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Establishing Objectives and Budgeting for IMC Programs

Tutored by : Prof. Sunil D Anto

Value of Objectives


Focus & Coordination

Plans & Decisions Measurement & Control

Characteristics of Objectives





Not Mutually Exclusive


Marketing Versus Communications Objectives

Marketing Objectives
Generally stated in the firms marketing plan Achieved through the overall marketing plan Quantifiable, such as sales, market share, ROI To be accomplished in a given period of time Must be realistic and attainable to be effective

Communications Objectives
Derived from the overall marketing plan More narrow than marketing objectives Based on particular communications tasks Designed to deliver appropriate messages Focused on a specific target audience


Many Different Factors Affect Sales


Advertising and promotion


Product quality




The economy

Sales As Advertising Objective

Image building/creating Ads

A. It is easy to translate sales goals into communications objectives ? B. It can be difficult to determine the relationship between communications objectives and sales performance ? C. Communications objectives cannot serve as operational guidelines to the planning, execution, and evaluation of the promotional program ? D. Marketing managers do not recognize the value of setting communications objectives ?

Advertising and Movement Toward Action

Conative Purchase Conviction Preference Liking Knowledge Cognitive
Realm of thoughts. Ads provide information and facts.
Point of purchase, Retail store ads, Deals Last-chance offers, Price appeals, Testimonials

Realm of motives. Ads stimulate or direct desires.


Competitive ads Argumentative copy Image copy Status, glamour appeals Announcements Descriptive copy Classified ads Slogans, jingles, skywriting Teaser campaigns

Realm of emotions. Ads change attitudes and feelings


Pyramid of Communications Effects

5% Use / re-buy 20% Trial 25% Preference 40% Liking

70% Comprehension 70% Knowledge & Knowledge

90% Awareness

The DAGMAR Approach to setting objectives

Define Advertising Goals for Measuring Advertising Results


Comprehension Comprehension



Pros and Cons of DAGMAR

Assessment of campaign effectiveness Value of communicationbased objectives

Problems with the response hierarchy Sales objectives

Measurement of stages
Less subjective

Practicality and cost

Inhibition of creativity

Advertising-Based View of Communications

Advertising Through Media

Acting on Consumers

Balancing Objectives and Budgets

What were willing and able to spend


What we need to achieve our objectives


Budgeting Approaches

1. Top-Down Budgeting

Top Management Sets the Spending Limit

The Promotion Budget Is Set to Stay Within the Spending Limit

Top-Down Budgeting Methods

Competitive Parity

Arbitrary Allocation

Top Management

Percentage of Sales

Return on Investment

Affordable Method

2. Bottom-Up Budgeting
Total Budget Is Approved by Top Management

Cost of Activities are Budgeted

Activities to Achieve Objectives Are Planned

Promotional Objectives Are Set

3. Build-up Approach: Objective and Task Method

Establish Objectives (create awareness of new product among 20 percent of target market) Determine Specific Tasks (advertise on market area television and radio and local newspapers)

Estimate Costs Associated with Tasks (determine costs of advertising, promotions, etc.)

Monitor and Adjust (monitor performance and adjust)

Allocating the budget: Spending and Share of Voice

Competitors Share of Voice

Decreasefind a Defensible Niche Attack With Large SOV Premium



Increase to Defend


Maintain Modest Spending Premium


Your Share of Market

Allocating to IMC Elements