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Value of Objectives

Specific
Objectives Communications

Planning &
Decision Making

Measurement
& Evaluation
Characteristics of Objectives

Specific

Attainable Measurable

Realistic Quantifiable
Marketing and Sales vs. Communications
Objectives

Marketing and Sales Communications


Objectives Objectives

• Generally declared in the • Derived from the overall


firm’s marketing plan marketing plan
• Achieved through the Vs.
• More narrow than
overall marketing plan marketing objectives
• Quantifiable, such as • Based on particular
sales, market share, communications tasks
• To be accomplished in a • Designed to deliver
given period of time appropriate messages
• Must be realistic and • Focused on a specific
attainable to be effective target audience
1. Sales as an promotional Objectives.
Sales Objectives

Increased Market Share

Increased Sales Brand Extensions


Factors Influencing Sales

Technology
Competition

The
Advertising economy
& promotion

Product
quality
Distribution
Price
Where Sales Objectives are Appropriate
2. Communications Objectives.

Objectives are:
1.Increasing company’s brand usage rate among
existing customers.
2.Increasing no. of target customers who associate
specific features and benefits with company’s brand.
3.Encouraging company’s brand trial among non users.
Communications Effects Pyramid

5% Use

20% Trial

25% Preference

40% Liking

70% Knowledge/Comprehension

90% Awareness
THE DAGMAR
APPROACH
Each purchase prospect
goes through 4 steps:
ODefine
Awareness
OAdvertising
OGOAL for Comprehension
OMeasuring
OAdvertising Conviction

OResult
Action
DAGMAR APPROCH

O DAGMAR Approach is the task of measuring ad


effectiveness as well as the objectives or goals of
advertising.
O In 1961, Russell H. Colley wrote a book under the
sponsorship of the association of National Advertisers
called Defining advertising goals for measured advertising
result. The book has become know as the DAGMAR
approach.
O Colley distinguished 52 advertising goals that might be
used with respect to a single advertisement.
COMMUNiCATiON TASK
Awareness: Making the consumer aware of the existence of the
brand or company.

Comprehension: Developing an understanding of what the product


is and what it will do for the consumer.

Conviction: Developing a mental disposition in the consumer to buy


the product.

Action: Getting the consumer to purchase the product.


CHARACTERiSTiCS OF
OBJECTiVES
The second importance concept of DAGMAR approach is
that the advertising goal should be specific. It should be
consists of:

Concrete, Well-defined
measurable tasks audience

Benchmark Specified
measures time period
 Measurement procedure: To indicate exactly what appeal
or image is to be communicated and to specify the
measurement procedure.
 Objective should be a precise statement of what message the
advertiser wants to communicate to the target audience.
Target Audience : In DAGMAR approach is that the target
audience be well defined.
Written
Goals
Finally, goals should be committed to paper. It becomes
easy to determine whether the goal contains the crucial
aspects of the DAGMAR approach

Specified time
period
Objectives is the specification of the time period during
which the objective is to be accomplished, e.g. 6months.
BENCHMARK:

The objectives should also specify how much


change or movement is being sought such as
increase in awareness levels, creation of
favorable attitudes or number of consumers
intending to purchase the brand, etc.
Criticisms of DAGMAR

• DAGMAR has contributed to the advertising planning


process, it has not been totally accepted by everyone
in the advertising field.

• A number of problems have led to questions


regarding its value as a planning tool.

1. Problems with the response hierarchy

– Its reliance on the hierarchy of effects model. The


fact that consumers do not always go through
this sequence of communications effects before
making a purchase has been recognized.
Continue…

2. Practicality and costs


• Money must be spent on research to establish
quantitative benchmarks and measure changes in the
response hierarchy.

3. Inhibition / Lack of creativity


• Many person think the DAGMAR approach is too
concerned with quantitative assessment of
campaign’s impact on awareness, brand name recall.
Pros and Cons of DAGMAR

Pros Cons
Focus on communications Relies heavily on the
objectives response hierarchy

Measurement of stages May not increase sales

Better understanding of
Practicality and cost
goals and objectives

Less subjective Inhibition of creativity


• Advertising budget is a financial document that shows
the total amount to be spent on advertising and lists the
way this amount is to be allocated.
• It is a translation of an advertising plan into monetary
units.

• It helps in meeting advertising objectives of an org.

• It is prepared for a specific future period of time.

• It is prepared by the advertising manager in


consultation with the marketing manager and approved
by the top management.

• It shows the plan of allocation of available funds to


various advertising activities.
ADVERTISING BUDGETING PROCESS

• Setting advertising objectives

• Determining the task to be performed to achieve the


objectives.

• Preparing advertising budget.

• Approval of the top management.

• Allocation of advertising budget

• Monitor and control


Establishing & Allocating the Promotional Budget

Direct
Sponsorship Marketing

Public Group Sales


Relations

Sales Internet
Promotions
Establishing a Budget

• Size of a firm's advertising and promotions


budget can vary from a few thousand dollars to
more than a billion.

• One of the most critical decisions facing


the marketing manager is how much to
spend on the promotional effort.

• Many managers fail to realize the value of


advertising and promotion.
Establishing a Budget
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• Advertising/promotional expenditures
increase, sales and gross margins also
increase to a point, but then they level off.

• Profits are shown to be a result of the gross


margin minus advertising expenditures.
Factors Influencing Advertising Budgets

Product Competition
life cycle

Product Product
stability price

Purchase
Differentiation frequency
Approaches of Budgeting

Management
decides how much
to spend
Top-Down Budgeting approaches/methods

Return on Top down Affordable


Investment budgeting Method
methods

Competitive Percentage
Parity of Sales
Top-Down Budgeting Methods
1. Affordable Method
• Firm determine amount to be spent in various areas such as
production and operations. Then it allocates what’s left to
advertising and promotion.

2. Competitive Parity
• Managers establish budget amounts by matching the
competition’s percentage of sales expenditures.
3. Return on Investment
• Advertising and promotions are considered investment like
plant and equipment. ROI looks good on paper, reality is that
it is rarely possible to assess the returns provided by
promotional effort.
4. Percentage of Sales
Perhaps the most commonly used method for budget
setting (particularly in large firms) is the percentage-of-sales
method, in which the advertising and promotions budget is
based on sales of the product. Management determines the
amount by either:

(1) taking a percentage of the sales


(2) assigning a fixed amount of the unit product cost to
promotion and multiplying this amount by the number of units
sold.
Bottom up Budgeting Methods
Object and Task Method :
• Most logical way of setting advertising budget.

• It focus on the advertising task that is to be achieved.

• Advertising objectives are fixed after intensive market


research.
Isolate objectives

Determine tasks required

Estimate required expenditures

Monitor

Reevaluate objectives