8.23:
IMC Budget I
The IMC budget represents the total money allocated for all promotional activities.
It prevents a company from overspending or underspending on marketing.
There are four primary budgeting methods:
First is the affordable method, where the budget is allocated based on what the company can afford. So, it is well-suited for small businesses operating on limited budgets but is less favored as it is not based on specific marketing needs.
Second, the percentage-of-sales method assigns a percentage of existing or forecasted annual sales to the marketing budget. It aids in reaching short-term goals but is dependent on sales volume.
Third, the competitive parity method involves setting the budget to match competitors' expenditures, providing a benchmark to prevent overspending. The method may disregard the firm's actual marketing needs.
Fourth, the objective-task method sets a budget based on communication goals and available resources. So, it is used widely but is challenging to implement if the objectives are unclear.
8.23 IMC Budget I
An Integrated Marketing Communications (IMC) budget is a comprehensive financial blueprint that outlines the projected costs for all promotional and marketing activities of a company.
This budget encapsulates every channel and tactic that the business intends to use to communicate its message to customers, such as social media, email marketing, SEO, traditional advertising, and more.
The IMC budget carries significant weight as it plays a crucial role in strategic planning, resource allocation, cost control, and measuring marketing effectiveness.
By setting a budget, businesses can ensure that their marketing activities align with their overall objectives and financial capabilities.
There are several types of IMC budgets:
Objective and Task Method: This method involves defining specific objectives, determining the tasks needed to achieve these objectives, and estimating the cost of each task.
Percentage of Sales Method: Here, the budget is set as a fixed percentage of past or anticipated sales.
Competitive Parity Method: This method involves setting the budget to match competitor's spending.
Affordable Method: The budget is determined based on what the company thinks it can afford.
Each type has its pros and cons, and the choice depends on the company's goals, industry standards, and financial capacity.