BY:RINKU MISHRA DEBASHISH PANDA

The advertising budget of a business typically grows out of the marketing goals and objectives of the company. Although fiscal realities can play a large part as well, especially for new and/or small business enterprises. The small business owner also needs to consider the nature of the market, the size and demographics of the target audience, and the position of the advertiser's product or service within it when putting together an advertising budget.

There are several allocation methods used in developing a budget PERCENTAGE OF SALES METHOD An advertiser takes a percentage of either past or anticipated sales and allocates that percentage of the overall budget to advertising.  OBJECTIVE AND TASK METHOD The benefit of this method is that it allows the advertiser to correlate advertising expenditures to overall marketing objectives.

 COMPETITIVE PARITY METHOD Keeping one's own objectives in mind, to compare its advertising spending with that of its Competitors.  MARKET SHARE METHOD A business equates its market share with its advertising expenditures.  UNIT SALES METHOD This method takes the cost of advertising an individual item and multiplies it by the number of units the advertiser wishes to sell.

 ALL AVAILABLE FUNDS METHOD

Allocation of all available profits to advertising purposes.  AFFORDABLE METHOD With this method, advertisers base their budgets on what they can afford.

Departmental Budgets The departments or product categories with the greatest sales volume receive the biggest share of the budget. Total Budget Your total budget may be the result of integrated departmental or product budgets. Calendar Periods Most executives of small businesses usually plan their advertising on a monthly or weekly basis.

 Media
The amount of advertising that you place in each advertising medium - direct mail, newspapers, radio, etc. - should be determined by past experience, industry practice, and ideas from media specialists.  Sales Areas You can either spend your advertising dollars in areas where your customers already frequent or you can use them to stimulate new sales areas.  A Flexible Budget Based on your advertising needs, you may find that you need all or only one of these methods to meet your advertising objectives.

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