This article is the first of a four part series inspired by our recent publication: The Ultimate Marketing Budget Planning Handbook, you can access the handbook here. Each installment will discuss a different budget planning process, what they entail and how to navigate each one. In this scenario the marketer’s goal is growth, with a set  goal and no budget constraints.

An unlimited budget might sound like a marketer’s dream, but in reality, effectively scaling and utilizing such a budget presents its own unique challenges. The notion of having an “unlimited budget”, often comes with  extremely strict KPI of either an impossible to reach ROAS or CPA goal.

Contrary to popular belief an “unlimited budget” doesn’t guarantee hypergrowth. As reaching targets, may be limited by various factors including the product itself, market saturation, channel mix, and ability to continuously optimize delivery and results.

Let’s take a closer look by breaking it down through the famous 4 Ps of Marketing: Product, Place, Price and Promotion. 

A Successful Product  is the Foundation to Marketing Success  

Does Poor Product= Poor Marketing? 
In essence, Yes!  

Think about it this way. The  product is the protagonist of the 4 Ps. In other words, it is the foundation of the marketing strategy and directly influences the success of the entire marketing mix. Therefore, if your product is of poor quality achieving success across the other Ps becomes challenging. The conversion rates  will be low and there is no amount of marketing that could ever fix that.

When launching a new product it is crucial that the process is thorough and several aspects are taken into consideration. For starters it's important to understand the customers needs and wants and create a product that addresses these. So ask yourself: What problem does the product solve? What unique value does the product provide to the customer?

Once you have determined what it is, try and understand the products’ value proposition. This goes one level deeper to determine the features, quality, and benefits the customer will receive when they engage with your product. You can understand these by asking questions such as: what are the key benefits of the product? What will the customer find interesting from my product?

Differentiation and positioning are crucial when it comes to building a product. A unique and well designed product can set a competitive advantage and positively influence the brand positioning in the market. For this  it is also important to understand what sets your product apart from similar offerings in the market. This is also important because of market saturation, but more on that later on.  So ask yourself: How does the product differentiate from competitors?

Understanding where a product stands in its lifecycle- whether it's in the introduction, growth, maturity, or decline stage- is crucial when devising the product’s marketing plan.  Different stages require different marketing approaches to maximize profitability and market share. For example, in the introduction stage the focus is on awareness and generating interest aka the top of the funnel marketing activities. In the growth stage, a marketer needs to expand market share by targeting new customer segments  and enhancing product features and  by incorporating feedback into the product. Whereas if the product is in a mature stage, now the focus is on maintaining market share through brand differentiation, pricing and promotion

Remember, the product is not just a physical entity but a core component that drives marketing decisions across the whole marketing mix. That’s why marketers need to understand the products’ features, benefits, positioning and lifecycle before embarking on the marketing strategy.

Place vs. Market (Saturation) 

Now that you have a good understanding of what your product should be and what components it needs to have to get into the market, let’s discuss the second P: Place.

Place refers to how and where the product will be sold and distributed. The main goal when determining your “place” is to identify the optimal channel or  location to showcase your  product in front of customers who are most likely to make a purchase. Now it’s important to note that place and promotion are closely linked. For example, if you have a mobility app your ads will likely be found where people are looking to book a form of transport such as the airport, train station or bus stations rather than a supermarket.

When discussing place a key element to consider is market saturation as these often intersect in budget planning. The principle of market saturation refers to a point of saturation, where growth becomes unattainable, leading to losses. At this point the market has reached its maximum level of penetration and growth potential. This in turn also influences promotion, because once market saturation is reached no matter how much paid promotion is done there will not be an increase in sales. For example, imagine there is a  product targeting an audience whose population size is 200,000 people, but the company already reaches 180,000 of the relevant audience. Additional ad spend will not create population growth (that fast..). Understanding market saturation insights empowers the company to make decisions about geographic expansion, identifying less saturated regions or markets to explore. 
 

Price Beyond the Purchase Value 

The price of your product is a very strategic element in the 4Ps. It goes beyond the monetary transaction between the customer and the company. The price you set will directly impact how the product is perceived by customers in terms of quality and value. Think about how premium products are regarded. Premium pricing often suggests higher quality, more innovation, exclusivity, etc.  That is why higher-priced products are often sold through exclusive channels, with premium service and sleek packaging. This also influences their promotion, in some cases a lot of money is spent on advertising to get the most exclusive partnerships or celebrity endorsements or no money is spent at all as the product speaks for itself.  Pricing strategies will not only impact promotional channels  but also messaging. Ultimately, the price set for the product and the sales volume will determine what your marketing budget will be.

As a marketer with an “unlimited budget” the price of the product plays a crucial role in shaping your marketing strategy. With an unlimited budget, you have the flexibility to promote products at various price points and across different channels. Strategic promotions can attract new audiences and influence purchasing decisions. When it comes to channel selection, it is important to understand each channel’s contribution and marginal performance, this can help companies optimize for the best channel mix. As there are various possibilities the marketer wants to ensure they have the right information at hand to get the most out of each dollar spent. Especially when there is a fine line between spending and overspending, resulting in diminishing returns. Finding the right balance between your advertising budget and strategy is essential to avoid wasting resources and find that “sweet spot” of maximum yield - when you are maximizing spending while enjoying the most efficient results.  One way to grasp the point of diminishing returns is by analyzing the current marginal cost per conversion across various spending levels.  To better understand the concept of diminishing returns see page 17 in “The Ultimate Marketing Budget Planning Handbook”. 
 

Heavy is the (Marketing) Head that Wears the Crown 

Budget planning is closely connected to the 4Ps of marketing. As evident, promotion (marketing) is shaped by factors such as price, place, and product.

More  importantly, it’s essential to recognize that for all marketing efforts to be successful , your marketing strategy needs to be constructed through informed decision making. Having an “unlimited budget” does not mean that you should waste money, but that you should spend the maximum while enjoying the best return while hitting your KPIs. 
 

Graduality is the name of the game for unlimited budget spends. It’s critical to monitor performance meticulously to avoid “hyper growth trap” where excessive spending will actually yield negative returns.

An unlimited budget sounds fun for marketers, but in reality it requires a lot of responsibility, and a need to act with discipline and accountability – monitoring and making sure that you’re not wasting most of the ad spend.