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Belch: Advertising and
Promotion, Sixth Edition
II. Integrated Marketing
Program Situation Analysis
3. Organizing for
Advertising & Promotion
including the identification of target markets as well as the development of integrated
marketing communications programs that will differentiate the brand. 5
There are some drawbacks to the decentralized approach. Brand managers often
lack training and experience. The promotional strategy for a brand may be developed
by a brand manager who does not really understand what advertising or sales promotion
can and cannot do and how each should be used. Brand managers may focus too
much on short-run planning and administrative tasks, neglecting the development of
long-term programs.
Another problem is that individual brand managers often end up competing for
management attention, marketing dollars, and other resources, which can lead to
unproductive rivalries and potential misallocation of funds. The manager’s persuasiveness
may become a bigger factor in determining budgets than the long-run profit
potential of the brands. These types of problems were key factors in Procter & Gamble’s
decision to switch to a category management system.
Finally, the brand management system has been criticized for failing to provide
brand managers with authority over the functions needed to implement and control the
plans they develop. 6 Some companies have dealt with this problem by expanding the
roles and responsibilities of the advertising and sales promotion managers and their
staff of specialists. The staff specialists counsel the individual brand managers, and
advertising or sales promotion decision making involves the advertising and/or sales
promotion manager, the brand manager, and the marketing director.
In-House Agencies
Some companies, in an effort to reduce costs and maintain greater control over agency
activities, have set up their own advertising agencies internally. An in-house agency is
an advertising agency that is set up, owned, and operated by the advertiser. Some inhouse
agencies are little more than advertising departments, but in other companies
they are given a separate identity and are responsible for the expenditure of large sums
of advertising dollars. Large advertisers that use in-house agencies include Calvin
Klein, The Gap, Avon, Revlon, and Benetton. Many companies use in-house agencies
exclusively; others combine in-house efforts with those of outside agencies. For example,
No Fear handles most of its advertising in-house, but it does use an outside agency
for some of its creative work (Exhibit 3-3). (The specific roles performed by in-house
agencies will become clearer when we discuss the functions of outside agencies.)
A major reason for using an in-house agency is to reduce advertising and promotion
costs. Companies with very large advertising budgets pay a substantial amount to outside
agencies in the form of media commissions. With an internal structure, these
commissions go to the in-house agency. An in-house agency can also provide related
work such as sales presentations and sales force materials, package design, and public
© The McGraw−Hill
Companies, 2003
Exhibit 3-3 Most of the
advertising for No Fear is
done by an in-house agency
75
Chapter Three Organizing for Advertising and Promotion