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    How To Spend Money On The Knife Edge

    2010/4/27 9:56:00 42

    Entrepreneurship

    Every time we integrate communication and communication, every department will argue about some seemingly trivial things.


    "Somewhere, the Inland Revenue Department organizes the assessment of taxpayers. In order to consolidate the relationship with the Inland Revenue Department, and at the same time, he advocates his" honest and law-abiding citizen image "in the media. Is it necessary to sponsor 300 thousand of this activity?


    "This is a selection of a financial media organization with a nationwide influence, which is conducive to publicizing the corporate image of the enterprise, as well as consolidating the media relations, rather than putting in 200 thousand."


    "News conference is bound to be opened, but is it big or small? Is it 500 thousand or 1 million? Actually, the final result is nothing more than a few manuscripts."


    "Now the media in the subway is good. Advertising there can not only display the brand and product image well, but also better close to our target groups, enhance interaction, and the price is not too expensive. I have a friend who can get a lower discount, rather than 2 million."


    ...


    Money is spent or not, how much does it cost? Every time a meeting is held, the manager is like a nightmare. Everyone wants the managers to cling to the board and confirm their advertising suggestions. But the manager was very hesitant. He had no idea. He didn't know whether the money should be spent or not.


    Set up your own rules of the game


    Managers especially hope that their subordinates will use this kind of advice when they propose to advertise: I suggest putting the LCD TV network on sale, because the terminal media is the most frequent contact area of our target audience, and it is also the most vulnerable area to generate impulse buying behavior. According to our planned cross media advertising plan for terminal, this month's advertising budget is 500 thousand yuan, mainly in A, B stores in Guangdong, Guangxi and Hunan provinces. During the launch period, we will adopt a random sampling method to conduct advertising effectiveness assessment as a basis for the next stage to continue.


    But in those enterprises that have not set up an integrated budget plan, managers will never hear such a rational voice. Managers want to find a standard to measure which money should be spent, which money should not be spent, when to spend money, where to spend, how to spend more efficiently, and achieve higher return on investment.


    Although Schultz's concept of integrated marketing communication (IMC) has been introduced into China for some years, large and small enterprises in China have been forming an integrated communications department, but there are few and far between the integration and dissemination of the enterprise and the norms and codes of conduct. On the one hand, on the one hand, it is related to the lack of meticulous management consciousness by the managers. On the other hand, it is also related to the lack of qualified managerial personnel who are familiar with the standardized operation of integrated communication.


    Managers who are competent for integrated communication work must be familiar with media public relations, familiar with media delivery, familiar with product strategy management and activity planning. They often have three backgrounds: advertising companies, media and enterprises. This compound background helps them better understand the gap between public relations, advertising and activities, the three major means of communication, and make every communication action of enterprises get the highest rate of return on investment.


    However, under the organizational pattern of enterprise advertising, public relations and market activities, it is difficult to break the organizational boundaries by finding public relations opportunities in advertisements, putting public relations materials as advertisements, and combining advertising with online and offline activities. If the idea of integrated broadcasting managers is not clear and the rules of the game are not established, the entangled disputes between different departments will make managers unable to extricate themselves from the mire.


    Compiling integrated communication budgets


    Integrated communication, budget first.


    There is no clear annual integrated communication budget, and no coordination with the PR, advertising and activity leaders in their respective cost levels, advertising orientation, input principles and effectiveness evaluation methods, integrated communication will be difficult in the enterprise. Generally speaking, integrated communication can be divided into four levels: the personal brand communication of president, the overall brand communication of enterprises (enterprise brand strategic planning and corporate social responsibility project communication), product brand communication (public relations communication, activity communication and advertising communication), communication channel management (enterprise website, enterprise internal publication). In the annual communication budget, managers must decompose the four levels of communication in the next year, and clearly understand the input cost of each category, brand products, all regions and months in various media advertising and various activities through the budget chart.


    The budget items of integrated communication can be roughly divided into four categories: 1. hard ads, TV, newspapers, magazines, radio, bus, subway, outdoor brand and other intercepting ads; 2. soft advertisements, TV programs, newspaper soft articles, magazine soft articles, network soft articles; 3. public relations, exhibition activities, product activities; 4.CSR (corporate social responsibility) spread. These budget categories are the direction of the cost of money, and those that need to spend on these projects are personal brand, corporate brand and category (or brand product).


    After the items that need to be paid and the budgetary limit of each item are finalized, the budget is decomposed into monthly, local and annual integrated communication budgets. If the product category of an enterprise is various and the brand products under the category are numerous and complicated, the final budget sheet will be very large, all of which are densely packed figures.


    At this point, if the manager rashly puts all the figures on the table to the decision maker, the budget of the manager's hard work will be like a pile of waste paper. Maybe lying on the decision maker's book for ten and a half months will not attract attention. No one will be bored to be interested in a bunch of unrelated and unrelated figures. If managers want the support of the highest decision makers, they must tell the origin of each decision figure and explain the logical relationship clearly.


    Budget allocation according to strategic planning


    The budget statement made by the manager at the beginning is just a form showing the items that need to spend money (all kinds of brands) and money expenditure projects (all kinds of transmission ways), leaving a number in the blank space. Managers need to specify rules to ensure appropriate budgetary allocation in the consolidation of mature products, upgrading of growth products, and development of new products in the import period according to the development of different categories, the business status of different brand products, the maturity of different regions and the expected sales volume distribution per month.


