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.