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    VB - Factors Affecting Advertising Budget

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    Sahil Tiwari
    There are several factors that affect how much a company budgets for advertising. These include frequency of advertisements needed to promote the product against competitors, the product's stage in its life cycle, targeted market and media types, projected annual sales, marketing objectives, and environmental conditions. Considering these factors helps ensure a company allocates enough funding for advertising to meet its goals but does not overspend.

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    VB - Factors Affecting Advertising Budget

    Uploaded by

    Sahil Tiwari
    25 views11 pages
    There are several factors that affect how much a company budgets for advertising. These include frequency of advertisements needed to promote the product against competitors, the product's stage in its life cycle, targeted market and media types, projected annual sales, marketing objectives, and environmental conditions. Considering these factors helps ensure a company allocates enough funding for advertising to meet its goals but does not overspend.

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    VB_Factors Affecting Advertising Budget

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    There are several factors that affect how much a company budgets for advertising. These include frequency of advertisements needed to promote the product against competitors, the product's stage in its life cycle, targeted market and media types, projected annual sales, marketing objectives, and environmental conditions. Considering these factors helps ensure a company allocates enough funding for advertising to meet its goals but does not overspend.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views11 pages

    VB - Factors Affecting Advertising Budget

    Uploaded by

    Sahil Tiwari
    There are several factors that affect how much a company budgets for advertising. These include frequency of advertisements needed to promote the product against competitors, the product's stage in its life cycle, targeted market and media types, projected annual sales, marketing objectives, and environmental conditions. Considering these factors helps ensure a company allocates enough funding for advertising to meet its goals but does not overspend.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 11

    Factors Affecting

    Advertising Budget
    Advertising Budget is the amount of
    money which can be or has to be spent on
    advertising of the product to promote it,
    reach the target consumers and make the
    sales chart go on the upper side and give
    reasonable profits to the company.
    Before finalizing the advertising budget of
    an organization or a company, one has to
    take a look on the favorable and
    unfavorable market conditions which will
    have an impact on the advertising budget.
    The market conditions to watch out for are as
    follows:
     Frequency of the Advertisement : This means
    the number of times advertise has been shown
    with the description of the product or service, in
    the granted time slots. So here, if any company
    needs more advertising frequency for its product,
    then the company will have to increase its
    advertising budget.
     Competition and Clutter : The companies may
    have many competitors for its product. And also
    there are plenty of advertisements shown which
    is called clutter. The company has to then
    increase their advertising budget.
     Market Share
    To get a good market share in comparison to their
    competitors, the company should have a better
    product in terms of quality, uniqueness, demand
    and catchy advertisements with resultant
    response of the customers. All this is possible if
    the advertisement budget is high.

     Product Life Cycle Stage


    If the company is a newcomer or if the product is
    on its introduction stage, then the company has
    to keep the budget high to make place in the
    market with the existing players and to have
    frequent advertisements. As the time goes on
    and product becomes older, the advertising
    budget can come down as then the product
    doesn’t need frequent advertising.
    An essential part of any plan, be it selling a
    product or service to a select group of
    consumers or creating a marketing plan
    includes coming up with a budget for
    advertising expenditures. While each
    company's advertising budget may differ, there
    are several factors that can affect even the
    smallest advertising budget.

    Projected Annual Gross Sales


    When entrepreneurs prepare to create
    advertising budgets for their businesses, it's
    important to take projected annual gross
    sales into account. This method helps
    protect entrepreneurs from spending too much
    or too little on advertising.
     Marketing Objectives
    Marketing objectives vary across organizations
    and can greatly affect what appears on a
    company's advertising budget. Determine
    which marketing objective will help you reach
    your annual business goals. Marketing
    objectives might include obtaining 5 percent
    more repeat customers, experiencing growth
    each month or increasing annual sales by 10
    percent. The objectives you come up with help
    you define marketing strategies and tactics,
    which ultimately give insight into how and
    where you advertise, both of which are things
    that can affect your budget.
    Target Market
    While one business is targeting customers
    whose annual household income is at least
    INR 500,000, another business may target
    recent college graduates who make at least
    INR 33,000 a year. The target market you're
    trying to reach has an impact on your
    advertising budget. Once you define your
    target market, you gain insight on how to
    reach them learning information such as
    what they read, where they shop, who they
    get advice from, their needs and wants and
    what motivates them to buy.
     Types of Media

    A print advertisement in a local


    publication may cost less than
    running an online advertisement
    with a popular, credible website. The
    types of media you select to
    promote your product, whether it's
    radio, print, web, email, billboards or
    direct marketing, can impact your
    advertising budget.
    Time of Year
    Advertising pricing may change during
    different times of the year, such as a new
    season or during popular holidays. While
    some advertisers may offer discounting,
    others will increase their prices if they feel
    their readership or viewership may peak
    during specific times or events. If you're
    trying to place an advertisement in a
    magazine's most popular issue of the year or
    a television commercial during a highly
    televised event, such as the FIFA or World
    Cup, you can expect a change in the amount
    you spend to promote your product or
    service.
     PLC/Product Launch vs. Existing Product
    If you're introducing a new product to the
    market, consider this as you create your
    advertising budget, as it may affect how
    much you spend. When products are
    launched, business owners often go into
    overdrive coming up with various ways to
    advertise and promote their new product or
    service to potential clients. This may cause
    an advertising budget to be higher than it
    would be for a product that customers are
    already aware of and have purchased in the
    past.
    Environmental Climate
    Company 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.

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