Nearly all companies, both big, and small use marketing as a way of promoting their business. In order for this to be as effective and efficient as possible, it is important to make a marketing budget. This should clearly state how much money will be spent, and on what. If a budget isn’t followed it’s easy to spend unnecessary money and fail with your marketing objectives. In this blog post an example of a promotion from Estee Lauder will be used to show how a marketing budget can be spent.
How did Estee Lauder use their marketing budget to boost sales?
Estee Lauder was one of the first companies to use gifts with purchases as a marketing tool, and they continue doing it to this day. This is a good way of incentivizing sales and increasing average spend per customer, as the gifts are only given away if you purchase products over a certain amount. Their latest promotion is a gift set including makeup and a travel bag. These promotional products often have logos on them which works as a type of long-term advertising, generating more exposure to the brand.
Most important aspects of a Marketing Budget
There are a few main things to take into account when creating your budget. First of all, what is the purpose of your marketing? If you’re a new company looking to break into a market you might have to spend a larger percentage of your revenue than an already well-established competitor. Deciding on what your objective is will also help you plan ahead on when your different promotions and campaigns should take place.
Secondly you must decide on how much money you will actually spend on your marketing budget. For example if you’re going to hand out giveaways on the street you’re probably better off buying cheaper promotional products. The price and quality of your promotions should depend on your customers.
In some countries standardized promotional gifts aren’t going to be very well received, so you might need a more unique approach or even OEM products. Which will in turn increase the price you have to pay. It’s important to look at what your competitors are doing, and what’s working well for them.
The last main thing you need to consider is timing. It’s important to plan ahead so you can order products in advance, thus reducing shipping and production costs. A lot of times, companies underestimate how long it takes to manufacture and deliver products. Things such as sampling and potential production errors need to be taken into account. If production and shipping needs to be rushed, this can push up prices dramatically.
Most companies launch extra marketing campaigns around holidays such as Christmas, and New Year. Therefore it is important to budget for the full year so you don’t run out of money after a few months.