Participants in the IMC Process

Advertiser
Advertiser (Client)
(Client)

Advertising
Advertising Agency
Agency

Media
Media Organizations
Organizations Direct
Direct Sales
Sales
Response
Response Promotion
Promotion
Agencies
Agencies Agencies
Agencies
Marketing
Marketing
Communications
Communications
Specialist
Specialist Organization
Organization Public
Public Interactive
Relations Interactive
Relations Agencies
Firms Agencies
Collateral
Collateral Services
Services Firms

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Functions performed by Interactive Agencies
Web
Web Web
WebSites
Sites
Banner
BannerAds
Ads

Interactive
InteractiveMedia
Media
Creation
Creation

CD-ROMs
CD-ROMs Kiosks
Kiosks

Audio
Audio Video
Video

Digital
Digital
Content
Content

Animation
Animation Special
Special Effects
Effects

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

ADVERTISING BUDGET
Is a plan for the companys future advertising, it can
make a useful contribution to a profitable operation.
A budget is a forward plan of any activity expressed
in terms of rupees, and budgeting is the process of
planning.
Therefore the advertising budget is the translation
of an advertising plan into rupees; and this infact
informs the top management of the amount of the
proposed advertising expenditure and its appointment
on the various advertising activities of the company.
Two major considerations determining budget
appropriation for advertising.
1. Per cent of sales concept
2. The advertising task or objectives
Percentage of sales concept
Select a factor or multiples, such as 3,5 or 7 percent,
and multiply this by the sales figures in rupees and the
sum so arrived at is the answer to the question of how
much to spend.
The other factor depends upon the number of
machines sold or units of product sold.
In the unit of sales method, a specific amount of
rupees is allocated to the adverising budget for each
unit sold.
Advertising objective and task method
The objective and task approach to advertising budget
is based on establishing advertising objectives and
the tasks to be accomplished, and then determining
the required size of the budget.
Tasks to be performed by Advertising
Campaign
A few typical examples of the tasks to be performed by
advertising campaigns.
 To increase the awareness of a product and its promotion.
 To develop the long term selling theme-quality product,
newness, customer service.
 To acquaint the market with the brand name.
 To overcome expected consumer objection to the use of
the product.
 To introduce a new product.
 To secure the required distribution, through wholesalers
& retailers.
Other methods of Budgeting
All you can afford
Competetive Parity method.
Incremental concept approach.
Product Life Cycle
Incremental concept approach to Advertising
Budget.
Managerial economics tell us that in any business,
profit maximisation is reached at a point where the
incremental cost is equal to the incremental
revenue.
Business men are fully aware that as long as the cost of
producing one extra unit is less than the additional
revenue generated by it, the business is a profitable
one.
Other considerations:
PLC: is another such consideration. In the
introduction and growth stages, promotional activities
are high and therefore advertising accounts for a
relatively higher share of the expenditure.