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Southern Rice Advertising Budget

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Southern Rice Advertising Budget


In the case of Southern Rice, what particular type(s) of budgeting method would you consider? Why? When introducing a new product, it is imperative to have a marketing plan. The Southern Rice Company has well establish a recognizable brand and built a strong brand equity. “Good advertising can make a consumer want to try a product, but a repeat sale is typically influenced by the consumer’s product experiences.” (Arens, page 263) Customers are paying extra for the satisfying quality that Southern Rice provides in their products. Recently a new style of cooking rice, instant rice, has become a threat and opportunity for the company. Using our substantial advertising budget, our overall goal is to bring the awareness of the launch of our newest subcategory product to our customers. The types of budgeting method we will consider are (1) share of market, share of voice and (2) objective/task. One approach compares the ratio of advertising to sales. I would consider this strategy because it holds the best chances of growing our market share. The share of market, share of voice is typically used to introduce a new product or entering a market with similar products. “According to this formula, when a new brand is introduced, the advertising budget for the first two years should be about one and a half times the brand’s targeted share of the market in two years.” (Arens, page 294) Share of voice is the advertising spending of the product’s category, whereas share of market is the brands total sales of the product category. Personally, I feel this can be an effective plan, but “advertising budgeting begins with an economics issue and ends in an activity or allocation issue.” (Kelley, page 93) From the economic perspective, we need to consider in the algorithm, the current “share of market” for the product category. This

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