Deciding on the advertising budgets, Marketing Management

Deciding on the advertising budgets:

How does a company know if it will be spending the right amount? If it spends too little, the effect will be negligible. If it spends too much, then some of the money could have been put to the better use. Advertising has a carry over effect that latest beyond the current period. Although advertising is treated as a current expanse. Part of it is really an investment that builds up an intangible asset called brand equity.

1.       Stage in the product life cycle: new products typically receive large advertising budgets to build awareness and to gain consumer trial. Establishes brands usually are supported with the lower advertising budgets as a ratio to sales.

2.       Market share and consumer base: high market share brands usually require less advertising expenditure as a percentage of sales to maintain their share. To build share by increasing market size requires larger advertising expenditures. On a cost - per- impression basis, it is less expensive to reach consumers of a widely used brand than to reach consumers of low share brands.

3.       Competition and clutter: in a market with a large number of competitions and high advertising spending, a brand must advertise more heavily to be brand. Even the simple clutter from advertisements not directly competitive to the brand creats a need for the heavier advertising.

4.       Advertising frequency: the number of repetions needed to put across the brand's message to consumers has an important impact on the advertising budget.

5.       Product substitutability: brands in a commodity class (cigarettes, beer, soft drinks) require heavy advertising to establish a differential image. Advertising is also important when a brand can offer unique physical benefits or features. 

Posted Date: 9/19/2012 9:16:22 AM | Location : United States







Related Discussions:- Deciding on the advertising budgets, Assignment Help, Ask Question on Deciding on the advertising budgets, Get Answer, Expert's Help, Deciding on the advertising budgets Discussions

Write discussion on Deciding on the advertising budgets
Your posts are moderated
Related Questions
What are the types of wholesalers in primary participants of distribution channels? Types of wholesalers in primary participants of distribution channels are as given here: the

approaches followed by FMCG in test marketing

What is consumes behaviour? Consumes Behaviour: The most significant issue for the marketers is to classify the requirements of the consumers since customer and consumer m

Evaluate the priomotional strategies that can be used by retailers

Illustrates the working of second barrier of exchange in channels distribution? The second barrier to smooth exchange procedure arises due to time of production and the time at

Taking an example of a new company, create a simple and complex marketing system that helps to enhance the sales of your organisation.

Question 1 Describe the stages in consumer decision making process Question 2 Define Product line and its strategies Question 3 Write a short notes on Ste

Let the node at which we are starting be called the initial node. Let the distance of node Y be the distance from the initial node to Y. Dijkstra's algorithm will assign some initi

consumer profile of typical buyer of rayban

Explain about the Shopping Goods These are goods that are purchased less frequently and are used very slowly such as clothes, shoes, household appliances. In case of these good