Budget Constraint in Marketing Strategizing: Confusions Demystified
Similar to other business plans, the marketing plan is closely tied to budgeting matters. Given that, how can marketers make informed decisions about budget allocations while leading actionable marketing strategies?
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What comes first in marketing: the budget or the strategy? Originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Budget range (not exact budget).
Strategy CAN be first, but why waste time building a strategic plan than can never be implemented because the needed budget is impossible to attain? Why create a strategic plan that includes a Superbowl commercial for your kids lemon aid stand? Yes it will send sales through the roof, but your kids will can’t afford a Superbowl commercial no matter how confident they are in the plan.
Here are some notes that will help clear up the confusion:
- There is no such thing as “without a budget”. A budget may be as little as $0 or $5, but they are still budgets. So stating that there are many free marketing tactics, is irrelevant to this question. You should utilize free tactics even if you budget is a billion $. You must Maximize the ROI no matter how small or big your budget is.
- Strategies do not cost money, tactics do. Tactics are how you implement your strategy. Although, when most people ask for your “strategy” they expect you to report the tactics and budget too.
- The best answers in this post I feel talk about BOTH. I start out with a budget range and then create a plan then adjust the budget to fit better. It is kind of like buying a car, you start with a budget range then work your way to a point when you can determine the actual final budget. But to start car shopping without a budget range in mind waste a lot of time, thus money.
- I think people that work for big companies may say “strategy.” Which for them is accurate, but that is because they already know a budget range in the back of their mind. Most importantly, big company players know that as long as they can show a convincing ROI expectation, then they can get more. If the expected ROI is 10%, then the larger the budget the larger the return in actual dollars.
- Giving someone a budget range for them to create a marketing plan does NOT mean you are giving them money to start spending without a plan. The budget is simply the ONLY limitation/parameter they must understand before they can design a viable marketing plan. The strategy (and marketing plan) still has to be finalized before any of the budget is actually used.