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Establishing Objectives and Budgeting for the Promotional Program

07. Establishing Objectives and Budgeting for the Promotional Program. Characteristics of Objectives. Specific. Attainable. Measurable. Realistic. Quantifiable. 7- 2. Sales vs. Communications Objectives. Sales Objectives. Communications Objectives. Primary goal is increased sales

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Establishing Objectives and Budgeting for the Promotional Program

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  1. 07 Establishing Objectivesand Budgeting for thePromotional Program

  2. Characteristics of Objectives Specific Attainable Measurable Realistic Quantifiable 7-2

  3. Sales vs. Communications Objectives SalesObjectives Communications Objectives • Primary goal is increased sales • Requires economic justification • Should produce quantifiable results • Increased brand knowledge, interest, favorable attitudes and image • Immediate response not expected • Goal is creating favorable predispositions 7-3

  4. Factors Influencing Sales Technology Competition The economy Advertising & promotion Product quality Distribution Price 7-4

  5. Communications Effects Pyramid 5% Use Conative 20% Trial 25% Preference Affective 40% Liking 70% Knowledge/comprehension Cognitive 90% Awareness 7-5

  6. GfK Purchase Funnel 7-6

  7. The DAGMAR Approach Awareness Comprehension Conviction Action Define Advertising Goals for Measuring Advertising Results 7-7

  8. Advertising-Based View of Marketing Ads Acting on Consumers 7-8

  9. Marginal Analysis 7-9

  10. Budget Adjustments Increase Spending If cost is less than the marginal revenue generated Hold Spending If the cost is equal to the marginal revenue generated Decrease Spending If the cost is more than the marginal revenue generated 7-10

  11. Sales Response Models A. Concave-Downward Response Curve B. S-Shaped Response Function Incremental Sales Incremental Sales Initial Spending Little Effect High Spending Little Effect Middle Level High Effect Range A Range B Range C Advertising Expenditures Advertising Expenditures 7-11

  12. Factors Influencing Advertising Budgets Hidden productqualities Product life cycle Productprice Productdurability Purchasefrequency Differentiation 7-12

  13. Top-Down vs. Bottom-Up Budgeting 7-13

  14. Build-Up Approaches • Objective and Task Method • Define communications objectives to be accomplished • Determine specific strategies and tasks needed to attain them • Estimate costs associated with performance of these strategies and tasks 7-14

  15. Implementing the Objective and Task Approach Isolate objectives Determine tasks required Estimate required expenditures Monitor Reevaluate objectives 7-15

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