Core Concepts of Marketing

DESIGNINGANIMeSTRATEGY 197

TABLE8.1 SummaryofTechniques:SettingtheIMCBudget

Technique

ArbitraryAllocation

Affordability
Ratio-to-sales
Competitivecomparisons
Experimentalapproach
Objective-taskmethod

GeneralDescription

Managementbasesbudgetonpersonalexperience, businessphilosophy,and

marketingintuition

Upperlimitofbudgetbasedonavailablecompanyresources

Amountbudgetedisbasedonsomeportionofpastorforecastedsales

Budgetbasedonamountbeingspentbymajorcompetitors

Budgetbasedontestmarketresults

Determinecostsofreachingspecificpromotionalobjectivesandsumamounts

fonnancemeasuresagainstthestandards.Indoingso,it is theoreticallypossibletodeter-

minethemosteffectivemethodsofmarketingcommunication.

Finally,howa companyorganizesforIMCdependsonthedegreetowhichit desires

toperfonnthecommunicationfunctioninternallyortoassignthistasktooutsideagencies.

Typically,thesalesfunctionis perfonnedinternallyandthesalesorganizationisa partof

theoverall,standingorganizationalplan.Occasionally,aswhenmanufacturer'sagentsare

used,outsideorganizationsareemployedtoperfonnpersonalselling.Advertisingservices

mightbeperfonnedinternallyorexternally. Salespromotionactivitiesareusuallyalsohan-

dledinternally,althoughit is notuncommonforadvertisingagenciestobeconsultedin con-

nectionwithsalespromotionplans.Thesameistrueforpublicrelations.

ThePromotionMix

ThemannerinwhichthefourcomponentsofIMC(i.e.,advertising,personalselling,sales

promotion,publicrelations)arecombinedintoaneffectivewholeiscalledthefMCmix.

Thepromotionmixtendstobehighlycustomized.While,ingeneral,wecanconcludethat

business-to-businessmarketerstendtoemphasizepersonalsellingandsalespromotionover

advertisingandpublicrelations,andthatmassmarketersarejusttheopposite,thereare

manyexceptions.However,thefollowingfactorstendtohaveanimpactontheparticular

IMCmixa companymightselect:

1. Marketing/fMCobjectives:Companiesthatdesirebroadmarketcoverageorquick
   growthinmarketshare, forexample,mustemphasizemassadvertisinginorder
   tocreatea dramaticandsimultaneousimpact.


2. Natureoftheproduct:Thebasiccharacteristicsofproduct(highlytechnical)sug-
   gesttheneedfordemonstrationandexplanationthroughpersonalselling,ormass
   advertisinginthecaseofa productwithemotionalappeal(perfume).


3. Placeintheproductlifecycle:Productsintheintroductorystageinthelifecycle
   oftenneedmassadvertisingandsalespromotion,thoseinmaturityneed personal
   selling,andthoseindeclineemploysalespromotion.


4. Availableresources:Companieswithlimitedfinancialandhumanresourcesare
   oftenrestrictedtosalespromotionandpublicrelationswhilethosewithplenty
   ofbothoptformassadvertisingandpersonalselling.^2
   ThemoststrikingfactaboutIMCtechniquesistheircross-substitutability.Theyrep-
   resentalternatewaystoinfluencebuyerstoincreasetheirpurchases. Itispossibletoachieve
   a givensaleslevelbyincreasingadvertisingexpendituresorpersonalselling,orbyoffering