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2013
Panchali Mallik
8/12/2013
Relevance of Marketing Communication in the
Present Society
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Relevance of Marketing Communication in the PresentSociety
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Executive Summary
Marketing management can essentially be referred to as the discipline of business which is focused on
the practical implementation of the marketing techniques in the real world scenario. It packages and
appropriately communicates the strategic thinking with the objective of meeting the needs of decision
making of the company executives. The report will delve into analyzing a very important doctrine of
marketing management. Marketing communication budget always emerged as a serious concern for
many companies. Different approaches adhered to by these companies will be analyzed in the report.
Evaluation of these approaches and laying down the recommendations to manage the organization will
be achieved by the report. Sound theoretical and conceptual perspectives which will contain the
evidences of the critical debate within the appropriate academic literature will included in the report.
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Contents Page Number
Introduction 4
Marketing 4-5
Marketing Communication 5
Marketing Communication Mix 6-7
Relevance or Importance of Marketing Communication 7-10
Factors influencing the Marketing Communication Budgets 11-12
Different approaches of Marketing Communication Budget 12-15
Conclusion 16
References 17-18
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Introduction
Business world today is characterized by cut-throat competition. The demography is very complex. The
role of marketing communication and marketing management is therefore becoming indispensable
due to the present policies of privatization, liberalization and globalization. These are the aspects which
also has adequate influence over the future of the business we are in. The dynamics of emerging
economies are not an easy one to comprehend, here nothing but change is constant. With so many
technological innovations, our ever evolving society has become more demanding. The central paradoxof globalization is the encounter between companies that are increasingly global and consumers who
remain largely local.
Marketing Management therefore, can be defined as that discipline of business which focuses on the
practical implementation of the techniques of marketing in the management of any companys
marketing resources and other related activities (Michael, 1997). It is important to note here in this
regard that that decision pertaining to marketing the communication budget is also a very essential
discipline under marketing management. For any company to reap the fruits of success and sustainableprofitability it is very important that they have a comprehensive and realistic budget. This is considered
to be a rather critical element in the in the annual marketing and communication plan of the company
(Kotler, 2011). It efficiently serves as a map that can ensure that the company can efficiently achieve its
goals and objectives. Therefore the report will delve into analyzing the different common approaches
taken by the companies to make decision pertaining to their communication budget.
Purpose
The report will delve into analyzing the different approaches which a company takes for the purpose of
setting the marketing communication budget. These approaches will be critically evaluated and
present recommendations to the management based on the understanding which has been achieved
from the analysis of the key aspects of Marketing Management and Communication.
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1. MarketingWhat is the single most important thing to be included for every aspect of our livelihood? Whether it is
the personal world or the periphery where we try
our professional gigs it is communication the
single most important aspect, which determines the
progress of our endeavors. Communication has a
vast orientation making it almost impossible
comprehend every genre it possesses in complete
actuality. For years different studies and researches
have been conducted to analyze and understand the
way communication facilitated different paradigms
of human life. Even the most crucial business endeavors and marketing ventures need appropriate and
adequate communication to achieve its business objectives.
In order to understand marketing communication the knowledge on the marketing is very important.
As defined by Philip Kotler, Marketing can be defined as the set of the human activities directed at
facilitating and consummating exchanges. Therefore from the above definition it can be understood
that marketing is the process in business by which the companies strive to create the value for the
customers and builds and maintains strong customer relationships. This is done with the aim of
capturing the value from the customer in return.
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2. Marketing CommunicationThe recent times are characterized by the widespread emergence of globalization. It is important to
understand that the success of any marketing process is directly related to the efficiency displayed by
the process of marketing communication adapted by the companies. For instance the international
market is flooded today with the diversified options for soft drinks are available (Macer, 2006). The
company which has the most competent strategy of marketing communication will be able to attain a
major chunk in the market. Marketing communication therefore can be defined as the coordinated
promotional messages which are delivered through the medium of one of more channels of
communication such as the print, radio, television, direct mail or personal selling (Richard, 2002). The
process of communication can be represented as under:
Fig:1
Fig: 1
The present day demography allows initiating marketing communication in different ways. There
are end number of tools and techniques which are used to culminate your marketing operations
into a more successful one. All you need is a strategy including the parameters of modern day
consumer appraisal.
