Module 3 - Planning for Marketing
Communication (Marcom)
Establishing marcom, Objectives and Budgeting for Promotional
Programmes-Setting communication objectives, Sales as marcom
objective, DAGMAR approach for setting ad objectives. Budgeting
for marcom-Factors influencing budget, Method to determine
marcom budget.
Marketing Communications (MarCom)
"Marketing Communications (MarCom) is the use of various
communication tools and channels to deliver a brand's message to its
target audience in a clear, consistent, and persuasive manner."
It encompasses both traditional and digital communication strategies,
including advertising, public relations, social media, direct marketing,
and more that work together to support marketing objectives.
Examples of MarCom
Brand: Allbirds - "The World’s Most Comfortable Shoe"
Industry: Sustainable Footwear & Apparel (Eco-friendly, minimalist
fashion focused on sustainability and comfort)
Activity
Each student has to analyze how a niche brand uses various Marketing
Communication (MarCom) tools and channels. (What, Where, How?)
List of Niche Brands
1. Hello Bello 9. Wild Refill
2. LARQ 10. Wild One
3. Who Gives a Crap 11. Moon Juice
4. Pela Case 12. Parachute
5. RXBAR 13. MasterClass
6. Drunk Elephant 14. Boll & Branch
7. July 15. Blueland
8. Snow Peak
Why is Marketing Communication Important?
1. Leads to Vision based on strategy
Due to the marketing communication, a company can develop
strategic vision and create plans which can help the business grow.
Marketing managers can develop innovative ideas to boost the
sales using different platforms and marketing opportunities.
For sharing the product specialty, companies use the marketing
communication and build the brand identity.
Why is Marketing Communication Important?
Example: Amul
Amul uses strategic marketing communication to build its brand vision
of being the "Taste of India."
Amul’s communication focuses on quality, affordability, and Indian
values, aligning with its long-term vision to serve every Indian
household.
Its famous Amul Topical Ads creatively address current events with
humor, keeping the brand relevant and engaging.
Through consistent and relatable messaging, Amul has built a strong,
trusted identity that reflects Indian culture and everyday life.
Why is Marketing Communication Important?
2. Competitive edge in the market
There is a lot of competition in various industries and due to this
customers have got various options to choose from.
Marketing communication can thus help brands in creating innovative
ideas and making customers attracted to them. This in turn can help in
having a specific edge over the peers.
Why is Marketing Communication Important?
Example: Paper Boat
Competing with big soft drink brands like Coca-Cola and Pepsi.
Paper Boat focuses on nostalgia-based storytelling using ads and
packaging that remind customers of traditional Indian drinks and
childhood memories.
By emotionally connecting with consumers and standing out with
culturally rooted messages, Paper Boat created a unique identity in a
saturated beverage market.
Why is Marketing Communication Important?
3. Build brand trust
From a consumer perspective, it’s a bit easy to trust a brand that
responds to them consistently. So to create trust among the audience,
it’s better to remember to communicate a consistent brand messaging
across all of the platforms.
Part of a company’s strategy can also entail going to journalists to help
tell your story. By leveraging the trustworthiness of some journalists or
publications you can make consumer trust through these types of
positive associations.
Why is Marketing Communication Important?
Example: Tanishq
Tanishq communicates themes of trust, tradition, and modernity consistently
across TV, print, and digital platforms, reinforcing its reliability as a jewellery
brand.
The brand has also worked with reputed publications and featured in positive
media coverage for progressive ad campaigns (like interfaith weddings), which
adds credibility.
This consistent, values-driven messaging has helped Tanishq build strong
consumer trust in a market where trust is essential due to high-value purchases.
Why is Marketing Communication Important?
4. Reach the right audience
With numerous platforms like magazines, billboards, radio, and social
media, PR teams must choose the right channels based on where their
target audience is most active.
To do this effectively, market research is essential using surveys, focus
groups, interviews, or analytics tools to understand audience behavior and
preferences.
It's also important to safely manage and share data, using secure tools like
VPNs to protect customer insights.
Why is Marketing Communication Important?
Example: Nykaa
Nykaa, a leading Indian beauty and cosmetics brand, uses multiple platforms like
Instagram, YouTube, magazines, and influencer collaborations to reach its audience.
