1 Objectives, Budgeting, and Advertising Management Chapters Six and Nine

2 Review: Chapter 1 Review: Chapter 1 All marketing communications should be: 2

3 Setting Marcom Objectives Setting 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 Considerations in Practice What is the Ad objective? How much are competitors spending? How much money is available?

5 Budgeting Methods Percent-of-Sales Budgeting Objective-and-Task Method Competitive Parity Method (match competitors method) Affordability Method

6 Percentage-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 Method The most sensible and defensible advertising budgeting method Specify:

8 The Competitive Parity Method Sets the ad budget by basically following what competitors are doing

9 Affordability Method Only the funds that remain after budgeting for everything else are spent on advertising Who does this?

10 Advertising Functions Informing Influencing Reminding Adding Value Assisting Other Company Efforts 10

11 Advertising Functions Informing

12 Informing Quaker OatsTarget

13 Advertising Functions Influencing Influences customers to try advertised products and services Primary demandPrimary demand- Secondary demandSecondary demand-

14 Influencing Gillette MACH3 Target:

15 Advertising Functions Reminding Keeps a company’s brand fresh in the consumer’s memory Influences brand switching by:

16 Advertising Objectives Kellogg’s Special KTarget

17 Advertising Functions Adding Value Three basic ways by which companies can add value: » Advertising adds value to brands by:

18 Advertising 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 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 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