How Plan for Marketing Budgets Can Keep You Out of Business Trouble

Whether you run a small business or a big corporation, I would say that marketing is essential to your profitability and growth. Yet many small businesses don’t allocate enough money to marketing or, worse, spend it haphazardly. Marketing Budget is considered an important part of your marketing strategy. Your marketing budget will include all of the prices that you expect to pay for each type of advertising you do‭. ‬This would include graphic and web design‭, ‬printed materials‭, ‬website development‭, ‬ongoing maintenance and search engine optimization and all Social Media‭. ‬It would also include radio and commercials‭, ‬trade shows‭, ‬advertisements in newspapers and other publications‭, ‬mailings‭, ‬etc. 

There are many ways to create a marketing budget. Here are a few popular ones, with advantages and disadvantages. 

1. Fixed Amount or % of Overall Budget. This is easy to do; consequently, it's one of the most common methods. At the beginning of the fiscal quarter or year, a company determines how much it will spend on marketing. To determine this amount, they might use industry averages. 

For example, movie studios generally spend an amount equal to 30% of the film's production budget, so for a $1 million movie, the marketing budget might be $300,000. 

Aside from being quick and easy, the advantage of this kind of budget is that the marketing department doesn't have to ask for money every time they want to spend it. (Since most companies consider marketing an expense, the answer the marketing department usually gets when they ask for more money is "no.")

One other advantage: Knowing how much money you have in advance also helps you plan campaigns.

The disadvantage of this kind of budgeting: it's completely nonstrategic since it offers no flexibility. No one can truly predict what kind of challenges the market will offer, or what this particular product might need. For example, one movie gets a positive critical review, so it needs less advertising. Another gets a poor review (or the critic refuses to review it at all), necessitating more advertising.

Another issue is what the competition is doing. If you're in a highly competitive market, then you might need to spend more money on marketing than if you're in a stable, peaceful market.

2. % of Sales. To ensure a steady source of marketing funds without plunging the company into a deficit, some companies allocate a fixed percentage of sales to marketing. For example, a company might say 30% of all sales will be used for marketing, so if the company makes $500,000, then $150,000 is given to the marketing department. That way, marketing never spends more than the company makes.

The problem, of course, is that this model cannot be used by a company that's just starting or otherwise has no sales at all.

There's a more critical problem: A company should actually spend MORE money on marketing when it's struggling, and less when it's successful. This model says the opposite. Because of this model, many companies cut their marketing budgets during a recession, when they should be increasing their marketing to grab market share from weak competitors. If an entire industry adopted this model, then successful companies would become even more successful (since they would spend more and more money on marketing) while struggling ones would fail (since they would spend less than less).

Finally, basing the marketing budget on a variable number makes planning extremely difficult.

3. Goal-Based Budgets. This is more complex, and requires a lot of data, so it's not as widely used. The key advantage of this method is that it helps convince managers and clients to spend the money.

It starts with an ambitious but realistic goal. While some managers say, "Let's just do something and see what happens," as MBA's, you're expected to have a goal. If you're working with a new company or in a turbulent industry, then such a goal might be difficult to predict. But perhaps you can find a competitor or similar company with more experience and base your goals on their results. I would also suggest starting with short term goals -- perhaps just a month -- then slowly extrapolate from there.

Let's use a really simplified, fictitious example of a goal-based budget:

Let's say your goal is to sell 5,000 computers for $1,000 each -- a total sales of $5,000,000. Now, unless you simply want to liquidate inventory or steal market share, you wouldn't want to spend more than $5,000,000 on marketing to achieve those sales. So you know your limit -- and that's more than most companies know when they begin marketing.

When any business owner can effectively analyze and fund the sources of business success, the business and its revenue will grow. A small business marketing budget can be a powerful tool to put one in the driver’s seat of how to determine that growth and success

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Twitter is a good share and worth investing in

Twitter shares rocketed 85 per cent as they hit the New York Stock Exchange today, surging from $26 to $46 immediately and continuing on to hit the $50 dollar mark. Read our report here.  Twitter shares finally hit the stock market today as increasing hype over the social media website's float saw the float price shift up again to $26.  This follows Twitter having boosted the price range of its shares just days before its public listing, as high demand for shares overcame its fears of being caught by the spectre of the Facebook flop.  The micro-blogging service that has helped topple governments, attract presidents and prime ministers and promote celebrities  increased the share price range from $17 to $20, to $23 to $25, on Monday, echoing Facebook’s move up on the eve of its flotation in May 2012.  Twitter, however, is hoping to dodge the market's bullets in a way Facebook failed to do.