Before investing in these channels, Nykaa conducted market research through surveys and
social media analytics to understand where its target audience (young, urban women)
spends time online.
It uses tools like Google Analytics and Meltwater to track customer interests and online
behavior.
Nykaa also ensures secure data handling through trusted platforms, maintaining customer
trust while gathering insights.
Why is Marketing Communication Important?
5. Achieving a Positive ROI
Marketing communication aims to drive consumer interaction and
ultimately boost sales. PR teams create strategies around promotions to
increase product or service uptake.
With modern PR and social media tools, businesses can now track and
measure the effectiveness of campaigns more accurately.
To see strong results, it’s essential to deliver the right message to the
right audience on the right platforms.
Why is Marketing Communication Important?
Example: Mamaearth
Mamaearth, a fast-growing Indian skincare brand, uses targeted digital
marketing and PR campaigns to promote its natural and toxin-free products.
It runs data-driven campaigns on platforms like Instagram, YouTube, and
Google, using influencers and social media ads to reach health-conscious
consumers.
Using tools like Google Analytics and social media insights, Mamaearth tracks
engagement, conversions, and sales, ensuring its efforts bring measurable ROI.
By delivering the right message to the right audience - young, eco-conscious
buyers - it has seen rapid growth and strong returns on its marketing spend.
Key Characteristics of Marketing Communications
1. Targeted - Focused on reaching specific audiences based on
demographics, interests, or behaviors.
2. Consistent Messaging - Delivers a clear and uniform message across
all channels to build brand identity.
3. Persuasive - Aims to influence customer attitudes and encourage
desired actions like buying or engagement.
4. Integrated - Combines various communication channels (advertising,
PR, social media, etc.) for a cohesive approach.
Key Characteristics of Marketing Communications
5. Two-Way Communication - Encourages interaction and feedback
between the brand and consumers.
6. Measurable - Allows tracking and evaluation of effectiveness through
metrics and analytics.
7. Creative - Uses innovative ideas and content to capture attention and
differentiate the brand.
8. Timely - Delivered at the right moment to maximize relevance and
impact.
Steps to establish Marketing Communications
4. Choose Communication Channels
Pick platforms that best reach your audience (social media, TV, print,
etc.).
5. Implement the Communication Plan
Launch and coordinate your marketing campaigns.
6. Measure and Evaluate Results
Analyze performance and adjust strategies as needed.
Objectives of Promotional Program
The primary goal of any promotional program is to influence consumer
behavior and achieve specific marketing and business objectives. These
objectives should be SMART: Specific, Measurable, Achievable,
Relevant, and Time-bound.
Objectives of Promotional Program
1. Create Awareness: The most fundamental objective, especially for
new products or brands. The goal is to make the target audience
aware that a product or service exists.
Example: When Google launched its Pixel phone line, it ran a
widespread ad campaign across TV, digital media, and billboards to
make consumers aware of its entry into the smartphone hardware
market.
Objectives of Promotional Program
2. Generate Interest: Once consumers are aware of a product, the next
step is to make them curious enough to learn more. This involves
providing engaging and relevant information that sparks curiosity.
Example: Before launching the new Model 3, Tesla released a series
of brief videos and images showcasing its minimalist interior and sleek
design, driving millions of potential customers to its website to learn
more and place reservations.
Objectives of Promotional Program
3. Provide Information: This objective focuses on educating the
audience about the product's features, benefits, and how it solves their
problems. Informed consumers are more confident in their purchasing
decisions.
Example: Microsoft created detailed white papers and case studies for
Microsoft 365 to demonstrate how its suite of productivity tools could
improve collaboration and efficiency for businesses, targeting B2B
clients.
Objectives of Promotional Program
4. Stimulate Demand: This is about motivating customers to take
immediate action, such as making a purchase, signing up for a trial, or
requesting a demo. Tactics often involve creating a sense of urgency or
offering a special value.
Example: Domino's Pizza regularly offers limited-time deals like "Buy
one, get one free" on its app to drive a quick surge in sales and
encourage customers to order more frequently.
Objectives of Promotional Program
5. Differentiate the Product: In a crowded market, promotional
programs help a product stand out from competitors by highlighting its
unique selling proposition (USP) and brand image.
