Chapter 1. An Introduction to Integrated Marketing Communications.pdf

MKT3102 Integrated Marketing Communications
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Nakarin L. 551-0353
Thanthita K. 551-1002
Chapter 1
An Introduction to Integrated Marketing Communications
The Role of Marketing
- Exchange: Two or more parties give something that has value to one another and it
is a way to communicate among parties. It is the basic marketing activity to build and
maintain relationships with customers.
- Marketing: It is a set of institutions, activities and processes for creating, delivering
and exchanging valuable offerings for customers, clients, partners and the society.
- Value: It is the difference between all the benefits that the customers perceive from
the product or service and all the costs that the customers give up for getting and
consuming it.
o Benefits
 Functional – product performance
 Experiential – feelings when using the product
 Psychological – feelings when owning a particular brand
o Costs
 Money paid for the product or service
 Getting information about the product or service
 Purchasing the product or service
 Learning how to use the product
 Maintaining the product
 Disposing of the product
The Marketing Mix – The combination of four elements; product, price, distribution and
communication for potential exchange with consumers in the market. Marketers need to
know about the issues and options in each element and aware of how they combine in
order to set effective marketing program to deliver value to customers. Marketers must do
consumer research to analyze the market and use the information to develop marketing
strategy and marketing mix.
Integrated Marketing Communications
IMC process involves different promotional elements and many marketing activities that
communicate with the customers. IMC process is used to plan, develop, execute and
evaluate coordinated measurable, persuasive brand communication programs with
consumers, customers, prospects, employees, associates and relevant internal and external
audiences so as to generate both short-term return on investment and long-term brand and
shareholder value.
Growing importance of IMC – Companies can take advantage of synergy among promotional
tools, develop more effective and efficient marketing communication programs, avoid
duplication.

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The role of IMC in branding – The combination of several factors; name, logo, symbols,
design, packaging, performance, image if product of service and any association that
consumers have in mind when thinking of a brand is called ‘brand identity’.
The Promotional Mix: The Tools for IMC
- Promotion: The unity of seller initiated efforts to set up information and persuasion
channels so as to sell products and services and to promote idea.
- Promotional mix: The basic tools that the companies use to accomplish their
communication objectives. There are six elements in promotional mix.
Advertising – It is a form of nonpersonal communication about company, product, service
and idea paid by an identified sponsor. Advertising involves mass media; TV, radio,
magazines, newspapers so that the message is transmitted to large groups of audience at
the same time. But there is no immediate feedback from the audience.
o Advertising to consumer markets
 National advertising: Advertisement that is broadcast nationwide on
prime-time TV by famous companies.
 Retail/local advertising: Advertisement that is done by retailers or
local stores.
 Primary-demand advertising: Advertisement that is broadcast to
encourage consumer’s demand in an entire industry.
 Secondary-demand advertising: Advertisement that is broadcast to
create consumer’s demand for a specific brand.
o Advertising to business and professional markets
 Business-to-business advertising: Advertisement that is broadcast to
encourage company’s demand of industrial goods and services.
 Professional advertising: Advertisement that is done for professionals
to encourage them to buy products for their business operations.
 Trade advertising: Advertisement that is done for members in
marketing channel to encourage them to promote and resell the
company’s branded products to the final customers.
Direct marketing – Companies communicate with their target market directly in order to get
the response and transaction. For example, database management, direct selling,
telemarketing, print media, direct response ads, direct mail and the Internet.
Digital/Internet marketing
o Interactive media: It is two way communication that users can participate and
modify information content that they receive in real time.
o Social media: Online communication and interaction among people to create,
share and exchange content.
Sales promotion – It provides extra value and incentives to the salespersons, distributors
and ultimate consumer to stimulate immediate sales in limited time.

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o Consumer-oriented sales promotion
o Trade-oriented sales promotion
Publicity/public relations
o Publicity: It is a form of nonpersonal communications in which the company,
product, service or idea do not paid for or run under an identified sponsor.
o Public relations: It is management function that evaluates attitudes of the public,
identifies individual’s and organization’s policies and procedures with public
interest and executes action program to get public understanding and
acceptance.
Personal selling – It is a form of person-to-person communication that the seller tries to
persuade the prospects to buy the company’s product or service.
IMC Audience Contact Tools
The following means of communication are used to reach the target audience.
- Broadcast media
- Print media
- Publicity/public relations
- Digital marketing
- Direct marketing
- Sales promotion
- Product placements
- Branded entertainment
- Events and sponsorships
- Word of mouth
- Point-of-purchase
- Personal selling
- Out-of-home media
The IMC Planning Process
1. Review of marketing plan – The company analyzes the situations in detail, sets
specific marketing objectives, sets marketing strategy and program, uses the
program to implement the strategy, monitors and evaluates performance.
2. Promotional program situational analysis
- Internal: The company uses its own promotional capabilities, reviews its previous
programs and results, assesses its brand image, strengths and weaknesses of its
products or services.
- External: The company analyzes its customers, competitors and the environment.
3. Analysis of communications process – The company make communication decisions.
4. Budget determination
5. Develop the IMC program – The company uses IMC strategies of creative and media.

