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An – Chapter 8 – Establishing

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Setting Objectives
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– Specific Goals & Objectives SHOULD form the foundation upon which ALL promotional decisions are made – IMC objectives are required for several reasons: 1. set direction, give focus and facilitate coordination 2. guide planning and decision-making 3. facilitate measurement and evaluation. In spite of its importance, setting objectives is one of the most poorly handled management functions.
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Hierarchy of objectives
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Marketing objectives ⇣ IMC objectives ⇣ Advertising objectives and Objectives for other elements of IMC
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Marketing objectives
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– Generally stated in the firm’s marketing plan – Achieved through the overall marketing plan – Quantifiable, such as sales, market share, ROI – Must be realistic and attainable to be effective – To be accomplished in a given period of time
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IMC objectives
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– Derived from the overall marketing plan – More narrow than marketing objectives – Based on particular communications tasks – Designed to deliver appropriate messages – Focused on a specific target audience
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Characteristics of objectives
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Elements of objectives : – Measurable communications tasks – Time period – Benchmark starting point for degree of change sought – Specify target audience
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Sales objectives
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– Sales ~ Volumes ~ $$$ Value – Return on Investment ~ [ROI] – Relative market share
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Communication objectives
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– Communications effects hierarchy – Phased movement toward purchase ~ Awareness action
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Factors affecting Sales
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– Advertising and promotion – Competition – Product quality – Distribution – Technology – Price – The economy
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Use sales objectives when…
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Sales objectives are appropriate when using: – IMC tools designed to elicit direct action ~ retail sales oriented advertising ~ direct response advertising ~ sales promotion initiatives ~~ [Coupons] [Trade Allowances] [POP Displays] Also useful when advertising plays a dominant role in the marketing program, such as in FMCG category.
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Communications Objectives
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Possible communication objectives include: – 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 target audience who prefer our product over the competition – encouraging 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.
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Communication Objectives Diagram
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** view diagram on page 237 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Pyramid of Communications Effects Diagram
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** view diagram on page 238 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Approaches to setting objectives: DAGMAR
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Define, Advertising, Goals for, Measuring, Advertising, Results Awareness ⇣ Comprehension ⇣ Conviction ⇣ Action
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DAGMAR’s advantages and limitations
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Advantages – Assessment of campaign effectiveness – Value of communication-based objectives – Measurement of stages – Less subjective Limitations – Problems with the response hierarchy – Sales objectives – Practicality and cost – Inhibition of creativity
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RTTT
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Realistic, Target market is clearly defines, Task – state exactly what degree of change is sought, T for the timeframe of the objective
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SMARTT
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Specific – clear, precise and directional Measurable – quantified measurement statement Achievable – capable for being achieved Realistic – approach in light of situation analysis Targeted – defines the target market Timed – timeframe for achievement
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Advertising-based view of communications
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** view diagram on page 245 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Balancing objectives and budgets
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What we’re willing and able to spend? What we need to achieve our objectives?
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Theoretical Issues associated with Budgeting
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– Many models take an economic or sales response perspective. Approaches include: ~ Marginal Analysis ~~ continue to spend on advertising while marginal revenues greater than costs ~Sales response models ~~ Concave-downward function ~- as advertising $ increase, its incremental value decreases ~~ S-shaped response function ~- Small initial impact for $, then incremental effect
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Marginal analysis
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** view diagram on page 247 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Basic principles of marginal analysis
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Increase spending – If the increased cost is less than the incremental (marginal) return Hold spending – If the increased cost is equal to the incremental (marginal) return Decrease spending – If the increased cost is more than the incremental (marginal) return
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Advertising sales/response functions
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** view diagram on page 249 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Top-down budgeting
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Top management sets the spending limit ⇣ The promotion budget is set to stay within the spending limit
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Top-down budgeting methods
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Top management – Competitive parity – Arbitrary allocation – Return on investment – Affordable method – Percentage of sales
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Percentage of sales
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** view diagram on page 253 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Impact of competitors’ advertising outlays
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** view diagram on page 255 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell
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Build-up Budgeting
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– Total budget is approved by top management – Cost of activities are budgeted – Activities to achieve objectives are planned – Promotional objectives are set
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Objective & Task method
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– Establish objectives – (create awareness of new product among 20% of target market) – Determine specific tasks – (advertise on market area television and radio and local newspapers) – Estimate costs associated with tasks – (determine costs of advertising, promotions, etc.) – Monitor and adjust – (monitor performance and adjust)
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Considerations in Allocating the IMC Budget
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– Allocation of budget between available IMC tools ~ Matching to objectives ~ Utilising optimum combination / creating synergy – Client / Agency policies – Market size – Market potential – Market Share goals
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Ad spending and share of voice
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** view diagram on page 263 of Advertising – Ab Integrated Marketing Communication Perspective by Belch, Belch, Kerr, Powell