When will business increase their marketing budgets?
A majority of companies (43%) that responded to a latest marketing budget trends survey by Team Namibia said they are set to give a boost to their marketing budgets anytime between now and the next six months.
This comes as most businesses had cut down their marketing expenditure owing to the economic depression.
“38% responded that they would increase marketing budgets when the economy is “more stable”, “picking up” or “showing recovery”. Only 8% of the respondents prioritised other financial commitments or expenditure.”
“This is despite the fact that many agree that “it is damaging to business if the marketing budget is simply based on what is left over after covering all expenditure,” Team Namibia has said.
With a large percentage of businesses having their financial year end in June (12.5 % of the respondents to the survey), Team Namibia advices that it is now the time for management teams to consider increasing their marketing budget.
The understanding being such that this would help “position oneself and to attract a larger market share for when the economy is on the up again”.
Team Namibia observes that most businesses start preparing their budgets for the next financial year two months (21.53%) or three months (23.07%) ahead of time.
“This would mean that businesses with financial year end in June are now likely to consider the compilation of their budgets. Under optimal circumstances, the creation of a budget is a team effort, and marketers should be given a role to play,” says Team account director, Bärbel Kirchner.
She adds, “Marketing is absolutely vital to not only create awareness of once product or services and to stimulate sales, but during current economic times, it might also help businesses to send out positive messages just by sharing information and thus to creating a positive spin-off.”
“The more messages about product or services we have out in the market, the more likely the consumer or buyer is to gain back confidence.
“Of course, from Team Namibia’s perspective, we need local producers, manufacturers and service providers to get active and position themselves, so that Namibia increasingly can replace imported products or services”.
The determination of marketing budgets can be based on the business’ turnover. If there are no sales whatsoever, it would not be wise to increase the marketing budgets unless this is indeed based on a well-justified business plans.
It might be worth the consideration for marketing budgets in general to be increased, especially if Namibian business is to compete with products from the region and elsewhere.
Perhaps the importance of marketing in an economy must be better recognised. John Quelch, dean of the University of Miami School of Business Administration and previous Charles Edward Wilson Professor of Business Administration at Harvard Business School, refers to marketing as a social and economic accelerant. According to him: “marketing accelerates the pace of economic development, the pace of innovation, the pace of adoption of new opportunities and services and products in the market place”. You essentially have to “have marketing to get the word out there”.
“Team Namibia is essentially a non-profit multi-sectorial business support and marketing organisation, to support raising awareness and the increased procurement and consumption of local goods and services.”
“It is important for us to get our word out there that all Namibians must support local. This will help us to move forward and support our efforts of reaching sustainable economic development.
“This applies not only to locally manufactured products and farm produce, but to our service providers across the sectors of our economy,” Kirchner says.