Communicating customer value: integrated marketing communications strategy - Setting the Total Promotion Budget and Mix

7 important questions on Communicating customer value: integrated marketing communications strategy - Setting the Total Promotion Budget and Mix

Based up on the following methods, you can create your promotion budget. What's the difference?

- Affordable method
- Percentage of sales
- Competitive parity
- Objective & tasks

Affordable method - companies have a promotion budget, based up on what they can afford.

Percentage of sales - percentage of sales is for promotion budget. However, this way you don't take into account an increase in sales.

Competitive parity - promotion budget compared to competitors.

Objective & task - most effective method in which you base your budget on the objectives you want to achieve and the tasks you need to do in order to achieve this. 

What's the difference between a push and pull promotion mix strategy? And how is this related to the B2B and B2C market?

With the push strategy you push the message/product/service through the marketing channels to the customer. B2B

With the pull strategy the producer directs its marketing activities to the final customer to induce them to engage with the company and buy the product. B2C

What is the affordable method when setting budgets?

Setting the budget for the promotion at the level the company can pay for, but ignores the effect of promotion on sales and leaves promotion as the last spending priorities.

What is the competitive parity method?

Setting the budget to meet the competitor outlays by getting information on competitor's advertising or industry estimates, however companies differ in their promotion campaigns and there is no evidence that this form prevents war.

What is the objective task method?

It is the most approachable, as it focuses the budget creation based on the objectives of the promotion. This technique helps managers to connect each unit of money spend with the benefited results.

Of which 3 parts does the objective task method consist?

1. Define the objectives of promotion
2. Determine tasks needed
3. Estimate task of performing this task

By which 2 main factors is the promotion mix shaped?

1. Nature
2. Strategies

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