Ad Objectives and budgeting

8/7/2019 Ad Objectives and budgeting

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Establishing Objectives

and Budgeting for thePromotional Program

Establishing Objectives

and Budgeting for thePromotional Program

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin


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Focus &Coordination

Plans &Decisions

Measurement

& Control

Plans &Decisions

Focus &Coordination

Value of Objectives


Objectives


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Attainable

Measurable

Specific

Realistic

Specific

Measurable

Attainable

Realistic

Not MutuallyExclusive

Characteristics of Objectives


Objectives


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Advertising Can Shape Corporate Images



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MarketingObjectives

Generally stated in the

firms marketing plan Achieved through the

overall marketing plan

Quantifiable, such assales, market share, ROI

To be accomplished in agiven period of time

Must be realistic andattainable to be effective

MarketingObjectives

Marketing Versus Communications Objectives


CommunicationsObjectives

Derived from the overall

marketing plan More narrow than

marketing objectives

Based on particularcommunications tasks

Designed to deliverappropriate messages

Focused on a specifictarget audience

Vs.Vs.


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Theeconomy

Distribution Technology Price

Advertisingand

promotionCompetition

Productquality

PriceTechnologyDistribution

Productquality

CompetitionAdvertising

andpromotion

Many Different Factors Affect Sales


$ALE$


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Direct Response Ads Seek Sales



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Some Communications Use Nontraditional Methods



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Sales As Advertising Objectives



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Test Your Knowledge


Which of the following statements aboutcommunications objectives is true?

A) It is easy to translate sales goals intocommunications objectives.

B) It can be difficult to determine therelationship between communicationsobjectives and sales performance.

C) Communications objectives cannot serveas operational guidelines to the planning,execution, and evaluation of thepromotional program.

D) Marketing managers do not recognize thevalue of setting communicationsobjectives.


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Advertising and Movement Toward Action


Teaser campaigns

AffectiveRealm of emotions.Ads change attitudesand feelings

CognitiveRealm of thoughts.Ads provideinformation and facts.

ConativeRealm of motives.Ads stimulate ordirect desires.

Image copyStatus, glamour appeals

AnnouncementsDescriptive copyClassified adsSlogans, jingles, skywriting

Competitive adsArgumentative copy

Point of purchaseRetail store ads, DealsLast-chance offersPrice appeals, Testimonials

Purchase

Conviction

Preference

Liking

Knowledge

Awareness


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Image Ads Can Have a StrongEffect on Preference



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20%Trial

40% Liking

90%Awareness

5% Use

70% Knowledge

25% Preference

90%Awareness

70% Knowledge

40% Liking

25% Preference

20%Trial

Pyramid of Communications Effects



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The DAGMAR Approach


DefineAdvertising

Goals forMeasuring

AdvertisingResults Action

AwarenessAwareness

Conviction

ComprehensionComprehension

Conviction


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Pros and Cons of DAGMAR


Problems with theresponse hierarchy

Assessment of campaigneffectiveness

ProsPros ConsCons

Sales objectives

Practicality and cost

Inhibition of creativity

Value of communication-based objectives

Measurement of stages

Less subjective

Problems with theresponse hierarchy

Assessment of campaigneffectiveness

Sales objectives

Practicality and cost

Value of communication-based objectives

Measurement of stages

Less subjective


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Advertising Through Media

Acting on Consumers

Advertising-Based View of Communications



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Balancing Objectives and Budgets


Dollars Goals

What werewilling and

able to spend

What we need

to achieve ourobjectives


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Test Your Knowledge


In marginal analysis all of the following should be

considered EXCEPT:A) salesB) fixed costs of advertisingC) advertising expenditures and other

variable costs

D) gross marginE) net worth


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The Promotion Budget Is Set to Stay Within

the Spending Limit

Top Management Sets the Spending LimitTop Management Sets the Spending Limit

Top-Down Budgeting



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AffordableMethod

AffordableMethod

CompetitiveParity

Percentage

of Sales

Return onInvestment

ArbitraryAllocation

Percentageof Sales

CompetitiveParity

ArbitraryAllocation

Top-Down Budgeting Methods


TopManagement


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Total Budget Is Approved byTop Management