Facebook increased its target price from $28 to $35 to $34 to $38 per share and suffered as it initially rose in value and then sunk.  Silicon Valley and Wall Street are hoping for a decent float from Twitter, after the Facebook minor disaster. The value of Facebook dived in its first weeks of trading prompting criticism of its advisers, claims that investors were not given a true picture, and that there were too many shares on offer at too high a price.  Facebook’s share price has since increased to around $49 but Twitter has taken steps to avoid an #epicfail.  The social media service is listing on the New York Stock Exchange, under the ticker TWTR, rather than Nasdaq, which Facebook used. The NYSE has tested its systems to avoid any technical glitches which plagued the first day of Facebook’s Nasdaq listing.  It has also sought to play down expectations and analysts suggest the shares are being priced at a level that could see them move up and stabilize.  

Should I buy Twitter shares? 

Twitter sold 70 million shares at $26 each, it said, raising a net $1.82bn. Including other stock, the price values the business at $18.1bn, according to Bloomberg.  The company has more than 230million active users, sending 500million tweets a year and has been credited with helping break news and coordinate protests, as well as prompt defamation cases and slang such as #YOLO (you only live once).    Brokers have been quick to point out that Twitter, unlike Facebook or Google, is yet to have made a profit.  It made a loss of $69m in the first six months of 2013, after reporting revenue of $254m.  Its plan to make money revolves around advertising to its huge number of users. But while Twitter has a direct line to their attention on computer screens, mobiles and tablets, it needs to balance promotions and the opportunity for targeting them with fears over invasion of privacy and intrusion.  A report on the IPO published by Eagle Alpha, a firm specializing in curating internet opinion, found that this was a widely accepted attitude towards advertising. Its research showed there would be 'outrage’ if Twitter was to add more intrusive advertisements to the feed. 

The same report also found rumors that the user experience may change as new features and partnerships are introduced, particularly around entertainment, television and e-commerce.  Eagle Alpha’s report also looked into advertising customer perspectives ahead of the IPO and the self-serve ad platform has been criticised for its lack of user friendliness. With advertising being critical to Twitter’s revenue stream, this is an area in clear need of improvement and something the marketing and advertising industries will be watching closely.  

How do technology stocks perform?

Many technology stocks such as Google and Facebook  have become household names which helps boost their initially popularity but isn’t always sustainable.  Analysis of previous technology and social media IPOs in the graph below by CMC Markets shows  while shares have tended to get off to a strong start, initial gains in those chosen have not usually stuck around. The chart plots the change in the share price over the following 100 weeks. Within 30 weeks all but Google were underwater. Baidu and Linkedin then climbed back above IPO value, while Facebook took until 66 weeks to get back into the black and Zynga and Groupon have still not made it there.  Colin Cieszynski, senior market analyst for CMC Markets, said it is important for traders to realize that opening day or even opening week success does not necessarily mean anything about the future prospects of the stock.

Written by  Marc Shoffman 

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How Did IT Outsourcing Strategy Become the Best Tool in The Market? Find Out

As industries become competitive, firms and organizations have been using their core competencies to gain competitive advantage. Outsourcing has become one of the strategies adopted by businesses to manage their Information systems (Gonzalez, Gasco & Llopis, 2006). In the same time using blue ocean strategy to create uncontested market space and make the competition irrelevant is considered a magic framework for company's growth and success.

To begin with, changing business climate found many firms looking for alternative ways to provide improved quality in their products, improved service to their customers, reduce time and cost to achieve company’s goals and get profit and reputation. Furthermore, the global trade has opened the competition doors for companies, and placed these companies under unprecedented competitive pressure. Businesses thus must understand how to maintain their competitive advantage, remain competitive in a volatile consumer market and overcome the critical problem of global competition. Outsourcing IT functions was one of the tools that used for surviving in the market competition, and has become a popular source of competitive advantage.

