Scenario 8-4
American Express is dissatisfied with the degree of penetration of its Gold Rewards Plus card in the U.S. market. Marketing managers at American Express feel that the firm needs to increase advertising to small entrepreneurial businesses to encourage more acceptance of the card for use in purchasing office supplies and durable goods like computers and office furniture. American Express feels that to accomplish the goal of increased penetration in this sector, the budget should be based on communications objectives aimed at certain target markets.
-(Scenario 8-4)The marketers are keenly aware that many budgeting methods fail to address the objectives originally set and relate these to the dollars to be spent.Which budgeting technique is American Express ultimately most likely to use,based on this awareness and the information in this scenario?

Question

Quizplus · Accepted Answer

The scenario emphasizes that American Express wants to increase advertising to small entrepreneurial businesses to encourage more acceptance of the card. Therefore, the most appropriate budgeting technique for American Express would be the objective-and-task approach. This approach involves setting communication objectives, determining the tasks required to achieve them, estimating the costs of performing these tasks, and then adding them up to create the budget. This approach is more likely to ensure that the budget is aligned with the company's objectives and that the required resources are available for communication activities.

Scenario 8-4 American Express Is Dissatisfied with the Degree of Penetration of Penetration