Download VTU (Visvesvaraya Technological University) MBA 4th Semester (Fourth Semester) 16MBAMM402-Integrated Marketing Communication IMC Module 3 Important Lecture Notes (MBA Study Material Notes)
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
39
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
39
Comprehensive Response Model
Applications
Lavidge and Steiner Hierarchy of
Effects Model
l As consumers proceed through the three stages,
they move closer to purchase.
Cognitive -- Affective -- Behavioral
l Consumers are not expected to respond to
advertising immediately.
l Ads must provide relevant information and create
favorable predispositions toward the brand before
purchase behavior will occur.
40
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
39
Comprehensive Response Model
Applications
Lavidge and Steiner Hierarchy of
Effects Model
l As consumers proceed through the three stages,
they move closer to purchase.
Cognitive -- Affective -- Behavioral
l Consumers are not expected to respond to
advertising immediately.
l Ads must provide relevant information and create
favorable predispositions toward the brand before
purchase behavior will occur.
40
Communications Effects
Pyramid
Lower level objectives such as awareness and
knowledge or comprehension must be accomplished
first.
The initial stages are easier to accomplish than than
those toward the top.
The percentage of prospective customers will decline
as they move up the pyramid.
41
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
39
Comprehensive Response Model
Applications
Lavidge and Steiner Hierarchy of
Effects Model
l As consumers proceed through the three stages,
they move closer to purchase.
Cognitive -- Affective -- Behavioral
l Consumers are not expected to respond to
advertising immediately.
l Ads must provide relevant information and create
favorable predispositions toward the brand before
purchase behavior will occur.
40
Communications Effects
Pyramid
Lower level objectives such as awareness and
knowledge or comprehension must be accomplished
first.
The initial stages are easier to accomplish than than
those toward the top.
The percentage of prospective customers will decline
as they move up the pyramid.
41
Communication Effects ?Pyramid?
Use ? 5%
Trial ? 20%
Preference ? 25%
Liking ? 40%
Knowledge ? 70%
Awareness ? 90%
Behavioral
Cognitive
Affective
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
39
Comprehensive Response Model
Applications
Lavidge and Steiner Hierarchy of
Effects Model
l As consumers proceed through the three stages,
they move closer to purchase.
Cognitive -- Affective -- Behavioral
l Consumers are not expected to respond to
advertising immediately.
l Ads must provide relevant information and create
favorable predispositions toward the brand before
purchase behavior will occur.
40
Communications Effects
Pyramid
Lower level objectives such as awareness and
knowledge or comprehension must be accomplished
first.
The initial stages are easier to accomplish than than
those toward the top.
The percentage of prospective customers will decline
as they move up the pyramid.
41
Communication Effects ?Pyramid?
Use ? 5%
Trial ? 20%
Preference ? 25%
Liking ? 40%
Knowledge ? 70%
Awareness ? 90%
Behavioral
Cognitive
Affective
43 43
Setting Objectives Using the
Communications Effects Pyramid
Product:Shampoo
Time period: Six months
Objective 1: Create awareness among 90 percent of
target audience. Using repetitive advertising in
newspapers, magazines, TV and radio programs. Simple
message.
Objective 2: Create interest in the brand among 70
percent of target audience. Communicate information
about the features and benefits of the brand-I.e., that it
contains no soap and improves the texture of the hair
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
6
6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
7
Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
9
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
16
Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
21
1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
22
2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
23
3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
24
3.Percentage-of-Sales Method
25
Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
26
4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
27
Competitors? Advertising Outlays Do
Not Always Hurt
28
Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
29
5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
30 31 31
Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
32 32
Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
33
Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
35
Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
36
Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
38
Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
39
Comprehensive Response Model
Applications
Lavidge and Steiner Hierarchy of
Effects Model
l As consumers proceed through the three stages,
they move closer to purchase.
Cognitive -- Affective -- Behavioral
l Consumers are not expected to respond to
advertising immediately.
l Ads must provide relevant information and create
favorable predispositions toward the brand before
purchase behavior will occur.
40
Communications Effects
Pyramid
Lower level objectives such as awareness and
knowledge or comprehension must be accomplished
first.
The initial stages are easier to accomplish than than
those toward the top.
The percentage of prospective customers will decline
as they move up the pyramid.
41
Communication Effects ?Pyramid?
Use ? 5%
Trial ? 20%
Preference ? 25%
Liking ? 40%
Knowledge ? 70%
Awareness ? 90%
Behavioral
Cognitive
Affective
43 43
Setting Objectives Using the
Communications Effects Pyramid
Product:Shampoo
Time period: Six months
Objective 1: Create awareness among 90 percent of
target audience. Using repetitive advertising in
newspapers, magazines, TV and radio programs. Simple
message.
Objective 2: Create interest in the brand among 70
percent of target audience. Communicate information
about the features and benefits of the brand-I.e., that it
contains no soap and improves the texture of the hair
44 44
Setting objectives using the
communications effects pyramid
Objective 3: Create positive feelings about the
brand among 40 percent and preference among
25 percent of the target audience. Create favorable
attitudes by conveying information, promotions, sampling, etc.
