To read the full version of this content please select one of the options below:

Allocation of budget on marketing efforts: an econometric approach in India

Mehir Kumar Baidya (Indian Institute of Social Welfare and Business Management, Kolkata, India)
Partha Basu (Department of Humanities and Social Sciences, Indian Institute of Technology Kharagpur, Kharagpur, India)

Asia Pacific Journal of Marketing and Logistics

ISSN: 1355-5855

Article publication date: 30 August 2011

Abstract

Purpose

Budget allocation on individual marketing efforts is a complex issue for managers. The purpose of this paper is to estimate the elasticities of individual marketing efforts to allocate budget by taking into consideration two brands in India.

Design/methodology/approach

Historical data on physical sales and various marketing efforts (advertising, sales force, promotion, distribution and price) have been collected for two brands. Double‐log regression model has been fitted on data to estimate the elasticity of sales to each effort. Subsequently, the estimated elasticities have been used to allocate budget on the individual marketing efforts in question.

Findings

Various interesting results have been observed, such as the sales force claimed the highest amount of budget for both the brands. Further, managers of both the brands are under‐spending on all the efforts except for advertising in the case of second brand.

Practical implications

The findings will provide insight into allocation of budget on individual marketing efforts objectively instead of subjectively, which dominates in the field of marketing.

Originality/value

This research captures the real‐world situations (rather than small scale lab‐studies or theoretical modeling) and will definitely add some value in marketing literature.

Keywords

Citation

Baidya, M.K. and Basu, P. (2011), "Allocation of budget on marketing efforts: an econometric approach in India", Asia Pacific Journal of Marketing and Logistics, Vol. 23 No. 4, pp. 501-512. https://doi.org/10.1108/13555851111165057

Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited