Marketing Communications

184 CHAPTER 6 BUDGETS

communications eff ect at all. Even if communications eff ort is zero, there will be a certain level

of sales, and a minimum investment is needed to enjoy any results of the communications

programme and to increase sales. When that level is reached, sales will start to increase with

incremental communications expenditures. Th e higher the investments, the greater the addi-

tional sales will be. At point A, increased investments start to lead to smaller changes in sales.

It is impossible, even with very high communications investments, to exceed a certain satura-

tion level of sales. Th is is due to the market and the cultural and competitive environment.

Exorbitant communications investments may even lead to negative eff ects, such as irritation

and consumer resistance.^3

Estimating the relationship between the communications budget or eff ort and sales or

market share is not easy. First of all, marketing communications are not the only marketing

mix instrument infl uencing sales. Prices, product line decisions and changes in the distribu-

tion strategy will also infl uence sales. Furthermore, an eff ective marketing mix implies that

synergy and interaction exist between the various marketing tools. In a well-designed mar-

keting plan each tool reinforces another. A communications plan may lead to better results if

the distribution strategy is optimised or the price is lowered. A rearrangement of the product

line may result in more eff ective communications, etc. As a result of this interaction, it is very

Figure 6.1 Concave sales response model

Figure 6.2 The S-shaped sales response model

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