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Establishing Objectivesand Budgeting for the

Promotional Program

7

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc !ll rights reser"e#

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Value of Objectives

Communications

Communications

Planning &Decision Making

Planning &Decision Making

Measurement& Evaluation

Measurement& Evaluation

SecificObjectives

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Characteristics of Objectives

Secific

Measurable

!uantifiable

"ttainable

#ealistic

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Measurable #esults

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Marketing vs$ Communications Objectives

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Sales Objectives

%ncreased Sales

%ncreased Market Share

Brand Etensions

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'actors %nfluencing Sales

Cometition(echnolog)

(he

econom)

Product*ualit)

PriceDistribution

"dvertising& romotion

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+here Sales Objectives are "roriate

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'rom ",areness to "ction

Affective#ealm of emotions$"ds change attitudesand feelings

Cognitive#ealm of thoughts$"ds rovideinformation and facts

Conative#ealm of motives$"ds stimulate ordirect desires

(easer camaigns

 -%mage. co)Status/ glamour aeals

"nnouncementsDescritive co)Classified ads/ slogans/0ingles/ sk),riting

Cometitive ads"rgumentative co)

Point of urchase#etail store ads/ deals -1ast2chance. offersPrice aeals

(estimonials

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

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Creating an %mage

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Communications Effects P)ramid

345 (rial   C  o   n   a   t    i   v  e

645 1iking   A   f   f

  e  c   t    i   v  e

745 ",areness   C  o  g    n   i   t   i   v

  e

85 9se

:45 ;no,ledge<Comrehension

385 Preference

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(he D"=M"# "roach

Define

 Advertising

Goals for 

M easuring

 Advertising

Results"ction"ction

",areness",areness

ConvictionConviction

ComrehensionComrehension

Consumer resonse> "ttention/ %nterest/

Desire and "ction ?"%D" model@

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Characteristics of Objectives

Concrete/measurable tasks

Benchmarkmeasures

+ell2definedaudience

Secifiedtime eriod

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"dvertising2Based Vie, of Communications

 Acting on Consumers

"ds

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9tiliAing a Variet) of Media

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Establishing & "llocating the Promotional Budget

Sonsorshi9nder,riting

Public#elations

SalesPromotions

%nternet

=rou Sales

DirectMarketing

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Establishing a Budget ?Marginal "nal)sis@

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Budget "djustments

IncreaseSpending

IncreaseSpending

%f the cost is less than themarginal return

%f the cost is less than themarginal return

HoldSpending

HoldSpending

%f the cost is e*ual to theincremental return

%f the cost is e*ual to theincremental return

DecreaseSpending

DecreaseSpending

%f the cost is more than theincremental return

%f the cost is more than theincremental return

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"ssumtions for Marginal "nal)sis

Sales aredetermined

solely yadvertising

and promotion

Sales are adirect measureof advertising

and promotionsefforts

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Sales #esonse Models

   %  n  c  r  e  m  e  n  t  a   l    S  a   l  e

  s

"dvertising Eenditures

A! Concave"Downward#esponse Curve

   %  n  c  r  e  m  e  n  t  a   l    S  a   l  e  s

"dvertising Eenditures

Range A Range B Range C  

$! S"Shaped #esponse%unction

   B   i  g   h

   S    e  n   d   i  n  g

   1   i  t  t   l  e   E   f   f  e  c  t

   %  n   i  t   i  a   l    S    e  n   d   i  n  g

   1   i  t  t   l  e   E   f   f  e  c  t

   M   i   d   d   l  e   1  e  v  e   l

   B   i  g   h

   E   f   f  e  c  t

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Share of market vs Share of Voice

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Purchasefre*uenc)

'actors %nfluencing "dvertising Budgets

Productlife c)cle

Productdurabilit)

Differentiation

Productrice

idden roduct*ualities

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(o2Do,n vs$ Bottom29 Budgeting

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"llocating to %MC Elements