ch. 7: objectives and budgeting for promotional programs n why should we establish objectives for...
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Ch. 7: Objectives and Budgeting for Promotional Programs
Why should we establish objectives for promotional programs?
Marketing Objectives vs. IMC Objectives
Marketing objectives are generally stated in the firm’s marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period.
IMC objectives are statements of what various aspects of the IMC program will accomplish. They should be based on the particular communication tasks that are required to deliver the appropriate message to the target audience.
IMC Objectives: Sales vs. Communication Perspective
Sales-Oriented Objectives:
What are the potential problems with this perspective?
Communication-Oriented Objectives:
What are the potential problems with this perspective?
Characteristics of Good Objectives
Concrete and measurable Specify a well-defined audience Establish benchmark measures Specify a time period Attainable Realistic
Promotional Budget: Theoretical Issue
Assumptions:
1) sales are a direct measure of advertising and promotions efforts;
2) sales are determined solely by advertising and promotions.
Sales
Ad expenditure
Sales
Promotional Budget: Practical Approach
Top-Down Budgeting
Top Management sets the spending limit
Promotion budget set to stay within spending limit
• Affordable method
• Percentage of sales **
• Competitive parity
• Arbitrary allocation
Promotional Budget: Practical Approach
Build-up Budgeting
Promotion objectives are set
Activities needed to achieve objectives are planned
Costs of promotion activities are budgeted
Total promotion budget is approved by top management
• Objective and task method**
• Payout planning
• Quantitative models
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