Marketing Communication Appropriation

The concept and process

Communication Mix
Budgeting

Make the budget

commensurate with the
tasks required of the
communication
activities

Establishing the size of a communication

budget:

Formula-based guidelines
Qualitatively-based guidelines
Methods of Budgeting
Judgment oriented methods
 Percentage of sales method,

 arbitrary method,

 affordability method

Data oriented methods

 Competitive parity method

 Objective to task method

 Payment planning method

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
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
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 and
budget or direct relationship???
Suitability for New Products??
Situational influences??
Communication Mix
Budgeting

Percentage of sales approach

Past sales or anticipated sales can be
used for this approach

Per unit method

Multiply per unit spending with expected
sales volume
Mostly used by durable-goods
manufacturers (e.g., appliance marketers)
Data oriented methods
Competitive 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 the company can
defend its mkt. Share
 Reduces risks of making over expenditures
 Assumptions-compt. Spending is optimal and can be
considered as benchmark, matches compt. In all respects,
promo spending is key influencing factor for sales
 Disadv-conditions, relative position, objectives, may differ, past
figure no guarantee of future.
 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 done
effectively
 Disadv- difficult to ascertain costs sometimes
 This method is typically considered the best approach
 Communication Mix
Budgeting
Advertising Budget Allocation

SIX media:
Television
Radio
Magazine
Newspaper
Billboard
Internet

Each medium consists of vehicles that have

specific characteristics
 Communication Mix
Budgeting
Advertising Budget Allocation

Media are mostly chosen based on:

Cost
Reach
Frequency
Audience characteristics
Other considerations:
Purpose of the advertisement
Product needs
Editorial climate
Communication Mix Budgeting
Sales Force Budget Allocation

NC x FC x LC
NS =
TA

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)
Communication Mix Budgeting

Sales Force Budget Allocation Example

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
= 15 salespeople needed
1340
Evaluation and Control of the
Communication Process

Continuous monitoring of the execution of

any communication to ensure that
communication objectives are being
attained

Should incorporate some measure of

sales or profits

Budgeting
 Factors that influence…

 Marketing Communication goals

 Threshold effect
 Cumulative effect
 Diminishing returns effect
 Negative returns effect
Factors influencing allocation of
budget

 PLC and level of competition

 Branding strategy

 Pricing Strategy

 Market Share of the brand

 Organizational objectives
Process of appropriation…
 Identifying the marketing communication
objectives
 Fix initial budget and allocation-method,
amount of funds and the allocation of
communication expenditure, tool wise
allocation
 Implement the plan
 Control the budget