Budgeting for marketers

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You can watch this presentation, with video narration, at http://anacanhoto.com/2013/02/22/budgeting-for-marketers/

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Budgeting for marketers

  1. 1. Budge&ng  for  Marketers  A  (very  brief)  introduc&on   Dr. Ana Isabel Canhoto ww.anacanhoto.com (c)  Ana  Isabel  Canhoto  2013   1  
  2. 2. Disclaimer   •  This  presenta&on  is  a  primer;  just  a  primer   and  nothing  more  than  a  primer   •  Don’t  make  investment  decisions  based  on  the   contents  of  this  presenta&on   •  For  marketers   •  Context:  Marke&ng  programme   •  Different  from  capital  budge&ng,  etc.     (c)  Ana  Isabel  Canhoto  2013   2  
  3. 3. Terms  of  use  •  This  presenta&on  was  developed  for   students  in  the  MSc  Marke&ng  programme,   at  Oxford  Brookes  University.  •  You  can  use  the  content  and  ideas  in  this   presenta&on,  in  all  or  in  part,  under  the   following  condi&ons:   •  Always  acknowledge  the  source   •  For  non-­‐commercial  purposes:  no-­‐fee   •  For  commercial  purposes:  make  dona&on  to   charity  of  my  (c)  Ana  Isabel  Canhoto  2013   choice   3  
  4. 4. Structure   4   (c)  Ana  Isabel  Canhoto  2013  
  5. 5. 5  (c)  Ana  Isabel  Canhoto  2013  
  6. 6. The  origin  of  the  word  •  The  term  ‘budget’  comes  from   the  la&n  bulga,  which   described  a  liWle  pouch.  •  Budget  =  a  container  •  Money  coming  in  and  money   going  out  of  the  container   6   (c)  Ana  Isabel  Canhoto  2013  
  7. 7. Discussion  If  you  don’t  want  to  end  up  without  money  on  that  pouch  (or  with  too  much  money  lying  around  that  could  be  beWer  used  elsewhere),  what  do  you  need  to  iden&fy?   7   (c)  Ana  Isabel  Canhoto  2013  
  8. 8. To  keep  that  pouch  balanced….  You  need  to  iden&fy:   •  What  money  is  likely  to  come  in  /  go  out   •  When   •  Where  the  path  dependencies  are   8   (c)  Ana  Isabel  Canhoto  2013  
  9. 9. (Some)  Benefits  of  budge&ng  •  Establish  how  much  a  given  project  is  going   to  cost  you  •  Iden&ty  what  needs  to  be  done  for  the   project  to  succeed,  when  you  are  likely  to   be  short  of  cash  and  where  the  risks  are  •  Give  you  something  to  compare  actual   performance  against  •  Helps  focus  discussions  and  ac&on   9   (c)  Ana  Isabel  Canhoto  2013  
  10. 10. Budgets  in  marke&ng  •  As  a  marketer  you  will  be  proposing  ac&ons   (the  marke&ng  programme)  to  help  you   achieve  a  par&cular  strategy  (and,   ul&mately,  generate  shareholder  value)  •  Those  ac&ons  carry  costs  •  Budge&ng  helps  you  develop  a  compelling   argument  for  the  implementa&on  of  your   proposed  strategy   10   (c)  Ana  Isabel  Canhoto  2013  
  11. 11. (Some)  limita&ons  of  budge&ng  •  The  budget  is  only  as  good  as  the  data  that   goes  in:  garbage  in,  garbage  out   •  Do  your  research!  •  Assump&ons  are  not  reality:   •  Check  the  soundness  of  your  assump&ons   •  Create  buffers   •  Revise  regularly   11   (c)  Ana  Isabel  Canhoto  2013  
  12. 12. 12  (c)  Ana  Isabel  Canhoto  2013  
  13. 13. Marke&ng  in  the  Organisa&on   Organisa&on  Objec&ves  Translate  into…   Marke&ng  Objec&ves  Inform  development  of…   Marke&ng  Programmes   13   (c)  Ana  Isabel  Canhoto  2013  
  14. 14. Marke&ng  in  the  Organisa&on   Organisa&on  Objec&ves  Translate  into…   Marke&ng  Objec&ves   Focus  of  the  Inform  development  of…   marke:ng   Marke&ng  Programmes   budget   14   (c)  Ana  Isabel  Canhoto  2013  
  15. 15. Marke&ng  budget  •  Reflects  the  benefits  and  the  costs  of   delivering  a  marke&ng  programme.  •  Budge&ng  requires  you  to  iden&fy:  1.  Benefits  sought  2.  Ac&ons  that  deliver  sought  benefits   •  Direct  as  well  as  ‘enabling  ac&ons’  3.  Resources  needed  to  deliver  the  ac&ons   •  Including  someone’s  &me!   15   (c)  Ana  Isabel  Canhoto  2013  
  16. 16. 16  (c)  Ana  Isabel  Canhoto  2013  
