1. Objective Setting and Budgeting

2. Setting Marcom Objectives
Goals that the various marcom elements aspire to individually or collectively achieve during a scope of time such as a business quarter or fiscal year.

3. Marcom Objectives
Facilitate the successful introduction of new brands.
Build sales of existing brands by increasing the frequency of use, the variety of use, or the quantity purchased.
Inform the trade and consumers about brand improvements.

4. Marcom Objectives Create brand awareness Enhance a brand’s image
Generate sales leads
Persuade the trade to handle the manufacturer’s brands
Stimulate point-of-purchase sales
Increase customer loyalty

5. Marcom Objectives
Improve corporate relations with special interest groups
Offset bad publicity about a brand or generate good publicity
Counter competitors’ communication efforts
Provide customers with reasons for buying immediately instead of delaying a purchase

6. 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

7. Advancing Consumers From Unawareness to Awareness
Advertising (mass media or otherwise) is generally the most effective and efficient method for quickly creating brand awareness.
Creating an Expectation

8. Hierarchy of Effects Forming Beliefs and Attitudes
Reinforcing Beliefs and Attitudes
Accomplishing Brand Loyalty

9. Requirements for Setting Suitable Marcom Objectives
Include a precise statement of who, what, and when
Be quantitative and measurable
Specify the amount of change
Be realistic
Be internally consistent
Be clear and put it in writing

10. Should Marcom Objectives Be Stated in Terms of Sales?
Presales Objectives: communication objectives that attempt to increase the target audience’s brand awareness, enhance their attitudes toward the brand, shift their preferences from the competitors’ brand and so on.
Sales Objectives: means the marcom objective literally is to increase sales by a particular amount.

11. Should Marcom Objectives Be Stated in Terms of Sales?
Traditional View (Thesis)
Sales volume is the consequence of a host of factors in addition to marcom
Effect of marcom efforts is delayed

12. Sales Volume as a Marcom Objective
Heretical View (Antithesis)
Marcom’s purpose is to generate sales
Sales measures are “vaguely right”

13. Marcom Budgeting in Theory
The best(optimal) level of any investment is the level that maximizes profits(MR=MC)
Advertisers should continue to increase their advertising investment as long as it is profitable to do so MC
= (Change in total cost)
(Change in quantity)
= TC/Q MR
= (Change in total Revenue)
(Change in quantity)
= TR/Q

14. Sales-to-Advertising Response Function
The relationship between money invested in advertising and the response, or output, of that investment in terms of revenue generated.

15. Practical Budgeting Methods
Percent-of-Sales Budgeting
Objective-and-Task Method
Competitive Parity Method
(match competitors’ method)
Affordability Method

16. 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
Sales=f(Advertising) (o)
Advertising=f(Sales) (x)

17. Objective-and-Task Method
The most sensible and defendable advertising budgeting method
Specify what role they expect advertising to play for a brand and then set the budget accordingly

18. The Competitive Parity Method
Sets the ad budget by basically following what competitors are doing
SOM- the ratio of one brand’s revenue to total category revenue
SOV-the ratio of a brand’s advertising expenditures to total category advertising expenditures

19. Affordability Method
Only the funds that remain after budgeting for everything else are spent on advertising
Only the most unsophisticated and impoverished firms
However, affordability and competitive considerations influence the budgeting decisions of all companies