QUESTION

MEA Group is a leading company in Integrated Marketing solution services. The Group attempts to meld all aspects of marketing solution such as advertising, sales promotion, public relations, direct marketing, and social media, through a respective mix of tactics, methods, channels, media, and activities, so that all work together as a unified force.

The operations department of the MEA group tends to serve 5 internal business functions with the budget of KD 1 Million, distributed amongst the business functions according to each business unit’s projects or campaigns as briefly stated below:

Business development function with the budget of KD 220,000

• Project 1 – KD 100,000
• Project 2 – KD 30,000
• Project 3 – KD 40,000
• Project 4 – KD 15,000
• Project 5 – KD 35,000

Corporate marketing function with the budget of KD 300,000

• Project 1 – KD 75,000
• Project 2 – KD 98,000
• Project 3 – KD 50,000
• Project 4 – KD 13,500

Marketing communication function with the budget of KD 112,000

• Project 1 – KD 15,000
• Project 2 – KD 62,000
• Project 3 – KD 25,000
• Project 4 – KD 10,000

Market Research function with the budget of KD 150,000

• Project 1 – KD 20,000
• Project 2 – KD 15,000
• Project 3 – KD 35,000
• Project 4 – KD 50,000
• Project 5 – KD 30,000

Product Marketing function with the budget of KD 218,000

• Project 1 – KD 45,000
• Project 2 – KD 20,000
• Project 3 – KD 100,000
• Project 4 – KD 53,000

Based on the above budgetary information, and taking into consideration each project’s invoice starting from 5 up to 20 invoice split upon media, press, production, creative concept etc. depending on project/ campaign needs.

Identify a method in which budget are monitored and ensure covering all the following aspects:

1. Improvement in cash flow
2. Settling invoices in a timely manner
3. Updating business function with spending and remaining budget
4. Easy matching Budget control sheet with the Financial dep. System
5. Automatically processing of invoices instead of manual methods

Note:

• You are free to use any of Microsoft program; Excel, Word, PowerPoint.

 

ANSWER

 

Introduction

In today’s time the concept of integrated marketing has become relevant because of the changing landscape in the marketing world. An integrated marketing plan, essentially, is the new way advertisers must approach their interchanges and informing to make a durable ordeal for customers moving toward their image, business, or association. Integrated marketing envelops a wide range of marketing strategies including paid publicizing, advertising, internet-based life marketing, direct marketing, and sales promotion, utilizing each with a particular reason that meets an organization’s objectives and targets. A few specialists trust that integrated marketing isn’t just about the strategies for correspondence utilized, yet in addition how well you join your gathering of people into those techniques and strategies. But such type of integrated marketing plan requires money as these things can be costly. There would be times that we would require not all the plans. In such cases a budget is a very important so that the funds can be allocated in a manner as required.

Method

There are various methods in which integrated marketing budget can be allocated, but the best method that it can be allocated is the percentage method.

As per the percentage model the budget is based on the organization as a whole. The cost to be incurred by the organization would depend upon the sales of the organization, therefore as the sales of the organization would grow the cost incurred would also grow. The cost of integrated marketing would be a percentage of the total cost which can an number depending on the organizational policy of how much they want to spend on the marketing. Once the integrated marketing receives its share from the marketing it can further divide the amount into various functions like it was done in the case.

Integrated Marketing Budget

Integrated Marketing Budget	100.00%	10,00,000
Business Development	22.00%	2,20,000
Corporate Marketing	30.00%	3,00,000
Marketing Communication	11.20%	1,12,000
Market Research	15.00%	1,50,000
Product Marketing	21.80%	2,18,000

In the above example we can see that the organization has allocated KD 1 million for the Integrated Marketing budget for the year. Now it is up to the department how they want to allocate the cost to various functions. From the above allocation it is clear that the organization wants to focus on the corporate clients that is why they have the highest allocation to the corporate marketing of about 30%. If it would have been a FMCG company they would have more focused on retail marketing instead of Corporate Marketing. Therefore, we could say that the percentages are a lot dependent on the type of the business being done by the organization. These percentages are important because this reflects where the organization wants to focus on the future and thus should directly reflect the policies of an organization.

Business Development

Business Development	100.00%	2,20,000
Project 1	45.45%	1,00,000
Project 2	13.64%	30,000
Project 3	18.18%	40,000
Project 4	6.82%	15,000
Project 5	15.91%	35,000

Now once the amount has been allocated the business function it is up to the function how they want to allocate the money to individual projects. Here a lot of things about a project are taken into consideration such as the life of the project, importance of the project to the whole organization etcetera.

Projects can further divide the amount allocated to them into various sub categories. But one things that should be kept in the mind is that the allocation process should be in line with the overall organizational policy

Conclusion

The percentage method is the best method for the preparation of the budgets as cash is pre allocated to a particular department or function. They have access to cash and the organization as a whole knows how much cash is needed and when. Moreover, because of this method it is the responsibility of the department or function to raise the invoice and they can be settled by just referring to the budget. This reduces the task of finance department as they do not have to verify each and every invoice. Lastly, as the organization grows the budgetary allocation to each department also grows.

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