Marketing Budget Summary - Essay Example

Marketing Budget Summary Panera's marketing program consists of various strategies which have been listed below with the amount of budget allocated to each of them for 2007. Marketing StrategyBudgeted costs(in millions)Advertising19Market Research15Promotion10Publications1Total Budget 45According to Panera's Annual Report 2005 advertising expense for 2003, 2004 and 2005 are $5.8 million, $7.7 million and $10.3 million respectively which show that the advertising expense have increased by approximately 33 % each year.

Basing the budget calculation on this the advertising expense can be budgeted to be $14 million in 2006 and $19 million in 2007. Panera does extensive market research in all its states which includes various types of research tools such as online and offline surveys and focus groups. It has been approximated that market research spending would be around 15 million in 2007. Panera's promotional activities include various community and charity events. Going through the history of the events Panera has organized it can be approximated that the company will spend around 10 million in 2007.

Panera operates a newsletter and website to increase the awareness about its products and services amongst the customers which are examples of the items that will come under publications. As the newsletter is based on a subscription model the expenditure on the newsletter is covered by the subscription fee. However the cost of maintenance of the website and its content and other publications items will require some additional expenditure in the future. Thus publications will require a spending of around can be approximated 1 million in 2007.

Marketing Budget- Product wise breakupPanera divides its product offering into three wide categories, the approximated budgets for each of the following are as follows:Product-CategoryBudgeted costs(in millions)Bakery Products30Caf Products10Pantry Products5As Panera's bakery products are its major market the marketing expenditure for that segment will be the highest in 2007, followed by caf products and then pantry products. Ideally the marketing budget should be based on the proportion of the product category wise sales.

However, due to unavailability of such data these values have been derived based on judgment.Marketing Budget- Area-wise budgetPanera has a vast operation in 36 states. Having such a vast operation it must divide its marketing budget area wise as well. There are several ways for making a region wise division of the market budget. One way is to divide the budget according to the population another is by dividing it according to the past sales in each state. Also, the marketing expenditure on the bases of each branch or franchised bakery-caf (taken from Annual report 2005).

However, the Annual report also mentions the policy of both company owned and franchised bakery-cafs contribute 0.8% of sales for national advertising and marketing and administrative expenses while 2% of sales to local advertising. From this we can roughly estimate that 5/7 portion of the total budget can be separated for advertising on the national level while 2/7 portion should be budgeted equally to each branch for local advertising within the state.Thus marketing budget of 45 million can be used as followsMarketing on national level 32 millionMarketing on local level 13 millionThe 13 million can further divided between states using the following data retrieved from Annual Report 2005.