The marketing budget is the estimated cost of meeting the sales forecast. This budget is normally prepared on an annual basis. The sales forecast is an estimate of expected sales over the planning period and indicates what management expects to achieve during the planning period. By combining sales forecasts and budgeted expenses for marketing and functional areas, management can prepare proforma (estimated) income statements and other financial projections.
The sales forecast and bought are important planning and control tools for marketing management. Budgets are often prepared for the major marketing departments such as advertising, sales, product management and marketing research.
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