Advertising and Promotion (an integrated marketing communication perspective) Chapter 7

marketing objectives
generally stated in firm’s marketing plan and are statements of what is to be accomplished by overall marketing program.
integrated marketing communications objectives
statements of what various aspects of the IMC program will accomplish. particular communication tasks required to deliver appropriate msg to target audience
carryover effect
monies spent on advertising do not necessarily have an immediate impact on sales
model that says communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured
communications task
can be performed by, and attributed to, advertising rather than to a combination of several marketing factors
zero-based communications planning
determining what tasks need to be done and which marketing communications functions should be used and to what extent. focuses on task to be done and searches for best ideas and media to accomplish it.
contribution margin
the difference between total revenue generated by a brand and its total variable costs
concave-downward function model
effects of advertising quickly begin to diminish. fewer advertising dollars may be needed to create the optimal influence on sales
s-shaped response curve
this model suggests a small advertising budget is likely to have no impact beyond the sales that may have been generated through other means
top-down approaches
predetermined and have no true theoretical basis budgetary amount is established (usually at executive level) and then the monies are passed down to the various departments.
affordable method
firm determines amount to be spent in various areas such as production and operations then it allocates what’s left to advertising and promotion
arbitrary allocation
virtually no theoretical basis is considered and the budgetary amount is often set by fiat. that is, the budget is determined by management solely on the basis of what is felt to be necessary.
percentage-of-sales method
advertising and promotions budget is based on sales of the product
clipping service
clips competitors’ ads from local print media, allowing the company to work backward to determine the cumulative costs of the ads placed
competitive parity method
managers establish budget amounts by matching the competition’s percentage-of-sales expenditures
ROI budgeting method
advertising and promotions are considered investments, like plant and equipment
payout plan
determines the investment value of the advertising and promotion appropriation
computer simulation models
statistical techniques such as multiple regression analysis to determine the relative contribution of the advertising budget to sales
economies of scale
firms and/or brands maintaining a large share of the market have an advantage over smaller competitors and thus can spend less money on advertising and realize a better return

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