As a result of both strategies, a major trend in evidence is the outsourcing of various organizational functions, and accelerated technological advances have substantially improved industrial productivity. So in the domain of information systems and technology, outsourcing has become a viable strategic alternative to acquire and managing costly as well as complex information technology (hereafter called IT) (Grover, Cheon & Teng, 1994). And in the domain of products and services, Blue Ocean has become a starting point for a company to win in the future. (W. Chan Kim & Renée Mauborgne 2005) and works parallel with the outsourcing strategy.

The researchers have agreed that Information technology adoption offers a means of saving costs and increasing administrative efficiency. Krass (1990) indicated that outsourcing IT services can save 10-50% in IT expenditure. Based on that many companies nowadays have started to cut staffs, costs, and increasing efficiency by paying other companies and transferring some of an organization's recurring internal activities to outside providers (Maurice F , 1999) in order to run IT and other support divisions to remain competitive such as, telecommunications companies.

Those companies now are realizing the importance of developing their outsourcing capabilities and enter into arrangements with vendors to handle support processes (e.g., logistics, distribution, warehousing and information technology).

In truth, firms have outsourced since the industrial revolution, and Information Systems/Information Technology (IT/IS) outsourcing has become a basic strategy and has experienced considerable growth all over the world over the last several decades (King, 2008; Beasley et al., 2009) and this growth is expected to be continued and maintained in the near future (Gonzalez et al. 2006c; Beasley et al., 2009) – WHY? Because is considered an effective way to create competitive advantages by lowering costs, increasing productivity, and allowing the organization to focus on its core activities (Davis et al. 2006; King 2007; Can et al., 2009).

Overview of IT Outsourcing
Information Technology is considered as non-core functions of outsourcing, the idea of outsourcing is also applied for the procurement of IT services. Studies have shown that organizations have been outsourcing IT functions since the early 1960s (Due, 1992; Lacity, 1992). From data processing in the 60s, modern day IT outsourcing has made significant strides with a variety of business processes being outsourced. The use of outsourcing is becoming more sophisticated and nowadays more organizations are outsourcing business processes. As companies grow in size and operations, they outsource some of their business processes to focus on their core competences to remain competitive. Therefore, it becomes increasingly clear that their focus has to be redirected to their core activities while the non-core functions can be 'clouding' or 'outsourced' to suppliers or third party specialized in that particular function. Information Technology – Information System IT/IS one of such areas commonly outsourced in most of organizations.

IT Outsourcing as tool also has a challenge and has its downside. When functions are shipped elsewhere, the organizations will face risks from several areas. I would list some of these challenges that could affect negatively on organizations characteristics as follows:-

Firstly, security, privacy and confidentiality. Security can be a major issue. (Barthelemy and Geyer, 2004) maintained that outsourcing vendors’ reputations are not the best with information systems professionals. A company can better control access to information and protect equipment when it is on site (McDougall). Offshore assets and information in the server or possession of another company are much harder to protect, such as, customers background details, profiles and others. Therefore, customers’ information needs to be protected and, almost as importantly, feel protected (Thibodeau).

Secondly, the quality of personnel and work cannot always be guaranteed. Companies or organizations could face low quality or huge delays in work because they are at the mercy of the outsourcer. The contracting company does not interview and hire personnel, the outsourcer does. So If outsourcer hires poor skills workers just to fill seats, then quality is sure to suffer (Ross and Westerman)

Thirdly, High turnover at offshore providers is also another issue. Retention rates are very low overseas. The means large losses of efficiency as personnel are continually retrained (Overby).
Fourthly, Lack of flexibility, entering a long term contract with IT computer vendor may prove to be disadvantage when changing business or technological circumstances or even restructuring the firm which bring a need to migrate to alternative solution or process.

Lastly, Impact the local jobs and competence of IT functions Innovation and even. Outsourcing will reduce the organization’s capability for creative organizational development. Thus, it might face a reduced competence to innovate through synergetic interactions (Susan Cramm, 2010). Besides, from its distance position the vendor could have a limited potential or experience to acknowledge and develop some specific needs of the outsourcer, this in turn, will let competitors rapidly replicate offer same service or any advance upon any such innovations (Mata et al., 1995).