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6. Monitor, evaluate and control – The company determines whether the program is
doing well or not, corrects the problems, gains management feedback and creates
input for future strategy and promotion.
Chapter 2
The role of IMC in the marketing process
Marketing and promotions process model
Marketing Analysis
1. Opportunity Analysis
This is the analysis of marketplace. We do this to find market opportunity so that we
can fulfill the gap in terms of customers’ need, satisfaction, trend, demand, etc.
2. Competitive Analysis
Identifying your competitors and evaluating their strategies to determine their
strengths and weaknesses relative to those of your own product or service1
. This will
help you to know your competitors and know your company so as to go beyond your
competitors.
1
http://www.entrepreneur.com/encyclopedia/competitive-analysis

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3. Target Market selection
Next step after you evaluate yourself and your competitors, you have to define your
target market to aim your focus and plan what you have to do to achieve this
market. It is better to set object and KPI’s. The target market identifying will help
you to create appropriate ads to attract the consumers.
The Target Marketing Process
The Target Marketing Process
1. Identify markets – isolate consumers with similarity. The more common ground with
consumers, the more marketers able to reach and accomplish them.
2. Determining Segmentation – dividing the consumer into distinct group which carry common
needs, and respond to marketing action.
a. Criteria to determine segment
Customer Characteristics
- Geographic: region, city size, density
- Demographic: gender, age, race
- Socioeconomic: income, education
- Psychographic: personality, lifestyle
Buying Situation
- Outlet type: in-store, direct
- Benefits sought: product feature, need
- Usage
- Awareness and intention: product knowledge
- Behavior: involvement
3. Selecting a Target Market – which segment has more potential
a. Entering the segments
- Undifferentiated marketing- one product sells to whole market
- Differentiated marketing – has numerous segments, match product or
service to each segment respectively
- Concentrated marketing – one segment, attempt to be leader in market
share

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4. Market Positioning – setting product or service to segments to complete with competitors
- Positioning by product attributes and benefits – position the products
based on the benefit due to salient attributes, the important benefit
affected on purchasing decision
- Positioning by price – focus on price sensitivity of consumers
- Positioning by use – make the product to be used in specific purpose
such as car perfume
- Positioning by product class
- Positioning by product user – focus on the target group of users such as
celebrities, rich people
- Positioning by competitor – position the product to the same category
as competitors
- Positioning by cultural symbols – create meaning and uniqueness for the
product
- Repositioning – change the position of the product
Marketing Planning Program
1. Product decision
Product is not just the object to sell but it is the value and benefit deliver to
customers, the product decision will help marketer to be able to make money from
selling the products.
a. Branding – building and maintaining the company’s image in customers’ mind. It
includes brand identity which consists of name, logo, symbols package, anything
related to the company, to create awareness and interest. Moreover, it carries
brand equity which is building and fostering relationship with customers.
b. Packaging – it provide functional benefits such as economy, protection, and
storage and creating need at the pointing of purchase.
2. Price decision
Consumers may not buy the product because of their price sensitivity. To make
effective pricing strategy, marketers must consider these factors; cost, demand,
competition, and perceived value.
3. Distribution Channel
Marketing channel is the place that the product is available for use or consumption.
a. Direct channel – it is the direct-selling system which mostly used by the
company that sell expensive and complex product.
Indirect channel – usually using network of wholesalers or retailer. It means the company sells its
product to the retailers and the retailers resell the product again.

