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Case 10.

1: Budget Time

Case summary:

The case is based on allocation of marketing communication budget. A meeting is held to


review and rescheduling the budget of a company. The case is showing various tools of
constructing different budget, evaluation method and the effective strategies to implement
them. It also represent problems those will be faced in budgeting. Marisa, the manager for
managing trade show and others special events is strongly believe that a little change in the
trade show schedule and the increase in budget can change the story of company profitability.
But all other managers of other departments are not agreeing to go with her. This create very
inconvenient situation for Marisa and she is also worried about her job.

Questions and Answers

1Q.What type of information does Marisa need to justify her proposed budget? Where
would she go to get that information?

Ans. A fruitful marketing communication budget provides a formal process for planning,
tracking and measuring the impact of organization’s expenditures on marketing
communications activities such as advertising, direct marketing, telemarketing, marketing
research, events, trade show. The budget sets out the funding required to meet communications
objectives and goals as well as provides a method of managing the expenditure over a budget
year. Here, Marisa is a new and is responsible for managing trade shows and other special
events in the organization. She requested trade show budget that was 30 percent higher than
the previous year but other marketing communication managers ignored that proposal. They
think that trade shows are just a wild party. So, they requested Marisa to cut her budget. But
Marisa is sure that she could increase the number and quantity if leads enough to handle 12
percent increase in sales that management had already asked for. Now the question is how
Marisa could justify her budget.

Deciding where and how to spend communication budget is known as “Communication budget
allocation”. The marketing communications manager generally justifies a budget based on
performance, which requires questions such as which tasks work when and why. Here, Marisa
should demonstrate the effectiveness of trade shows by describing how her proposed budget
could facilitate the profitability of the organization by achieving their sales goals. Is trade show
exhibit and attendance delivering a desirable return on investment? In fact, there are many other
meaningful ways to evaluate trade show success. The most obvious indicator of trade show
success is the number of leads generated, and those leads that result in final sales. There are
several lead-tracking and sales management software packages that can assist with this
endeavor. Marisa could consider these other important methods of evaluating trade show
success:
 Meet with existing customers, which is an excellent way to reinforce the relationship.
Contact customers who plan to attend, or cannot attend, and make arrangements to meet
with them before, during or after the show.
 Leads are the key measure of success, but at-show sales and orders must also be
included. The same can be said for contracts, since trade shows are an excellent place
to lay the groundwork for future contracts.
 Count the number of visitors who stopped at booth.
 Use trade shows to conduct own market research. Solicit opinions and suggestions from
booth visitors. Take advantage of this captive and well-informed audience to learn what
people really want in today’s marketplace.
 Identify strategic partners. Trade shows are an ideal opportunity to meet prospective
partners, and Marisa can even conduct preliminary interviews.
 Gain insight into industry trends, future developments, emerging technologies, and new
players on the scene. The company will gain a competitive advantage that can serve
well in the coming months if Marisa keeps her eyes and ears open.
 Research competitors. Take advantage of trade show presence to conduct some
competitor reconnaissance. Gather useful and relevant information that will benefit the
company’s own trade show and marketing strategies.
 Learning from other exhibitors, and acquire new products, technologies and processes
that will improve business.
 Evaluate the success of trade show exhibit by seeking honest feedback from visitors.
Use the trade show to gather suggestions for improvement and greater effectiveness at
future shows.
 Lead generation and final sales will always be a key element to calculate trade show
return on investment. However, it should be remembered that there are many other
important means to evaluate the success of trade show attendance.

Marisa could get information from the following sources:


 Company records.
 Forecasts of future results.
 Competition in the marketplace.
 Secure funding.
 Performance of other companies.
 Target customers.
 Analyzing present market situation
 Analyzing present company environments

Q2. Similarly, how would any other marketing managers justify their budget requests?

