Allocating a Promotion Budget between Advertising and Sales Contest Prizes: An Integrated Marketing Communications Perspective

Pushkar Murthy () and Murali Mantrala ()

Marketing Letters, 2005, vol. 16, issue 1, 19-35

Abstract: This paper develops and analyzes a normative model for allocating a fixed, short-term promotion budget between product advertising and prizes of a rank-order sales contest for a homogeneous sales force when sales are driven by both personal selling effort and advertising. The model provides insights into how the optimal budget allocations vary with the synergy between advertising and selling effort, sales force size, salesperson risk-tolerance, perceived cost of effort, selling effectiveness and sales response uncertainty. The analysis highlights the need for and value of close coordination between marketing and sales management in designing a promotion program involving both advertising and sales force incentives. Copyright Springer Science + Business Media, Inc. 2005

Keywords: sales contests; advertising; integrated marketing communications; synergy; resource allocation (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1007/s11002-005-1138-6

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