Question

Topic: Strategy

Marketing Budget

Posted by gpaplauskaite on 125 Points
Hello guys,
I have a hypothetical question. Let's say marketing department's goal is to generate 200 million $ turnover in a B2B company per year. What budget would be realistic to achieve that? How would you calculate marketing budget?

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RESPONSES

  • Posted by mgoodman on Moderator
    It depends on a lot of factors.

    First, what are the current turnover and marketing budgets? What's the business's market position/share? Can the growth come from selling more to current customers, or is it all going to come from adding customers, or growing the market, or stealing market share from competitors?

    Who is the target audience? Who are the decision-makers? Who are important influencers? Etc.

    Who are the main competitors? What marketing strategies are they pursuing? How much are they spending on marketing? What are their vulnerabilities? (You might want to conduct a SWOT analysis.)

    How about pricing and profitability? Are the margins rich enough to justify aggressive marketing? Is pricing considered part of the marketing "budget?" How about R&D? Sales? Staffing?

    Hypothetical questions like the one you've posed don't have real answers because they require assumptions about marketplace conditions and internal issues that have greater impact than the basics of the hypothetical question itself.
  • Posted by Gary Bloomer on Member
    What kind of product or service is being offered to make up that $200 million?

    Is that 200 closed sales at $1,000,000 each?

    Or is that 400 closed sales at $500,000 each?

    And so on ...
  • Posted by gpaplauskaite on Author
    It's financial services providing company, targeting small to medium business owners. This is all information I have.
    I have this question for my job interview and it's seems too complicated to answer...
  • Posted by Jay Hamilton-Roth on Member
    In your interview, they aren't looking for a single magical answer. They want to hear your thinking. You've been given a lot of follow up questions, all of which would be appropriate responses to their inquiry. The challenge will be for you to get their answers to these questions, and then continue to share your expertise on how to achieve their goals given their parameters. Good luck.

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