INTEGRATED MARKETING COMMUNICATION

UNIT-I
Communication and IMC programs
Communication is a process of exchanging verbal and non verbal messages. It is a continuous process. Prerequisite of communication is a message. This message must be conveyed through some medium to the
recipient. It is essential that this message must be understood by the recipient in same terms as intended by
the sender. He must respond within a time frame. Thus, communication is a two way process and is
incomplete without a feedback from the recipient to the sender on how well the message is understood by
him.
Components of Communication Process Communication Process

The main components of communication process are as follows:

Context - Communication is affected by the context in which it takes place. This context may be physical,
social, chronological or cultural. Every communication proceeds with context. The sender chooses the
message to communicate within a context.
Sender / Encoder - Sender / Encoder is a person who sends the message. A sender makes use of symbols
(words or graphic or visual aids) to convey the message and produce the required response. For instance - a
training manager conducting training for new batch of employees. Sender may be an individual or a group or
an organization. The views, background, approach, skills, competencies, and knowledge of the sender have a
great impact on the message. The verbal and non verbal symbols chosen are essential in ascertaining
interpretation of the message by the recipient in the same terms as intended by the sender.
Message - Message is a key idea that the sender wants to communicate. It is a sign that elicits the response
of recipient. Communication process begins with deciding about the message to be conveyed. It must be
ensured that the main objective of the message is clear.
Medium - Medium is a means used to exchange / transmit the message. The sender must choose an
appropriate medium for transmitting the message else the message might not be conveyed to the desired
recipients. The choice of appropriate medium of communication is essential for making the message
effective and correctly interpreted by the recipient. This choice of communication medium varies depending
upon the features of communication. For instance - Written medium is chosen when a message has to be
conveyed to a small group of people, while an oral medium is chosen when spontaneous feedback is
required from the recipient as misunderstandings are cleared then and there.

Recipient / Decoder - Recipient / Decoder is a person for whom the message is intended / aimed / targeted.
The degree to which the decoder understands the message is dependent upon various factors such as
knowledge of recipient, their responsiveness to the message, and the reliance of encoder on decoder.
Feedback - Feedback is the main component of communication process as it permits the sender to analyze
the efficacy of the message. It helps the sender in confirming the correct interpretation of message by the
decoder. Feedback may be verbal (through words) or non-verbal (in form of smiles, sighs, etc.). It may take
written form also in form of memos, reports, etc.
Noise: The unplanned static or distortion during the communication process, which results in the receivers
getting a different message than the one the sender sentthe consumer is distracted while reading the
magazine and misses the ad or its key points.
Explain the Marketing Communications Mix
A companys total marketing communications mix, or promotion mix, consists of the specific blend of
advertising, personal selling, sales promotion, and public relations tools that the company uses to pursue its
advertising and marketing objectives. The five major types of promotion are
Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services by an
identified sponsor.
Personal selling: Personal presentation by the firms sales force to make sales and build customer
relationships.
Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.
Public relations: Building good relations with the companys publics by obtaining favourable publicity,
building up a good corporate image, and handling or heading off unfavourable rumours, stories, and
events.
Direct marketing: Direct communications with carefully targeted individual consumers to obtain an
immediate responsethe use of mail, telephone, fax, e-mail, and other non-personal tools to communicate
directly with specific consumers or to solicit a direct response.
Each type of promotion has its own tools. Advertising includes print, broadcast, outdoor, and other forms.
Personal selling includes sales presentations, trade shows, and incentive programs. Sales promotion includes
point-of-purchase displays, premiums, discounts, coupons, specialty advertising, and demonstrations. Direct
marketing includes catalogues, telemarketing, fax transmissions, and the Internet. Thanks to technological
breakthroughs, marketers can now communicate through traditional media (newspapers, radio, telephone,
and television), as well as its newer forms (fax machines, cellular phones, pagers, and computers). These
new technologies have encouraged more companies to move from mass communication to more targeted
communication and one-on-one dialogue.
Explain the Steps in Developing Effective Communication
We now examine the steps in developing an effective integrated communications and promotion program.
The marketing communicator must:
identify the target audience;
determine the response sought;
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choose a message;
choose the media through which to send the message;
select the message source; and
collect feedback.
Identifying the Target Audience : A marketing communicator starts with a clear target audience in
mind. The audience may be potential buyers or current users, those who make the buying decision or
those who influence it. The audience may be individuals, groups, special publics, or the general
public. The target audience will affect the communicators decisions on what will be said, how it will
be said, when it will be said, where it will be said, and who will say it.
Determining the Desired Response : After defining the target audience, the marketing
communicator must decide what response is desired. In most cases, the final response is purchase.
But purchase is the result of a long process of consumer decision making. The target audience may
be in any of six buyer readiness stages, the stages that consumers typically pass through on their way
to making a purchase. These stages are awareness, knowledge, liking, preference, conviction, and
purchase (see Figure 13-3). The marketing communicator needs to know where the target audience
is now and to what stage it needs to be moved. The marketing communicators target market may be
totally unaware of the product, know only its name, or know little about it. The communicator must
first build awareness and knowledge. When Nissan introduced its Infiniti automobile line, it began
with an extensive teaser advertising campaign to createIntegrated Marketing Communications

Designing a Message
Having defined the desired audience response, the communicator turns to developing an effective message.
Ideally, the message should get attention, hold interest, arouse desire, and obtain action (a framework known
as the AIDA model). In practice, few messages take the consumer all the way from awareness to purchase,
but the AIDA framework suggests the qualities of a good message. In putting together the message, the
marketing communicator must solve three problems: what to say (message content), how to say it logically
(message structure), and how to say it symbolically (message format). Message Content The communicator
must identify an appeal or theme that will produce the desired response. There are three types of appeals:
rational, emotional, and moral. Rational appeals relate to the audiences self-interest. They show that the
product will produce the desired benefits. Rational appeal messages may show a products quality, economy,
value, or performance.
Emotional appeals attempt to stir up either negative or positive emotions that can motivate purchase.
Communicators can use such positive emotional appeals as love, pride, joy, and humour. Advocates for
humorous messages claim that they attract more attention and create more liking and belief in the sponsor.

Moral appeals are directed to the audiences sense of what is right and proper. They often are used to
urge people to support such social causes as a cleaner environment and aid to the needy, or combat such
social problems as drug abuse, discrimination, sexual harassment, and spousal abuse.
Message Structure The communicator must decide which of three ways to use to structure the
message. The first is whether to draw a conclusion or leave it to the audience. Early research showed
that drawing a conclusion was usually more effective; however, more recent research suggests that
the advertiser is often better off asking questions and letting buyers draw their own conclusions. The
second structure issue is whether to present a one-sided argumentmentioning only the products
strengthsor a two-sided argumenttouting the products strengths while also admitting its
shortcomings.
Message Format :The marketing communicator needs a strong format for the message. In a print ad,
the communicator has to decide on the headline, copy, illustration, and colour. To attract attention,
advertisers can use novelty and contrast; eye-catching pictures and headlines; distinctive formats;
message size and position; and colour, shape, and movement. If the message will be carried over the
radio, the communicator must choose words, sounds, and voices. The sound of an announcer
promoting banking services, for example, should be different from one promoting quality furniture.
Choosing Media The communicator now must select channels of communication. There are two
broad types of communication channelspersonal and non-personal.
Personal Communication Channels In personal communication channels, two or more people
communicate directly with each other. They can communicate face to face, over the telephone, or even
through the mail or e-mail. Personal communication channels are effective because they allow for personal
addressing and feedback.
Non-Personal Communication Channels Non-personal communication channels are media that carry
messages without personal contact or feedback. They include major media, atmospheres, and events. Major
media include print media (newspapers, magazines, direct mail); broadcast media (radio, television); and
display media (billboards, signs, posters). Atmospheres are designed environments that create or reinforce
the buyers leanings toward buying a product.
Selecting the Message Source : In either personal or non-personal communication, the
messages impact on the target audience is affected by how the audience views the
communicator. Messages delivered by highly credible sources are more persuasive. Therefore,
marketers hire celebrity endorserswell-known athletes, actors, and even cartoon charactersto
deliver their messages.
Collecting Feedback : After sending the message, the communicator must research its effect on
the target audience. This involves asking the target audience members whether they remember
the message, how many times they saw it, what points they recall, how they felt about the
message, and their past and present attitudes toward the product and company. The
communicator also wants to measure behaviour resulting from the messagehow many people
bought a product, talked to others about it, or visited the store.
Integrated Marketing Communication
what does integrated marketing communication mean?
Integrated marketing communication refers to integrating all the methods of brand promotion to
promote a particular product or service among target customers. In integrated marketing
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communication, all aspects of marketing communication work together for increased sales and maximum
cost effectiveness.
IMC is the coordination and integration of all marketing communication tools , avenues, and sources within
a company into a seamless program that maximize the impact on consumers and other end users at a
minimal cost.
Don Schultz (1993) stated:
IMC is the process of developing and implementing various forms of persuasive communication
programs with customers and prospects over time.
The goal of IMC is to influence or directly affect the behaviour of the selected audience. IMC
considers all sources of brand or company contacts which a customer or prospect has with the product or
service as potential delivery channels for future messages.
Explain the components of IMC
Let us go through various components of Integrated Marketing Communication:
1. The Foundation - As the name suggests, foundation stage involves detailed analysis of both the
product as well as target market. It is essential for marketers to understand the brand, its offerings
and end-users. You need to know the needs, attitudes and expectations of the target customers. Keep
a close watch on competitors activities.
2. The Corporate Culture - The features of products and services ought to be in line with the work
culture of the organization. Every organization has a vision and its important for the marketers to
keep in mind the same before designing products and services. Let us understand it with the help of
an example.
Organization As vision is to promote green and clean world. Naturally its products need to be eco friendly
and biodegradable, in lines with the vision of the organization.
3. Brand Focus - Brand Focus represents the corporate identity of the brand.
4. Consumer Experience - Marketers need to focus on consumer experience which refers to what the
customers feel about the product. A consumer is likely to pick up a product which has good
packaging and looks attractive. Products need to meet and exceed customer expectations.
5. Communication Tools - Communication tools include various modes of promoting a particular
brand such as advertising, direct selling, promoting through social media such as facebook, twitter,
orkut and so on.
6. Promotional Tools - Brands are promoted through various promotional tools such as trade
promotions, personal selling and so on. Organizations need to strengthen their relationship with
customers and external clients.
7. Integration Tools - Organizations need to keep a regular track on customer feedbacks and reviews.
You need to have specific software like customer relationship management (CRM) which helps in
measuring the effectiveness of various integrated marketing communications tools.
Integrated marketing communication enables all aspects of marketing mix to work together in harmony to
promote a particular product or service effectively among end-users.
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Explain an integrated marketing communication plan:

Integrated marketing begins with development of master marketing plan. The marketing plan is the
basis of the total integrated communication design. The plan provides for coordination of efforts in all
components of the marketing mix. The purpose of the plan is to achieve harmony in relaying messages to
customers and other publics . Planning also should integrate all key promotional efforts , which in turn keeps
the company s total communication program.
Situation analysis
Marketing objectives
Marketing budget
Marketing strategy
Marketing tactics
Evaluation of performance
situational analysis
The first step is a situational analysis, which is the process of examining factors from the
organization internal and external environments. The analysis identifies external environmentally generated
marketing problems and the opportunities; internal company strength and weaknesses are also considered.
Marketing analysis
The second step is to define primary marketing objectives. These objectives normally spelled out in
the areas of sales, market share, competitive position and desired customer actions
Marketing budget
Based on these objectives, a marketing budget is prepared and marketing strategies are finalized
Marketing strategy:
The strategies include the ingredients of the marketing mix plus all positioning, differentiation, and
branding strategies the firm wants to use.
Marketing Tactics
From these strategies, marketing tactics emerge to guide the day-by-day steps necessary to support
marketing strategies.
Evaluation of performance
The final step in the marketing plan is the evaluation of performance . These six steps are similar to those
prescribed by management strategies attempting to integrate all company activities into one consistent
effort.when properly designed and followed they provide guidance to company leaders and marketing
experts as they try to make certain the firms total communication package is fully integrated.
EXPLAIN THE VALUE OF IMC PLAN
A major force compelling firms to seek greater integration of advertising and marketing communications is
information technology. Computers, the World Wide Web, and telecommunications have moved the world
into an information age where business and more business and most consumers have access to an abundance
of marketing communication.
1. Information Technology
2. Changes In Channel Power
3. Increase In Competition
4. Brand Parity
5. Integration of information
6. Decline In The Effectiveness Of Mass-Media Advertising
Information Technology
Technology allows instant communication among business executives, employees, and others around the
world. It has also created new opportunities for marketing communications. For example, predicting the
purchasing behaviors of consumers in the past was based on the results of test markets, attitudinal research,
and intention-to-buy surveys. Although these are excellent means of obtaining information about consumers,
they often are slow, costly, and are potentially unreliable.
Today, predicting purchase behavior is more precise due to the development of the UPC (Universal Product
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Code) bar-coding system. The technology was originally used to manage inventories. UPC code combined
with other technology programs allow huge amounts of data and information about customers to be
gathered. Advanced statistical software helps company leaders analyze these data files. Connections between
financial and business firms make it possible to collect purchasing data. Using this information, the
demographic and psychographic information about consumers can be correlated with the items they buy,
when they make purchases, and where they make purchases. Consequently, marketers can quickly determine
who is buying a companys products and identify best communication channels to reach those customers.
Changes In Channel Power
Technological developments also served as catalysts for changes in channel power. Two typical market
channels are:
Producer
wholesaler
retailer
consumer
Producer

