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Marketing Communications

Marketing Communications. Budgeting and Planning. Why Plan?. After things have gone from bad to worse, the cycle will repeat itself. The Communications Plan. CONTEXT ANALYSIS. Key Issues. COMMUNICATION OBJECTIVES. Market Research. COMMUNICATION STRATEGY. Target Audience

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Marketing Communications

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  1. Marketing Communications Budgeting and Planning

  2. Why Plan? • After things have gone from bad to worse, the cycle will repeat itself.

  3. The Communications Plan CONTEXT ANALYSIS • Key Issues COMMUNICATION OBJECTIVES Market Research COMMUNICATION STRATEGY • Target Audience • Creative and Media Strategy • Push, Pull and Profile Strategy INTEGRATED COMMUNICATION PLAN • Budgets • Scheduling • Implementation (Chris Fill, 2002)

  4. The Communications Context ENVIRONMENTAL CONTEXT STAKEHOLDER CONTEXT BUSINESS CONTEXT CUSTOMER CONTEXT Ethical and Moral Stance Local and National Government ORGANISATION CONTEXT Market dynamics Investors City Shareholders Business Objectives Retention Acquisition Customer Profiling Competitive positioning Suppliers Employees Partners Local and National Community

  5. The Communication Budget • Who decides the budget? • When is it set? • How is the decision reached? • Special cases for expenditure

  6. Difficulties Justifying the Budget • Tangible v Intangible benefits • Uncertainty • Time Scales

  7. The Communications Budget • % of previous years sales • % of product gross margin • Desired share of voice • % of anticipated turnover • Objective & task • Experimentation • All we can afford • Marginal analysis • New products

  8. Share of Voice Leader underspending SOV=SOM B1 Original Position . . B2 New position New position B1 Competitor launches attack spend Share of market . . B3 . B6 . B2 Original Position . B4 . B5 Share of voice B1, 3, 4 & 6 - SOM>SOV B2 & 5 SOM<SOV

  9. SOV & SOM Budget Setting • Zero-based brands – Niche • no advertising spend • Growth brands – SOV>SOM • heavy advertising • Milking brands – SOV<SOM • token advertising • Profit-taking brands – SOM>SOV • relaxed advertising • Equilibrium brands – SOM=SOV • maintenance advertising

  10. How much do promotional activities cost? • Cost items • ????? • Space/Media • Creative aspects/ message • Sales Promotions

  11. Strategies for Advertising Spend HIGH Decrease - find a defensible niche Increase to defend Competitors SOV Attack with large SOV premium Maintain a modest spending premium LOW LOW Your share of market SOM HIGH (Schroer, 1990)

  12. How much does promotion cost?

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