This process has many forms, I have probably seen most of them over the years.
Percentage of sales, opposition activity, what the P&L can bear, what was spent last year, what seems like a nice round number, what the new CEO says, the last and “balancing” item in the budget, and there are others, including and significantly the confusion between strategic investments and short term tactical spending which is often just a cost of doing business in a distribution channel.
Notice the absence of customers in the mix?
All of these common budget setting tools are internal, the serve the operational needs of the business, and have nothing to do with customers, and how they are to be reached, engaged, and persuaded to become apostles for your business.
No wonder we get so much random rubbish thrown at us through the multiplicity of media channels we now have, that have nothing to do with the brand building and strategic positioning of the product or service.