From other perspective, researchers have seen that without the ability to outsource, organizations could lose competitiveness. Outsourcing (IT) allows companies to rapidly add talented people and more capacity. A firm needs good process discipline to outsource effectively. As noted there were hundreds companies enter into outsourcing agreements without that. This can lead to escalating costs, poor results, and difficulties managing the relationship (Murphy, 2004).

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Sell Yourself As Brand And Get Much Traffic For Hiring!

Everyone looking to find a good job in a big company, and most of us are planning to fill up a good position as part of goals achievement, but is it easy for us to do that and reach this level?? I would say definitely NO. Nowadays not only skills and experience are considered essential elements in getting job; from my perspective sell yourself as brand (Logo) is playing a key role in promoting you to find a good job and position.

A logo is not a brand. A logo is a symbol that represents the company, just like your photo represents you. A logo is just one of the many factors that make up a brand, and it's not even the most important one.

So what is a brand?

There are as many definitions of "brand" as there are marketing books and marketing professors. Here is the definition that I have found most effective in discussing brands with clients.

A brand is your voice, design and reputation combined into one impression.

I like this definition because it can be applied to a person or an organization. (Yes, we all have personal brands.) It also contains elements that you can control and others that you can't:

Voice: You have a lot of control over your voice and the voice of your company brand. This is obviously how the individual or organization expresses itself (funny, serious, caring, etc.). We can also refer to it as "personality" or "attitude" or simply how the brand "sounds." The challenge for an organization is that it has many employees and representatives, each of whom may express the personality in a different way. So it will be workable on as individual and how you can behave and express your personality, characteristic and attitude when make your resume and do first interview. Body language is a core of your voice when you start sell yourself (applying for job)

Design: This is how an individual or organization physically presents itself. We can also refer to it as "style" or "appearance." Design is primarily visual: ad agencies create "brand identities" for companies, So when I am talking about persons it means your design could be the clothes you wear to work, your grooming and physical fitness, the quality of your resume, or the products you use. (Fair or not, we are judged by our looks and our possessions. If you drive a Porsche, people will think of you differently than if you drive a smoky old Yugo!!) Think about your appearance, and what you do every day to shape it.

Reputation: Your reputation is what other people think about you. It may be based on a number of factors: the quality of your products or service if we are talking about companies. If it is in personal case you shoud ware about how you treat others (including business partners, workers, and the environment), and most importantly, your values and goals as confident person and how you express them. 

While you can shape your voice or design, your reputation ultimately resides in the minds of other people. They make the final decision whether they admire you, fear you, respect you or love you OR Hiring you.

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Initiate New Idea and Differentiate In Your Business

In every business or firms and organizations, it is often easier to come up with a variety of ideas for new businesses and more difficult to actually implement those concepts. Most of us are looking to start their own business and be the owners of new ideas to run this business. A business concept is a bridge between an idea and a business plan. It focuses one’s thinking so that the entrepreneur can identify the specifics of his/her proposed venture.

From my point of view, converting an idea into a business concept requires thinking about how the product or service will be offered, presented and sold and who will buy it, the benefits of the product or service, how it is differentiated from similar ones, and methods of delivery. In the same time if we are working under employer we should apply same concept but from different view.

I would say before you kick off any new ideas, make sure that you have done your research. Know what your project is going to entail, inside and out. Whether you’re contributing to enhance your company vision or building your own business!

In fact, once you get an idea for a business, what's the most important trait you need as an entrepreneur? Perseverance. When you set out to launch your business, you'll be told "no" more times than you've ever been told before. You can't take it personally; you've got to get beyond the "no" and move on to the next person--because eventually, you're going to get to a "yes."

"The challenge with being an initiator of new ideas and work on it is that you are never, ever done."

Therefore, when we have an idea and we sure it will help us to come up with something new, we should work on it and paint a vivid vision for our new idea. Build up some excitement around what we are trying to do. After that we should develop it and know what resources do we need to get our idea off the ground.

Determining what you want to do is only the first step. You've still got a lot of homework to do, a lot of research in front of you. Don't sit back year after year and say "This is the year I'm going to start my business." Make this the year you really do it! Furthermore, you need to make sure that you have or you can create a suitable environment that helps to grow the idea and achieve its goals. 

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