Chapter 7 - Establishing objectives and budgeting for the promotional program. After completing this unit, you should be able to: To recognize the importance and value of setting specific objectives for advertising and promotion, to understand the role objectives play in the IMC planning process and the relationship of promotional objectives to marketing objectives, to know the differences between sales and communications objectives and the issues regarding the use of each,...
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Chapter 7 Establishing Objectives and Budgeting
for the Promotional Program
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Value of Objectives
Communications
groups
Planning and decision making
of the integrated marketing communications plan
Measurement and evaluation of results
or failure
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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
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Figure 7.1 Factors Influencing Sales
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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
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Figure 7.2 Communications Effects
Pyramid
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Criticisms of DAGMAR
Problems with the response
hierarchy
Sales objectives
Practicality and costs
Inhibition of creativity
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Figure 7.4 Traditional AdvertisingBased
View of Marketing Communications
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Figure 7.5 Objectives and Strategies in the Social Consumer Decision Journey
Source: Expert interviews; McKinsey analysis
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Figure 7.8 Marginal Analysis
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Figure 7.9 Advertising Sales/Response
Functions
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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
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Figure 7.12 TopDown versus Bottom
Up Approaches to Budget Setting
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Figure 7.15 Investments Pay Off in
Later Years
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Figure 7.16 Competitors’ Advertising
Outlays do not Always Hurt
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Figure 7.18 The Objective and Task
Method
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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
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Figure 7.21 How Advertising and
Promotions Budgets Are Set
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Budget Allocation: Factors to Consider
Allocating to IMC elements
Client/agency policies
Market size
Market potential
Market share goals
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Figure 7.24 The Share of Voice (SOV) Effect and Ad Spending: Priorities in Individual Markets
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