lecture_5_mkt.ppt

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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#



Value of Objectives

Communications

Communications

Planning &Decision Making

Planning &Decision Making

Measurement& Evaluation

Measurement& Evaluation

SecificObjectives



Characteristics of Objectives

Secific

Measurable

!uantifiable

"ttainable

#ealistic



Measurable #esults



Marketing vs$ Communications Objectives



Sales Objectives

%ncreased Sales

%ncreased Market Share

Brand Etensions



'actors %nfluencing Sales

Cometition(echnolog)

(he

econom)

Product*ualit)

PriceDistribution

"dvertising& romotion



+here Sales Objectives are "roriate



'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



Creating an %mage



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



(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@



Characteristics of Objectives

Concrete/measurable tasks

Benchmarkmeasures

+ell2definedaudience

Secifiedtime eriod



"dvertising2Based Vie, of Communications

Acting on Consumers

"ds



9tiliAing a Variet) of Media



Establishing & "llocating the Promotional Budget

Sonsorshi9nder,riting

Public#elations

SalesPromotions

%nternet

=rou Sales

DirectMarketing



Establishing a Budget ?Marginal "nal)sis@



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



"ssumtions for Marginal "nal)sis

Sales aredetermined

solely yadvertising

and promotion

Sales are adirect measureof advertising

and promotionsefforts



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



Share of market vs Share of Voice



Purchasefre*uenc)

'actors %nfluencing "dvertising Budgets

Productlife c)cle

Productdurabilit)

Differentiation

Productrice

idden roduct*ualities



(o2Do,n vs$ Bottom29 Budgeting



"llocating to %MC Elements

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