GOOD AFTERNOON

ADVERTISING BUDGETING
TECHNIQUES/APPROACHES
AFFORDABLE

VIDALE AND WOLFES MODEL

ARBITRARY

THE COMPROMISE MODEL

PERCENTAGE OF SALES

JOHN LITTLE MODEL

PERCENTAGE OF PROFIT
COMPETITIVE PARITY
UNIT OF SALE METHOD
HISTORICAL METHOD

REFERENCES
YOURARTICLELIBRARY.COM

AFFORDABLE
ALL OTHER EXPENSES ARE TAKEN CARE OF FIRST
MONEY LEFT IS USED FOR ADVERTISING
ADVERTISEMENT IS CONSIDERED AS AN EXPENDITURE
NO EXPECTATIONS
TACTICAL AND NOT STRATEGIC IN NATURE

ARBITRARY ALLOCATION
COMPLETELY DEPENDENT ON THE MANAGEMENTS DISCRETION
DECISION DEPENDS ON PSYCHOLOGICAL AND EMOTIONAL BUILD UP
NO OBJECTIVES HAVE BEEN BUDGETED FOR
NO LOGICAL DECISION MAKING

PERCENTAGE OF SALES METHOD

UNIT PRODUCT COST FOR PROMOTION*TOTAL NUMBER OF UNITS
CONSIDERS EITHER PAST SALES OR PROJECTED SALES
PERCENTAGE ALLOCATED VARIES FROM INDUSTRY TO INDUSTRY
THIS WORKS ONLY WHEN THE COMPANY IS FARING WELL

PERCENTAGE OF PROFITS METHOD

CURRENT OR FORECASTED PROFITS
HIGHLY UNSTABLE
POLITICAL, SOCIAL, DEMOGRAPHIC FACTORS AFFECTING COST WHICH IN
TURN AFFECT PROFITS

UNIT OF SALE METHOD

CONSUMER DURABLE FIRMS
FIXED SUM PER UNIT OF PRODUCT
CALCULATES AMOUNT OF ADVERTISEMENTS REQUIRED FOR SELLING EACH
PRODUCT
ADOPTED FOR SPECIALTY GOODS ESPECIALLY WITH HIGH PRICES
NOT SUITABLE FOR PRODUCTS WITH VOLATILE MARKETS

HISTORICAL METHOD
HIGHLY DEPENDENT ON PREVIOUS YEARS ADVERTISING BUDGET
ADOPTED WHEN THERE IS SLOW GROWTH IN THE MARKET
PREVIOUS YEARS BUDGET MULTIPLIED BY A FACTOR TO COVER MEDIA COST
INCREASE

COMPETITIVE PARITY METHOD

BASED ON AMOUNT SPENT BY COMPETITORS
HEAVY-ADVERTISING MARKETS
ESTABLISHED BRANDS SPEND LESS AND GROWING BRANDS SPEND MORE
DOESNT FOCUS ON SPECIFIC OBJECTIVES
RATHER DONE TO FACE COMPETITION

VIDALE AND WOLFE'S MODEL

VERY HUGE AMOUNT IN ADVERTISING
WHEN CUSTOMERS FORGET ADVERTISEMENTS, SALES POTENTIAL REMAINS
UNTAPPED
DOESNT TAKE INTO ACCOUNT COMPETITIVE ADVERTISING OR
EFFECTIVENESS

THE COMPROMISE MODEL

COMBINATION OF DIFFERENT METHODS
TYPE, SIZE,LOCATION OF TARGET AUDIENCE
MEDIA COMBINATION
TYPE OF CAMPAIGN
FREQUENCY OF ADVERTISEMENTS

JOHN LITTLE MODEL

ADAPTIVE CONTROL METHOD
AD EXPENDITURE BASED ON CURRENT INFO- LARGER MARKET
HIGHER AD BUDGET FOR ONE SECTION
LOWER AD BUDGET FOR ANOTHER
BUDGET IS ADAPTED BASED ON PERFORMANCE

THANK YOU

BY
PADMAVATHI.V.S.

142

PREM KUMAR.T.

143

RAM KUMAR.P
SWITHIN ZADOK R
DINESH KUMARAN.R

144
145
147

PAVITHRA.G

148

VIGNESH.R.

150

VINODH KUMAR.L. 151