Example: Starbucks' promotional efforts often focus on the
"Starbucks Experience," emphasizing a premium coffee culture and a
comfortable third-place environment, differentiating itself from
fast-food coffee chains like McDonald's.
Methods for budgeting promotional programmes
Determining the budget for a promotional program is a critical decision
that directly impacts its scale and effectiveness. There are several
common methods for setting a promotional budget.
1. Affordable Method: This is the simplest and most risk-averse method.
A company allocates what it believes it can afford after all other
operational expenses are covered. This is often used by small
businesses or startups.
Example: A local craft brewery with limited resources decides to
allocate $1,000 this month for social media ads and local event
sponsorships, as that's the amount it can spare after paying for
ingredients and staff.
Advantages of Affordable Method
Simplicity: This method is easy to understand and implement. It doesn't require
complex calculations or detailed market research, which makes it an appealing
option for businesses with limited resources or expertise in marketing.
Financial Prudence: It ensures that the company does not overspend and only
allocates funds that are genuinely available. This can be a financially responsible
approach, especially for a new business with unstable cash flow, as it prevents
debt from being incurred for promotional activities.
Risk Aversion: By only spending what is left over, the company minimizes the
financial risk associated with marketing. If a campaign fails, it won't impact the
company's core operations.
Disadvantages of Affordable Method
Treats Marketing as a Discretionary Expense: This is the most significant
drawback. The method views marketing as an "afterthought" or a "nice-to-have"
rather than a strategic investment. This can lead to a dangerously low budget that
is insufficient to achieve any meaningful marketing goals, especially in a
competitive market.
Ignores Business and Marketing Objectives: The budget is not tied to any
specific goals like increasing brand awareness, generating leads, or launching a
new product. A company may have an objective to grow its market share by
10%, but the affordable method does not ensure that the budget is sufficient to
achieve this.
Disadvantages of Affordable Method
Leads to Under- and Over-Spending: The budget can be either far too low to be
effective or, in a very profitable year, unnecessarily high. In a year with low
sales, the budget would shrink, which is precisely when a company might need
to increase its marketing to stimulate demand. Conversely, in a good year, a
company might waste money on marketing simply because it has the extra
funds.
Uncertain and Inconsistent Budgets: The budget for marketing can fluctuate
wildly from year to year, or even from quarter to quarter, based on the company's
financial performance. This makes long-term planning, building brand equity,
and consistent messaging very difficult. It can also lead to a "stop-and-go"
marketing approach that is ineffective and can confuse customers.
Methods for budgeting promotional programmes
2. Percentage of Sales Method: A company sets its promotional
budget as a fixed percentage of current or projected sales. This
method is straightforward and ensures that promotion spending is
proportional to revenue.
Example: Coca-Cola allocates a budget for its global advertising
campaigns based on a percentage of its previous year's total sales. If
they project $40 billion in sales, they might allocate 8% ($3.2
billion) for marketing.
Advantages of the Percentage-of-Sales Method
Simplicity and Ease of Calculation: This method is very easy to
implement. Once the percentage is set, the budget is automatically
determined by the sales figures, requiring minimal effort and time.
Links Spending to Revenue: It directly ties marketing spending to the
company's financial performance. When sales increase, the budget for
marketing also increases, and vice-versa. This prevents the company
from overspending during a downturn.
Advantages of the Percentage-of-Sales Method
Fosters Financial Stability: The method ensures that marketing
expenditures remain within a company's financial capacity, promoting a
sense of financial control and stability.
Makes Long-Range Planning Easier: If a company maintains a consistent
percentage, it can easily forecast its marketing budget for future years
based on its sales projections. This aids in strategic financial planning.
Useful for Benchmarking: It allows a company to easily compare its
marketing spending with that of competitors or industry averages,
especially if the percentage is an industry standard.
Disadvantages of the Percentage-of-Sales Method
Treats Sales as the Cause of Marketing, Not the Result: This is the most
significant flaw. It assumes that sales drive marketing, when in reality,
marketing is a key driver of sales. If sales are low, the budget shrinks,
which is the exact opposite of what might be needed to boost sales.
Ignores Marketing Objectives: The method is not based on specific goals.
A company may need a larger budget to launch a new product or enter a
new market, but this method could limit the budget simply because current
sales are low.
