chapter 7737
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Focus &Coordination
Plans &Decisions
Measurement
& Control
Plans &Decisions
Focus &Coordination
Value of Objectives
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Objectives
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Attainable
Measurable
Specific
Realistic
Specific
Measurable
Attainable
Realistic
Not MutuallyExclusive
Characteristics of Objectives
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Objectives
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Advertising Can Shape Corporate Images
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
$ALE$
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Direct Response Ads Seek Sales
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Some Communications Use Nontraditional Methods
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Test Your Knowledge
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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, Deals
Last-chance offersPrice appeals, Testimonials
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
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Image Ads Can Have a StrongEffect on Preference
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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The DAGMAR Approach
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DefineAdvertising
Goals forMeasuring
AdvertisingResults Action
AwarenessAwareness
Conviction
ComprehensionComprehension
Conviction
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Pros and Cons of DAGMAR
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Balancing Objectives and Budgets
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Dollars Goals
What werewilling and
able to spend
What we need
to achieve ourobjectives
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Test Your Knowledge
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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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Marginal Analysis
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Advertising / Promotion in $
Salesin$
Point A
Profit
Sales Gross Margin
Ad. Expenditure
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BASIC Principle of Marginal Analysis
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
IncreaseSpending
DecreaseSpending
HoldSpending
If the increased cost is lessthan the incremental(marginal) return
If the increased cost is equalto the incremental(marginal) return.
If the increased cost is morethan the incremental(marginal) return
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Assumptions for Marginal Analysis
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Sales are theprincipal
objective ofadvertising
and promotion
Sales are theresult of
advertising andpromotion, and
nothing else
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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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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AffordableMethod
AffordableMethod
CompetitiveParity
Percentage
of Sales
Return onInvestment
ArbitraryAllocation
Percentageof Sales
CompetitiveParity
ArbitraryAllocation
Top-Down Budgeting Methods
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Test Your Knowledge
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Well known brand name products do not receive
incremental advantages from increased dollarexpenditures on advertising. Once the ad hits themarket, subsequent budget increases result in little orno incremental gains. This might best be explainedby:
A) arbitrary allocationB) the objective and task methodC) competitive parityD) an S-shaped responseE) rapidly diminishing returns
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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
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Monitor and Adjust(monitor performance and adjust)
Estimate Costs Associated with Tasks(determine costs of advertising,promotions, etc.)
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Media Expenditures
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Are There Economies of Scale?
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
No evidence to support this!No evidence to support this!
No evidence to support this!No evidence to support this!
No evidence to support this!No evidence to support this!
PropositionI
Larger firms can support their brands with lower relativeadvertising costs than smaller firms.
Proposition IIThe leading brand in a product group enjoys lower advertisingcosts per sales dollar than do other brands.
Proposition IIIThere is a static relationship between advertising costs perdollar of sales and the size of the advertiser.
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Ad Spending and Share of Voice
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Decreasefind aDefensible Niche
Increase to Defend
Attack With LargeSOV Premium
Maintain ModestSpending PremiumC
ompetitors
ShareofVoice
High
Low
HighLowYour Share ofMarket
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