Objective 4: Obtain trial among 20 percent of the
target audience. Use sampling and cents-off coupons along
with advertising and promotions
Objective 5: Develop and maintain regular use of
Shampoo among 5 percent of the target
audience. Use continued reinforcement advertising, fewer
coupons and promotions
FirstRanker.com - FirstRanker's Choice
1
MODULE 3
ADVERTISING OBJECTIVES
AND BUDGETING
Ms. Jaya Shetty
Assistant Professor
Department Of Business Administration
MITE, Moodabidri
2
The Advertising Planning
qThe major activities of advertising management
are planning and decision making.
qThe development of advertising plan essentially
requires the generation and specification of
alternatives.
qThe alternatives could be levels of expenditure,
media choices etc.
Advertising Plan stands on three legs
3
Targeting the Audience: Whom are you trying to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
Decision making involves choosing from
among the alternatives.
A complete advertising plan reflects the
results of the planning and decision-
making process.
4 5 5
The Advertising Planning Cycle
1. Where are we?
2.Why are we there?
3.Where could we be?
4. How could we get there?
5. Are we getting there?
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6
Advertising Planning and Decision Making
Situation
Analysis
Marketing
Program
Advertising
Plan
Implementation
The
Communication/
Persuasion
Process
Consumer/Market Analysis
Competitive Analysis
Role of Advertising, Sales
Force, Price, Promotion, Public
Relations
Objectives/Segmentation/Positioning
Message Strategy and Tactics
Media Strategy and Tactics
?Facilitating? Agencies
Social and Legal Constraints
Framework for advertising planning and decision making
Understanding of Communication Process
A typical communication process model
A model of persuasion process
l Ad exposure
l Different functions of advertising messages
l Brand attitude
l Purchase behavior
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Developing an Advertising Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and
tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of
various forms of IMC and repeat the
process.
8
Typical Advertising or Campaign Plan Outline
I. Introduction
? Executive Summary or Overview is provided.
II. Situation Analysis
? Advertising Problems
? Advertising Opportunities
III. Key Strategy Decisions
? Advertising Objectives
? Target Audience
? Competitive Product Advantage
? Product Image and Personality
? Product Position
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IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
? Sales promotion
? Public relations
? Direct marketing
? Personal selling
? Sponsorships, merchandising, packaging, etc.
VII. Implementation and Evaluation
VIII. Evaluation
IX. Budget
10
Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
Competitive analysis: to achieve and
maintain a ?competitive advantage?
Target market selection
==> Marketing plan (4Ps)
11
Marketing Program
Role of Advertising, sales Force.
Price, Promotion, Public Relations
12
Implementation
Facilitating Agencies
Social and Legal Constraints
13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
v When sales objectives are appropriate
-- Challenges with communication objectives
14 15 15
What is Good Objectives?
Good Objectives
Concrete and
Measurable
Specify a well-
defined audience
Attainable
Specify a time
period
Establish bench-
Mark measures
Realistic
Objectives such as..
Sales as an objective.
Towards operational objectives.
New customers from other categories.
Increasing share of requirements (SOR)
Increasing brand loyalty, reducing
attrition and price elasticity.
Increasing usage.
Behavioral or action objectives.
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Budget Decisions
Establishing the budget
Budgeting approaches
Allocating the budget
17
Factors Influencing Advertising Budgets
18
Budgeting Approaches
Top-down budgeting
Bottom-up budgeting
19
Top-Down Budgeting
20
Top Management Sets the
Spending Limit
The Promotion Budget Is Set to Stay
Within the Spending Limit
Top-Down Budgeting
1.The affordable method
2.Historical Method
3.Percentage of Sales
4.Competitive parity
5.The objective and task method
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1.The Affordable Method
It is used when a company allocates whatever
is left over to advertising.
It is common among small firms and certain
non-marketing-driven large firms.
Companies using this approach don?t value
advertising as a strategic imperative.
Logic: we can?t be hurt with this method.
Weakness: it often does not allocate enough
money.
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2.Historical Method
Historical information is the source for
this common budgeting method.
The inflation rate and other marketplace
factors can be used to adjust the
advertising amount.
This method, though easy to calculate,
has little to do with reaching advertising
objectives.
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3.Percentage-of-Sales Method
It compares the total sales with the
total advertising budget during the
previous year or the average of several
years to compute a percentage.
Two steps
l Step 1: past advertising dollars/past sales
= % of sales.
l Step 2: % of sales X next year?s sales
forecast = new advertising budget.
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3.Percentage-of-Sales Method
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Method 1: Straight Percentage of Sales
2007 Total dollar sales
Straight % of sales at 10%
$1,000,000
$100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer
Unit cost allocated to advertising
$4
$1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
DD
3.Percentage-of-Sales Method
Pros
l Financially safe
l Reasonable limits
l Stable
Cons
l Reverse the cause-and-effect relationship between
advertising and sales.
l Stable?
l Misallocation
l Difficult to employ for new product introductions.
l Sales? ? Advertising budget?
