Establishing Objectives and Budgeting for IMC Programs

Tutored by : Prof. Sunil D Anto

Value of Objectives

Objectives

Focus & Coordination

Plans & Decisions Measurement & Control

Characteristics of Objectives

Attainable

Realistic

Measurable

Objectives

Not Mutually Exclusive

Specific

Marketing Versus Communications Objectives

Marketing Objectives
Generally stated in the firms 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

Communications Objectives
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.

Many Different Factors Affect Sales

$ALE$

Advertising and promotion

Competition

Product quality

Distribution

Technology

Price

The economy

Sales As Advertising Objective

Image building/creating Ads

FYT
A. It is easy to translate sales goals into communications objectives ? B. It can be difficult to determine the relationship between communications objectives and sales performance ? C. Communications objectives cannot serve as operational guidelines to the planning, execution, and evaluation of the promotional program ? D. Marketing managers do not recognize the value of setting communications objectives ?

Advertising and Movement Toward Action

Conative Purchase Conviction Preference Liking Knowledge Cognitive
Realm of thoughts. Ads provide information and facts.
Point of purchase, Retail store ads, Deals Last-chance offers, Price appeals, Testimonials

Realm of motives. Ads stimulate or direct desires.

Affective

Competitive ads Argumentative copy Image copy Status, glamour appeals Announcements Descriptive copy Classified ads Slogans, jingles, skywriting Teaser campaigns

Realm of emotions. Ads change attitudes and feelings

Awareness

Pyramid of Communications Effects

5% Use / re-buy 20% Trial 25% Preference 40% Liking

70% Comprehension 70% Knowledge & Knowledge

90% Awareness

The DAGMAR Approach to setting objectives

Define Advertising Goals for Measuring Advertising Results

Awareness

Comprehension Comprehension

Conviction

Action

Pros and Cons of DAGMAR

Pros
Assessment of campaign effectiveness Value of communicationbased objectives

Cons
Problems with the response hierarchy Sales objectives

Measurement of stages
Less subjective

Practicality and cost

Inhibition of creativity

Advertising-Based View of Communications

Advertising Through Media

Acting on Consumers

Balancing Objectives and Budgets

What were willing and able to spend

Dollars

What we need to achieve our objectives

Goals

Budgeting Approaches

1. Top-Down Budgeting

Top Management Sets the Spending Limit

The Promotion Budget Is Set to Stay Within the Spending Limit

Top-Down Budgeting Methods

Competitive Parity

Arbitrary Allocation

Top Management

Percentage of Sales

Return on Investment

Affordable Method

2. 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

3. Build-up Approach: 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)

Allocating the budget: Spending and Share of Voice

Competitors Share of Voice

Decreasefind a Defensible Niche Attack With Large SOV Premium

Low

High

Increase to Defend

Low

Maintain Modest Spending Premium

High

Your Share of Market

Allocating to IMC Elements