To deploy successful strategies and marketing campaigns, every business and brand needs a budget to cover marketing activities. However, depending on the size of the business and marketing objectives, they can save on various costs to optimize budget while still ensuring high effectiveness in the marketing strategy. In today’s article, Optimal FB will share with you how much to charge for marketing strategy.
About marketing strategy costs
Marketing Costs are the total amount a business spends on marketing activities, including sales, brand building, and development. When considering the ratio of marketing costs to revenue, there is a variance between B2B and B2C businesses. Typically, B2C companies tend to spend a larger portion of their total revenue on marketing, ranging from 5% to 10%. In some cases, particularly when a business wants to reposition or enhance brand awareness, marketing costs can be higher, especially for large corporations. However, for B2B businesses, the marketing cost ratio is generally lower, typically between 2% and 7% of total revenue.
Types of costs in a marketing strategy
To execute a marketing strategy, companies need to invest in specific costs as follows:
Market research costs
Although market research activities are not cheap, they are an important and useful part of developing a business’s marketing plans. This activity provides valuable data on customer trends and behaviors, as well as information about competitors. Thereby helping businesses adjust their marketing strategies effectively. Sometimes, large businesses even have a dedicated market research team.
Personal selling costs
Personal selling is always an important part of a business’s marketing strategy, especially for B2B companies, as it involves direct contact with customers and helps bring products closer to them. It include training expenses, recruitment costs for sales staff, bonuses, benefits policies, and costs for developing sales scripts.
Public relations (PR) costs
Costs for public relations activities include sponsoring events relevant to the business field and other expenses related to organizing activities to build a positive image of the business in the community.
Marketing personnel costs
Marketing personnel costs (salaries) are used to pay for internal marketing staff, including positions like marketing managers, marketing employees, designers, and marketing collaborators. In some cases, businesses may decide to outsource to save costs and optimize human resources. Marketing personnel costs vary depending on the size and scope of work of the business.
Online marketing costs
Costs for online marketing activities include expenses for website design and maintenance, content marketing, pay-per-click (PPC) ads, social media marketing, and email marketing.
Costs for Third-Party Advertisers
Many companies that lack the resources and experience to carry out ads campaigns often choose to hire third-party advertisers to design and implement them. Costs paid to third-party advertisers can include outdoor advertising, in newspapers, on TV, and online advertising.
Other costs
Besides the above, there are other marketing expenses depending on the specific goals of the business. It includes costs for brand development, logo design, marketing images and videos, marketing consultancy fees, gifts for customers, marketing automation, and expenses for participating in exhibitions and product displays.
Costs for print and direct mail campaigns
Direct mailing and printing are marketing mediums through the design and distribution of mailers, flyers, and coupons. This is one of the effective marketing mediums to increase sales. However, the costs for these activities are usually higher than initially expected due to the variation in printing prices in the market.
How much to charge for marketing strategy?
To caculate the costs for a marketing strategy, you can follows these methods:
Calculating marketing strategy costs based on revenue
Many businesses determinine marketing costs based on a percentage of monthly/quarterly/annual revenue. According to this method, marketing costs are calculated using the formula:
Marketing Cost = Revenue x % allocated for marketing activities
For example: If your company’s annual revenue is 50 billion VND and the marketing allocation rate is 5%, then the marketing cost would be 2.5 billion VND.
This method assumes that marketing costs should not exceed 10% of the total revenue. By calculating in this way, businesses can evaluate the effectiveness of deployed marketing activities and determine the optimal level of costs and whether they are exceeding it. While there may be cases where marketing costs exceed the target, if revenue increases correspondingly, this can still be considered effective.
Determining costs for a marketing strategy based on established ratios
Company leadership and marketing department heads often discuss together to determine marketing costs based on a ratio, regardless of revenue or other factors. Small businesses usually use this method because it focuses on available resources and provides a reasonable figure for marketing costs, based on the company’s financial capability. However, this method has limitations when managers do not have an overall view of the project and do not specify the necessary types of costs. This can lead to underestimating marketing costs, not ensuring enough resources for the project, and not achieving the desired results.
Calculating marketing costs based on company expectations
Before starting business operations for a quarter or year, every company typically sets specific objectives. Based on these objectives, business can calculate and allocate the marketing costs appropriately. Goals and expectations usually include increasing revenue, market share, expanding business scale, and intensifying promotional activities. For businesses, clearly defining objectives and expectations helps to easily estimate costs for marketing activities to achieve those goals. If the company’s objectives and expectations are higher, then the marketing costs will also increase proportionally to ensure sufficient resources to achieve the desired outcomes. For example, if the company’s goal is to achieve a quarterly sales revenue of 20 billion VND, then the marketing budget for the next quarter will be increased correspondingly to the expected revenue ratio.
In the article above, Optimal FB hopes you can the various investment costs when executing a marketing campaign and successfully calculating costs for a marketing campaign.
Contact Info
Information about “How much to charge for marketing strategy” hopes to provide you with additional necessary knowledge. At optimal FB, there is a team of highly qualified and experienced staff and experts who will provide facebook agency ads account as well as support when you run Facebook ads. Contact us via phone number: +84 564 104 104.
FAQ
When launching a new product to the market, determining the marketing budget is a crucial part of the marketing strategy. This budget includes traditional advertising costs and activities such as market research, brand image development, and marketing strategy formulation. The allocation of the budget needs to be carefully planned to ensure the highest effectiveness in promoting the new product, attracting the attention of the target customers, and creating sustainable growth for the product in a competitive market.
Online marketing costs comprise the total expenses that a business must pay to carry out online advertising and marketing activities. This may include expenses for website design and maintenance, production of marketing content, online advertising (such as PPC and social media advertising), email marketing, and other costs related to marketing and promotion on the internet. Online marketing costs are usually adjusted flexibly according to the marketing strategy and specific business objectives of each company.
