Given the current economic and marketplace pressures on retailers to maximise the productivity of their marketing expenditures, the marketing budgeting practices of retailers are examined. Results of the study reported here show that most of the retailers used relatively unsophisticated methods to determine the level (total amount) of marketing budget and that marketing expenditure allocation decisions of retailers were, ad hoc, leading to possible imbalances in the marketing expenditure mix and ineffectiveness of the total marketing effort. A considerable gap between marketing budget theory and practice in retailing is suggested. Scope for research to demonstrate the effectiveness of sophisticated approaches to budget setting in the retailing context is outlined.
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