Question

2) A new company launching a new brand of locally manufactured and locally marketed motorcycles in Oklahoma is to arrive at its Advertising and Integrated Marketing Communication budget. In this context discuss:

1. The ideal method for developing a budget. Which of the percentage of sales method or the objective and task method do you consider more appropriate, explain why.
2. Discuss which of the promotional or integrated marketing communication components such as advertising, publicity and public relations, sales promotion, personal selling etc. do you regard as more important in this context and why.

Answer 1

a. Initial phase of the launch of the motorcycles will involve establishing the brand in target customers' minds  by reaching the right people in the most effective manner and covering as much of target market possible so as to make them aware of the prouct's existence, its intended benefots and the additional value it will create vis a vis the competitive products. These activities would help the company to build a ground for initialising the sales.In this way, the objective and task method is the best approach to prepare a budget where the focus is on meeting the strategic objectives of the company. Percentage of sales method can be a right method ony when the sales stabilise and the company achieves its desired market position.

b. advertisement and sales promotion are the best method to reach the prospective customers by showcasing the product to them and reach as many customers as possible. It will help the company to acheive the target of greatest exposure to the customers and provide them necessary information which is essential for decision making between this motorcycle and its competitive products. Other means such as publicity and public relations would be good after some time, when the sales stabilise while the personal selling would be less effective for this type of product.