7. Establishing Objectives and Budgeting for the Promotional Program. Setting Objectives. Obstacles to setting objectives Complex marketing situations Conflicting perspectives Uncertainty over resources. Value of Objectives. Measurement/Evaluation. Planning & Decision Making.
Establishing Objectivesand Budgeting for thePromotional Program
Planning & Decision Making
Won’t work in isolation
Ad effects take time
Hard to determine precise relationship between advertising and sales
Offers little guidance to those planning and developing the promotional program
Advertising & promotion
Which of the following statements about communications objectives is true?
A) Sales goals are easily translated 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 for planning, executing, and evaluating promotional programs.
D) Marketing managers often do not recognize the value of setting communications objectives.
Ads stimulate ordirect desires
Ads change attitudes and feelings
information and facts
Favorable attitudes and image
Brand knowledgeand interest
Concrete, measurable tasks
Problems with response hierarchy
Only relevant measure is sales
Costly and time consuming
Acting on Consumers
What we’re willing and able to spend
What we need to achieve our objectives
To whom should we allocate the monies?
How much should we spend on advertising and promotion?
When times get tough, advertising and promotional budgets are the first to be cut
Sales are a direct measure of advertising and promotions efforts.
Sales are determined solely by advertising and promotion.
In marginal analysis, all of the following should be considered except:
B) Fixed costs of advertising
C) Advertising expenditures and other variable costs
D) Gross margin
E) Net worth
If cost is less than the marginal revenue generated
If the cost is equal to the marginal revenue generated
If the cost is more than the marginal revenue generated
A. Concave-Downward Response Curve
B. S-Shaped Response Function
Product life cycle
Percentage of Sales
Determine tasks required
Estimate required expenditures
Decrease–find a defensible niche
Increase to defend
Share of Voice
Attack with large SOV premium
Maintain modest spending premium
Your Share of Market
Larger firms can support their brands with lower relative advertising costs than smaller firms.
The leading brand in a product group enjoys lower advertising costs per sales dollar than do other brands.
There is a static relationship between advertising costs per dollar of sales and the size of the advertiser.
There is no evidence to support any of these!