DECISION MODELS, SALES RESPONSE & DECAY MODELS

INTRODUCTION:
Advertisement is an integral element of promotional mix. Advertising is any paid form of nonpersonal communication of information, usually persuasive, about products, services, ideas or an organisation. The information is communicated via mass media to influence an audience and it is paid for by an identified sponsor. The objective of advertisement might be to build awareness, provoke interest, increase sales or just bring about a favourable change of attitude. An advertisement necessarily has two groups of people co-ordinating it. Firstly, the advertiser or the sponsor, one who wants to advertise about one's organisation, product or services. And secondly, the advertising agency, an independent form of creative people and business people, that specialises in development and preparation of advertising plans, advertisements and other promotional tools for advertisers. A third factor also contributes to the success of any advertisement i.e. the media. Media is the channel of communication chosen to convey the message or advertisement from the advertiser to the audience. It can be television, radio, print media, etc.

ADVERTISING TASKS:
The major decision areas in advertising are: setting advertising objectives, deciding how much to spend on advertising (budgeting), deciding where and how often to spend it i.e. the media to be used and frequency of exposure (Media Planning), deciding when to spend it i.e. how to phase advertising during the year, deciding what to say (Message design), and finally, measuring how well we have spent the advertising rupee i.e. Advertising Research and Evaluation.

1)Setting advertising objectives : When clients and agencies advertise to keep their brand presence in the market or to "create brand goodwill it is not an appropriate objective. It shows a failure to define the precise advertising objectives. When defining advertising objectives, the management should be clear about what it seeks to achieve out of the years advertising campaign and even out of specific advertisements. In fact, defined goals make measurement of advertising results possible. 2) How much to spend on advertising (budgeting)? The question of how much to spend on advertising should be treated in principle as part of the larger question of how much to spend on promotion. The share of advertising budget will depend on how much is the share to advertising tasks within the promotional programme.

3) Where and how often to spend the budget? For Media Planning, the first clue is given by the media habits of the target audience. The product itself is an important factor in choosing the media. New products whose usage has to be explained are best shown by demonstration. The tea bags usage for example was demonstrated on TV with the slogan of dip, dip, dip. Hence, television is an important medium for such products. Though television is an expensive medium, if we have a national product it may become very cost effective as its cost per thousand will become low. For colour film, where quality of colours captured is to be shown, colour magazines will be a good media. For local advertisers, hoardings and local newspapers will be found more useful than other media

4) When to spend? The phasing of advertising is also a decision to be taken by the agency, assuming that the sales cycle follows a cyclical seasonal pattern.

5) Deciding What to say? : The account executive in the agency has to keep in mind the critical fact that the client is to judge the output of the agencys creative department i.e. the creative brief which results after the marketing advertising brief is given to the creative department.

Kotler has also discussed the sales response and decay models, communication stage models, adaptive control models and competitive share models :
The sales response and decay model attempts to measure the direct relation between advertising expenditures and sales. Given the shape of the sales/advertising curve, the profit-maximising advertising outlay can be determined. The communication-stage model decides the budget by seeing its effects on several intermediate variables that link advertising expenditures to ultimate sales. It is more useful when used with a micro-linkage advertising model called Decision-Mapping via Optimum Go-No Networks. Adaptive control model makes the assumption that parameters of sales response to advertising are not stable but change through time. Advertising expenditures should set each period in such a way as to yield information about current level of this sales response parameters. Competitive share model assumes that market shares in the long run will tend to equal marketing-effort shares. A businessman would express this as to get a 10% share of market, you have to spend roughly 10% of all marketing funds.

CONCLUSION: Decision models will give an idea of budgeting the advertising by organization or by advertising agency,and sales response and decay models will help to take a budgeting decision for advertising on consideration of sales and relative advertising.