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4.Competitive-Parity Method
This method uses competitors? budgets as
benchmarks and relates the amount invested in
advertising to the product?s share of market.
Logic: share of media voice ? share of consumer
mind ? share of market.
Share of media voice: the advertiser?s media
presence.
The actual relationship above depends to a great
extent on factors such as the creativity of the
message and the amount of clutter in the
marketplace.
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Competitors? Advertising Outlays Do
Not Always Hurt
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Competitive-Parity Method
Pros
l Take advantage of the collective wisdom of
the industry
l Spending what competitors spend helps
prevent promotion wars.
Cons
l Companies differ greatly.
l There is no evidence that budgets based
on competitive parity prevent promotion
wars. (Prisoners? Dilemma)
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5. The objective and task method
The marketer decides what he or she
wants to accomplish and then works the
budget out based on what it will cost to
create and implement the
communications needed to make that
happen.
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Historical Method
Task-Objective Method:
Bottom-Up
Percentage-of-Sales
Method
?Common budgeting method.
?May be based on last year?s with
a percentage increase.
?Nothing to do with advertising
objectives.
?Most common method.
?Looks at objectives set for each
activity, and determines the cost
of accomplishing each objective.
?Compares total sales with the total
advertising (or marketing
communication) budget during a
previous time period to compute a
percentage.
The Advertising Budgeting Methods
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Competitive Methods
All You Can Afford
Method
?Relates the amount invested in
advertising to the product?s share
of market.
?Must understand share-of-mind.
?Allocates whatever is left over to
advertising.
?Companies who use this don?t
value advertising very much.
The Advertising Budgeting Methods
The DAGMAR Approach
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Define
Advertising
Goals for
Measuring
Advertising
Results
The DAGMAR Approach
It is basically an approach to advertising
planning and a precise method for selecting
and quantifying goals and for using those
goals to measure performance.
It is based on a hierarchical model of the
communication process.
Awareness
Comprehension
Conviction
Action 34
In 1961, Russel Colley prepared the
model called Defining Advertising Goals
for Measured Advertising Results
(DAGMAR).
It propounds that communications'
effects are the logical basis for
advertising goals and objectives against
which success or Failure should be
measured.
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Advertising's job is to communicate to a defined
audience information and a frame of mind that
Stimulates action.
Advertising succeeds or fails depending on how well
it communicates the desired information and
attitudes to the right people at the right time and at
the right cost.
Under the DAGMAR approach, an advertising goal
involves a communication task that is specific and
measurable.
Colley proposed that the communications task be
based on a hierarchical model of the
communications process with four stages:
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Communication process in DAGMAR approach
37
Unaware
Aware
Comprehension and Image
Attitude
Action
Characteristics of Objectives
Well-Defined Target Audience
Concrete Measurable Communication Tasks
Existing Benchmark Measure
Specific Time Period
Specific ? Measurable-Attainable-Realistic-
Timely
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Limitations of DAGMAR
Problems with response hierarchy
l Consumers do not always go through this
sequence of the communication effects before
making a purchase.
Practicality and costs
l Research costs more than it is worth.
Inhibition of creativity
l Imposes too much structure.
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Comprehensive Response Model
Applications
Lavidge and Steiner Hierarchy of
Effects Model
l As consumers proceed through the three stages,
they move closer to purchase.
Cognitive -- Affective -- Behavioral
l Consumers are not expected to respond to
advertising immediately.
l Ads must provide relevant information and create
favorable predispositions toward the brand before
purchase behavior will occur.
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Communications Effects
Pyramid
Lower level objectives such as awareness and
knowledge or comprehension must be accomplished
first.
The initial stages are easier to accomplish than than
those toward the top.
The percentage of prospective customers will decline
as they move up the pyramid.
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Communication Effects ?Pyramid?
Use ? 5%
Trial ? 20%
Preference ? 25%
Liking ? 40%
Knowledge ? 70%
Awareness ? 90%
Behavioral
Cognitive
Affective
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Setting Objectives Using the
Communications Effects Pyramid
Product:Shampoo
Time period: Six months
Objective 1: Create awareness among 90 percent of
target audience. Using repetitive advertising in
newspapers, magazines, TV and radio programs. Simple
message.
Objective 2: Create interest in the brand among 70
percent of target audience. Communicate information
about the features and benefits of the brand-I.e., that it
contains no soap and improves the texture of the hair
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Setting objectives using the
communications effects pyramid
Objective 3: Create positive feelings about the
brand among 40 percent and preference among
25 percent of the target audience. Create favorable
attitudes by conveying information, promotions, sampling, etc.
Objective 4: Obtain trial among 20 percent of the
target audience. Use sampling and cents-off coupons along
with advertising and promotions
Objective 5: Develop and maintain regular use of
Shampoo among 5 percent of the target
audience. Use continued reinforcement advertising, fewer
coupons and promotions
THANK YOU
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This post was last modified on 18 February 2020