Disadvantages of the Percentage-of-Sales Method
Can Lead to an Inadequate Budget: It can result in either too little or too much
spending. For a new product or brand trying to build awareness, a percentage of
current sales (which are likely low or non-existent) would be an insufficient
budget.
Doesn't Account for Competition: It fails to consider the competitive landscape. If
a competitor increases their spending to gain market share, a company using this
method may not be able to respond effectively, as their budget is fixed to their own
sales.
Ignores Market Dynamics: It doesn't consider external factors like a recession, new
technologies, or shifts in consumer behavior that might require a change in
marketing strategy and a different budget.
Methods for budgeting promotional programmes
3. Competitive Parity Method: This method involves setting a
budget based on what competitors are spending. The logic is to
maintain a level playing field and avoid being outspent.
Example: When Pepsi launches a new campaign featuring a
celebrity, Coca-Cola often responds by increasing its ad spending or
launching a similar high-profile campaign to maintain its market
share and brand visibility.
Advantages of Competitive Parity Method
Helps Maintain Market Position: By matching competitor spending, a
company can ensure it doesn't lose market share due to being
out-promoted. This is particularly useful in highly competitive, mature
markets where products are similar (e.g., the soft drink industry).
Prevents "Promotional Wars": If companies in an industry all follow
this method, it can lead to a stable marketing environment where no
single company tries to outspend the others in a way that would escalate
costs for everyone.
Advantages of Competitive Parity Method
Simple and Data-Driven: It relies on readily available external data
competitors' spending. This can be easier than conducting extensive
internal research to determine the optimal budget, especially for
companies with limited data analysis capabilities.
Reflects Industry Standards: It can be a good starting point for new
companies entering a market, as it provides a baseline for what is
considered a normal or effective level of spending in that industry.
Disadvantages of Competitive Parity Method
Assumes Competitors are Optimal: This is the biggest flaw. It blindly
assumes that a competitor's marketing budget is the result of careful,
strategic planning and is the right amount to spend. A competitor might be
overspending, or their spending might be a response to their own unique
problems or goals, which are not relevant to your company.
Ignores Company's Unique Needs: This method completely overlooks a
company's specific marketing objectives, product life cycle stage, and
unique strengths and weaknesses. For example, a new brand needing to
build awareness will require a much larger budget than an established
competitor focused on retention, regardless of what the competitor is
spending.
Disadvantages of Competitive Parity Method
Can Lead to "Me-Too" Strategies: By focusing on matching competitors' spending,
a company may neglect to develop its own unique, creative, and differentiating
marketing strategy. This can make the brand seem like a follower rather than a
leader.
Difficult to Get Accurate Data: It can be challenging to get precise data on what
competitors are spending, and on which channels. Companies often use different
methods for reporting their spending, making direct comparisons unreliable.
Does Not Guarantee Success: Simply matching a competitor's spending does not
guarantee similar results. The effectiveness of a marketing campaign depends on
many factors, including creativity, message, timing, and execution, not just the
budget size.
Methods for budgeting promotional programmes
4. Objective and Task Method: This is widely considered the most
logical and strategic method. It involves a three-step process:
Define Objectives: Set specific, measurable marketing goals.
Determine Tasks: Identify the specific promotional activities needed
to achieve those objectives.
Estimate Costs: Sum the costs of all the required tasks to arrive at
the final budget.
Methods for budgeting promotional programmes
Example: Nike aims to increase its market share in the running shoe
segment by 10%. To achieve this, it identifies the necessary tasks: a
major digital ad campaign, sponsoring major marathons, and hiring
key running influencers. Nike's budget would then be the sum of the
costs for all these activities, ensuring every dollar is aligned with a
specific goal.
Advantages of Objective and Task Method
Strategic and Goal-Oriented: The biggest advantage is that the budget is
directly linked to specific, measurable business objectives (e.g.,
"increase brand awareness by 20%," "generate 5,000 new leads"). This
ensures every dollar spent is purposeful and accountable, promoting a
results-driven mindset.
Logical and Justifiable: It provides a clear and defensible rationale for
the budget. Marketers can present a well-reasoned case to management
by outlining the specific tasks and their associated costs needed to
achieve a desired outcome.
Advantages of Objective and Task Method
Flexibility and Adaptability: This method is highly flexible. If market conditions
change or a new competitor emerges, the company can re-evaluate its objectives and
tasks, and adjust the budget accordingly. It avoids the rigidness of methods tied to sales
or historical data.
