Lecture Advertising and promotion (2/e) – Chapter 8: Establishing objectives and budgeting for the IMC program

Chapter 8 - Establishing objectives and budgeting for the IMC program. The goals of this chapter are: To recognise the importance and value of setting specific objectives for advertising and imc; to understand the role objectives play in the imc planning process and the relationship of marketing communication objectives to marketing objectives; to know the differences between behavioural and communication objectives, and the issues regarding the use of each;...

Chapter 8

Establishing objectives and

budgeting for the IMC program

1 To recognise the importance and value of setting

specific objectives for advertising and IMC.

2 To understand the role objectives play in the IMC

planning process and the relationship of marketing

communication objectives to marketing objectives.

3 To know the differences between behavioural and

communication objectives, and the issues regarding the use of each.

4 To recognise some problems marketers encounter in setting objectives for their IMC programs.

5 To understand the process of budgeting for IMC.

6 To understand the theoretical issues involved in

budget setting.

Learning objectives

Determining

objectives

Budgeting approaches

Allocating the budget

The value of objectives

Marketing versus

communication objectives

Marketing objectives

• Generally stated in the

firm’s marketing plan

• Achieved through the

overall marketing plan

• Quantifiable, such as

sales, market share, ROI

• To be accomplished in a

given period of time

• Must be realistic and

• Generally stated in the

firm’s marketing plan

• Achieved through the

overall marketing plan

• Quantifiable, such as

sales, market share, ROI

• To be accomplished in a

given period of time

• Must be realistic and

• Focused on a specific

vs

Characteristics of objectives

Specify target audience

Specify target audience Measurable communications tasks

Benchmark starting point for

Benchmark starting point for degree of change sought

Time period Elements of

objectives

Elements of objectives

Google Labs’ objectives

Characteristics of objectives

Pure Blonde’s Live well with as little compromise as

possible campaign

Determining

objectives

Budgeting approaches

Allocating the budget

Sales vs communication objectives

Communication objectives

Factors affecting sales

The economy

The economy Distribution

Product quality

SALES

Use sales objectives when…

Sales objectives are appropriate when using:

 IMC tools designed to elicit direct action (sales promotion, direct marketing)

 direct response advertising

 retail advertising.

Also useful when advertising plays a dominant role in the marketing program, such as in FMCG.

Communications objectives

Possible communication objectives include:

 increasing the percentage of consumers in the target market who associate specific features, benefits or advantages with our brand

 increasing the number of consumers in the target audience who prefer our product over the competition

 encouraging current users of the product to use it more frequently or in more situations encouraging consumers who have never used our brand to try it.

Communications objectives (cont.)

Westpac is a good corporate

citizen

‘Last-chance’ offers Price appeals, testimonials Competitive ads

Argumentative copy

‘Image’ copy Status, glamour appeals Announcements

Descriptive copy Classified ads Slogans, jingles, skywriting

Purchase Conviction Preference Liking Knowledge Behavioural Movement Relevant promotions

Pyramid of

communications effects

5% Use

70% Knowledge 40% Liking 25% Preference

20% Trial

Backstage Shampoo

Clear and consistent

communications objectives

Determining

objectives

Budgeting approaches

Allocating the budget

Advertising opportunity score

(AOS)

Advertising opportunity score

(AOS) (cont.)

DAGMAR’s advantages and

Other approaches: RTTT

R ealistic

T arget market is clearly defined

T ask—state exactly what degree of change is sought

T is for the timeframe of the objective

Other approaches: SMARTT

Advertising-based view of

communications

Determining

objectives

Budgeting approaches

Allocating the budget

Advertising and cost cutting

Balancing objectives and budgets

What we’re

willing and

able to spend

What we need to achieve our objectives

Marginal analysis

Basic principles of marginal

analysis

Increase spending

Decrease spending

Hold spending

Hold spending

If the increased cost is less than the incremental (marginal) return

If the increased cost is less than the incremental (marginal) return

If the increased cost is equal to the incremental (marginal) return

If the increased cost is equal to the incremental (marginal) return

If the increased cost is more than the incremental (marginal) return

If the increased cost is more than the incremental (marginal) return

Other factors in budget setting

Differentiation

Top-down and build-up budgeting

Top-down budgeting methods

Affordable method

Affordable method

Competitive parity

Competitive parity

Return on investment

Percentage of sales

Impact of competitors’ advertising outlays

Build-up budgeting methods

Payout planning Objective & task

Objectives

Objective and task method

Estimate costs associated with tasks

(determine costs of advertising, promotions, etc.)

Estimate costs associated with tasks

(determine costs of advertising, promotions, etc.)

Determine specific tasks

(advertise on market area television and radio and

local newspapers)

Determine specific tasks

(advertise on market area television and radio and

Monitor and adjust

(monitor performance and adjust)

Monitor and adjust

(monitor performance and adjust)

Payout planning

Payout planning (cont.)

How communications budgets are set

Ad spending and share of voice

Decrease–find a defensible niche

Decrease–find a defensible niche Increase to defend

Increase to defend

Attack with large SOV premium

Attack with large SOV premium spending premium Maintain modest

Maintain modest spending premium

Your share of market

Summary and conclusions

 Setting objectives is an essential part of the