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Belch: Advertising and
Promotion, Sixth Edition
IV. Objectives and
Budgeting for Integrated
Marketing
Communications Programs
7. Establishing Objectives
and Budgeting for the
Promotional Program
The promotional planner should determine what role various
sales promotion techniques, publicity and public relations,
direct marketing, and personal selling will play in
the overall marketing program and how they will interact
with advertising as well as with one another.
For example, the marketing communications program
for the San Diego Zoological Society has a number of
objectives. First, it must provide funding for the society’s
programs and maintain a large and powerful base of supporters
for financial and political strength. The program
must educate the public about the society’s various programs
and maintain a favorable image on a local, regional,
national, and even international level. A major objective
of the IMC program is drawing visitors to the two attractions
(Exhibit 7-9).
To achieve these objectives, the San Diego Zoological Society and its advertising
agency developed an IMC program. As can be seen in Figure 7-8, this program
employed a variety of integrated marketing communication tools. When setting objectives
for these promotional elements, planners must consider what the firm hopes to
communicate through the use of this element, among what target audience, and during
what time period. As with advertising, results should be measured and evaluated
against the original objectives, and attempts should be made to isolate the effects of
each promotional element. Objectives for marketing communications elements other
than advertising are discussed more thoroughly in Part Five of the text.
If you take a minute to look back at Figure 1-4 on page
26, you will see that while the arrows from the review of
the marketing plan and the promotional situation analysis
to analysis of the communications process are unidirectional,
the flow between the communications analysis
and budget determination is a two-way interaction. What this means is that while
establishing objectives is an important part of the planning process, the limitations of
the budget are important too. No organization has an unlimited budget, so objectives
must be set with the budget in mind.
Often when we think of promotional expenditures of firms, we think only about
the huge amounts being spent. We don’t usually take the time to think about how
these monies are being allocated and about the recipients of these dollars. The budgeting
decisions have a significant impact not only on the firm itself but also on
numerous others involved either directly or indirectly. The remainder of this chapter
provides insight into some underlying theory with respect to budget setting, discusses
how companies budget for promotional efforts, and demonstrates the inherent
strengths and weaknesses associated with these approaches. Essentially, we focus on
two primary budgeting decisions: establishing a budget amount and allocating the
budget.
Establishing the Budget
The size of a firm’s advertising and promotions budget can vary from a few thousand
dollars to more than a billion. When companies like Ford, Procter & Gamble, and
General Motors spend over 2 billion dollars per year to promote their products, they
expect such expenditures to accomplish their stated objectives. The budget decision is
no less critical to a firm spending only a few thousand dollars; its ultimate success or
failure may depend on the monies spent. One of the most critical decisions facing the
marketing manager is how much to spend on the promotional effort.
Unfortunately, many managers fail to realize the value of advertising and promotion.
They treat the communications budget as an expense rather than an investment.
Instead of viewing the dollars spent as contributing to additional sales and market
share, they see budget expenses as cutting into profits. As a result, when times get
tough, the advertising and promotional budget is the first to be cut—even though there
© The McGraw−Hill
Companies, 2003
Exhibit 7-9 The San
Diego Zoo attempts to
attract visitors through
advertising
Establishing and Allocating
the Promotional Budget
211
Chapter Seven Establishing Objectives and Budgeting for the Promotional Program