Cost ofActivities are Budgeted

Activities to Achieve ObjectivesAre Planned

Promotional Objectives Are Set

Cost ofActivities are Budgeted

Activities to Achieve ObjectivesAre Planned

Promotional Objectives Are Set

Bottom-Up Budgeting



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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 productamong 20 percent of target market)

Determine Specific Tasks(advertise on market area television and

radio and local newspapers)

Establish Objectives

(create awareness of new productamong 20 percent of target market)

Objective and Task Method


Monitor and Adjust(monitor performance and adjust)

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


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Long Run Impact of

Advertising

Advertising

NewCustomers

Immediate Sales Future Sales

Change AttitudeImprove Image


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Towards Operational

ObjectiveWho is the target Segment

What is the ultimate behavior within

that segment that advertising isattempting to precipitate, reinforce,Change or influence

What process will lead to thedesired behavior


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Behavioral Dynamics

Segment NThose not buying

Product Class

Segment EExisting

Customers

Segment OThose buying otherbrands exclusively


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Behavioral Dynamics New Customers from Other Brands

Target Switchable consumers from

other brands who are dissatisfied

Acquire those customers who arelikely to grow their sales volumesover the years to come.


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New Customers from other

categoriesAttract people from segment N, those

not now using the product class.

The firm in the industry that has thehighest market share, the largestdistribution, the biggest sales force andthe highest awareness is the one most

likely to get sales from a customer justentering the product category


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Increasing share of requirements

Where customers have arepertoire of preferred brands then

the advertising task is increasingthat existing users share ofrequirements going to that

particular brand.


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Increasing Brand Loyalty,

Reducing Attritionand

Price Elasticity


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Increasing brand Loyalty Reinforce existing preference

Use frequent shopper programs

Reduce churn in the customerbase by creating switching costsfor the customer

Decrease a consumers pricesensitivity


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Increasing Usage

Increase amountconsumed per usage

occasions

Reduce time between

usages eg. Clinic plus

Suggest new usageoccasions and opportunities

E.g. Cadburys, vicks


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The aim is to do more than justinduce an extra purchase; but

must change long term behavioralpatterns so that the increasedusage will continue over time.


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Advertising Response

Variables Key Qs:

What communication, association, or

persuasion task will be likely toprecipitate the desired action.

How can this task best beconceptualized and measured


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Precipitate a new thought and action Shifting focus from cosmeticpropositions such as texture and sheen, the new campaign forKansai Nerolac repositions the brand as an eco-friendly,'healthy' paint.


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Brand Awareness

Advertising creates awareness for the

new brand, and the awareness will createthe trial purchase, after which the brandis on its own to gain acceptance


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Brand ComprehensionCommunicate facts or brand attributesto influence brand comprehension.

e.g. Complan (the complete plannedfood for growing children)hp pavilion the pc is personal again.


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Brand Image and

PersonalityAssociations that the brand developswith a type ofperson or even anotherproduct.


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Brand Attitude

The like-dislike feeling towards thebrand


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Associating Feelings with

Brands or use Experiences

Create feelings ofwarmth, energy, fun

Anticipation, fear or concern andassociate those feelings with the brand.

e.g warmth-Brooke Bond Red Label(pyala tere pyaar ka.Energy: Boost (boost is the secret of my energy)Fun: Mountain dew.


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Specifying the target

SegmentThe process of objective setting is intimatelylinked with that of selecting a target segment

and may involve sub-segments that are relevantto the communication tasks.

E.g Maggi Dal Atta Noodles


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Behavioral Measures such as Usage andLoyalty can be used to define the target

Segments

Heavy User

Non User

The Loyal User of our Brand

Loyal User of another brand


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The DAGMAR Approach Defining Advertising Goals for

Measured Advertising Results


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The Advertising Plan Focus on three crucial tasks

Objectives and target selection

Message strategy and Tactics

Media Strategy and tactics


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A Communication Task Create awareness

impart Information

develop attitudes

induce action


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The Hierarchy ofEffects model of thecommunication Process

Comprehension & Image

Aware

Unaware

Attitude

Action


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Other Hierarchy Model AIDA

Adopter Hierarchy Model - 5Stages

Awareness

Interest

EvaluationTrial

Adoption

Ad Objectives and budgeting

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