Chapter 13
Planning Marketing Campaigns: Budgeting and Evaluation
Learning Objectives
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13.1
Know about the various Marketing Campaigns in travel and tourism
Understand the various methods of budgeting the marketing campaigns used in travel and tourism
Understand the concept of monitoring and evaluation of the marketing campaigns
Know about various means of performance measurement of the marketing campaigns
Marketing Campaigns in Travel and Tourism
Marketing campaign may be explained as a systematic list of marketing activities taking care of
several aspects in general (product design, pricing, promotion, communication and distribution)
and are synchronized. A marketing campaign is a planned, integrated action plan designed to
achieve specific marketing objectives and targets, through the deployment of a budget on the
promotion and distribution of products over a specified time period. A wide range of methods
used for marketing campaigns are:
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Creating Distribution Channels and offering commission
Direct Distribution / Door to door sales
Display at POS - Point of Sale and Merchandising
Industry Exhibitions / Trade Shows and Workshops
Paid Advertising (in media)
Personal Selling
Price Reduction (Discounting)
Printed format Sales Literature
Public Relations
Sponsorship
Sales Promotion
Using the World Wide web (the Internet)
In case of tourism products (e.g. tour operation, transportation, accommodation, or car rental),
wherein the purchase is before its actual use, it is always essential to plan and have a provision
for distribution in the in the entire budget of marketing campaign.
In a nutshell, the, marketing campaigns have all the basic four elements of the marketing mix
(four Ps). These are used in the short time to impact and facilitate the customer behaviour in order
to realize targeted campaign objectives.
13.2
Marketing Campaign Budgeting Methods
The marketing budget may be defined as the sum of the costs of the campaign action plan
assessed necessary to achieve the specified objectives and targets set out in the marketing plan.
In practice, setting campaign budgets depends on finding answers to three fundamental questions.
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How much amount to be spent in total on a marketing campaign, in order to achieve the
desired objectives?
How will the total be allocated in between the products and segments included in the
campaign?
How will the total be divided between the component parts of the action plan?
Budgeting Methods
Most of the management experts have suggested some methods commonly used for framing up
the total budget as well as any bifurcation of the same. These are as follows:
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Affordable Method
Percentage of Sales Method
Competitive Parity Method (matching competitors’ spending)
Objective and Task Method
Generally all these methods are closely related and depend on mainly the past data (earlier
budgeting information), marketing intelligence about competitors’ actions and some ‘industry
norms’. These are based on ‘gut feeling’ or are ‘rule of thumb’ methods and have a broad
assumption of allocation of marketing expenditure that can be considered as affordable.
Affordable Method
In the affordable method (normally referred to as the "all-you-can-afford method"), the firm
determines the amount to be spent in various areas such as production and operations. Then it
allocates what's left to advertising and promotion, considering this to be the amount it can afford.
Percentage of Sales Method
General: Method of estimating cash requirements by expressing revenues and expenses as
percentages of sales, and using these percentages to construct a pro forma income statement.
Competitive Parity Method
In the competitive parity method, managers establish budget amounts by matching the
competition's percentage-of-sales expenditures. The argument is that setting budgets in this
fashion takes advantage of the collective wisdom of the industry.
The Objective and Task Method
The objective and task method has somewhat different approach. It begins with a specification of
what is to be achieved (objective) and goes further towards use of budgeting methods (tasks)
required to achieve it.
13.3
Performance Measurement: Evaluation, Monitoring and Control
In general the effectiveness and efficiency of marketing is in turn decided by the quality of
performance measurement methods used. These are evaluation, monitoring and marketing
control.
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Evaluation – defined as the systematic time based (periodic) assessment of achievement
of stated objectives.
Monitoring – the systematic measurement of performance on a daily, weekly or monthly
basis, which assesses actual results against targeted sales.
Marketing Control – means short term (tactical) marketing management actions taken on
continuous basis in response to the information gained by monitoring.
Such performance measurement is based on identifying changes in several parameters. These parameters
will vary from company to company. Still the most commonly used parameters are sales variance, market
share variance and customer satisfaction variance.