business agent

business merchant

business user

With the advancement of the World Wide Web and information technology, the power has shifted to the
consumer. Currently, consumers can obtain information about goods and services from their homes or
businesses and purchase almost anything over the internet. To illustrate how technology has changed
channel power, think about an individual in the market for a new stereo. First, she goes to the internet and
searches for information. She then identifies several possible brands and narrows them down to three. Next,
she travels to a local mall and investigates the three brands. Asking questions of the sales clerks helps her
gather additional product information. Going home, she then logs onto the Web sites of the three
manufacturers to learn about warranties and company policies. Having gathered sufficient information to
make a decision, she can utilize internet sources or a catalog to finalize the purchase either via the web or by
telephone. Within 3 days, the new stereo arrives complete with a money-back guarantee if she is not
satisfied. The result is that the buyer is in charge of the entire process, not the retailer or the wholesaler.
Increase In Competition
Information technology has dramatically changed the market place. Consumers can purchase goods and
services from anywhere in the world. People want quality, but they also want a low price. The company that
delivers on both quality and price gets the business, regardless of location. In this type of market, the only
way one firm can gain sales is to take customers away from another firm. Integrating advertising and other
marketing communications becomes extremely important in such an environment. Advertising alone is not
enough to maintain sales. The situation is further complicated for manufacturers when retailers hold stronger
channel power and control the flow of merchandise to consumers. In that situation, manufacturers have to
invest in trade promotions to keep their products in various retail outlets. Encouraging retailers to promote a
manufacturer brand or prominently display it for consumer viewing requires even greater promotional
dollars. Manufacturers also must invest heavily in consumer promotions to keep end users loyal to their
companies and encourage them to purchase their brands because they know that the more they promote their
own products, the more attractive the product become to retailers.
Brand Parity
When consumers believe that most brands offer the same set of attributes, the result is called brand parity.
Form the consumers perspective, this means shoppers will purchase form a group of accepted brands rather
than one specific brand. When brand parity is present, quality is often not a major concern because
consumers believe that only minor quality differences exist. Consumers often view quality levels of products
as being nearly equal. As a result, they often base purchase decisions on other criteria such as price,
availability or a specific promotional deal. The net effect is that brand loyalty has experienced a steady
decline. Hence, the marketing team should try to create a message that expresses how the companys
products are clearly different. They must convince consumers that the product is not the same as the
competition. A quality IMC program is, in part, is designed to gain benefits associated with a strong brand
name.
Integration Of Information
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Todays consumers have a variety of choices regarding where they obtain information about a brand. If
consumers are not satisfied with what they hear, they can seek additional information. They may go to the
internet and read about other brands and companies. As a result, most companies now list internet address on
advertisements. Web users can discuss products and companies with other customers in chat rooms or in
web logs. They may also travel to retail stores and discuss various options with the sales clerk.
Others may consult independent sources of information such as consumer reports. The marketing team
should be concerned with the ways consumers integrate the information they receive. Company leaders
should make sure that every contact point projects the same message. Contact points are the places where
customers interact with or acquire additional information form a company. An effective IMC program sends
a consistent message about the nature of the company, its product and the benefits that result from making a
purchase from the organization.
Decline In The Effectiveness Of Mass-Media Advertising
The influence of mass-media advertising has dramatically changed. The rise in popularity of cable TV, DVR
recorders, and satellite dishes means consumers have a wider variety of viewing choices. Using the remote
while watching television means it is likely that, during most commercials, the viewer is surfing other
channels to see what else is on. Many television advertisements are not seen, even by those people watching
a particular program. In a recent survey conducted by Brandweek magazine, only 16 percent of viewers said
that they watch commercials during a program. To overcome this problem, it is vital to create new and
innovative communications program.
Many firms employ advertising agencies to assist in marketing efforts. Until 1970 almost all advertising
agencies focused only on the advertising aspect of the marketing plan. Now however, many advertising
agency spend substantial amounts of time assisting clients in the development of IMC programs. These
agencies also design consumer promotion materials and direct-marketing programs, along with other
marketing tactics.
EXPLAIN GLOBALLY INTEGRATED MARKETING COMMUNICATION
