Marketing Communication Appropriation
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Transcript of Marketing Communication Appropriation
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Marketing Communication Appropriation
The concept and process
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Communication MixBudgeting
Formula-basedguidelines
Qualitatively-based guidelines
Make the budget
commensurate with the
tasks required of thecommunication
activities
Establishing the size of a communicationbudget:
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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
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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
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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
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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??
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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
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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.
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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
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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
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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
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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
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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
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Factors that influence
Marketing Communication goals
Threshold effect
Cumulative effect
Diminishing returns effect
Negative returns effect
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Factors influencing allocation of
budget
PLC and level of competition
Branding strategy
Pricing Strategy
Market Share of the brand
Organizational objectives
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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