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Chapter 3
Organizing for Advertising and Promotion: The Role of Ad Agencies and Other
Marketing Communications Organizations
Marketing Communication Process
The participants in marketing communication process are advertiser, advertising agency,
media organization, marketing communication specialist organization, collateral services.
But the key participants in marketing communication process are the clients or the
advertisers. They want to market products or services and pay for advertising and
promotions. Many companies use outside firms or advertising agency to create and produce
communication messages and provide service of marketing and promotion process.
Marketing Communication Model
Participants in the Integrated Marketing Communication Process
1. Advertisers/ Clients – They are the major participants in the process that have the
products, services, causes to be marketed. They provide funds for advertising and
promotions. They develop the marketing program and make the final decisions.
2. Advertising agencies – There are four types of advertising agencies as follows.
o In-house agencies: The company has its own advertising agencies internally.
In-house agency is set up, owned and operated by the advertiser.
o Full-service agencies: They offer full range of marketing, communications and
promotions services. They plan, create, produce advertising, perform
research and select media. They are made up of different departments to
provide needed activities in order to perform the various advertising
functions to serve the client. The departments included are account services,
marketing services, creative services, management and finance.
o Creative boutiques: They are a small advertising agency which provide
creative services only. They have better access to creative talent and can turn
out inventive creative work quickly.
o Media specialist companies: They specialize in buying media like radio and TV
time. And they specialize in analyzing and purchasing advertising time and
space. They are compensated with fee or commission.
Message
Source Communication
Channel
Receiver
Feedback
Noise

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3. Media organizations – They provide information or entertainment to their
subscribers, viewers and readers. They also provide entertainment for the firm’s
marketing communication message. The advertisers and advertising agencies buy
time and space with them.
4. Specialized services – They provide specialized services in different functions that
complement the efforts of advertising agencies.
o Direct marketing agencies: They provide various services such as direct mail,
database analytics and management, research, media services, creative and
production capabilities.
o Sales promotion agencies: They provide the services needed to plan, develop
and execute many sales promotion programs.
o Public relations firms: They develop and implement programs to manage the
organization’s publicity, image and affairs with consumers and other relevant
publics.
o Digital/ Interactive agencies: They are specialized in the development and
strategic use of various digital marketing tools like websites, banner ads,
search engine optimization, mobile marketing and social media campaigns.
5. Collateral services – They are the final participants in the process that include
marketing research companies, package design firms, consultants, photographers,
printers, video production houses and event marketing services firms.
Agency Compensation Methods
• Commission from media
• Fee, cost and incentive-based systems
• Percentage charges
Gaining and Losing Clients
The agencies lose clients because of the following reasons.
- Poor performance or service
- Poor communication
- Unrealistic demand by the client
- Personality conflicts
- Personal changes
- Change in size of the client or agency
- Conflicts of interest
- Changes in the client’s corporate and marketing strategy
- Declining sales
- Conflicting compensation philosophies
- Changes in policies
- Disagreements over marketing and creative strategy
- Lack of integrated marketing capabilities
The ways that the agencies gain clients are as follows.

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- Referrals
- Solicitations
- Presentations
- Public relations
- Image and reputation

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Chapter 4
Perspectives on Consumer Behavior
What is consumer behavior?
The study of consumers and the processes they use to choose, use (consume), and
dispose of products and services. 2
Figure4-1 A Basic Model of Consumer Decision Making
1. Source of problem recognition
1.1 Out of stock – when consumers use their products till it is all out, it is simple that
consumers will repurchase what has been used.
1.2 Dissatisfaction – Consumers will buy when they do not satisfied with the current product
or the products being used.
1.3 New needs/want – It is the purchase that depend on consumer changed. However,
consumers may buy according their want, a desire to possess something they do not
have aside from basic needs.
1.4 Related products/ purchases – It is a need for accessories used with main product such
as mobile and cover.
1.5 Market-Induced Problem Recognition – Marketers encourage consumers to buy via ads,
changes in fashion.
1.6 New product – When there is a new product that capture attention, consumers will
generate need.
2
http://www.marketingteacher.com/what-is-consumer-behavior/

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Maslow’s Hierarchy of Needs
2. Information Search – consumers are looking for details about products services to satisfy
their need so as to make decision.
2.1 Internal Search – Consumers gather the information from their memory, experience.
2.2 External Search – Consumers gather information via these sources
- Internet source –website, social network
- Personal source – friends, cousin, colleague.
- Public source – article inside magazine, newspaper, TV
- Personal experience - examining, testing the products.
Perception – the process in which consumers receive, select, organize, and interpret information so
as to create picture of something.
Sensation – the immediate direct response of senses (taste, smell, sight, touch, and hearing)