Ans. Other marketing managers could justify their budget requests by demonstrating the
campaign effectiveness and efficiency. Measuring marketing communication is essentially
driven by the quest to assess both efficiency and effectiveness. Being effective means
producing powerful effects. Financial transparency is often a good way to reinforce the idea
that marketing managers own the marketing plans. It is essential for the managers to better
understand and articulate reasonable key success factors for campaigns to come ahead. This
helps both the company and various vendors supporting the initiatives. For example, we can
consider the advertising budget for advertising manager. In order to keep the advertising budget
in line with promotional and marketing goals, a business owner should start by answering
several important questions:
 Who is the target consumer? Who is interested in purchasing the product or service,
and what are the specific demographics of this consumer (age, employment, sex,
attitudes, etc.)? Often it is useful to compose a consumer profile to give the abstract
idea of a "target consumer" a face and a personality that can then be used to shape the
advertising message.
 Which media will be most useful in reaching the target consumer? What is required to
get the target consumer to purchase the product? Which appeals are most likely to
persuade the target consumer? What is the relationship between advertising
expenditures and the impact of advertising campaigns on product or service purchases?
In other words, how much profit is likely to be earned for each dollar spent on
advertising?

Answering these questions will help to define the market conditions that are anticipated and
identify specific goals the company wishes to reach with an advertising campaign. Once this
analysis of the market situation is complete, a business must decide how best to budget for the
task and how best to allocate budgeted funds.
In summary, measurement makes it easier for the marketing team to figure what worked and
what did not. As important, it helps to report results to senior management and justify next
year’s marketing budget.

3Q.What type of budgeting does it seem the company does now? What should the
company do? What challenges will tom face in implementing a different budgeting
process? How should Tom go about that implementation?

Ans. From the case, we have found that the company is approaching objective-and-task method
for budgeting. It is also known as budget buildup method. The best method for budgeting in
order to reach strategic objectives is the objective-and-task method. To establish a budget by
this method, one needs a coordinated marketing program with specific objectives based on a
thorough survey of markets and their potential. Because of the importance of objectives in
business, the task and objective method is considered by many to make the most sense and is
therefore used by most large businesses. The method has three steps:
1. Defining objectives.
2. Determining objectives.
3. Estimating costs.
In this situation the company should do the following:
1. The decision maker should balance what can be afforded with what is desired.
2. The marketing director should examine the effectiveness of particular strategy.
3. Information should be collected regarding marketing communication tools and the
method should be strategy driven and learning based.
Case 10.2: Eurocom

Case Summary

Eurocom Global is the new division of Eurocom created through the acquisition of over 2o
different companies. The division’s new president Charles vanNostrom has given the charge
of creating new brand equity for this Eurocom Global. But it is not so easy as there are many
factors have already exists. Each different companies has unique marketing communications
strategies. If Cole wants to inyroduce a new brand equity he has to think differently as there
are some tangible and intangibles barriers. Tangible barriers are the slogans, marketing
events,strategies of each and every companies and intangible barriers are the egoistic problem
of the founder of individual companies.

Q1. What process should Cole follow in establishing the new branding and positioning
strategy? What should vanNostrom’s role be?

Ans. For creating new branding and positioning Cole can use integrated marketing
communications process. At first he has to identify the segment of his customers, then he has
to identify the strategies. He has to identify different communications tools such as personal
selling, direct marketing, e-mail marketing, tele-marketing and at lust he has to research the
whole segmented customers as it will help him to identify which things are actually customers
want. If the customers can understand that Eurocom Global is here to meet their expectation, a
strong position will create in the customer mind Secondly, the company has to fulfill this
expectations.

vanNostrom can give enough financial help to Cole to establish the ultimate strong market as
well as he can also provide enough man power and logistics supply to identify and establishing
enough strong position in customer’s mind.

Q2. How should Cole deal with the potential turf battles in the various operating units,
given that each unit was acquired intact and all of the personnel who created those
original branding strategies will now be the ones who will carry out the new strategy?

Ans. It is so simple but in this case Cole has to deal with human psychology that in each and
every company is good and they have strong areas to fight but now they have to make
understand that they all are now under one umbrella. Now they have think jointly for the
betterment of the company Eurocom Global not for individual company. In this case various
types of motivational speeches, training will provide the best result and Cole has to take each
and very company’s strength and has to mash up them and give proper treatments to each
departments. He has to show that each and every departments are very important and without
one another, the company will destroy.