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

1. Budge&ng
for
Marketers
A
(very
brief)
introduc&on
Dr. Ana Isabel Canhoto
ww.anacanhoto.com
(c)
Ana
Isabel
Canhoto
2013
1

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. 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. Structure
4
(c)
Ana
Isabel
Canhoto
2013

5. 5
(c)
Ana
Isabel
Canhoto
2013

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. 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. 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. (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. 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. (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
(c)
Ana
Isabel
Canhoto
2013

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. 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. 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
(c)
Ana
Isabel
Canhoto
2013

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. 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. 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. Developing
the
marke&ng
programme
Product
Customer
Service
• Sales
materials
Price
• Customer
support
• Inventory
management
20
(c)
Ana
Isabel
Canhoto
2013

21. Improving
Customer
Service
Sales
materials
Sources
of
complaints
re:
customer
service
Inventory
Customer
management
support
21
(c)
Ana
Isabel
Canhoto
2013

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. 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. 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. 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. 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. 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. Linking
costs
and
benefits
• Quan&fying
the
change:
– Causal
market
research
– Historical
transac&on
data
– Models
– Theories
28
(c)
Ana
Isabel
Canhoto
2013

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. Resources
hWp://anacanhoto.com/2012/10/05/
book-­‐review-­‐marke&ng-­‐accountability-­‐(c)
Ana
Isabel
Canhoto
2013
30
by-­‐mcdonald-­‐and-­‐mouncey/

31. Budge&ng
for
Marketers
A
(very
brief)
introduc&on
Dr. Ana Isabel Canhoto
ww.anacanhoto.com
@canhoto
(c)
Ana
Isabel
Canhoto
2013
31