Source Encoding Message Decoding Receiver
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Marketing Communication the very name suggest the idea is to communicate our business
objectives to the consumers and create and impulse within them to listen to us and consider the
products or services we have to offer at their own will. The technique necessary here is
ENGAGEMENT SEQUENCE!
2.1.Engagement SequenceThis is the simple way in which you can engage more and more number of consumers to your
business objective. All this can be achieved by following four very simple steps:
Connect: to the immediate and visceral members of the society to whom you want to directyour business objective.
Inform: your potential customers about your business message, attributes of the productyou offer and how is it different from your contemporaries.
Entertain: your customers with social context, humorous, horrific or seductive contents. Share: facet of life, currency of affection and reputation.
Fig: 2
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3. Marketing Communication MixThe budget of communication to a great extent depends upon the marketing communication mix,
since it enumerates the different parameter which goes into the determination of marketing
communication strategy thereby having direct bearing to the determination of marketing
communication budget. Following are the elements in a marketing communication mix:
Fig: 3
3.1.Advertising:Advertising is any form of non personal presentation and it functions for the promotion of the goods,
ideas or services.
Advertising
Sales Promotion Personal Selling
Direct Marketing Public Relations
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3.2.Personal Selling:Under this system personal sales presentation is undertaken by the companys sales representative for
the purpose of making direct sales and building relationship with the customers (Kerin, 2010).
3.3.Sales Promotion:Under this system short term incentives are offered in order to encourage or boost the rate of sales of
products or services.
3.4.Public relations:Under this system such campaigns and activities are undertaken which can initiate and create goodwill
for the company thereby creating positive brand image and brand identity for the company and the
product or services extended by it.
3.5.Direct Marketing:As the very name suggests under this system direct communication is targeted with the individuals so
that their immediate responses could be tracked and studied (Leadley, 2004).
Therefore various elements of marketing communication mix are the various factors on which the
communication expenditure is incurred. It is important to note that choice regarding the selection of
method of communication is made based on the market, the target audience, consumer behavior and
the product type (Owen, 2010).
4. Relevance or Importance of Marketing CommunicationMarketing Communication emerged as one of the most integral disciplines in Marketing Management
given the present day scenario. It is important to note here in this regard that there are different ways in
which marketing communication is initiated by different companies. The strategies are also determined
based on the market they want to communicate the message to, the target consumers and the
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potential consumer behavior, as opined by Leitner, A., (2007). Therefore it can be mentioned here in
this regard that the purpose of any marketing communication is to make available to the market a
particular set of information to the potential audience which will have the ability to create impulse
within the target audience in a way that will create a positive response among the target audience
towards the product concerned (Smith, 2004). Therefore the importance or the relevance of the
Marketing Communication can be enumerated as under:
4.1.Helps in Persuading the customers:The first and foremost importance of marketing communication is the fact that it provides reason to
the company for getting engaged in the activity of marketing. Therefore marketing communication
helps in effective persuasion of the audience towards procuring any particular product or service
(Hollenson, 2010). For instance Coca Cola Inc will aim at persuading the audiences in favor of theproduct by making them believe that it is a refreshing cola which will bring the world together.
4.2.Communicating Information:The next very important objective which is fulfilled by the functions of marketing communication is the
communication of relevant information in the market pertaining to the given product. The information
is structured distinctly to focus on the most important quality of the product. For instance the Subway
promotes itself as Guilt Free Subs. Therefore the message entails that fresh and healthy subs with
proper nutritional content will be supplied to the customers. Therefore communication of information
can be achieved most effectively only through the process of marketing communication.
4.3.Creation of Brand Image and Identity:It is very important to note here in this regard that the Marketing Communication also ensures that
goodwill is created about the company in the market together with the products or the services which
are offered to the market by the producers (Kotler, 2009). Regular and continuous flow of positive
information about the product and the services helps in the creation of brand image and identity for the
product.
4.4. Advertising and Promotion:A very important function performed by the marketing communication is to initiate effective
advertising and promotion of the products and services of the company. It is important to note here in
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this regard that while the calculation of the marketing communication budget is sought these are the
two distinct factors which are efficiently considered (Cant, 2009). The advertising and promotion
function carried out by the process of marketing communication is rather important since this are
crucial for ensuring sustainable growth to the business and or company. The expansion of the business
is also directly related to the same aspect.
4.5.Information pertaining to consumer behavior:The research on consumer behavior is of utmost necessity to ensure successful entry in the market
which will also be sustainable. Information about the consumer behavior is of utmost necessity. This is a
major determinant for the structuring of the message or rather the campaigns to be launched for the
particular products (Peter, 2010). Therefore information pertaining to the consumer behavior is of
utmost necessity. The marketing communication also performs the very important function ofresearching the consumer behavior. Therefore it helps to benefit the creation of the message to be
transmitted to the market.
5. Marketing ManagementMarketing Management is the business discipline which is dedicated to initiate the practical
implementation of the techniques of marketing, the resources of the firm and the different activities
which the firm is engaged in. These particular fields of management have gained in importance over
the past few years. With the rapidly emerging forces of globalization the discipline has gained in
significance in the international marketing system. It is important to note here in this regard that the
marketing management is a distinct process which consists of the planning, organizing, activating and
controlling the way the activity is performed (Loudon, 2004).
One of the very important aspects of marketing communication which will be delved into in this section
of the report is the approach to be undertaken for the purpose of determining the budget for marketing
communication. Therefore it is very important to understand that marketing communication is a very
essential and integral part of the marketing management. The decision pertaining to the marketing
communication is diligently deliberated after appropriate research. The decision taken therefore is
influenced by various factors.
6. Factors influencing the Marketing Communication Budgets
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Before delving into the analysis of the different approaches it is very important to gather the
understanding pertaining to the factors which affect the decision pertaining to the marketing
communication budget. These are:
6.1.Competition:The present age is the age of globalization wherein widespread competitions have successfully made its
foray in every realm of marketing. Combating these forces of competition is of utmost necessity so that
the major share of the market can be obtained together ensuring affecting the consumer behavior in
the favor of the concerned product or company (Loudon, 2004). Therefore the budget is determined in
accordance to the intensity of the competition prevailing in the market. For instance more the number
of substitutes in the market more will be the allotment of communication budget and vice versa.
6.2.The Product life cycle:
Another very important determinant of the marketing communication budget is the product life cycle.
According to Peter, (2010), the longer the product lifecycle is expected to be continuous investment in
the communication budget is necessary so that sustainable growth in the market can be guaranteed.
For instance in case of household appliances likes Washing Machine or Refrigerator the budget allotted
as the communication budget will be more.
6.3.Market Size:The Marketing Communication budget is also greatly influenced by the size of market. This is because
larger market means larger percentage of audiences that the product will need to cater. Therefore
invariably the cost of research on consumer behavior and corresponding preference pattern will
increase with the size of market (Webster, 1971). Thereby leading to an increase in the budget allotted
for marketing communication.
6.4. The Product Type:Yet another very important determinant of the marketing communication budget is the product type
the message pertaining to which is to be communicated. This is because every product type is built for a
particular group of audience based on which the marketers try to accomplish different approaches of
communicating the message which can encourage the target audience to procure the product (Egan,
2007). Therefore it can be mentioned here in this regard that the type of product also determines the
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budget to be allotted for marketing communication. For instance budget allotted for Washing
Machines will be invariably more than that allotted for the washing detergents.
6.5.Media Plan:One of the very significant determinants of the marketing communication budget is the media plan
selected for the purpose of communication (John, 2007). Therefore it can be mentioned here in this
regard that the media plan is the way of determining the most appropriate and most relevant media
platforms that can create a positive consumer behavior for a particular brand or product (Laseca, 2009).
