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Establishing Objectives and Budgeting for the Promotional Program PowerPoint PPT Presentation


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07. Establishing Objectives and Budgeting for the Promotional Program. Characteristics of Objectives. Specific. Attainable. Measurable. Realistic. Quantifiable. 7- 2. Sales vs. Communications Objectives. Sales Objectives. Communications Objectives. Primary goal is increased sales

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Establishing Objectives and Budgeting for the Promotional Program

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Establishing objectives and budgeting for the promotional program

07

Establishing Objectivesand Budgeting for thePromotional Program


Characteristics of objectives

Characteristics of Objectives

Specific

Attainable

Measurable

Realistic

Quantifiable

7-2


Sales vs communications objectives

Sales vs. Communications Objectives

SalesObjectives

Communications Objectives

  • Primary goal is increased sales

  • Requires economic justification

  • Should produce quantifiable results

  • Increased brand knowledge, interest, favorable attitudes and image

  • Immediate response not expected

  • Goal is creating favorable predispositions

7-3


Factors influencing sales

Factors Influencing Sales

Technology

Competition

The economy

Advertising & promotion

Product quality

Distribution

Price

7-4


Communications effects pyramid

Communications Effects Pyramid

5% Use

Conative

20% Trial

25% Preference

Affective

40% Liking

70% Knowledge/comprehension

Cognitive

90% Awareness

7-5


Gfk purchase funnel

GfK Purchase Funnel

7-6


The dagmar approach

The DAGMAR Approach

Awareness

Comprehension

Conviction

Action

Define

Advertising

Goals for

Measuring

Advertising

Results

7-7


Advertising based view of marketing

Advertising-Based View of Marketing

Ads

Acting on Consumers

7-8


Marginal analysis

Marginal Analysis

7-9


Budget adjustments

Budget Adjustments

Increase Spending

If cost is less than the marginal revenue generated

Hold

Spending

If the cost is equal to the marginal revenue generated

Decrease Spending

If the cost is more than the marginal revenue generated

7-10


Sales response models

Sales Response Models

A.Concave-Downward Response Curve

B.S-Shaped Response Function

Incremental Sales

Incremental Sales

Initial Spending

Little Effect

High Spending

Little Effect

Middle Level

High Effect

Range A

Range B

Range C

Advertising Expenditures

Advertising Expenditures

7-11


Factors influencing advertising budgets

Factors Influencing Advertising Budgets

Hidden productqualities

Product life cycle

Productprice

Productdurability

Purchasefrequency

Differentiation

7-12


Top down vs bottom up budgeting

Top-Down vs. Bottom-Up Budgeting

7-13


Build up approaches

Build-Up Approaches

  • Objective and Task Method

    • Define communications objectives to be accomplished

    • Determine specific strategies and tasks needed to attain them

    • Estimate costs associated with performance of these strategies and tasks

7-14


Implementing the objective and task approach

Implementing the Objective and Task Approach

Isolate objectives

Determine tasks required

Estimate required expenditures

Monitor

Reevaluate objectives

7-15


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