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3. Alternative Evaluation
3.1 The Evoked Set -the set of product choices that you believe are viable options
for you to purchase based upon your needs and desires relating to the product.3
3.2 Evaluation Criteria – the various aspects consumers used to assess the different
products in order to compare the alternatives.
Types of Consequences
1. Functional Consequences – the outcomes of products or services that directly
experienced by consumers.
2. Psychosocial Consequences - the outcomes of products or services that
generated from consumers’ feeling.
4. Purchase Decision
4.1 Purchase intention – matching purchase motive with characteristics of brands under
consideration. It is different actual purchase in term of the purchase intention may need
addition decisions.
4.2 Brand Loyalty - Brand loyalty is a result of consumer behavior and is affected by a
person's preferences.4
It occurs when customers continue buying the products with the
same brand without price or any things concerns.
5. Post purchase Evaluation – the level of experience after using the products or services.
Possible outcomes
1. Satisfaction
Expectation > Actual Experience = Dissatisfaction
Expectation ≤ Actual Experience = Satisfaction
2. Cognitive Dissonance - describe the feelings of discomfort that result from
holding two conflicting beliefs (in this case it means products). For example, you
planned to buy the new IPhone 6 which will have a grand sale on February 23, at
8.00 am. Then, you went to the Apple shop and the salesperson told you that
they had already sold all the phones. You was very upset and went back home.
There were inconsistency between your expectation and your experience. You
are suffering from the uncomfortable, unpleasant state of cognitive dissonance.
3
http://education-portal.com/academy/lesson/evoked-set-in-marketing-definition-lesson-quiz.html
4
http://www.investopedia.com/terms/b/brand-loyalty.asp

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The Consumer Learning Process
The knowledge or experience after consuming the products or service which will be applied
to future behavior.
Environmental Influences on Consumer Behavior

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Chapter 5
The Communication Process
The Nature of Communication
Communication is the passing of information, the exchange of ideas and the process of
establishing thoughts between two parties, sender and receiver. The communication
process is very complex. The success depends on the nature of the message, the audience’s
interpretation and the environment in which the message is received.
The Basic Model of Communication
1. Source encoding
The source or sender has information to share with another person or group of people.
The source can be both individual (spokesperson) and nonpersonal entity (corporation/
organization). The receiver’s perceptions of the source influence how the communication is
received. The communicator should be knowledgeable, trustworthy and relate in some
manner. For encoding, it is the process of putting thoughts, ideas or information into the
symbolic form in the way that the receivers will understand by the words, signs and
symbols.
2. Message
Message contains the information or meaning that the source hopes to convey. It can be
verbal, nonverbal, oral, written or symbolic.
3. Channel
It is a method by which the communication travels from the sender to the receiver. For
nonpersonal channels, it uses mass media, print media and broadcast media, to direct to a
number of people at one time.
4. Receiver
Receiver is the person, mostly are consumers, whom the sender shares thoughts, ideas
and information. Decoding is the process of transforming the sender’s message back into
thought.
5. Noise
Noise is unplanned distortion, inference, distractions, errors or problems that occur in
the encoding of the message at the point of reception.
6. Response/ feedback
Response is the receiver’s set of reactions after seeing, hearing or reading the message.
Feedback is the receiver’s response which is communicated back to the source.
Analyzing the Receiver

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To analyze the audience, the marketers need to identify the target audience. The company’s
advertising and promotional efforts to focus on the target audience. The target audience are
ranked from small groups to big groups. The groups are individual and group audiences,
niche markets, market segments and mass markets.
The Response Process
AIDA model is the personal-selling process through attention, interest, desire and
action. First, the company gets the customer’s attention. Then, it arouses them some
interest in the company’s product. Next, it create desire to own or use the product. Lastly, it
makes customers take action by get ing them make a purchase decision.
The alternative response hierarchies are as follows.
- The standard learning hierarchy: The consumers go through the response process in
the sequence depicted by the traditional communication model, learn  feel  do.
- The dissonance/ attribution hierarchy: the consumers behave, develop attitudes or
feelings and learn information that support the behavior. Do  feel  learn.
- The low-involvement hierarchy: The product in the purchase process is low
involvement and there are minimal differences among brands. Learn  do  feel.
The Cognitive Response Approach
Cognitive response in the thoughts that occur while reading, viewing and hearing
communication that can be measured by having consumers write down or verbally report
reactions to the message.
- Product/ message thoughts
• Counterarguments – thoughts the recipient has that are opposed to the claim
made in the message.
• Support arguments – thoughts that affirm the position taken in the message.
- Source-oriented thoughts
• Source derogations – negative thoughts about the spokesperson or company
making the message, so they are annoying and untrustworthy.
• Source bolsters – favorable thoughts to the source of the message.
- Ad execution thoughts
• Ad execution-related thoughts – can be either favorable or unfavorable
attitudes toward the advertisement and the brand.
• Attitude toward the ad – feelings of favorability or unfavorability toward the
advertisement.
The Elaboration Likelihood Model
ELM is the differences in the ways that consumers process and respond to the
persuasive message. The change in attitude depends on the amount and nature of
elaboration. There are two elements in ELM, motivation and ability. And there are two basic
routes to persuasion or attitude change. The first one is central route to persuasion where

