Business Budgeting and Marketing
The Uses of a Budget
Firstly a budget is a financial plan, there are different types dependent on the business from sales to production to cash flow and marketing budgeting. Some small businesses may have one budget where as other larger businesses with for example multiple sites will have different budgets for different sites, or even different departments within a large business. A budget is agreed upon based on the income and the expenditure of a business to determine a fair financial amount which can be spend whilst still giving the business reasonable profit.
A budget is implemented for a number of reasons, firstly, it gives a means of monitoring income and expenditure against a planned activity, whether the activity be a warehouse operation or a small business staff budget. Budgets are also used to identify and prioritise the business needs within the financial year.
A budget being in place for any business helps give a real idea of the financial performance, and will help identify current and future issues. If a budget is not being achieved this gives a business the opportunity to look at and revise the budget or investigate the reason for over spending, which in turn contributes to the continuous improvement of a business as they try to come in on budget.
Although budgets can be revised, generally in business this has to be done for good reason, such as unforeseen internal and external situations and changes which are beyond the control of the business, if a budget needs to be amended or isn’t being met, then corrective actions should be the first course of action before budgets are amended to identify, investigate and resolve issues which are causing over spending.
How to Manage a Budget
In order to manage a budget, we first as a business need to determine what the budget is, this is done through looking at projected profit and expenditure. We also need to look at the business needs such as continuous improvements as well as the day to day running of the business to determine if extra budgeting is required to help progress the business further to allow further profits.
Once the above is determines, a budget can be set and allocated to the appropriate resources or projects giving realistic targets.
Throughout the year a budget should be monitored and if needed revised, a reassessment of a budget could be due to business needs or unforeseen internal or external financial needs. Monitoring of the budget allows a company to determine the performance of the area the budget is allocated to within the time scale, by offsetting the criteria met against budget used.
Often a budget is used as a way to improve performance, many businesses will include budgets in higher managements targets to ensure that they are monitored and assessed regularly against the areas they are planned to, this gives accountability to the budgets and responsibility to an individual to help ensure that the budgets are used in the appropriate manner for the business.
At the end of the year, a review of all budgets should take place for all areas, where budgets have not been met then this should be investigated to determine the cause and allow a business to implement further resources if required. If in the case of a project a budget is not met then again, this should be looked at and assessed and can give a clear indication of performance.
The Principles of Marketing
Marketing is the advertisement and promotion of a business, product or service which helps sells the final product to the consumer. This covers the use of market research and advertising.
Affective marketing covers the 7 P’s.
Product – the product is what is being advertised or marketed to the consumer, which out this product or service marketing would not be needed as there would be no end goal to the marketing campaign.
Price – The price of the product will determine the audience in which the product or service needs to be aimed at and therefore marketed for, a marketing campaign for a low budget hand bag for example will vary greatly to a marketing campaign for a more bespoke designer handbag.
Place – The location in which a product is available for the consumer to purchase, this should be evident within a marketing campaign as without access to the product, it cannot be sold and make the business profit.
Promotion – this is how the customer is made aware of the product or service on offer, this could be through the use of leaflets for say local takeaways or hairdressers to TV advertisements for bigger more profitable businesses which need to gain customers from a wider area/range.
People – this is the people responsible for all aspects of the marketing, from market research to production of the marketing piece, without these people the advertisement of a product or service would not be possible and therefore the product or service would not be as well known.
Physical Prescience – this is how the product or service is viewed and how the brand presents itself, for example the people employed within a restaurant are the physical presence and represent that brand, therefore their actions and how the deal with the customer are extremely influential when it comes to securing future business from individuals. This is the case for all businesses where people are dealing with people.
Process – this is how the product or service is delivered to the customer, whether it be through physical manual work for a service, or through the consumer physically going to a place to purchase a product.
The 7 P’s are all factors which need to be considered when marketing to ensure that the marketing project enhances a product and makes it appealing to the right audience, an effective marketing campaign will promote a product in the correct way and ensure that it reaches its maximum sale potential.
The Sales Process
The process of selling a product of service first, starts with determining the audience of the product and who the potential target market is, as well as networking to get the product or services name out there, this can be done through making contact with other businesses or through business to business referrals. This can also be done through social media which reaches a wide audience. All the above help determine the level of sales and is called prospecting for sales.
The next thing in a sale process is the approach, this is how the product or service is put out to the consumer which again will depends on who the consumer/target audience of the product or service is, this is often done through sales meetings, calls or through mailing information out.
The next thing to determine is the customer needs, this can be done through market research and the questioning and most importantly listening to the consumer and establishing the needs and requirements of a product to gain a full understanding of the requirements for the targeted consumer to feel they would purchase a product or service.
The presentation of the product or service is the next step, presenting the product/service appropriately to the consumer and using demonstrations where required will demonstrate and establish the benefits of the product/service to the consumer, whilst giving a full explanation of the product.
The next thing to do is overcome objections, this could be through fine tuning a product to better meet criteria for the consumer or through negotiation with the consumer for a service to tailor it to the needs of the specific consumer. Negotiations may be more prominent in the warehouse field that I work in as high company managers negotiate terms with customers to determine the best level of service for them.
Closing of the deal is the final step, whether it be the closing of a deal with a large store to stock the product or closing of the agreement between a third party logistics company and the customer. This is done when all agreements are in place and the next steps are ready to be implemented.
After the final agreement and the closure of a deal then monitoring and follow ups are required to ensure that the product or service is meeting expectations of the customer.
Features and Uses of Market Research
Market research is used to measure the suitability of a product to a customer and help develop a further understanding of the customers’ requirements. It can also be used to identify buying patterns trends and changes in markets. This is done through gathering data and information from market research, this data can be collated in different ways.
Data collected from market research can be quantitative and therefore in number form, or qualitative which is feedback which can be read and interpreted rather than say a questionnaire using numbers to rate answers to questions. Primary and secondary research and be used as well as customer surveys, questionnaires and comment cards. All data can be sorted into either qualitative or quantitative which can then be analysed and information interpreted from it.
The Value of a Brand to an Organisation
A brand is a name, logo, image, design or symbol which represents a product or service, with time the brand can become instantly recognisable and provide a unique selling point for a product and even give the expectation of quality. This can be seen with certain products already available to consumers such as IPhone which incorporates the Apple brand and give the immediate perception of a quality product.
The value of a product having a brand to the company supplying it can be irreplaceable as the brand develops a customer relationship and loyalty and also differentiates the product from competitors. A good brand will develop trust and prestige and gain a competitive advantage within the products marketing sector above other brands and their products.
Relationship between Sales and Marketing
Sales and marketing are closely linked, as a good marketing campaign can product a higher level of sales, therefore the relationship between the two should be mainly positive as the two should align for common goals and have trust and respect for each other as they consult over important factors of a product or service and use teamwork with open communication to achieve these common goals. This in turn creates positive effects on the sales and the marketing of a business as knowledge of the consumer needs and feedback is given to help improve products and services to increase customer satisfaction. Marketing and sales relationships which are positive will product increased sales, customer satisfaction, product development and increase business innovation.
Although these relationships should be primarily positive, there is always potential for conflict due to different cultures and min-sets leading to misunderstandings, sales will be focused on profits and margins whilst marketing focuses on the customer needs, this can create conflicts if the customer requirements established through marketing cannot be met due to financial constraints. This can have an overall effect on the business itself as lack of communication and information sharing can create distrust and conflicting goals which constrict a product or services developments, stopping it from achieving its true potential.