Your ability to make money as a business man or women to a large extent is dependent on your marketing skills. Business is about selling services or products to people in exchange for money. That is the reason why the marketing department of any organization must be up and about sourcing for new clients and building stronger business relationship with old clients.
There are factors that could determine the size of your marketing budget; that is what this article is about. The rule of thumb here is that you will have to spend money to get money; your marketing team must be well packaged and empowered if you want them to perform optimally.
Although, there are some important factors that determines the size of your marketing budget, but the truth is that there is no hard and fast rule about marketing budget because of the unique nature of various businesses. The uniqueness of your business should determine the size of your marketing budget. Now let us quickly go through the 10 factors that will determine the size of your marketing budget;
10 Factors That Will Determine the Size of Your Marketing Budget
1. The Nature of Your Business
One of the major factors that will determine the size of your marketing budget is the nature of your business. There are certain businesses that doesn’t require huge budget for its marketing and there some businesses that requires huge marketing budget. For example, if you run a water re–fill station, you don’t need to spend much in marketing the business, because people that need water will always find a way to locate your water re – fill station. But, if you are a telecommunication provider, you will spend huge budget in marketing both your products and services.
2. Your Capital Base of Your Business
No doubt, your capital base is another factor that will determine the size of your marketing budget. You can only spend what you have; even if you have the intention to hit the market big, with unique marketing concept, you can only go as far as your money can carry you. It won’t be a wise decision to allocate the lion shares of your startup capital to marketing because you would need to rent a facility, you would need money to purchase your working tools, and you would need money for other stuffs. So ensure that you operate a well balanced budget irrespective of your marketing concept.
3. The Size of the Market
Another factor that will determine the size of your marketing budget is the size of the market. As a business owner, you would have done your feasibility studies before launching your business and part of what your feasibility studies will reveal to you, is the size of the market that is available to your business (your industry). For instance, if the size of the market (those that your product or services is meant for) is vast, then the size of your marketing budget should be large and if the size is small, then the size of your marketing budget should be small.
4. Your Mission and Goal
If your mission and goal of starting your business is to take your business to all parts of the world just like Coca Cola®, Apple® and Samsung®, then you must operate a very large marketing budget, but if your intention is to only sell your goods or services to people in your local community, then you should be very moderate with your budget. For example if you run a canteen that sells local delicacies, you don’t have to break the bank to promote and market this type of business.
5. The Demography of Your Target Market
The demography of your target market to a larger extent will determine the size of your marketing budget. For example; if your business is all about selling products or services to the elites, then you should operate a large sized marketing budget. You are not expected to be in the business of manufacturing or selling luxurious goods /products like Rolex Watches, Rolls Royce, and Bentley et al and not spend more on your marketing budget.
6. The Level of Competition in Your Industry
It is simple, if the competition in your industry is high, then automatically the size of your marketing budget should be high. For example, if your intention is to compete with established brands like Hugo Boss or Calvin Cline et al, then you must come up with a reasonable marketing budget.
7. The Feedback You Get From the Field
It is important for every business to open channels for receiving feedbacks from their customers and potential customers as well. For example, if the feedback you get from the field via your survey indicates that a lot of people don’t know about your products or services, then you don’t have any options other than the increase the size of your marketing budget.
8. The Dynamics of Your City or Country
The dynamics of your city or country is yet another factor that determines the size of your marketing budget. For example; if you live in a country like Switzerland or in a City like New York, then you should consider a huge marketing budget for your business. It is simple, the cost of living in the country or city your business is located will determine the size of your marketing budget.
9. The Growth Stage of Your Business
Another key factor that will determine the size of your marketing budget is the growth state of your business. For instance; if your business is in its infancy stage, you are not expected to run same marketing budget with a company that is well established.
10. The Quality of the Marketing Staff in Your Payroll
The quality of the marketing staffs in your payroll is another factor that will determine the size of your marketing budget. If your business requires you to employ experts and well experienced staffs in your marketing department, then you should be ready to operate a huge marketing budget. Factors like pool cars, drivers, maintenance and fueling et al will surely gulp money.
There you have it; the 10 factors that will determine the size of your marketing budget.
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