Budget Allocation and Marketing Control

Budget Allocation and Marketing Control

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Budget Allocation and Marketing Control

Digital marketing involves any process used on the internet to conduct a marketing action. Proper alignment of revenue and marketing leads to a better inflow of profits for any enterprise. Most companies face hurdles in coordinating an open and effective relationship between the management of revenue and marketing. In digital platforms management of revenue and marketing depends on the business processes that are based on advanced analytic tactics to mobilize a significant amount of revenues. Digital marketing is a recent development in the enterprise world and has received a good response about advertising opportunities aided by the digital world. Digital marketing is rapidly growing as a large number of advertisers seek to cope with the diverse advertising landscape. The main constant in all this is the growing advertising budgets in a still under-utilized platform as businesses seek to connect with its customers and make prospects (Leff, Bay, Dawley and Ferro, 2014).

Many large ventures ensure that marketing control and management of revenues function at cross-purposes. Such business ensures that both work towards the generation of better profits at a strategic level, although at a tactical level the definitions of success can vary. For instance, a marketer may be happy to sell at a loss while revenue managers cry as their revenue per inventory unit goal gets out of their hand. Conversely, a revenue manager might react to an increase in demand because of a marketing campaign by ensuring that it is impossible for those targeted by the campaign to purchase at a competitive price. The conflict and rivalry between the management of revenues, which increases the rate of profit generation by ensuring that prices are at moderate rates of conversion, and digital marketing, which can move demand to a better capacity with accuracy and receptiveness, cannot be achieved in the offline marketing world.

According to Leff, Bay, Dawley, and Ferro, (2014), revenue management and marketing control have a lot of characteristics that are complementary to each other. The two aspects are robust analytic processes that require explicit forecasts of customer behavior, and sometimes innovative mathematical enhancement strategies. The two processes involve large amounts of tactical business decisions to increase profits. Due to such sophisticated needs, an automated system has been developed to increase the precision and rate of the required decisions. Marketing control and revenue management complement each other because they fall under two diverse points of the marketing world (Wang et al., 2015). While marketing is intended to attract already established leads such as customers looking for the right products, it can be applied in the process of advertising from creating awareness and attention to adaptation. Conversely, the management of revenue might stimulate or restrict the demand at conversion point by changing the value and accessibility. It matches the levels of inventory to demand forecasts to create the best pricing methods that aim at conversion rates provided by the inventory. In places where inventory is flexible, revenue management can incorporate the substitution cost.

Revenue management is important in extracting revenues from strong and stable markets. This leaves it exposed to over-reaction and lack of accurateness under soft demand. The way revenue management responds to soft market situations can be to reduce rates across the board to encourage demand. In some cases this is right, but in most cases, it is very costly. Unlike the amount spent on marketing, the effects of lowering the price are not considered as obvious expenses since a cut on prices can result in shocking impacts on profitability. If marketing control and revenue management are integrated, the effects of reducing the price are compared against the impacts of driving additional business. In different areas of marketing practice, the granularity level available for marketers is not enough to establish a clear understanding of the effects of certain investments on strategical pricing and conversion rates (Wang et al., 2015).

Appendices

Table 1: Budget Allocation  

Table 2: Revenue Forecasting

Table 3: Marketing Metrics Measurements

Table 4: Gantt Chart

References

Leff, A., Bay, D., Dawley, P., & Ferro, M. (2014). U.S. Patent No. 8,818,839. Washington, DC: U.S. Patent and Trademark Office.

Wang, X. L., Yoonjoung Heo, C., Schwartz, Z., Legohérel, P., & Specklin, F. (2015). Revenue management: progress, challenges, and research prospects. Journal of Travel & Tourism Marketing, 32(7), 797-811.