Chapter07.ppt describe marketing research

Marketing

1. Establishing Objectives
and Budgeting for the
Promotional Program
7
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2. Starbucks
•Core competencies
–Third Place
–Neighborhood coffee shop
•Failed Ventures
–Joe magazine
–Café Starbucks
–Circadia
•Losing focus
–Hear Music
–Akeelah and the Bee
•Closing down stores

3. Value of Objectives
Communications
Planning &
Decision Making
Measurement
& Evaluation
Specific
Objectives

4. Characteristics of Objectives
Specific
Measurable
Quantifiable
Attainable
Realistic

5. Measurable Results

6. Marketing vs. Communications Objectives
Marketing
Objectives
•Generally stated in the
firm’s 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 realisticand
attainableto be effective
Communications
Objectives
•Derived fromthe overall
marketing plan
•More narrow than
marketingobjectives
•Based on particular
communicationstasks
•Designed to deliver
appropriate messages
•Focused on a specific
target audience
Vs.

7. SalesObjectives
Increased Sales
Increased Market Share
Brand Extensions

8. Factors Influencing Sales
Competition
Technology
The
economy
Product
quality
Price
Distribution
Advertising
& promotion

9. Where Sales Objectives are Appropriate

10. Where Sales Objectives are Appropriate

11. Test Your Knowledge
Which of the following statements about
communications objectives is true?
A) Sales goals are easily translated 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 for planning,
executing, and evaluating promotional
programs.
D)Marketing managers often do not recognize
the value of setting communications objectives.

12. IMC perspective Geico
•Increases in Advertising
–Sell via internet & direct sales
–In 2005, increased advertising expenditures 75%
to $403 million
–In 2006, spent twice as much as nearest
competitor
–Also spent in more places
•Increases in Sales
–5.8% new customer acquisition (2.1% is
industry average)
–91% ad message recognition
–Only brand to have double digit market share
growth 13.1%

13. From Awareness to Action
Affective
Realm of emotions.
Ads change attitudes
and feelings
Cognitive
Realm of thoughts.
Ads provide
information and facts
Conative
Realm of motives.
Ads stimulate or
direct desires
Teaser campaigns
“Image” copy
Status, glamour appeals
Announcements
Descriptive copy
Classified ads, slogans,
Jingles, skywriting
Competitive ads
Argumentative copy
Point of purchase
Retail store ads, deals
“Last-chance” offers
Price appeals
Testimonials
Purchase
Conviction
Preference
Liking
Knowledge
Awareness

14. Creating an Image

15. Communications Effects Pyramid
20% Trial
40% Liking
90% Awareness
5% Use
70% Knowledge/Comprehension
25% Preference

16. The DAGMAR Approach
Define
Advertising
Goals for
Measuring
Advertising
Results
Action
Awareness
Conviction
Comprehension

17. Characteristics of Objectives
Concrete,
measurable tasks
Benchmark
measures
Well-defined
audience
Specified
time period

18. Pros and Cons of DAGMAR
Cons
Inhibition of creativity
Relies heavily on the
response hierarchy
May not increase sales
Practicality and cost
Pros
Focus on communications
objectives
Measurement of stages
Better understanding of
goals and objectives
Less subjective

19. Advertising-Based View of Communications
Acting on Consumers
Ads

20. UtilizingaVarietyof Media

21. San Diego Zoo Protect Endangered Species
*Click outside of the video screen to advance to the next slide

22. Establishing & Allocating the Promotional Budget
Sponsorship
Underwriting
Public
Relations
Sales
Promotions
Internet
Group Sales
Direct
Marketing

23. Test Your Knowledge
In marginal analysis, all of the following should be
considered except:
A) Sales
B) Fixed costs of advertising
C) Advertising expenditures and other
variable costs
D) Gross margin
E) Net worth

24. Establishing a Budget

25. Budget Adjustments
Increase
Spending
If the cost is lessthan the
marginal return
Hold
Spending
If the cost is equalto the
incremental return
Decrease
Spending
If the cost is morethan the
incremental return

26. Assumptions for Marginal Analysis
Sales are
determined
solely by
advertising
and promotion
Sales are a
direct measure
of advertising
and promotions
efforts

27. Sales Response Models
Incremental Sales
Advertising Expenditures
A.Concave-Downward
Response Curve
Incremental Sales
Advertising Expenditures
Range A Range B Range C
B.S-Shaped Response
Function
High Spending Little EffectInitial Spending Little Effect Middle Level High Effect

28. Purchase
frequency
Factors Influencing Advertising Budgets
Product
life cycle
Product
durability
Differentiation
Product
price
Hidden product
qualities

29. Top-Down vs. Bottom-Up Budgeting

30. Top-Down Budgeting Methods
Top
Management
Affordable
Method
Competitive
Parity
Percentage
of Sales
Return on
Investment
Arbitrary
Allocation

31. Test Your Knowledge
Well known brand name products do not receive
incremental advantages from increased dollar
expenditures on advertising. Once the ad hits the
market, subsequent budget increases result in little or
no incremental gains. This is best explained by:
A) Arbitrary allocation
B) The objective and task method
C) Competitive parity
D) An S-shaped response
E) Rapidly diminishing returns

32. Object and Task Method
Isolate objectives
Reevaluate objectives
Determine tasks required
Estimate required expenditures
Monitor

33. Payout Planning

34. Quantitative Models

35. Allocating to IMC Elements

36. Share of Voice Effect
Decrease–find a
defensible niche
Increase to defend
Attack with large
SOV premium
Maintain modest
spending premium
Competitor’s
Share of Voice
High
Low
HighLow
Your Share of Market

37. Economies of Scale
There is no evidence to support any of these!
Proposition I
Larger firms can support their brands with lower relative
advertising costs than smaller firms.
Proposition II
The leading brand in a product group enjoys lower
advertising costs per sales dollar than do other brands.
Proposition III
There is a static relationship between advertising costs
per dollar of sales and the size of the advertiser.

38. Organizational Characteristics
•Factors that influence advertising and
promotion budgets
–The organization’s structure
–Power and politics
–The use of expert opinions
–Characteristics of the decision maker
–Approval and negotiation channels
–Pressure on senior managers to arrive
at the optimal budget