Establishing Objectives and Budgeting for IMC Programs

Tutored by : Prof. Sunil D’ Anto

Focus &Coordination

Plans &Decisions

Measurement& Control

Plans &Decisions

Focus &Coordination

Value of Objectives

Objectives

Attainable

Measurable

Specific

Realistic

Specific

Measurable

Attainable

Realistic

Not Mutually Exclusive

Characteristics of Objectives

Objectives

Marketing 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

Marketing Objectives

Marketing Versus Communications Objectives

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.

Theeconomy

Distribution Technology Price

Advertising and

promotionCompetition

Productquality

PriceTechnologyDistribution

Productquality

CompetitionAdvertising

and promotion

Many Different Factors Affect Sales

$ALE$

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

Teaser campaigns

AffectiveRealm of emotions.Ads change attitudes and feelings

CognitiveRealm of thoughts.Ads provide information and facts.

ConativeRealm of motives.Ads stimulate or direct desires.

“Image” copyStatus, glamour appeals

AnnouncementsDescriptive copyClassified adsSlogans, jingles, skywriting

Competitive adsArgumentative copy

Point of purchase,Retail store ads, Deals“Last-chance” offers,Price appeals, Testimonials

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

20% Trial

40% Liking

90% Awareness

5% Use / re-buy

70% Knowledge

25% Preference

90% Awareness

70% Comprehension & Knowledge

40% Liking

25% Preference

20% Trial

Pyramid of Communications Effects

The DAGMAR Approach to setting objectives

Define

Advertising

Goals for

Measuring

Advertising

Results Action

AwarenessAwareness

Conviction

ComprehensionComprehension

Conviction

Pros and Cons of DAGMAR

Problems with the response hierarchy

Assessment of campaign effectiveness

Pros Cons

Sales objectives

Practicality and cost

Inhibition of creativity

Value of communication-based objectives

Measurement of stages

Less subjective

Problems with the response hierarchy

Assessment of campaign effectiveness

Sales objectives

Practicality and cost

Value of communication-based objectives

Measurement of stages

Less subjective

Advertising Through Media

Acting on Consumers

Advertising-Based View of Communications

Balancing Objectives and Budgets

Dollars Goals

What we’re willing and

able to spend

What we need to achieve our

objectives

Budgeting Approaches

The Promotion Budget Is Set to Stay Within the Spending Limit

Top Management Sets the Spending LimitTop Management Sets the Spending Limit

1. Top-Down Budgeting

Affordable Method

Affordable Method

Competitive Parity

Percentageof Sales

Return onInvestment

Arbitrary Allocation

Percentageof Sales

Competitive Parity

Arbitrary Allocation

Top-Down Budgeting Methods

TopManagement

Total Budget Is Approved byTop Management

Cost of Activities are Budgeted

Activities to Achieve ObjectivesAre Planned

Promotional Objectives Are Set

Cost of Activities are Budgeted

Activities to Achieve ObjectivesAre Planned

Promotional Objectives Are Set

2. Bottom-Up Budgeting

Estimate Costs Associated with Tasks(determine costs of advertising, promotions, etc.)

Determine Specific Tasks(advertise on market area television and radio and local newspapers)

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)

Establish Objectives(create awareness of new product among 20 percent of target market)

3. Build-up Approach: Objective and Task Method

Monitor and Adjust(monitor performance and adjust)

Estimate Costs Associated with Tasks(determine costs of advertising, promotions, etc.)

Allocating the budget: Spending and Share of Voice

Decrease–find a Defensible Niche

Increase to Defend

Attack With Large SOV Premium

Maintain Modest Spending PremiumC

ompetitor’s

Shar

e o

f V

oic

e

Hig

hLo

w

HighLow

Your Share of Market

Allocating to IMC Elements