Integrated marketing communication is called as GIMC, a globally integrated marketing communications
program. The goal is to coordinate marketing efforts. The challenges are grater due to larger national and
cultural differences in target markets.
In the past, marketers could employ two different strategies for global companies. The first approach was
called standardization, in which the idea was to standardize the product and message across countries. The
goal of this approach was generating economies of scale in production while creating a global product using
the same promotional theme. The language would be different but the basic marketing message would be the
same.
The second approach to global marketing was adaptation. Products and marketing messages were designed
for and adapted to individual countries. Thus, the manner in which a product was marketed in France was
different than in Italy, India or Australia. The GIMC approach is easier to apply when a company relies on
the standardization method; however GIMC can and should be used with adaptation or standardization. To
reduce costs, careful coordination of marketing efforts should occur across countries. Even when a firm uses
the adaptation strategy, marketers from various countries learn from each other. A company should try to
transmit a consistent theme, even when there are differences in local messages. In terms of marketing, the
philosophy many countries use is market globally, but act locally.
Global marketing communications is a great way to send a consistent marketing message all across the
globe. It takes careful planning and a thorough execution to pull it off successfully. Global brand building
through advertising is a different matter - firstly the company and its marketing head should be able to think
and act globally, secondly the brand message must be well matched with the company's offering - in this
case high performance IT consulting. Thirdly, it takes serious commitment and budgets to build a strong
brand.
PROMOTIONS OPPORTUNITY ANALYSIS
A promotions opportunity analysis is the process marketers use to identify target audiences for a companys
goods and services and the communication strategies needed to reach these audiences. People are different
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and have unique uses for various products. The same is true for businesses. These special features are
especially pronounced in global markets. Therefore communication to each group requires distinct and
somewhat customized approaches. An effective promotional analysis identifies the approach or appeal that
is best suited to each set of customers.
A promotions opportunity analysis must accomplish two objectives: (1) determine which promotional
opportunities exist for the company and (2) identify the characteristics of each target audience so that precise
advertising and marketing communications message can reach them. The more a marketer knows about an
audience, the greater the chances a message will be heard, understood, and result in the desired outcome.
There are five steps in developing a promotions opportunity analysis as follows.
1. Conduct a communication market analysis
2. Establish communication objectives
3. Create communications budget
4. Prepare promotional strategies
5. Match tactics with strategies.
1.Communication market analysis
The first step of a promotions opportunity analysis is a communication market analysis. A communication
market analysis is the process of discovering the organizations strengths and weaknesses in the area of
marketing communication and combining that information with an analysis of opportunities and threats
present in the firms external environment. This process is quite similar to a managerial approach called
SWOT analysis. The primary difference is that instead of looking at environment from a company-wide or
strategic business units of view, the analysis is from a communication perspective.
A communication market analysis examines five areas:
a. Competitors
b. Opportunities
c. Target markets
d. Customers
e. Product positioning
Competitors
When examining competitors, the objective is to discover who the competition is and what they are doing in
the areas of advertising and communication. The marketing tactics that competitors use must be identified to
understand how they are attacking the market place. Consumers integrate information from a variety of
sources. It is helpful to know what potential customers see, hear, and read about the competition. The
marketing team should visit the vendors and suppliers who have dealt with the competition or who have read
the competitions statement.
Opportunities
A second component of communication market analysis is the search for opportunities. This includes
carefully watching for new marketing communication opportunities by examining all of the available data
and information about the market. One firm that has recently identified a new and unique communication
opportunity is Digital Lifestyles Group.
Target markets
A third communication market analysis activity is examining various target markets. This analysis requires
the marketing department to recognize the needs of various consumer and business groups. Company
marketers must discover the benefits customers are seeking and determine the various ways in which the
customers can be reached. The goal is to divide the overall market into smaller market segments. Then the
company can develop marketing programs and advertising campaigns for each of these similar groups.
Customers
Another ingredient in examining a target market is conducting an in-depth analysis of customers. There are
three types of customers to study:
Current company customers
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 The competitions customers

Potential new customers
Creating effective advertisements and marketing communications requires knowing everything that
goes on in the minds of customers. It is helpful to ascertain how customers perceive individual
advertisements as well as what they think about the larger company. Service metrics examines a
firms Web Site from the customers perspective and, more importantly, compares the website to the
competitions. This type of analysis identifies all of a firms communication avenues. It also tells the
company how its Web Site compares to the competitions.
Product positioning
Part of a communications analysis is examining the position a firm has relative to its competition. Product
positioning is the perception created in the consumers mind regarding the nature of the company and its
products relative to the competition. The quality of products, prices charged, methods of distribution, image,
communication tactics, and other factors create positioning and are, in turn affected by the brands position.
In examining the brands positioning, the marketing firm should determine how the brands position is
viewed by consumers, businesses and customers. It is important to make sure the position being promoted is
consistent with current views by the various constituencies and is also consistent with various elements of
the IMC program.
2. ESTABLISHING MARKETING COMMUNICATION OBJECTIVES
The second step of a promotions opportunity analysis is to identify objectives. Communication objectives
help account executives and advertising creatives design effective messages. A communication plan is often
oriented toward a single objective. It is possible, however, for a program to accomplish more than one goal
at a time. The process of defining and establishing communication objectives is a crucial element of a
promotional opportunities analysis. Without clearly specified objectives, the company can quickly drift off
course or lose its focus on the overall IMC program. Communication objectives are derived from marketing
objectives, which tend to be general because they relate to the entire marketing plan. They also must be
measurable. Marketing objectives address:
Sales volume
Market share
Profits
Return on investment.
3. ESTABLISHING A COMMUNICATIONS BUDGET
The third step of promotions opportunity analysis is preparing a communications budget. Budgets are based
on communications objectives as well as marketing objectives. Communications budgets differ from
consumer markets and business-to-business markets. A much larger percentage of the budget for B-to-B is
allocated for telephone marketing than in the consumer market. There are several factors which influence the
expenditure on promotion and sales.
The goal of the promotion: communication goals differ depending on the stage in the buying process that is
being addressed. Hierarchy of effects model suggests that prior to making a purchase a consumer goes
through stages of awareness such as knowledge, liking, preference, conviction.
Threshold effects: The early effects of advertising are minimal. The same is true for all communication
expenditures. At first, there may be little behavioral response, especially if only advertisements are used.
Over a time, a consumer who is exposed repeatedly to a companys marketing message recalls the company
and eventually is willing to make a purchase.
Carryover effects: Another factor which influences the relation between promotion and sales is a carryover
effect. Many products like washing machines and refrigerators are only purchased when needed.
Promotions for these products must be designed to generate carryover effects. This occurs when the
consumer has been exposed to the companys message for so long that, when the time comes to buy, the
individual remembers the key company.
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Wear-out effects: At a certain point, an advertisement or particular promotion simply becomes old or
boring. In such cases consumer tend to ignore the advertisement or just tune it out. The challenge for
marketing communication is to keep an ad beyond the threshold effects and long enough to capture
carryover effects, but no so long that wear-out effects begin to take place.
Decay effects: when the company stops advertising, consumers begin to forget the message. In some
instances, the degree of decay is dramatic. The promotional budget must be structured to avoid the problem
of decay effects.
Random effects: Random events affect promotions. The September 11, 2001 attacks affected a variety of
industries and individual companies. Promotional expenditures were, in some cases, cut back as the nation
recovered. It would be impossible to demonstrate the relationship between promotions and sales in such
circumstances. Therefore, as the marketing team constructs the budget, the assumptions that drive the
process should be considered.
TYPES OF BUDGET
There are many ways to prepare a communications budget.
The percentage of sales method: Companies using this form prepare communications budgets for coming
years based on 1) sales from previous year or 2) anticipated sales for the next year. A major reason for using
this type of budget is its simplicity. The approach also has problems. First, this type of budget tends to
change in the opposite direction of what may be needed. Second, it does not allocate money for special
needs or to combat competitive pressures. Therefore, many marketing efforts believe the disadvantages of
the percentage of sales method tend to outweigh its advantages.
The Meet-the-competition method: Some firms use the meet-the-competition method of budgeting. The
primary goal of this form of budgeting is to prevent the loss of market share. It is often used in highly
competitive markets where rivalries between competitors are intense. The drawback of this method is that
the marketing dollars are not spent effectively. The concept to remember is that it is not how much is spent,
but rather how well the money is allocated and how effectively the marketing campaign works at retaining
customers and market share.
The what we can afford method: This technique sets the marketing budget after all the companys other
budgets have been determined. Money is allocated based on what the company leaders feel they can afford.
The objective and Task method: To prepare this type of communications budget, management first lists all
of the objectives it intends to pursue during the year; then, they calculate the cost of accomplishing each
objective. The communications budget is the cumulative sum of the estimated costs for all objectives.
Payout planning: payout planning establishes a ratio of advertising to sales or market share. This method
normally allocates greater amounts in early years to yield payouts in later years. By allocating larger
amounts at the beginning of a new product introduction, brand awareness and brand equity are built. Then,
as the brand is accepted and sales build, a lower percentage of advertising dollars is needed to maintain a
target growth.
Quantitative models:
In some instances, computer simulations may be developed to model the
relationship between advertising or promotional expenditures with sales and profits. These models are far
from perfect. They do have the advantage of accounting for the type of industry and product as the model is
created.
Pay out Planning: It establish a ratio of advertising to sales or market share . This method normally
allocated greater amounts In early years to yield payouts in later years.By allocating larger amounts at the
beginning of a new product introduction , brand awareness and brand equity are built . Then , as the brand is
accepted and sales build, a lower percentage of advertising dollars is needed to maintain a target growth.

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4. PREPARING PROMOTIONAL STRATEGIES

The fourth step of promotions opportunity analysis program is to prepare a general communication strategy
for the company and its products. Strategies are sweeping guidelines concerning the essence of the
companys marketing efforts. Strategies provide a long-term direction for all marketing activities. An
excellent example of a general communications strategy is found in the marketing efforts of Mountain Dew.
The primary market for Mountain Dew is teenagers and yound adults. As a result, communication efforts are
directed to that market using slogans such as Do the Dew to Been There Done That and so forth. So
communications strategies should be directly related to a firms marketing objectives. Stategies must be
achievable using the allocations available in the marketing and communications budget.
5. MATCHING TACTICS WITH STRATEGIES
Tactics are activities performed to support strategies. Tactics include promotional campaigns designed
around themes based on strategic objectives. Tactics do not replace strategies, nor should they distract
consumers from the consistent message or the theme the company is trying to create. At the same time, they
add excitement or interest to what the company is ordinarily doing. The company leaders must be aware of
communication opportunities present in the environment along with any threats to the companys marketing
program. They must study and understand the companys competition to the greatest degree possible. Target
markets must be defined and budgets set. Then, the marketing leaders of the company can establish
strategies and tactics to guide efforts to reach specific marketing objectives and performance targets.
Case study Titan Watch
In October 2004, Titan Industries Ltd. (TIL), a leading manufacturer and marketer of watches, jewelry, eye
wear, and other lifestyle products, appointed Aamir Khan (Aamir) as the brand ambassador for its Titan
range of watches. There is a perfect fit between Aamir and Titan -- their stature, timelessness, and the love
and trust they both share with the people, both nationally and internationally, makes this an ideal
partnership. Moreover, Aamir has a universal appeal that extends to everyone, across age groups, just as our
watches do.
TIL's Communication Strategy
TIL's communication strategy evolved over time. In 1987, the company was known only for the parent
brand.
Through the 1990s, the company introduced several collections and sub-brands for different segments of the
market. Though innovative and appealing, the marketing and communication efforts of these sub-brands
were not integrated. Initially, they were advertised under the mother brand, but with the development of the
market, it became necessary for TIL to develop separate communication and marketing campaigns for its
sub-brands...
UNIT-I (COMPLETED)
Reference:
Integrated advertising promotion and marketing communications- Kenneth clow
Integrated advertising promotion and marketing communications-philip kotler

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