mktg 373: chapter 7 - establishing objectives and budgeting for the promotional programs

value objectives in promotion

communications, planning and decision making, measurement and evaluation

communications

key point: problems can be avoided when parties from from written, approved objectives that guide actions and provide a common foundation.

planning & decision making

key point: decisions about creative direction, media selection, and budget allocation should be based on how well each strat aligns with comapny’s marketing objective

measurement & control

key point: orgs assess return on promotional investment by comparing actual performance against measurable objectives to determine if the results justify the expense

marketing objectives

goals to be accomplished by an organization’s overall marketing program such as sales, market share, or profitability. must be realistic and attainable. quantifiable and date

communications (IMC) objectives

statements of what various aspects of the integrated marketing communications program will accomplish with respect to factors such as communication tasks, sales, market share, and the like.

sales perspective

the basic reason a firm spends money on advertising an promotion is to sell its products or service. thus these efforts should produce measurable sales results

issues with sales perspective

1. other marketing mix variables

2. macro factors

3. carryover effect

4. planning development and execution

carryover effect

advertising efforts are not always immediate

communications effect pyramid

(top) awareness → knowledge/comparison → liking → preference → trial → use(bottom)

conative stage of pyramid

20% trial and 5% use

affective stage of pyramid

40% liking & 25% preference

cognitive stage of pyramid

90% awareness & 70% knowledge/comprehension

dagmar’s characteristics of “good” communication objectives

concrete & measurable, target audience, benchmark & degree of change sought, specified time period

concrete & measurable(dagmar)

presice statement of what appeals or message the advertiser wants to communicate to the target audience

target audience(dagmar)

specify well-defined audeicne

benchmark & degree of change sought(dagmar)

measure to determine where the target audience stands and how much change is being sought

specified time period(dagmar)

appropriate for the communication objective

setting the budget

budgeting decisions are not made in isolation, directly impacts promotional mix strategies that are to be developed

top down budgeting

top management sets the spending limit → promotion budget stays in spending limit

bottom up budgeting

objectives set → activities needed to achieve objectives are planned → costs of activities are budgeted → total budget is approved by management

top down approach

budgeting approaches in which the budgetary amount is established at the executive level and monies are passed down to the various departments.

top down advantages

quick and simple, control, predictability

top down disadvantages

lack of detail, risk of underfunding, low team involvement

bottom down advantages

objective driven, more accurate, team engagement