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SALES PROMOTION BUDGET


SALES PROMOTION BUDGET
       Sales promotion is part of overall promotion strategy of the firm. Sales promotion manager is responsible to allocate resources for various units. Total sales promotion budget is divided into major activities required to achieve the predetermined target. Budget is a tool of planning as well as control. Resources are limited in the organisation. Each unit demand more and more resources. Out of promotion-mix budget, in large organisation, emphasis is given to advertising. Although in recent times this emphasis is shifting towards sales promotion. Following techniques are uses to allocate funds for sales promotion:

1. Percentage of Sales Method: Under this approaches the budget is determined on the basis of forced percentage of sales. It is very useful method for calculating the budgeted past sale as well as forecasted sales should be considered. This is popular method but not very much suitable for a new company.

2. Parity Method: In this approaches the sales promotion budget is based on the competitors are present in the market. Each firm has its unique strategy for sales promotion, so this approach may mislead the firm and weaken the strategy. Each company’s market requirement are different so this method is not advisable on logical grounds.

3. Unit of Sales Method: In this method sales promotion is based on physical volume of sales rather than dollar value of sales. This method is generally used by companies dealing in high priced goods such as washing machines, refrigerators, two-wheelers and microwave ovens.

4. Objective and Task: In this method the promotion budget is decided on the basis of promotional targets for the year. This techniques is also popular. In this approach at first the objectives are decided then on the basis of these objectives, the funds are allocated. This approaches supports the object oriented approaches in the marketing strategies.

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