1. Chapter 7 Establishing Objectives and Budgeting for the Promotional Program

2. Value of Objectives Communications Planning and decision making
Objectives facilitate coordination of the various groups
Planning and decision making
Objectives guide decision making and development of the integrated marketing communications plan
Measurement and evaluation of results
Objectives provide a benchmark to measure success or failure

3. Integrated marketing communications objectives
Marketing Objectives versus Integrated Marketing Communications Objectives
Marketing objectives
Identify what is to be accomplished by the overall marketing program
Defined in terms of specific and measurable outcomes
Must be quantifiable, realistic, and attainable (sales volume/market share/profits)
Integrated marketing communications objectives
Statements of what various aspects of the IMC program will accomplish
Based on the particular communications tasks required to deliver the appropriate messages to the target audience

4. Case Study
Meril Splash TVC

5. Figure 7.1 - Factors Influencing Sales

6. Problems with Sales Objectives
Successful implementation requires all marketing elements to work together
Carryover effect: Monies spent on advertising do not have immediate impact on sales
Advertising has carryover effect
It is difficult to determine precise relationship between advertising and sales
Do not offer much guidance for planning and developing promotional program

8. Figure 7.2 - Communications Effects Pyramid

9. Figure 7.8 - Marginal Analysis

10. Figure 7.9 - Advertising Sales/Response Functions

11. Figure 7.12 - Top-Down versus Bottom-Up Approaches to Budget Setting

12. Top-down budgeting The Affordable Method Arbitrary Allocation
Promotions budget is allocated after all other spending (e.g. production/operations)
Arbitrary Allocation
Promotions budget determined by management solely on the basis of what is felt to be necessary

13. Top-down budgeting Percentage of sales Competitive Parity
Promotions budget is based on sales of the product
Difficult to employ for new products
Decrease in sales may reduce budgets
Competitive Parity
Promotions budget is based on matching the competition’s percentage-of-sales expenditures
Similar expenditures does not mean equally effective promotional programs

14. Figure 7.15 - Investments Pay Off in Later Years

15. Figure 7.16 - Competitors’ Advertising Outlays do not Always Hurt

16. Figure 7.18 - The Objective and Task Method

17. Steps to Develop and Implement the Budget
Employ comprehensive strategy
Develop strategic planning framework that employs an integrated marketing communications philosophy
Develop contingency plans
Focus on long-term objectives
Evaluate effectiveness of programs have to be consistently

18. Figure 7.21 - How Advertising and Promotions Budgets Are Set

19. Budget Allocation: Factors to Consider
Allocating to IMC elements
Client/agency policies
Market size
Market potential
Market share goals