1. ADERTISING BUDGET REGARDS, SOURABH GUPTA- 35 SUDHANSHU- 36 M.B.A 3RD SEM.

2. Advertising Budget zThe decision about how much money should be spent for advertising during a specific time period in order to accomplish the specific objectives of a client. zAdvertising budget is the translation of an advertising plan into rupees. z It serves as a decision-making tool for the top management in addition to its control function of such expenses.

3. Advertising budget Process z Appropriation of the estimates z Short term target z Budget preparation z Budget presentation z Implementation z Budget control

4. FACTORS AFFECTING THE SIZE OF THE BUDGET:- zObjective of the company zThe coverage of the market zThe product class zStages of the product life cycle zEconomic conditions zAge of the company zFunds available zCompetitive position

5. METHODS OF FIXING ADVERTISING BUDGET:- z Percentage of sale method z Unit of sales method z Competitive parity method z Affordability method zMail order method zObjective and task method zIncremental method

6. 1. Percentage of sales method It establish link between sales and the amount allotted to the budget. In this method a factor or multiplier is selected, then multiply this by the sales figures and the sum so arrived is the amount to be spend.

7. Limitations zLesser money is alloted when sales are declining zSpecific needs of the company is not satisfied.

8. 2. Unit of sale method In unit of sales method, a specific amount of rupees is allocated to the advertising budget for each unit sold. This is a fixed guideline approach to the advertising budget. This method is also known as fixed-sum-per-unit- of-product method.

9. 3. Competitive parity method Spend as much as the competitors do. The logic behind this is that the collective thing of various firms in the industry can't be too far from the optimal figure.

10. Disadvantages zSpecific needs of the company is not taken care off. zIt is difficult to determine the exact amount spent by the competitors.

11. 4. Affordability Method This is another decision rule on which many firms base their advertising budgets, particularly firms with limited resources. Limited fund is only allocated after other unavoidable expenditures have been met. It ensures that advertisers do not spend too heavily, but there are possibilities that advertising may be neglected as a potent tool for want of enough fund allocation.

12. Limitations zThe rule is based on the premise that sales are independent of advertising expenditure. zBudget decisions are left to the whim of the management and are not based on the rational business needs.

13. 5. Objective and task method z It tries to find out objectives. z Task for the objectives. z Cost of performing that task is determined. z Check whether the cost is affordable. This method is based on establishing the advertising objectives and the tasks to be accomplished, and then determining the required size of the budget.

14. 6. Incremental method Under this method the company goes on advertising until the marginal returns no longer exceed the marginal expenditure. With regard to the total advertising budget among different product lines, the marginal product concept dictates that money should be apportioned on different lines until the marginal returns are equal.

15. Limitations zIt is very difficult to measure the additional profit generated by the additional rupee spent on advertising zThe approach is valid only at the conceptual level and has very limited usage in practice.

16. 7. Mail order method Under this method the company directly sends the mail order to consumers and get the order for the products which the consumers want to buy.

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