Generally, promotional budgets tend to be much smaller those allocated to advertising. Exact costs can only be worked out once the campaign has been planned in detail, although a budget has usually been set well in advance of this stage.
While established brands tend to have a fixed percentage of their sales allotted to promotional activity, it is not always easy to determine how much to spend on a new brand.
Theoretically, a figure can be determined using a maximum cost per new consumer, depending on the promotional objectives. In practice, this is virtually impossible to calculate.
It is important to bear in mind that promotions do not always have a fixed cost. For example, a gift with purchase promotion can be preset, according to the number of units produced.
A competition, on the other hand, will require an estimation of the number of responses, to gauge the cost of fulfilment – receiving in and judging. Coupon redemption and uptake on mail-in offers is harder still to assess.
Further help
Sales promotion is a complex business. If you are considering running any promotional activity at all, it is vital to obtain further information and advice. The following organisations may be able to help:
Institute of Sales Promotion
Arena House
66-68 Pentonville Road
London
N1 9HS
Tel: 020 7837 5340
Website: www.isp.org.uk
Advertising Standards Authority
Brook House
2-16 Torrington Place
London
WC1E 7HN
Tel: 020 7580 5555
British Promotional Merchandise Association (BPMA)
BPMA Secretariat
Suite 12
4th Floor
Parkway House
Sheen Lane
East Sheen
London
SW14 8LS
Tel: 020 8878 0825
Chartered Institute of Marketing (CIM)
Moor Hall
Cookham
Maidenhead
Berkshire
SL6 9QH
Tel: 01628 524922
Direct Marketing Association (DMA)
Haymarket House
1 Oxenden Street
London
SW1Y 4EE
Tel: 020 7321 2525