promotional management · mkt 337: wsk establishing objectives and budgeting for the promotion...

MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme

Promotional Management

Chapter 7

ESTABLISHING OBJECTIVES AND BUDGETING

FOR THE PROMOTION PROGRAMME


The Value of Objectives

• Don’t value the importance of setting objectives

• Disagreement as to what the objectives should be

• Reasons: The functions they serve in

– Communications [coordination]

– Planning and Decision Making [all phases based on objective, choices]

– Measurement and Evaluation


DETERMINING IMC OBJECTIVES


Marketing Vs Communication Objectives

• Marketing objectives are statements of what is to be accomplished

by the overall marketing programme within a given time period

• Defined in specific measurable outcomes – sales, mkt share, ROI

• Good marketing objective

– Quantifiable

– Have a time frame

– Realistic and attainable


Marketing Vs Communication Objectives

• Statements of what various aspects of the IMC programme will

accomplish

• Marketing goals are not appropriate for communication goals

– They are objectives for the overall marketing programme

• For example, a company might be successful at communications

– But has poor distribution. CANNOT BLAME Communications Manager

• Sales Vs Communications Objectives

– To sell or to communicate?


Sales Vs Communications Objectives

• Sales-oriented Objectives

– Only meaningful objective

– Believe objectives should be based on sales

– ROI

– Make agencies accountable

• Problems with sales objectives

1. Communications alone does not attain success

[“Nothing can kill a poor product faster than good advertising”]

2. Effects of advertising occurs over an extended period [Carryover Effect]

3. Offers little guidance to Promotional Planners


Factors Influencing Sales

Sales

Technology

The economy

Product Quality

Price Distribution

Advertising and

Promotion

Competition


Where Sales Objective are appropriate

• Direct Action Promotion Efforts

• Direct-response advertising

• Retail Advertising

• Advertising plays a dominant role [Eg. OnePlusOne]


Communications Objectives

• Some believe primary role of IMC is to communicate

• Designed to achieve brand knowledge, favourable image and

purchase intention

• Consumers cant be expected to respond immediately

• Favourable predisposition towards the brand before purchase

behaviour


Communications Effects Pyramid


Problems with Communications Objectives

• Too difficult to translate sales objective into communications objectives

• Increase sales by 10% will translate to

– Increasing the percentage of consumers in the target market who

associate specific features, benefits, or advantages with our brand

– Increasing the number of consumers in the TA who prefer our product

over the competitor’s

– Encouraging the current users of the product to use it more frequently or

in more situations

– Encouraging consumers who have never used our brand to try it


Characteristics of Objectives

• Concrete, Measurable Tasks

• Target Audience

• Benchmark and Degree of Change

• Specified Time Period


ESTABLISHING AND ALLOCATING THE PROMOTIONAL BUDGET


Establishing the Budget

• Many fail to recognise the importance of advertising

• View it as an expense

• First to be cut, when cost-cutting

• Not a one time responsibility

– Each time a new product is introduced

– Internal/external factors necessitate change for competitiveness


Budgeting Approaches

• Top down Approaches

– The Affordable Method

– Arbitrary Allocation

– Percentage of Sales [% of sales $, unit cost for advertising]

– Competitive Parity

– Return on Investment



• Build up Approaches

– Objective and Task Method

a) Define communication objectives

b) Determine specific strategies and tasks needed to attain them

c) Estimating the costs associated


Allocating the Budget

1. Allocating to IMC budgets

– Away from traditional media

– Stretching their budget

2. Client-agency Policies

3. Market Size

4. Market Potential

5. Market share goals

6. Economies of Scale

7. Organisational Characteristics


End of Chapter

promotional management · mkt 337: wsk establishing objectives and budgeting for the promotion...

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