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the receiver has high ability and motivation to attend, comprehend and evaluate messages.
The second one is peripheral route to persuasion in which the receiver lack of motivation
and ability to process information. They are not likely to engage in detailed cognitive
processing.
ELM also has important implications for marketing communication. If the level of
involvement is low, peripheral cues are more important than detailed message arguments.
But if the level of involvement is high, the advertisement should contain strong arguments
which are difficult for the message receivers to refute.

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Chapter 6
Source, Message, and Channel Factors
Promotional Planning Through the Persuasion Matrix
1. Receiver/comprehension: Can the receiver comprehend the ad?
Marketers should know their target market so as to create their message clear and
understandable
2. Channel/presentation: Which media will increase presentation?
Marketer must consider which media channel will be most effectively used to attract
the target consumers such as TV commercial or magazine.
3. Message/yielding: What type of message will create favorable attitude?
Marketer must create message that generate persuasion and positive feeling to
consumer.
4. Source/attention: Who will be effective in getting consumers’ attention?
Marketer must select effective source to capture consumers’ attention. For
example, using famous athletic in sport advertisement.
Source Factors
Source means a person involved in marketing communication. There are 2 levels of
involvement
1. Direct source: A person or endorser delivers or demonstrates the product him/herself e.g.
James Jirayu demonstrated the feature of Toyota Altis.
2. Indirect source: a model does not deliver a message directly but draw attention instead e.g.
Barcelona FC advertises Pepsi ads.
1. Source Creditability
Creditability is the degree to which people believe and trust what other people and
organizations tell them about a particular product or service.
Applying Expertise – using people in advertisement according to or bases on their experts
e.g. Colgate advertise its toothpaste by always saying that the all toothpaste products were
recommended by dentist.
Applying Trustworthiness – asides from the expertise, marketer must use people whom
gain consumers trust such as Johnny Walker once used Raewat Puttinan looked alike, one of GMM
founders to give a speech about ambition and confidence because most people trust and rely on
him.
Using Corporate Leaders as Spokespeople – the company creates creditability by using their
CEO or president to promote the product such as Nok Air used Mr. Patee Sarasin, CEO run the
advertisement.
2. Source Attractiveness
1. Similarity – representing the sense of similarity between consumers and marketer e.g.
Tiger Wood in Nike.

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2. Familiarity – knowledge that consumers gain through the exposure of products or
services.
3. Likeability – using spot person whom admired or influences the consumers to enhance
consumers’ perception in term of image and performance
Drawbacks of using endorsers
1. Overshadowing the Product – Consumer may focus more on the endorsers than the
product.
2. Overexposure - sometime consumers do not believe in product because they know that
the celebrities are paid to promote the product e.g. Nutrition food product.
3. Target Audiences’ Receptivity – Consumers may not feel involve with the brand
endorser such as using endorsers who do not match with the product.
Choosing a Celebrity Endorser
The most important key is that the celebrity must match with target audience, product,
brand, image of celebrity, cost, trustworthiness, risk of controversy, and familiarity and likeability
between audiences and celebrity.
3. Source Power – occurs when someone can administer rewards and punishment to the receiver
3.1 Perceived control – source is perceived as being administered positive or negative to
receiver.
3.2 Perceived concern – source follows what consumers’ attention or not
3.3 Perceived scrutiny – The receiver’s estimate of the source’s ability to observe
conformity.
3.4 Compliance – source has power to influence consumers.
Message Factors
1. Message Structure – message should be focus on content, structure, and appeal.
Order of Presentation
- Primacy effect - Putting the strong point in a correct position such as in
the beginning.
- Recency effect – Putting most persuasive message at the end of Ads.
2. Message Sidedness
2.1 One-sided message – the ads that mention only benefit or positive view of the product
e.g. Dentiste (toothpaste) advertise its message by telling the benefit to reduce mouth
odor in the morning.
Ad message recall as a
function of order of
presentation

