marketing communications and budgets.ppt
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Marketing Communications and
Budgets B2B Communications
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Types of Objectives
Marketing Objectives
Statements of what is to be accomplished by the overall marketingprogram within a given time period.
Need to bequantifiablesuch as sales volume, market share, profits, or
ROI. Need to be realistic, measurable and attainable
IMC Objectives
Statements of what various aspects of the IMC program will accomplish
based on communication tasks required to deliver appropriatemessages to the target audience.
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Allocating the IMC Budget
Factors Affecting Allocation to Various IMCElements
A. Client/Agency Policies
B. Size of Market
C. Market Potential
D. Market Share Goals
E. Market Share and Economies of ScaleF. Organizational Characteristics
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Problems With Sales Objectives
A. Sales are a function of many factors, not just advertisingand promotion.
B. Effects of IMC tools such as advertising often occur over
an extended time period.
C. Sales objectives provide little guidance to those
responsible for planning and developing the IMC program
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When Sales Objectives Are Appropriate
A. For promotional efforts that are direct action in nature
and can induce an immediate behavioral response.
A. Sales promotion
B. Direct response advertising
C. Retail advertising for sales or special events
B. When advertising plays a dominant role in a firms
marketing program and other factors are relatively stable
C. When sales effects of an IMC variable can be isolated.
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Advertising and Movement Toward Action
ConativeRealm of motives.
Ads stimulate or direct
desires.
AffectiveRealm of emotions.
Ads change attitudes
and feelings
CognitiveRealm of thoughts.
Ads provide
information and facts.
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
Point of purchaseRetail store ads, DealsLast-chance offersPrice appeals, Testimonials
Competitive adsArgumentative copy
Image copyStatus, glamour appeals
AnnouncementsDescriptive copyClassified adsSlogans, jingles, skywriting
Teaser campaigns
Related behavioral
dimensions
Movement
towardpurchase
Types of promotions and
advertising at each step
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Inverted Pyramid of Communications Effects
90% Awareness
70% Knowledge
40% Liking
25% Preference
20% Trial
5% Use
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DAGMAR Difficulties
Response Hierarchy Problems Doesn't always define the
process people use to reach
purchase/use.
Attitude - BehaviorRelationship Attitude change doesn't always
lead to change in actions or
behavior.
Sales Objectives Are Needed
Sales are all that really counts,
not communications
objectives. Costly and Impractical
The research and efforts cost
more then the results are
worth.
Inhibition of Creativity
Too many rules and structure
curb genius.
Legitimate Problems Questionable Objections
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Advertising-Based View of Communications
Purchase
BehaviorAttitudes Knowledge Preference Conviction
One-Way
Linear
Advert is ing Throu gh Media
Act ing on Consumers
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Ad Budget Defined
1. The advertising budget of a business is typically asubset of the larger sales budget and, within that, themarketing budget. Advertising is a part of the salesand marketing effort. Money spent on advertising canalso be seen as an investment in building up the
business.2. An estimation of a company's promotionalexpenditures over a period of time. An advertisingbudget is the money a company is willing to set asideto accomplish its marketing objectives. When creatingthe advertising budget, a company must weigh the
trade-offs between spending one additional advertisingdollar with the amount of revenue that dollar will bringin revenue.
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Questions to ask for Ad Budgeting
1. Who is the target consumer?2. Who is interested in purchasing the product or service, and what are
the specific demographics of this consumer (age, employment, sex,
attitudes, etc.)?
3. Often it is useful to compose a consumer profile to give the abstract
idea of a "target consumer" a face and a personality that can thenbe used to shape the advertising message.
4. What media type will be most useful in reaching the target
consumer?
5. What is required to get the target consumer to purchase the
product? Does the product lend itself to rational or emotional
appeals? Which appeals are most likely to persuade the targetconsumer?
6. What is the relationship between advertising expenditures and the
impact of advertising campaigns on product or service purchases?
In other words, how much profit is likely to be earned for each dollar
spent on advertising?
