Marketing Communication Appropriation

8/8/2019 Marketing Communication Appropriation

1/17

Marketing Communication Appropriation

The concept and process


2/17

Communication MixBudgeting

Formula-basedguidelines

Qualitatively-based guidelines

Make the budget

commensurate with the

tasks required of thecommunication

activities

Establishing the size of a communicationbudget:


3/17

Methods of BudgetingJudgment oriented methodsJudgment oriented methods

Percentage of sales method,

arbitrary method,

affordability method

Data oriented methodsData oriented methods

Competitive parity method Objective to task method

Payment planning method


4/17

Arbitrary method Experience and judgement of market

conditions and Compt. moves

Suitable for firms with low budgets and

smaller operations

Funds allocated in Ad hoc manner

No proper basis for spending


5/17

Affordable Method Basis of fund position of the company

First expenses are taken into

consideration on different heads May be used by companies whose

managements give least preference to

marketing related activities. Skeptic about use of Ads

May produce unpredictable results


6/17

Percentage of Sale Method Communication budget is based on sales

Two forms of percentage of sales method can

be used. Past sales and future sales ???

Percentage-based on either industry average

Disadv- Ad causes sales or Vice versa???

Inverse relationship with sales andbudget or direct relationship???

Suitability for New Products??

Situational influences??


7/17

Percentage of sales approach

Past sales or anticipated sales can beused for this approach

Per unit method

Multiply per unit spending with expectedsales volume

Mostly used by durable-goods

manufacturers (e.g., appliance marketers)

Communication Mix

Budgeting


8/17

Data oriented methodsCompetitive parity method Use of competitor spending level reflects

collective wisdom of the industry

Communication budget with that of the compt.

Helps in the risk of overspending

Buy spending in par with the competition thecompany can defend its mkt. Share

Reduces risks of making over expenditures

Assumptions-compt. Spending is optimal andcan be considered as benchmark, matchescompt. In all respects, promo spending is keyinfluencing factor for sales

Disadv-conditions, relative position, objectives,

may differ, past figure no guarantee of future.


9/17

Objective task Method Identify communication objectives Designing communication program

Ascertaining the cost incurred in each tasks.

Monitoring the program and control

Adv-systematic, budget allocation can be doneeffectively

Disadv- difficult to ascertain costs sometimes This method is typically considered the best

approach


10/17


11/17

Medi re tly en ed n:

Cost

r

i r t risti s

Ot er nsider ti ns:

Pur oseof t e ertisement

Product needs

Editori l climate

Communication Mix

BudgetingAdvertising Budget Allocation


12/17

NS= number of sales people

NC = number of customers (actual or potential)

FC = necessary frequency of customer calls

LC = length of average customer call, including

travel time

TA = average available selling time per

salesperson (less administrative time)

NC x FC x LC

TA

NS =

Communication Mix BudgetingSales Force Budget Allocation


13/17

No. of potential customers = 2500

No. of calls per customers per year = 4

Travel time per call = 2 hrs

Number of working hours per year = 1340

2500 x 4 x 2

1340=15 salespeople needed

Sales Force Budget Allocation Example

Communication Mix Budgeting


14/17

Evaluation and Control of the

Communication Process

Continuous monitoring of the execution of

any communication to ensure thatcommunication objectives are being

attained

Should incorporate some measure of

sales or profits

Budgeting


15/17

Factors that influence

Marketing Communication goals

Threshold effect

Cumulative effect

Diminishing returns effect

Negative returns effect


16/17

Factors influencing allocation of

budget

PLC and level of competition

Branding strategy

Pricing Strategy

Market Share of the brand

Organizational objectives


17/17

Process of appropriation

Identifying the marketing communicationobjectives

Fix initial budget and allocation-method,amount of funds and the allocation ofcommunication expenditure, tool wiseallocation

Implement the plan

Control the budget

Marketing Communication Appropriation

Documents

Transcript of Marketing Communication Appropriation