Value of objectives
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Lecture 7 - PowerPoint PPT Presentation

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Value of Objectives Focus and Coordination They help to orient everyone involved toward one, common goal. Plans and Decisions They serve as criteria for developing plans and making decisions. Measurement and Control They provide the standards and benchmarks for evaluating results.

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Value of objectives l.jpg
Value of Objectives

  • Focus and Coordination

    • They help to orient everyone involved toward one, common goal.

  • Plans and Decisions

    • They serve as criteria for developing plans and making decisions.

  • Measurement and Control

    • They provide the standards and benchmarks for evaluating results.

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Types of Objectives

Marketing objectives

  • Statements of what is to be accomplished by the overall marketing program within a given time period such as sales volume, market share, profits, or ROI.

  • IMC Objectives

    • Statements of what various aspects of the IMC program will accomplish based on communication tasks required to deliver appropriate messages to the target audience.

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    SALES? A Questionable Objective!


    Product Quality





    The Economy

    Price Policy

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    When Sales Objectives Are Appropriate

    • For promotional efforts that are direct action in nature and try to induce an immediate behavioral response.

      • Sales promotion

      • Direct response advertising

      • Retail advertising for sales or special events

    • When advertising plays a dominant role in a firm’s marketing program and other factors are relatively stable

    • When effects of an IMC variable can be isolated.

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    Realm of motives.

    Ads stimulate or direct desires.


    Realm of emotions.

    Ads change attitudes and feelings


    Realm of thoughts.

    Ads provide information and facts.

    Point of purchase

    Retail store ads, Deals

    “Last-chance” offers

    Price appeals, Testimonials

    Competitive ads

    Argumentative copy

    “Image” copy

    Status, glamour appeals


    Descriptive copy

    Classified ads

    Slogans, jingles, skywriting

    Teaser campaigns

    Advertising and MovementToward Action

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    Inverted Pyramid ofCommunications Effects

    90% Awareness

    70% Knowledge

    40% Liking

    25% Preference

    20% Trial

    5% Use




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    The DAGMAR Approach



    Goals for




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    Characteristics of Objectives

    Good Objectives:

    • Concrete, Measurable CommunicationTasks

    • Well-Defined Target Audience

    • Have an Existing Benchmark Measure

    • Specify Degree of Change Sought

    • Specific Time Period

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    Legitimate Problems

    Response Hierarchy Problems

    Doesn't always define the process people use to reach purchase/use.

    Attitude - Behavior Relationship

    Attitude change doesn't always lead to change in actions or behavior.

    Questionable Objections

    Sales Objectives Are Needed

    Sales are all that really counts, not communications objectives.

    Costly and Impractical

    The research and efforts cost more then the results are worth.

    Inhibition of Creativity

    Too many rules and too much structure curb genius.

    DAGMAR Difficulties

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    Advertising-Based View of Communications

    Advertising Through Media









    Acting on Consumers

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    Marginal Analysis

    Gross Margin


    Sales in $

    Ad. Expenditure


    Point A

    Advertising / Promotion in $

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    Problems with Marginal Analysis

    • Assumption:

      • Sales are the principal objective of advertising and/or promotion.

    • Assumption:

      • Sales are the result of advertising and promotion and nothing else.

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    A. Concave-Downward Response Curve

    B. S-Shaped Response Function

    Middle Level

    High Effect

    Incremental Sales

    Incremental Sales

    High Spending

    Little Effect

    Initial Spending

    Little Effect

    Range A

    Range B

    Range C

    Advertising Expenditures

    Advertising Expenditures

    Advertising Sales/Response Functions

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    The Promotion Budget Is Set to Stay Within the Spending Limit

    Top-Down Budgeting

    Top Management Sets the Spending Limit

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    Top-Down Approaches Limit

    • The Affordable Method

      • What we have to spare. What's left to spend.

    • Arbitrary Allocation Method

      • No system. Seemed like a good idea at the time.

    • Percentage of Sales Method

      • Set percentage of sales or amount per unit.

    • Competitive Parity Method

      • Match competitor or industry average spending.

    • Return on Investment Method

      • Spending is treated as a capital investment.

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    Bottom-Up Budgeting Limit

    Total Budget Is Approved by

    Top Management

    Cost of Activities are Budgeted

    Activities to Achieve Objectives

    Are Planned

    Promotional Objectives Are Set

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    Determine Specific Tasks Limit

    (advertise on market area television and radio and local newspapers)

    Estimate Costs Associated with Tasks

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

    Objective and Task Method

    Establish Objectives

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

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    Allocating the IMC Budget Limit

    Factors Affecting Allocation to Various IMC Elements:

    • Client/Agency Policies

    • Size of Market

    • Market Potential

    • Market Share Goals

    • Market Conditions

    • Organizational Characteristics

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    Problems With Sales Objectives Limit

    • Sales are a function of many factors, not just advertising and promotion.

    • Effects of IMC tools such as advertising often occur over an extended time period.

    • Sales objectives provide little guidance to those responsible for planning and developing the IMC program

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    BASIC Principle of LimitMarginal Analysis

    IncreaseSpending . . . IF:

    The increased cost is less than the incremental (marginal) return.

    DecreaseSpending . . . IF:

    The increased cost is more than the incremental (marginal) return.

    HoldSpending Level. . . IF:

    The increased cost is equal to the incremental (marginal) return.