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Budgeting Decisions
Two major decisions
Establishing the size of the budget
Allocating the budget
Budgeting decisions involve determining how muchmoney will be spent on advertising and promotioneach year and how the monies will be allocated
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Marginal Analysis
Advertising / Promotion in Rs
Salesin
Point A
Profit
Sales Gross Margin
Ad. Expenditure
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Advertising Sales/ResponseFunctions
Inc
rementalSales
Advertising Expenditures
A. Concave-DownwardResponse Curve
Inc
rementalSales
Advertising Expenditures
Range A Range B Range C
B. S-Shaped ResponseFunction
HighSpend
ing
LittleEffect
InitialSpending
LittleEffect
MiddleLeve
l
HighEffect
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Total Budget Is Approved byTop Management
Bottom-Up Budgeting
Cost of Activities are Budgeted
Activities to Achieve ObjectivesAre Planned
Promotional Objectives Are Set
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Objective and Task Method
Establish Objectives(create awareness of new product among
20 percent of target market)
Determine Specific Tasks
(advertise on market area television and
radio and local newspapers)
Estimate Costs Associated with Tasks
(create awareness of new product among
20 percent of target market)
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Payout PlanningTo determine how much to spend,
marketers develop a payoutplanthatdetermines the investment value of theadvertising and promotion appropriation
Example of a three-year payout plan ( Rs / millions)
Year 1 Year 2 Year 3Product sales 15.0 35.50 60.75Profit contribution
(@ Rs.50 per case) 7.5 17.75 30.38Advertising/promotions 15.0 10.50 8.50Profit (loss) (7.5) 7.25 21.88Cumulative profit (loss) (7.5) (0.25) 21.63
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Share of Voice and Ad Spending
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Top Ad Spenders in IndiaAd spend in Rs cr
Ad spend of
% of sales
2011-12 2012-13 2011-12 2012-13
Uni Lever 759.09 835.98 7.51 8.42
ITC 265.72 220.53 4.15 2.90
Ranbaxy Lab 182.26 201.72 5.01 5.44
Tata Motors 123.60 172.37 0.96 1.01
Dabur India 154.95 171.79 14.31 14.01
Hero Honda 124.46 147.48 2.13 1.99
Bajaj Auto 129.32 143.87 2.71 2.50
Colgate Palmolive 147.65 136.84 15.74 14.23
Reckitt Benck 102.17 124.41 16.21 16.43
Nestle India 136.12 121.26 6.36 5.44
ICICI Bank 68.68 116.26 0.76 1.24
Reliance Ind 220.64 114.56 0.43 0.17
GlaxoSmith Consumer 97.92 101.45 12.30 11.78
Britannia Ind 114.66 101.09 7.96 6.37
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Advertising Budgeting Process
Setting objectives
Determination of Tasks
Preparation of Budgets Approval of Top Management
Allocation of Budgets
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Methods of setting Advertising
Budgets
A. The Affordable MethodWhat we have to spare.What's left to spend.
B. Arbitrary Allocation Method
No system.Seemed like a good idea at the time.
C. Percentage of Sales MethodSet percentage of sales or amount per unit.
D. Competitive Parity MethodMatch competitor or industry average spending.
E. Return on Investment MethodSpending is treated as a capital investment
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Percentage of Sales Method
Here a fixed percentage of the sales is allocated forthe ad
A. Advantages
Simple and easy
Expenditure related to funds
Expenses in Ads directly related to cost
B. Disadvantages
Views sales in the ad decider
Makes long range product planning difficult
Discourages experiments
Not applicable for new products requiring heavy ads
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Objective and task MethodBudget is based on the task to be done at hand.
Steps
Task definition
Determination of strategy
Estimating cost of various elements
Deciding on the firms financial strengths
A. Advantages Logical
Accounts business conditions
Does not rely on past sales
Objectives need to be well defined
B. Disadvantages Fails a basis of prioritizing
Objectives need s to be well defined
Difficult to ascertain tasks
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Factors influencing the advertising
budgets
Tasks achieved
Stage in the PLC
Market Share
Competition
Frequency of Advertising
Product Differentiation
Support from retailers
Financial Resources
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B2B Communications
Business-to-business (B2B) describes commerce transactions between businesses,such as between a manufacturer and a wholesaler, or between a wholesaler and aretailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G). B2B branding is a term used in marketing.
The overall volume of B2B (Business-to-Business) transactions is much higher than the
volume of B2C transactions. The primary reason for this is that in a typical supplychain there will be many B2B transactions involving sub components or raw materials,and only one B2C transaction, specifically sale of the finished product to the endcustomer. For example, an automobile manufacturer makes several B2B transactionssuch as buying tires, glass for windscreens, and rubber hoses for its vehicles. The finaltransaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.
B2B is also used in the context of communication and collaboration. Many businessesare now using social media to connect with their consumers (B2C); however, they arenow using similar tools within the business so employees can connect with oneanother. When communication is taking place amongst employees, this can bereferred to as "B2B" communication.
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5 Keys to B2B Communications
I. Be consistent
II. Keep it personal
III. Stay relevant and offer value
IV. Use a variety of formats
V. Write well
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