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The power of the marketing department and its political control of the budgeting process relative to the power and political behaviour of other departments can be used to predict budget size. Previous literature on marketing budgeting has focused on technique rather than the task environment. Here an attempt has been made to place marketing resource allocation in its context of the “corporate environment for marketing management”. A model of the power and politics of marketing budgeting is given, and a small exploratory empirical study of medium‐sized UK manufacturing firms validates certain elements of the model. The results point to three areas for concern: the management of marketing in organisations; the construction of curricula for marketing education; and the lines of investigation to be pursued next.

Marketing planning and the annual budget are two procedures that organizations engage in. Although controlled by the marketing department and the finance department respectively, the marketing plan and annual budget are interlinked in many ways. Investigates the importance of this interrelationship. Reports on the results of a study of 41 fast moving consumer goods companies following a literature review of budgeting and marketing planning. The results show that there is a high degree of interaction between the marketing and finance departments. They also show that most companies tended to do the marketing plan and annual budget together. In addition, the sales forecast, although controlled by the marketing department, is set to meet financial targets.

Based upon a study of between fifty to sixty case examples of new venture start‐ups, the author presents a screening procedure for entrepreneurs to use when evaluating whether a proposed low‐budget marketing strategy for a new venture shows promise of being successful. The procedure consists of four sets of screening conditions. A well‐designed marketing strategy should have a reasonably good chance of being successful if it (1) will tightly integrate the product/service and price offerings, the intended distribution method, and the intended promotion plan with the new venture’s designated target market, (2) will encounter no serious marketing strategy execution difficulties which cannot be resolved, (3) uses marketing concepts which can be executed with a small marketing budget, and (4) displays three characteristics believed to be strongly associated with marketing strategies that are successful over the long term.

One of the greatest gaps in our knowledge of how marketing decisions for domestic and international operations are made relates to the impact of the organisational setting in which most decision‐making takes place. While the concept of the marketing environment — all those impinging forces in the international marketplace outside the firm — is familiar, this article introduces and makes use of the idea of the corporate environment — the organisational forces and conditions surrounding the marketing decision maker. This corporate environment includes such elements as organisational climate, organisational power and politics, and the use and manipulation of information within organisations. The corporate environment provides a way of explaining and understanding some marketing decisions which do not conform to the “rational” models of economics and management science. In particular this is illustrated by re‐examining the fundamental question of the determination of marketing budgets.

The purpose of this paper is to allocate marketing budgets in complex environments, where data are scarce and management judgment is available. In this research, marketing budgets are allocated, to maximize customer equity as a long-term profitability measure.

The researchers provide a model for allocation of marketing budgets based on both decision calculus and econometric models and combine it with the concept of Markov chain model to cope with data scarcity. Dynamic programming is used to find the optimal solution.

The authors examine the model in telecommunication industry. Applicability of the model is supported by an illustrative example. To allocate marketing budgets, researchers consider three strategies for each period: do nothing, retention-focused strategy and acquisition-focused strategy. The results show the applicability and effectiveness of the model to find the best strategy.

As the suggested approach is based on management judgment, it is useful in situations, as the authors have experts or experienced managers to achieve reliable data. In situations which the authors do not have access to experienced managers, the results may be unreliable.

The suggested approach is useful in situations of data scarcity, where experienced managers are accessible. The researchers have focused on telecommunication industry cases; however, the model is useful in other industries like the insurance industry.

The main contribution of the research lies in the suggestion of a new approach to allocate marketing budgets in data scarcity situations in multi-period planning horizons. The researchers use both decision calculus and econometric tools to find the transition matrices of marketing plans.

To achieve a full understanding of the role of marketing from plan to profit requires a knowledge of the basic building blocks. This textbook introduces the key concepts in the art or science of marketing to practising managers. Understanding your customers and consumers, the 4 Ps (Product, Place, Price and Promotion) provides the basic tools for effective marketing. Deploying your resources and informing your managerial decision making is dealt with in Unit VII introducing marketing intelligence, competition, budgeting and organisational issues. The logical conclusion of this effort is achieving sales and the particular techniques involved are explored in the final section.

Brand managers in packaged goods firms are under pressure to increase or maintain high sales promotion spending at the expense of media advertising. This study investigates the antecedents and outcomes of brand managers’ advertising and sales promotion budget allocations by adopting a bounded rationality perspective. Based on survey data collected from 165 brand managers in the USA, higher advertising (vs sales promotion) allocations are associated with: single, relatively high priced brands in the early phases of the product life cycle; and more experienced brand managers who are subject to less retail influence. Also, brands with higher budget allocations to advertising, relative to sales promotion, tend to have more favorable consumer attitudes, stronger brand equity, and higher market share increases and profits. Managerial implications and areas for future study are discussed.

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.

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.

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.

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

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.

Preface The functions of business divide into several areas and the general focus of this book is on one of the most important although least understood of these—DISTRIBUTION. The particular focus is on reviewing current practice in distribution costing and on attempting to push the frontiers back a little by suggesting some new approaches to overcome previously defined shortcomings.

This study aims to ask whether the funding behaviour of companies is different during a recession. Specifically, the authors study whether firms fund marketing resources and capabilities with internal or external financing during a recession and under which conditions of strategic financial flexibility debt might be used to fund marketing resources and capabilities in recessions.

This study estimates empirical models using a newly merged data set covering 17 years, from 2000 to 2016. The authors merge firms’ marketing and financial information from Advertising Age, the American Customer Satisfaction Index, Compustat and the Centre for Research in Security Prices. The sample includes a panel of 653 firm-years of 67 top corporate advertisers.

The results indicate that firms take recessions as opportunities to be proactive and invest in short- and long-term marketing capabilities, companies with higher strategic financial flexibility relative to their industry peers tend to rely more on debt to fund short- and long-term marketing capabilities during recessions, firms use internal financing to fund their marketing budgets and short-term marketing capabilities in recessionary and non-recessionary periods and firms use internal financing and signals from past stock returns as mechanisms to fund long-term marketing capabilities.

The findings contribute to the body of knowledge on the antecedents of marketing resources and capabilities. The results extend the pecking order theory to include recessions and provide nuances of the financing drivers of resources and capabilities.

Companies should be proactive during recessions and invest in short- and long-term marketing capabilities. When negotiating marketing budgets with chief financial officers, marketing practitioners could suggest the sources to finance specific marketing resources and capabilities. Based on the results of top corporate advertisers, the authors recommend companies to fund marketing capabilities with internal resources (e.g. cash flows, retained earnings), and if cash is not available, companies need to rely on their superior strategic financial flexibility to access long-term debt and fund investments in marketing capabilities. The authors also recommend companies to fund long-term marketing capabilities by re-allocating investments. As well, signals from past performance are an important source to gain access to capital and fund investments in long-term marketing capabilities.

This study provides a more complete picture of the financial antecedents of marketing resources and capabilities in general and during a recession. The authors provide light on the moderating role of strategic financial flexibility during recessions. This study also clarifies the potential signalling of past performance for funding marketing resources and capabilities.