Focuses on the Future: Unlike the Percentage-of-Sales method, which is based on past
or current sales, this method looks forward. It's ideal for launching new products,
entering new markets, or undertaking a major brand overhaul, as it allocates the
necessary funds for a successful campaign regardless of current revenue.
Promotes Collaboration: It requires close collaboration between marketing teams and
management to define objectives and agree on the necessary tasks, ensuring that the
marketing budget is aligned with the broader business strategy.
Disadvantages of Objective and Task Method
Difficulty in Implementation: It is the most challenging method to implement. It can be
difficult to accurately determine which specific tasks will be most effective in
achieving an objective and to precisely estimate the costs of each task. For example,
how many social media ads and how much spending are truly needed to increase
awareness by a certain percentage?
Time-Consuming: This method requires significant time and effort for research,
planning, and cost estimation. For small businesses with limited resources, this can be
a major barrier.
Potential for High Costs: The budget is not constrained by what the company can
"afford." The sum of all necessary task costs might result in a budget that is higher than
the company's financial capacity. This can lead to a gap between the desired marketing
plan and what is financially feasible.
Disadvantages of Objective and Task Method
Subjectivity: While it is a logical process, there can still be a degree of subjectivity in
estimating the costs and determining the most effective tasks. Different managers
might have different opinions on the best way to achieve an objective, which can lead
to disagreements.
Doesn't Account for All Uncontrollable Factors: While it is more forward-looking than
other methods, it still cannot fully account for all uncontrollable external factors like a
sudden economic downturn, new regulations, or disruptive technologies that may
render a well-planned budget ineffective.
Several key factors influence this decision:
1. Business and Marketing Objectives:
This is the most fundamental factor. The budget should be directly
aligned with what the company wants to achieve. For instance, a
new brand aiming to build awareness will require a much larger
budget than an established brand focused on customer retention.
Objectives could include increasing brand awareness, driving sales,
entering new markets, or launching a new product.
Several key factors influence this decision:
2. Product Life Cycle Stage: The stage a product is in significantly impacts
the required budget.
a. Introduction: High budget is needed to create awareness and encourage
trial. Advertising, public relations, and sales promotion are crucial.
b. Growth: Budget remains high to build selective demand and compete
with new entrants.
c. Maturity: Budget may decrease as the focus shifts to maintaining brand
loyalty and fending off competition.
d. Decline: Budget is often reduced, with a focus on minimal promotion
to support remaining sales.
Several key factors influence this decision:
3. Competitive Landscape:
Analyzing what competitors are spending and on what channels is
essential. A company in a highly competitive industry may need to spend
more to gain a share of voice and stand out. Benchmarking against
competitors' budgets can provide a baseline, but it's important to remember
that simply matching their spending doesn't guarantee success.
Several key factors influence this decision:
4. Target Audience and Consumer Behavior:
Understanding your target audience is key. The budget should be allocated
to the channels and mediums that effectively reach and resonate with them.
For example, a campaign targeting college students will likely allocate
more to social media and digital channels, while a B2B company might
invest more in trade shows, professional publications, and personal selling.
Several key factors influence this decision:
5. Financial Situation of the Company:
The financial health of the company directly dictates the available budget.
Factors like profitability, cash flow, and overall financial resources will set
a ceiling on what can be spent on MarCom.
Several key factors influence this decision:
6. Product Type and Purchase Decision: The type of product and the nature
of the purchase decision (high vs. low involvement) influence the
promotional mix and budget.
High-Involvement Products: (e.g., cars, homes, expensive electronics)
require more personal selling and informative advertising. The budget for
these channels will be higher.
Low-Involvement Products: (e.g., consumer goods like snacks, soft
drinks) rely more on mass advertising and sales promotions to create brand
familiarity and encourage impulse buys.
Several key factors influence this decision:
7. Market Size and Potential:
The size of the market and its growth potential will influence the budget.
Larger, growing markets may justify a higher investment to capture market
share.
Several key factors influence this decision:
8. Internal and External Factors:
Internal: Operational issues, company culture, and communication tactics.
External: Economic conditions, regulatory laws, and technological
advancements. For example, during a recession, companies may use more
sales promotions to drive sales.