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2.2 Two-sided message – the ads that mention both positive and negative point e.g. Lifely,
elder pamper, the narrator tells not to use the product while the video explains how to
use the product.
3. Message Appeal – it is designed according to consumers’ logic such as emotion, rational.
Effect of Alternative Mass Media
Differences in Information Processing
1. Information in printed ads – this information is self-paced; readers can read,
interpret, make understand, etc. anytime they want and as many as they can such
as magazine, newspaper, and email.
2. Information from broadcasting media – this information is externally paced; the
ads are controlled by the medium which means that audiences are limited to
watch such as ads in television, radio.
Source: Rajesh Kumar , Professor of Marketing management, IMC, Branding
& Strategic Management at IMT-Ghaziabad CDL (DIMS) & IP University

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Effects of Context and Environment
The environment and context inside the ads may influence the ads that cause how
audiences interpret the message. All of that create qualitative media effect means that the medium
of message affect the efficiency of ads. For example, restaurant ads will be most effective in Food
magazine, women cosmetic in CLEO.
Clutter
It is defined as
number of ads within the medium. It should be enough amount of ads but not too many. For
example, if there are 10 ads consistently displayed from the 1st
page to 10th
page, the reader may
stop reading or forget the very first ads because they have seen lots of ads with 10 p

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Chapter 7
Establish Objectives and Budgeting for the Promotional Program
The Value of Objectives
- Communications: IMC programs have the objectives of facilitating coordination of
various groups involved in the campaign as there are many people working on
planning and developing IMC programs.
- Planning and decision making: The objectives guide development of IMC plan and for
decision making. The firm’s promotional strategy should be based on the
establishment of objectives.
- Measurement and evaluation of results: The objectives also provide benchmark
against which the success or failure of promotional campaign can be measured.
Integrated Marketing Communications Objectives
1. Marketing objectives – focus on specific measurable results like sales volume,
market share, profits, return on investment, etc.
2. Integrated marketing communication objectives – focus on particular
communications tasks required to deliver the appropriate messages to the target
audience.
3. Sales-oriented objectives – require economic justification and based on the
achievement of sales results.
The factors that influence sales to increase or decrease are product quality, price,
distribution, advertising and promotion, competition, technology and the economy.
Communications Objectives
Advertising and promotional efforts are designed to achieve brand knowledge and
interest, favorable attitudes and image, and purchase intentions. They provide relevant
information and create favorable predispositions toward the brand before purchase will
occur. As consumers pass through three successive stages; cognitive, affective and conative,
they move closer to making a purchase.
Characteristics of Objectives
- Concrete, measurable tasks: The message that the advertiser wants to communicate
to the target audience.
- Target audience: The target audience must be well-defined based on descriptive
variables like demographics, psychographics, behavior, usage rate and benefits
sought.
- Benchmark and degree of change sought: Benchmark measure gives the promotional
planners basis for determining what communications tasks that are needed to be
accomplished for particular objectives.

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- Specified time period: Appropriate time periods depends on the situation that the
advertisers face and the type of response being sought.
Zero-Based Communications Planning
In involves determining what tasks need to be done which marketing communications
functions should be used and to what extent.
Budgeting Approaches
1. Top-down approaches – The budgetary amount is established by executive level,
then the money are passed down to the various departments.
• Affordable method – It is all-you-can-afford method in which the firm uses
the money left from other departments to invest in promotion.
• Arbitrary allocation – The budget is determined solely by management what
is felt to be necessary.
• Percentage of sales – The budget is based on sales of the products.
• Competitive parity – The budget is based on what the competitors allocate.
• Return on investment – The additional investments in advertising lead to the
incremental sales.
2. Build-up approaches – It is the objective and task method of budget setting. It
consists of three steps. First of all, defining the communications objectives to be
accomplished. The second step is determining the specific strategies and tasks. The
final step is estimating the costs associated with performance of these strategies and
tasks.
Allocating the Budget
1. Client-agency policies – It is the individual policy of the advertising agency or the
company.
2. Market size – The size of the market affect the decision making.
3. Market potential – some markets have higher potential than others.
4. Market share goals – The goals are keeping and increasing market share.
Organizational Characteristics
There are several factors that influence the decision of allocating advertising and
promotion budget as follows.
- The organization’s structure
- The organization’s power and politics
- The use of expert opinion
- The decision maker’s characteristics
- Approval and negotiation channels

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- Pressure on senior managers to arrive at the optimal budget

Chapter 1. An Introduction to Integrated Marketing Communications.pdf

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Chapter 1. An Introduction to Integrated Marketing Communications.pdf