relevance of marketing communication in the present society

7/27/2019 Relevance of Marketing Communication in the Present Society

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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.

References

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Davis, A., Principles and Practices in Marketing Communication: Journal of Marketing Communication.

(2004). Taylor and Francis Group. Vol. 5. pp. 1466-1498

Egan, J., (2007). Marketing Communication. 6th edition. Lawrence Erlbaum Associates: Hillsdale, NJ.


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