Budget
Deciding how much the advertising should cost - including how much should be invested to increase sales - and how that amount should be allocated is completely up to vodafone
Advertising costs are a controllable expense. Advertising budgets are the means of determining and controlling this expense and dividing it wisely among departments, product lines or services.
This fact sheet describes various methods of establishing an advertising budget, and suggests ways of applying budget amounts to get the desired outcome.
If Vodafone want to increase sales, it is almost certain that they will need to advertise. How much should they spend? How should they allocate their advertising budget? How can they be sure that their advertising spending is not out of line? The advertising budget helps you determine the amount to be spent as well as how they are going to spend it.
Methods of Establishing a Budget
Each of the various ways in which to establish an advertising budget has its advantages and constraints. No method is perfect for all types of businesses, nor for that matter is any combination of methods.
Concepts from several traditional methods of budgeting have been combined into three basic methods: percentage-of-sales or profits; unit-of-sales; and objective and task. You will need to use judgment and caution in choosing your method or methods.
Percentage of Sales or Profits
The most widely used method of establishing an advertising budget is to base it on a percentage of sales. Advertising is as much a business expense as, say, the cost of labor and, thus, should be related to the quantity of goods sold.
The percentage-of-sales method avoids some of the problems that result from using profits as a base. For instance, if profits in a period are low, it might not be the fault of sales or advertising. But if they stick with the same percentage figure, they will automatically reduce their advertising allotment.
Such a cut in the advertising budget, if profits
Advertising costs are a controllable expense. Advertising budgets are the means of determining and controlling this expense and dividing it wisely among departments, product lines or services.
This fact sheet describes various methods of establishing an advertising budget, and suggests ways of applying budget amounts to get the desired outcome.
If Vodafone want to increase sales, it is almost certain that they will need to advertise. How much should they spend? How should they allocate their advertising budget? How can they be sure that their advertising spending is not out of line? The advertising budget helps you determine the amount to be spent as well as how they are going to spend it.
Methods of Establishing a Budget
Each of the various ways in which to establish an advertising budget has its advantages and constraints. No method is perfect for all types of businesses, nor for that matter is any combination of methods.
Concepts from several traditional methods of budgeting have been combined into three basic methods: percentage-of-sales or profits; unit-of-sales; and objective and task. You will need to use judgment and caution in choosing your method or methods.
Percentage of Sales or Profits
The most widely used method of establishing an advertising budget is to base it on a percentage of sales. Advertising is as much a business expense as, say, the cost of labor and, thus, should be related to the quantity of goods sold.
The percentage-of-sales method avoids some of the problems that result from using profits as a base. For instance, if profits in a period are low, it might not be the fault of sales or advertising. But if they stick with the same percentage figure, they will automatically reduce their advertising allotment.
Such a cut in the advertising budget, if profits