  17. 17. Developing  the  marke&ng  programme  Organisa&on  Objec&ves   Profitability   Marke&ng  Objec&ves  Marke&ng  Programmes   17   (c)  Ana  Isabel  Canhoto  2013  
  18. 18. Developing  the  marke&ng  programme  Organisa&on  Objec&ves   Profitability   Marke&ng  Objec&ves   Customer  Reten:on  Marke&ng  Programmes   18   (c)  Ana  Isabel  Canhoto  2013  
  19. 19. Developing  the  marke&ng  programme  Organisa&on  Objec&ves   Profitability   Marke&ng  Objec&ves   Customer  Reten:on  Marke&ng  Programmes   Customer  Sa:sfac:on   19   (c)  Ana  Isabel  Canhoto  2013  
  20. 20. Developing  the  marke&ng  programme  Product   Customer  Service   •  Sales  materials  Price   •  Customer   support   •  Inventory   management   20   (c)  Ana  Isabel  Canhoto  2013  
  21. 21. Improving  Customer  Service   Sales   materials   Sources  of   complaints   re:  customer   service   Inventory   Customer  management   support   21   (c)  Ana  Isabel  Canhoto  2013  
  22. 22. Ac&ons:  Sales  Materials  •  Research  customers’  informa&on  needs  •  Revise  exis&ng  materials  vs.  requirements  •  Develop  new  materials  •  Ensure  sales  informa&on  is  consistent   across  the  various  channels  •  Update  the  website  •  Train  sales  force  and  customer  support   staff  about  the  new  materials  available    •  …   (c)  Ana  Isabel  Canhoto  2013   22  
  23. 23. Ac&ons:  Customer  Support  •  Improve  instruc&ons  on  packaging  •  Improve  FAQ  page  on  website  •  Create  forums  on  website  or  Facebook  page  •  Integrate  customer  databases  •  Ensure  customer  facing  staff  have  access  to   relevant  customer  related  data  •  Developed  unified  process  for  key  accounts  •  Train  customer  facing  staff  •  …   (c)  Ana  Isabel  Canhoto  2013   23  
  24. 24. Ac&ons:  Inventory  Management  •  Improve  knowledge  sharing  within   organisa&on  –  e.g.,  regarding  produc&on   schedules,  regarding  problems  with  supplier,   regarding  customer  insight…  •  Develop  models  of  consumer  behaviour  to     an&cipate  when  customers  are  likely  to  need   replacements,  what  colour  /  model  /  size  is   likely  to  be  in  more  demand,  etc.  •  …   24   (c)  Ana  Isabel  Canhoto  2013  
  25. 25. Ac&ons  =>  Benefits   Enabling   Direct   Benefits   ac&ons   ac&ons  •  Check  regula&ons  •  Select  design   Improve   Improve   company   packaging   customer  •  Produce  new   instruc&ons   support   leaflets  •  Produce  new   boxes  •  Replace  exis&ng   boxes  •  Etc   25   (c)  Ana  Isabel  Canhoto  2013  
  26. 26. Iden&fying  Costs   Ac&ons   Cost   Freque Intern Extern Direct   Enabling   Who   When   ncy   Metric   al   al  Improve  packaging  instruc&ons                               Check   Legal   By   Approval  by  Legal       regula&ons   department   week  3   once   department           Select  design   Crea&ve       company   director                       Produce  new       leaflets                           Produce  new       boxes                           Replace  exis&ng       boxes                               Etc                           26   (c)  Ana  Isabel  Canhoto  2013  
  27. 27. Linking  costs  and  benefits   •  Capturing  and  quan&fying  causes  and   effects      Ac&ons   Desired  level  of   customer  sa&sfac&on   Current  level  of   customer  sa&sfac&on     27   (c)  Ana  Isabel  Canhoto  2013  
  28. 28. Linking  costs  and  benefits  •  Quan&fying  the  change:   –  Causal  market  research   –  Historical  transac&on  data   –  Models   –  Theories   28   (c)  Ana  Isabel  Canhoto  2013  
  29. 29. Issues  •  Limited  resources   –  Priori&se  ac&ons   •  Limit  on  expenses   •  Quick  return   •  Long  standing  contracts   •  Internal  skills   •  …  •  Cost  of  Opportunity   –  Choice  •  Shio  happens   (c)  Ana  Isabel  Canhoto  2013   29  
  30. 30. Resources  hWp://anacanhoto.com/2012/10/05/book-­‐review-­‐marke&ng-­‐accountability-­‐(c)  Ana  Isabel  Canhoto  2013   30  by-­‐mcdonald-­‐and-­‐mouncey/    
  31. 31. Budge&ng  for  Marketers  A  (very  brief)  introduc&on   Dr. Ana Isabel Canhoto ww.anacanhoto.com @canhoto (c)  Ana  Isabel  Canhoto  2013   31  

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