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Chapter 7 Establishing Objectives and Budgeting for the Promotional Program

Chapter 7 Establishing Objectives and Budgeting for the Promotional Program. Value of Objectives. Communications Objectives facilitate coordination of the various groups Planning and decision making

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Chapter 7 Establishing Objectives and Budgeting for the Promotional Program

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  1. Chapter 7 Establishing Objectivesand Budgeting for thePromotional Program

  2. 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

  3. Marketing Objectives versus Integrated Marketing Communications Objectives Marketing objectives Integrated marketing communications 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 • 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

  4. Figure 7.1 - Factors Influencing Sales

  5. Problems with Sales Objectives Successful implementation requires all marketing elements to work together Advertising has carryover effect • Carryover effect: Monies spent on advertising do not have immediate impact on sales It is difficult to determine precise relationship between advertising and sales Do not offer much guidance for planning and developing promotional program

  6. Figure 7.2 - Communications Effects Pyramid

  7. Criticisms of DAGMAR Problems with the response hierarchy Sales objectives Practicality and costs Inhibition of creativity

  8. Figure 7.4 - Traditional Advertising-Based View of Marketing Communications

  9. Figure 7.5 - Objectives and Strategies in the Social Consumer Decision Journey Source: Expert interviews; McKinsey analysis

  10. Figure 7.8 - Marginal Analysis

  11. Figure 7.9 - Advertising Sales/ResponseFunctions

  12. 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.

  13. Figure 7.12 - Top-Down versus Bottom-Up Approaches to Budget Setting

  14. Figure 7.15 - Investments Pay Off in Later Years

  15. Figure 7.16 - Competitors’ Advertising Outlays do not Always Hurt

  16. Figure 7.18 - The Objective and Task Method

  17. 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

  18. Figure 7.21 - How Advertising and Promotions Budgets Are Set

  19. Budget Allocation: Factors to Consider Allocating to IMC elements Client/agency policies Market size Market potential Market share goals

  20. Figure 7.24 - The Share of Voice (SOV)Effect and Ad Spending: Priorities in Individual Markets

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