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Establishing Objectives & Bugeting for the Promotional Program
- 1. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Chapter 7
Establishing
Objectives
and Budgeting
for the
Promotional
Program
- 2. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Value of Objectives
Communications
Objectives facilitate coordination of the various
groups
Planning and decision making
Objectives guide decision making and development
of the integrated marketing communications plan
Measurement and evaluation of results
Objectives provide a benchmark to measure success
or failure
2
- 3. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Marketing Objectives versus Integrated
Marketing Communications Objectives
Marketing objectives
• Identify what is to be accomplished
by the overall marketing program
• Defined in terms of specific and
measurable outcomes
• Must be quantifiable, realistic, and
attainable
Integrated marketing
communications objectives
• Statements of what various
aspects of the IMC program will
accomplish
• Based on the particular
communications tasks required to
deliver the appropriate messages
to the target audience
3
- 4. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.1 - Factors Influencing Sales
4
- 5. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Problems with Sales Objectives
Successful implementation requires all
marketing elements to work together
• Carryover effect: Monies spent on advertising do not have
immediate impact on sales
Advertising has carryover effect
It is difficult to determine precise relationship
between advertising and sales
Do not offer much guidance for planning and
developing promotional program
5
- 6. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.2 - Communications Effects
Pyramid
6
- 7. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Criticisms of DAGMAR
Problems with the response hierarchy
Sales objectives
Practicality and costs
Inhibition of creativity
7
- 8. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.4 - Traditional Advertising-Based
View of Marketing Communications
8
- 9. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.5 - Objectives and Strategies in
the Social Consumer Decision Journey
Source: Expert interviews; McKinsey analysis
9
- 10. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.8 - Marginal Analysis
10
- 11. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.9 - Advertising Sales/Response
Functions
11
- 12. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.10 - Factors Influencing
Advertising Budgets
Note: 1 relationship means the factor leads to a positive effect of advertising on sales;
2 relationship indicates little or no effect of advertising on sales.
12
- 13. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.12 - Top-Down versus Bottom-
Up Approaches to Budget Setting
13
- 14. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.15 - Investments Pay Off in
Later Years
14
- 15. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.16 - Competitors’ Advertising
Outlays do not Always Hurt
15
- 16. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.18 - The Objective and Task
Method
16
- 17. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Steps to Develop and Implement the
Budget
Employ comprehensive strategy
Develop strategic planning framework that employs an
integrated marketing communications philosophy
Develop contingency plans
Focus on long-term objectives
Evaluate effectiveness of programs have to be
consistently
17
- 18. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.21 - How Advertising and
Promotions Budgets Are Set
18
- 19. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Budget Allocation: Factors to Consider
Allocating to IMC elements
Client/agency policies
Market size
Market potential
Market share goals
19
- 20. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Figure 7.24 - The Share of Voice (SOV)
Effect and Ad Spending: Priorities in Individual Markets
20