Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

14. Promotion −
    Introduction to Integrated
    Marketing
    Communications

Text © The McGraw−Hill

Companies, 2002

Promotion_Introduction to Integrated Marketing Communications 417

4. Base the budget on the job to be done. For example, the spending level might
   be based on the number of new customers desired and the percentage of cur-
   rent customers that the firm must retain to leverage investments in already
   established relationships. This is called the task method—basing the budget
   on the job to be done.

In the light of our continuing focus on planning marketing strategies to reach

objectives, the most sensible approach to budgeting promotion expenditures is the

task method. In fact, this approach makes sense for anymarketing expenditure, but

here we’ll focus on promotion.

A practical approach is to determine which promotion objectives are most impor-

tant and which promotion methods are most economical and effective for the

communication tasks relevant to each objective. There’s never enough money to do

all of the promotion that you might want to do. However, this approach helps you

to set priorities so that the money you spend produces specific results.

The amount budgeted using the task method can be stated as a percentage of

sales. But you should see that calculating the right amount is more involved than

picking up a past percentage. It requires careful review of the specific promotion

(and marketing) tasks to be accomplished and how each task fits with others to

achieve the overall objectives. The costs of these tasks are then totaled—to deter-

mine how much should be budgeted for promotion (just as money is allocated for

other marketing activities required by the strategy). In other words, the firm can

assemble its total promotion budget directly from detailed plans rather than by sim-

ply relying on historical patterns or ratios.

This method also helps to eliminate budget fights between different promotion areas.

Such conflicts may occur if managers and specialists responsible for different promo-

tion methods see themselves as pitted against each other for limited budget dollars.

Instead, the task method of budgeting encourages everyone to focus on the overall

strategy and what promotion objectives need to be achieved. The specialists may still

make their own suggestions about how to perform tasks. But then the budget alloca-

tions are based on the most effective ways of getting things done, not on what the firm

did last year, what some competitor does, or even on internal politics. With this

approach, different promotion specialists are also more likely to recognize that they

must all work together to achieve truly integrated marketing communications.^20

Task method can lead

to budgeting without

agony

Promotion is an important part of any marketing mix.

Most consumers and intermediate customers can choose

from among many products. To be successful, a producer

must not only offer a good product at a reasonable price

but also inform potential customers about the product

and where they can buy it. Further, producers must tell

wholesalers and retailers in the channel about their

product and their marketing mix. These middlemen, in

turn, must use promotion to reach their customers.

The promotion blend should fit logically into the

strategy being developed to satisfy a particular target

market. Strategy planning needs to state whatshould be

communicated to them and how. The overall promotion

objective is to affect buying behavior, but the basic pro-

motion objectives are informing, persuading, and

reminding.

Three basic promotion methods can be used to reach

these objectives. Behavioral science findings can help

firms combine various promotion methods for effective

communication. In particular, what we know about the

communication process and how individuals and groups

adopt new products is important in planning promotion

blends.

An action-oriented framework called AIDA can help

marketing managers plan promotion blends. But the

marketing manager has the final responsibility for com-

bining the promotion methods into one integrated

promotion blend for each marketing mix.

In this chapter, we considered some basic concepts

that apply to all areas of promotion. In the next two

chapters, we’ll discuss personal selling, advertising, and

sales promotion in more detail.

Conclusion