1

Objectives, Budgeting, Objectives, Budgeting, and Advertising and Advertising

ManagementManagement

Chapters Six and Nine

2

Review: Chapter 1Review: Chapter 1

All marketing communications should be:

2

3

Setting Marcom ObjectivesSetting Marcom Objectives

• Expression of management consensus

• Guides the budgeting, message, and media aspects of advertising strategy

• Provide standards against which results can be measured

3

4

Budgeting ConsiderationsBudgeting Considerations in Practice in Practice

• What is the Ad objective?

• How much are competitors spending?

• How much money is available?

5

Budgeting MethodsBudgeting Methods

• Percent-of-Sales Budgeting

• Objective-and-Task Method

• Competitive Parity Method

(match competitors method)

• Affordability Method

6

Percentage-of-Sales BudgetingPercentage-of-Sales Budgeting

• A company sets a brand’s advertising budget by simply establishing the budget as a fixed percentage of past or anticipated sales volume

• Criticized as being illogical

Why?

7

Objective-and-Task MethodObjective-and-Task Method

• The most sensible and defensible advertising budgeting method

• Specify:

8

The Competitive Parity MethodThe Competitive Parity Method

• Sets the ad budget by basically following what competitors are doing

9

Affordability MethodAffordability Method

• Only the funds that remain after budgeting for everything else are spent on advertising

• Who does this?

10

Advertising FunctionsAdvertising Functions

Informing

Influencing

Reminding

Adding Value

Assisting Other Company Efforts10

11

Advertising FunctionsAdvertising Functions

Informing

12

InformingInforming

Quaker Oats

TargetTarget

13

Advertising FunctionsAdvertising Functions

Influencing

• Influences customers to try advertised products and services

• Primary demandPrimary demand-

• Secondary demandSecondary demand-

14

InfluencingInfluencing

Gillette MACH3

Target:

15

Advertising FunctionsAdvertising Functions

Reminding

• Keeps a company’s brand fresh in the consumer’s memory

• Influences brand switching by:

16

Advertising ObjectivesAdvertising Objectives

Kellogg’s Special K

TargetTarget

17

Advertising FunctionsAdvertising Functions

Adding Value

• Three basic ways by which companies can add value: »

• Advertising adds value to brands by:

18

Advertising FunctionsAdvertising Functions

Assisting Other Company Efforts

• Advertising is just one member of the marketing communications team

• Sometimes, an assister that facilitates other company efforts in the marketing communications process

• Examples?

19

The Advertising Management ProcessThe Advertising Management Process

Advertising Strategy

• Setting Objectives•Formulating Budgets

•Creating Ad messages•Selecting Ad Media and Vehicles

Strategy Implementation

Assessing Ad Effectiveness 19

20

Research Workshop:February 17Research Workshop:February 17

Conducting Consumer Research

» Secondary research: Plenty of resources online» Library Resources Link on website: Dr.Song, BEL

» Primary research: Planning ahead• Focus groups, surveys, observations• Plan your questions ahead in detail• Select sample(s) carefully (target audience)• Sensitivity, confidentiality, ethics