7. Different approaches of Marketing Communication BudgetBefore getting into the determination of the marketing communication budget it is very important that
the different approaches which can be adhered to for the purpose must be understood and delved into.This will enable the management to decide upon the situation and thereafter select the approach which
they might consider to be appropriate for the given situation, product, market condition and the target
consumer behavior (Egan, 2007). Therefore the different approaches of marketing communication are
enumerated in the fo9llowing paragraphs:
7.1.The Percentage Approach:This is an approach which is designed for the type of expenditure of marketing communication which
might reflect the non profits evolution and the size of the budget. The fact that this kind of approach to
the determination of marketing communication budget is organic; the organizational finances can be
viably benefited (Schultz, et al 1996). Herein the budget is shaped by the percentage approach. For
instance the following example describes how this kind of budget is determined:
3% Allocated for the purchase of media for the purpose of advertising and promotion media, this can
include newspaper, radio, television, internet, direct mail etc.
+
4% Allocated for the purpose of designing the art work and the design of all types of printing
communications such as the pamphlet, brochures, websites, press kits etc.
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+
1.5% Allocation for the production of the special events
+
3.5% Allocated for paying the salaries to the consultants and the freelancers
=
12% Therefore almost 12% of the total organizational budget is dedicated for the purpose of marketing
communication.
7.2.The Dollar Approach:The flat dollar approach is also considered to be relevant for certain situations. This kind of approach
can be adhered to ones the marketing budget records of previous few years is accessible (Davis, 2004).
This system commences with the quick and dirty calculation based on the cost of last year and thereby
performing an efficient review upon the campaigns and other factors undertaken. It is important to
note here in this regard that inflation is also considered for the purpose.
7.3.Arbitrary:Under this system any pre determined set of amount for the marketing expenditures are not adhered
to. Further certain ad hoc decisions are made. These decisions are taken on the basis of factors such as
the condition of marketing, the level of competitive activities prevalent and the changing requirements
of the marketing brands (Smith, 2004). This method can also be considered as very flexible since the
marketing communication budget is determined based on the various environmental factors which in
itself is never constant (Wernerfelt, 1996). Although experts argue that this method cannot be termed
as proper budgeting technique in real sense.
7.4.The Affordable Method:Under this approach of determining the marketing communication budget the companies set a budget
which they consider to be affordable. It has been observed that one of the main reasons behind the
criticism of this method is the fact that the affordable method ignores the concept of promotion as an
investment and the immediate impact which the promotion can have on the volume of sale (Leinter,
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2007). Therefore this often leads to a prevalence of uncertainty in the annual budget thereby acting as a
major bottle neck to the long range planning.
7.5.Competitive Parity:This is matching which is based on the competitors strategy so that the relative position of the product
in the market. It is important to note here in this regard that the psychological equity is often referred
to be as the appropriate method for the budget setting (Varey, 2002).
8. RecommendationsTherefore based on the evaluation of the different factor which goes into the determination of
marketing communication budget and the different approaches according to which the marketing
communication budget is determined it can be recommended that there are various factors which mustbe considered before making the marketing decision pertaining to the communication budget. It is very
important that before making any decision proper research has been carried out on the market where
the product or the service is going to be marketed together with mobilizing appropriate information
about the target audience and the target audience behavior. There are several other factors which need
to be considered before making decision pertaining to the marketing communication budget. For
instance the strategy followed by the competitors, the level of competition prevailing in the market and
number of close substitutes available in the market must be clearly analyzed.
Conclusion
Marketing Communication Budget is one of the integral decisions taken under the realms of Marketing
Management. The success as well as the sustainable growth of the company is directly relevant to the
decision taken pertaining to the communication budget. It is important to note here in this regard thatthere are several factors which go into the determination of the marketing communication budget.
Based on these factors decisions are taken pertaining to the approach to be adapted for the purpose of
determining the marketing communication budget. These approaches are influenced by various factors
of marketing communication mix and also the policies adapted by the company. Even the factors like
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the media planning, Product life cycle and consumer behavior also have a direct bearing over the
decision pertaining to the marketing communication budget approach to be selected by the company.
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