ADVERTISING AND PROMOTION

Advertising And Promotion

Advertising and Promotion

Introduction

In order to keep their businesses alive, companies need heavily to invest in their marketing activities. Advertising and promotion are one of the main marketing activities of a company. These activities involve a lot of time, innovative thinking, and most importantly cost. Companies, through advertising and promotion activities, connect to their customers. Advertising means to communicate with your customers about the products your business is offering. In order for companies and businesses to survive and sell their products, companies and businesses need heavily to invest in advertising activities. Advertising helps businesses make its products familiar to their customers. On the other hand, promotions refer to retaining your existing customers and attracting your previous customers. (Dunn, 2012, pp.1 - 6)

DiscussionMarketing Budget And Determination Process

Companies need to have a check and balance to have a control on all of their business activities. One of the tools through which companies can achieve this check and control balance is the budgeting tool. Budgeting is the most widely used method and one of the most effective method of controlling a company's cost. Every company has a marketing budget to control and keep a check and balance on its marketing activities. There are various methods to determine a budgeting plan for a business or a company. The most common and widely used marketing budgeting methods are percentage of revenue method, percentage of net sales method and affordable method. In the percentage of sales methods, budget allocation is based on forecasted sales of the business or company, either forecasted sales are used as a base or past sales are used as a base. A small percentage is then applied on the sales amount, and the resulting amount is allocated to the marketing activities. Some might argue that using past year's sales as a base is a very conservative approach. On the other hand, the critics of this method might argue that it is fairly a rigorous process accurately to forecast the subsequent sales amount. However, this method is one of the most widely used method and is easy to understand. Percentage of net sales method is very similar to the percentage of sales method. The only difference between both methods is that one method takes in account the revenue and the other takes in account the net revenue, which is after deducting all its expenses. On the other hand, affordable method allocates funds to marketing budget on the basis of how much a business or company can afford to spend on its marketing activities. This is a complicated method, as it is very complicated for businesses to identify how much they can afford to spend on their marketing activities after taking in consideration of their other expenditures to achieve their overall objectives and goals.Marginal Analysis

It is an economic term. It can also be applied in the overall marketing process. A business or a company may continue spending in its marketing activities as long as its marketing activities are generating revenues for ...