Assignment no 3 Advertising budget Badal rathod Roll No. :-M9
ABOUT THE COMPANY:- FORD INDIA MOTORS
Ford India Pvt Ltd Via. S P Koil Post Chengalpattu Tamil Nadu Tamil Nadu - 603204 India Ph : 910044-27454375-79/9270 Fax : 91-044-27454275/76 Website : www.india.ford.com
President & MD Mr Michael Boneham Product Manufactured Passenger Cars, Utility vehical Installed Capacity (Nos. per annum) 100,000 Present Status Turnover
27,223 (Rs in million)
Gross Profit Investment
17,750 (Rs in million)
Employees (in Nos.)
2,138
Foundation Day
2/1/1999
WORLDWIDE PRODUCTION OF THE VEHICLES Ranking
Name of Company
1 General Motors (GM) 2 Toyota Motor (TM) 3 Volkswagen (VLKAY) Ford Motor Company 4 (F) Honda Motor 5 Company (HMC) 6 PSA (Peugeot Citroen) 7 Nissan Motor (NSANY) 8 FIAT S.p.A. (FIA) 9 Renault Hyundai Motor 10 Company 11 Suzuki Motor (SZKMF) 12 Chrysler 13 Daimler AG (DAI) Bayerische Motoren 14 Werke AG (BMW) 15 Mitsubishi
Total Vehicle Output 93,49,818 85,34,690 62,67,891 62,47,506 39,11,814 34,57,385 34,31,398 26,79,451 26,69,040 26,17,725 25,69,316 25,38,624 20,69,977 15,41,503 14,11,975
ADVERTISING BUDGET FOR FORD Objectives of the advertisement 1. By the next month 10000 units of ford endeavour should be sold.
2. Market share of the ford should be increased from 1% to some
extent.
Advertising budget by percentage of sales:This is by far the most talked about method of determining your budget. This method works by taking a fixed percentage of your revenues (that’s every penny your company brings in) and allocating that amount for marketing. The most commonly used numbers are 5-10% (generally
for bigger businesses), 20% (used more for small businesses), and 2-5% (very large companies). Picking the percentage that works best for you will probably take some trial and error. Pros: It’s an easy and understandable answer. It makes for great cocktail party and networking event rumours. Cons: It really isn’t very accurate. In fact, it’s not accurate at all. Also, with small or new businesses, it can completely break down if you don’t have much to show for revenue. Oh yea, and it will vary wildly depending on your profit margins. From above table we can see that in the month of April 2010 ford motor were able to sold 7509 units. Units sold
7509 UNITS.
Cost of 1 unit
8 LAKHS RS.
Sales revenue
6758100000 RS
As ford is the very large company and it is an automobile company so we will take 1% of sale revenue for advertising budget.
1% * 6758100000 =
135162000 i.e. 13.5162 corers.
Current year sale: - As Indian economy is in growing condition Ford motors were able to achieve sales revenue of Rs. 675.81 corers Desired sale :- in he last moth ford had achieved growth more than 200% as compared to their sale in the same month for the previous year. So for the next month sale of units should be 10000.
Best marketing communication options a. Paid advertising Television:- Indian media and entertainment industry stood at US$ 12.91 billion in 2009, up 1.4 percent over the previous year. The industry is slated to grow at a compounded annual growth rate (CAGR) of 13 per cent by 2014 according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and research firm KPMG. The phenomenal exponential development witnessed in recent years in media and entertainment has made these one of the most rapidly performing sectors in our economy. This is the one of the most popular media of
advertising. This media can make customer aware about the product easily. When pricing a television commercial, you need to weigh the costs of two separate things: (1) the cost of producing the commercial, and (2) the cost of airing it. 1) Cost of producing the commercial – 3500000/2) Cost of air it – 9500000/•
Newspaper:- This is very important media for us as customer which we are going to target are sec A1 and A2 class people. These people have the habit of reading newspaper. Advertisement cost of newspaper 1) Expenditure for print adv :- 450000/2) Half page adv in Sunday times:- 200000 * 5 =
1500000/3) On other day apart from Sunday:- 1000000/-
•
Magazines:-Same as above 1) Magazine adv cost- 1500000/-
•
Banners and holdings:-This should be situated near the corporate offices or on the highway 1) Expenditure for making banners and holding :- 500000/2) Cost of display :- 1000000/-
b. Unpaid advertising (Public Relations) •
This can be doe by PR manager or PR department of the company. They are able to present a company or individual to the world in the best light. The role of a public relations department can be seen as a reputation protector.
c. Web advertising
•
Internet is going very popular now days. Many people work on the internet. They spend their lot of time on the net. Most important is that people to whom we are targeting are mostly sec A1 and A2 class people who use the web lot. 1) Expenditure for making commercial adv : - 450000/2) Cost of air it and maintain it :- 750000/-
d. Distribute printed flyers •
Direct mail:- direct mail to the customer can be send This can be send by company employees from the office internet.
e. Road show •
Road show will be conducted near the corporate office area to attract the customer 1) Cost of accessories needed and to run he program :2500000/-
Total cost of advertising
= ( television + newspaper + magazine + banners and holdings + web advertising + road show) = 22650000/-
Rest of the budgeting money i.e. (112512000/-) will be utilise for advertising of the other vehicle.
