’s value and keep customers engaged and loyal.