Setting a communication budget

The recommended method for developing a communication budget is the so-called objective-and-task method, where marketers first define their specific objectives, then determine the tasks that must be performed to achieve these goals, and finally estimate the costs of the necessary resources to perform these tasks. This method has the advantage of spelling out assumptions about the relationship between dollars spent, exposure levels, and sales.

Unfortunately, in the high-tech business, this method is not of much use, because most related data are not easily defined. The makeup of the target market (consisting of innovators and early adopters) makes it difficult to assess the exposure cost of a message and even more difficult to assess the number of exposures to the message that are needed before a part of the target market decides to try the product.

Consequently, advertising budgets are very often determined pragmatically as a percentage of sales figures or sales forecasting or advertising budgets of previous years for similar products, if available. One should note that the amount of advertising varies significantly depending upon the type of business. Telecommunication and computers companies are big spenders while, aerospace, energy, or biochemical firms spend relatively little money in advertising and communication.

The key point is to be able to react quickly and with flexibility to any major change in the market while taking into account any move from the

Was this article helpful?