INTRODUCTION

Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders. It generates the strategy that underlies sales techniques,
business communication, and business developments. It is an integrated process through which
companies build strong customer relationships and create value for their customers and for
themselves. It is used to identify the customer, satisfy the customer, and keep the customer. With
the customer as the focus of its activities, it can be concluded that marketing management is one
of the major components of business management. Marketing evolved to meet the stasis in
developing new markets caused by mature markets and overcapacities in the last 2-3 centuries.

Marketing is essential for the organic growth of a company. Not surprisingly, firms spend
billions of dollars on marketing. Given these large investments, marketing managers have the
responsibility to optimally allocate these resources and demonstrate that these investments
generate appropriate returns for the firm.
For example, in 2009, Proctor and Gamble spent over $5.9 billion in advertising alone. The total
advertising budget of U.S. companies in 2009 exceeded $685 billion (Advertising Age 2009).
This is more than the GDP of Malaysia, Hong Kong or New Zealand. Given these large
investments, marketing managers have the responsibility to optimally allocate these resources
and demonstrate that these investments generate appropriate returns for the firm.
Allocating marketing resources is a complex decision in a constantly evolving environment. The
emergence of new media such as online search and display advertising, video games, virtual
worlds, social networking, online user-generated content, and word of mouth marketing is
creating both new opportunities and challenges for companies. It is not easy to isolate the effect
of a marketing instrument in this dynamic business environment where multiple factors influence
sales and profits. Consequently, many managers continue to rely on simple heuristics and
decision rules for resource allocation.
Its very important for any company either domestic or international to select optimum resources
for its marketing and promotion of goods and services.
Definition:
A marketing resource is any physical or virtual entity of limited availability that needs to be
consumed to obtain a benefit from it. In most cases, commercial or even non-commercial
factors require resource allocation through resource management.

Marketing resources can be in any form like financial resource, human resource or informational
resources and selection of resources depends on type of marketing or promotional activity needed.
The purely economic value of a resource is controlled by supply and demand. This is, however, a
narrow perspective on resources as there are many things that cannot be measured in money.

The process of marketing resource allocation consists of two stages. In stage one, a model
of demand is estimated. This model empirically assesses the impact of marketing actions on
consumer demand of a company’s product. Ideally, the model also includes competitive
activities. While in some cases data on competitors‟ actions are available (e.g., scanner data
studies for consumer packaged goods), in many other scenarios these data are not known (e.g., in
database marketing).
In stage two, estimates from the demand model are used as input in an optimization model that
attempts to assess the economic impact of marketing actions.
This stage takes into account costs as well as firm’s objectives and constraints (e.g., minimum
market share requirement). While most optimization models do not account for competitive
reactions to changes in target firm’s marketing budget, more sophisticated models can take these
reactions into consideration either through simulation or game
theoretic equilibrium models.
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Types of marketing and resources require:-
Marketing can be classified on the basis of need of resource or type products and services need to
promote and also on the basis of type of consumers.
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