How to allocate funds for marketing

The Budgeting Exercise

Overall Budget

  • Marketing $
  • Production $
  • Admin $
  • Finance $
  • R&D $
  • Customer Support $
  • Sales $
  • Top Management $

There are 2 ways to come up with the Marketing budget

Bottom Up

Bottom up

Consists in taking input from marketing teams at a micro level. Each team (They) will have to indicate the amount of marketing spend that is needed to achieve planned revenue. When estimates of micro teams are aggregated this gives us bottom up. Single product or product line, each team has to add in their budget. This gives us the bottom up marketing spend forecast.

Top Down

An estimate made by the firm’s top management. They’ll typically model Marketing espenses as a percentage of budget revenues. Then division heads must allocate the budget to micro teams within the structure.

Once budgets have been assigned..

The crucial element is how they’ll be used by marketing managers

a common mistake resources to a large number of campaigns

It is much better to run a few campaigns and do it in a powerful and concentrated way.

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