The Relocation of Marketing Communications Budgets

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Why have marketing communications budgets been reallocated in recent years to increase expenditure on promotions and reduce spending on advertising?

Discuss with reference to one example

This report will examine some of the reasons why marketing communications budgets have been reallocated in recent years to increase expenditure on promotions and reduce expenditure on advertising. It will specifically examine the McDonalds Corporation in light of this growing phenomenon.

An integrated marketing communications program, the promotion mix, consists of four aspects. Advertising, any form of paid nonpersonal presentation. Sales promotion, short term incentives to encourage purchases or sales. Public relations, a building of good relations with the company’s various publics by obtaining favourable publicity, developing a good corporate image, and handling or heading off unfavourable rumours, stories or events. And personal selling, oral presentations in conversation with a prospective buyers for the purpose of making sales. (Kotler, Bowen & Makens, 2006)

The objective of advertising is to provide a specific communication task to be accomplished with a specific target audience in mind (Kotler, Armstrong , Brown, Adam & Chandler 1998). However on a large scale it is also known to be quite costly and ineffective unless it is targeted at the right audience. Marketers run the risk of having the message lost on deaf ears or an audience that does not take notice. One of the great advantages of advertising is that it helps to build company and brand equity, provides information and influences the audiences perception of a product. (Belch & Belch 2007) The McDonalds Corporation has been greatly criticized for it’s advertising techniques & business practices. Most of this criticism has come about based on it’s campaigns targeted at children. For example, many of its TV and print advertising campaigns feature the imaginary Ronald McDonald....
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