    Because enterprises must continue to develop, we must constantly support the development of alternate brands and products, cultivate new forces, and maintain a good echelon sequence of brand products. But in the old budgetary allocations of sales and distribution, the growth products and new products of enterprises are hard to develop. The fundamental reason is that they do not have strong budget support. These products, because of their small contribution to sales, and little support for their dissemination, make the product development of enterprises form a distinct "Matthew effect": the better the support of the products is, the more willing the salesmen are to promote; the less the support of the weaker products gets, the less the sales force will lose, and the less they will be left behind.


    Faced with the harsh reality, managers have to rethink and adjust the proportion of category and brand product development, and pay enough attention to budget allocation. The total budgetary quota is usually based on the 3%~5% of estimated sales. Considering that the competition pressure in the coming year is too great, or the growth of new products and the growth products that need to be supported, or the market of the whole category market will have a larger increase in the coming year, or the enterprises will have a larger proportion of the transmission budget, the enterprises can also raise the budget proportion as appropriate, and generally adjust to 1.5 times ~2 times of the regular budget, that is, 5%~10%.


    Sales forecasts for the coming year are not difficult for sales managers in the market.


    When formulating a communication budget, the data of the total dissemination budget can be obtained directly from the chief financial officer or the highest decision maker. However, it is not an easy task to decompose this huge transmission cost to every category, every brand product, every communication item, and even refine it by region and month.


    Because the budget allocation must take into consideration the competition situation of all localities, months and individual products in the coming year, and should be carried out under the principle of consolidating mature products, enhancing growth products and vigorously developing new products, then what kind of support ratio should managers give to mature products, growing products and new products separately, and how to classify the existing product categories of the enterprises into mature products, growing products and new products?


    Allocation of budget by Boston matrix


    It is necessary for managers to introduce Boston matrix to cluster analysis of all products. First, managers must analyze the market growth rates of each category in the past two years (the proportion of sales this year is higher than last year), and then estimate the relative market share of each product (the ratio of the product to the largest competitor of its kind). With these two data as the Boston matrix of horizontal axis and vertical axis, the products can be categorized into four intervals: thin dog products, problem products, star products and Taurus products. After categorization, managers can eliminate thin dog products according to Boston matrix principle, cautiously develop problems products, vigorously cultivate promising new products, continue to enhance star products and consolidate Taurus products.


    However, the Boston matrix only summarizes all kinds of products and determines the supporting policy for a certain range of products. The drawback is that it does not solve the supporting proportion of products in the same interval. Even if two identical products are in the stage of star products, the support policies should be different because of different development conditions. At this point, managers should introduce a relative variable to convert the budgetary proportion, that is, the ratio of market growth rate to relative market share and several relative values aggregated together, so that the specific support ratio of each development stage can be obtained.


    The process is too digital, but when marketing management develops to a certain extent, and really goes towards institutionalization and normalization, the use of numbers, models and a series of complex analytical tools will be inevitable. If managers do not have deep theoretical foundation and digital sensitivity, they will be more and more unable to control the dissemination of budget management.


    A lot of people have misunderstood the work of communication. They think that it is enough to have a creative network and a resource network. These obsolete and extensive ideas of communication have been imprisoned by the minds of business managers, making many enterprises' dissemination work like the spread of heaven and women, seemingly unreal, but in fact they have no direction. They have not directed all the communication actions to the communication needs of enterprises.


    What really meets the needs of the enterprise's communication must be obtained through rigorous data analysis and fact deduction. A reality that we must face up to is that it is not enough to survive in complex enterprises. Only professional analytical methods are not enough. If managers want to put their proposals into practice in enterprises, they must have enough political skills to unite all forces that can be united and overcome resistance and antagonistic forces.


    The implementation of this process requires managers to first get the approval and support of the highest decision makers when making budgets, and then, as far as possible, they will drag in as many departments as possible in the process of budgeting. For example, budgeting requires sales data, market growth rates and relative market share data of various products. Managers must make budgets with all kinds of managers. For example, budgets involve media cost estimates, and managers should involve colleagues who are responsible for buying media. In short, managers should integrate the dissemination budgeting into everyone's work, and it is the credit of all. Only when we unite most people can we have enough courage to deal with the malicious attacks of a few.


    Budget managers should be prescient.


    It is a good thing to integrate and disseminate all expenditures for budget management, which can improve the planning of enterprise financial management and communication action, reduce operational risks, and facilitate the personnel of various market categories to clearly measure the amount of dissemination support of a brand product in any region and stage, and then launch targeted market actions.


    But from the day the budget is finalized, a new round of quarrels around the budget will start.


    The plan will never catch up with the change. The management of the budget must not be rigidified. The adjustment should be carried out in the actual promotion process, so as to master certain flexibility. Managers should make a budget plan at the beginning of the year, and put it in the remarks column: the budget can be fine-tuning between different months, different regions and different products under the condition that the total budget of each category is unchanged.


    At the same time, the manager should also attach an exemption clause: "the Department's own budgetary expenses should be borne by the departments, and the evaluation of the effectiveness of the communication will be assessed by the budget management department, and the whole company will be notified." The advantage of this provision is that managers can avoid holding some irresponsible communication costs on their own, so as not to be dragged down by year-end departmental examinations. Because there are always some departmental leaders who want to put some activities and media into consideration because of their personal relationship. Budget managers clarify the rules of the game beforehand, and inform the whole company of the results after examination. This will naturally make some leaders who are trying to play the role of favouritism fear.

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