Abstract
Selecting the adequate method for promotion has a huge importance in increasing business’s performance. Selecting the method of the budget depends from a number of factors. The formulation of budget is known as the most critical period which requires special analysis from marketing’s managers. The expenses for promotion are usually high, and every investment made in the field of promotion directly influences in the business situation. Thus, the selection and adequate formulation of budget methods for promotion influences the growth of profit. The allocated amount for promotion depends from a number of factors, such as: the size of the firm, the sector in which it operates, competition etc. After planning the budget, we have to do the budget allocation to select the promotional form which is considered to be successful by the firms in promoting the products and services and that will help the company to connect with its clients. In this paper, I have elaborated the role and importance of the preparation and selection of budget methods for promotion in the theoretical aspect and the practical one as well.
Highlights
Selecting the adequate method for promotion has a huge importance in increasing business’s performance
From the respondents 43.4% said that the budget shared for promotion had a huge impact in increasing sales, 19.6% said that the budget had an average impact, 27.2% said that the shared budget had a very little impact in increasing sales and only 9.8% said that the budget shared for promotion had no impact at all in increasing the sales
Selecting the adequate method for promotion budget is one of the indicators that show the success of promotion in the company
Summary
The money spent for advertisements constitutes an important factor of cost regardless the kind of the company, big or small. The companies use the method of percentage of sales by fixing their promotional budgets in a percentage of actual or foreseen sales, or they set the budget based on a percentage of the price of sale per unit This method can prevent the increase of costs, sometimes needed to totally change the decreased sales (Kotler & Armstrong, 2011). Based on the method of competitive parity the allocation of budget is done by fixing their promotion budget to the extent that they share the same amount with the one of their competitors They monitor their competitors’ advertisements or evaluate their promotional expenses from publications or trade associations and they fix their budgets based on the average of the industry (Kotler & Armstrong, 2011).
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