promotional management · mkt 337: wsk establishing objectives and budgeting for the promotion...
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MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Promotional Management
Chapter 7
ESTABLISHING OBJECTIVES AND BUDGETING
FOR THE PROMOTION PROGRAMME
MKT 337: WSK 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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
DETERMINING IMC OBJECTIVES
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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?
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Factors Influencing Sales
Sales
Technology
The economy
Product Quality
Price Distribution
Advertising and
Promotion
Competition
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Where Sales Objective are appropriate
• Direct Action Promotion Efforts
• Direct-response advertising
• Retail Advertising
• Advertising plays a dominant role [Eg. OnePlusOne]
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Communications Effects Pyramid
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Characteristics of Objectives
• Concrete, Measurable Tasks
• Target Audience
• Benchmark and Degree of Change
• Specified Time Period
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
ESTABLISHING AND ALLOCATING THE PROMOTIONAL BUDGET
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Budgeting Approaches
• Top down Approaches
– The Affordable Method
– Arbitrary Allocation
– Percentage of Sales [% of sales $, unit cost for advertising]
– Competitive Parity
– Return on Investment
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Budgeting Approaches
• 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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
Budgeting Approaches
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
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
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
MKT 337: WSK Establishing Objectives and Budgeting for the Promotion Programme
End of Chapter