Transcript Chapter 1
Establishing Objectives and Budgeting for the Promotional Program © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Promotional Objectives © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Value of Objectives Objectives Focus & Coordination Plans & Decisions Measurement & Control © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Characteristics of Objectives Attainable Realistic Measurable Objectives Not Mutually Exclusive Specific © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Marketing Versus Communications Objectives Marketing Objectives IMC 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 attainable to be effective • Derived from the overall marketing plan • More narrow than marketing objectives • Based on particular communications tasks • Designed to deliver appropriate messages • Focused on a specific target audience Vs. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin IMC Objectives Marketing Sales Objectives Objectives IMC More sales Communications Objectives IMC Awareness IMC Attitudes IMC Recall IMC Preferences © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin IMC Objectives Sales Objectives © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Objectives: Problem 1 Many Different Factors Affect Sales $ALE$ Advertising and promotion Distribution Product quality Competition Technology Price © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The economy Sales Objectives: Problem 2 Carryover effects of promotion © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Objectives: Problem 3 No formula to relate between sales level and promotion © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales objectives are appropriate when: Promotion attempts to induce immediate response Direct response advertising Retail ads during sales period or special events When other promotional factors can be controlled © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin IMC Objectives Communication Objectives © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising and Movement Toward Action Purchase Conative Realm of motives. Ads stimulate or direct desires. Conviction Preference Affective Realm of emotions. Ads change attitudes and feelings Liking Competitive ads Argumentative copy “Image” copy Status, glamour appeals Knowledge Announcements Descriptive copy Classified ads Slogans, jingles, skywriting Awareness Teaser campaigns Cognitive Realm of thoughts. Ads provide information and facts. Point of purchase Retail store ads, Deals “Last-chance” offers Price appeals, Testimonials © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Image Ads Can Have a Strong Effect on Liking and Preference © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Pyramid of Communications Effects 5% Use 20% Trial 25% Preference 40% Liking 70% Knowledge 90% Awareness © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Problems of communication objectives Measuring effectiveness of communication Difficult to translate sales goals into specific communication objectives © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Promotional Budget © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Balancing Objectives and Budgets What we’re willing and able to spend Dollars What we need to achieve (objectives) Goals © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Top-Down Budgeting Top Management Sets the Spending Limit The Promotion Budget Is Set to Stay Within the Spending Limit © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Top-Down Budgeting Methods Competitive Parity Arbitrary Allocation Top Management Return on Investment Percentage of Sales Affordable Method © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Bottom-Up Budgeting Total Budget Is Approved by Top Management Cost of Activities are Budgeted Activities to Achieve Objectives Are Planned Promotional Objectives Are Set © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Objective and Task Method Establish Objectives (create awareness of new product among 20 percent of target market) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Estimate Costs Associated with Tasks (determine costs of advertising, promotions, etc.) Monitor and Adjust (monitor performance and adjust) © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin