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Advertising and Promotional Strategy > Lecture 5 > Flashcards

Lecture 5 Flashcards

1
Q

Value of Objectives

A

Focus & Coordination
Plans & Decision making for IMC
Measurement, Control & Evaluation

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2
Q

Characteristics of Objectives

A 
Not Mutually Exclusive
Realistic
Attainable
Measurable
Specific
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3
Q

Advertising Can Shape

A

Corporate Images

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4
Q

Specific objectives are needed to guide the

A

budgeting & development of the Promotional program.

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5
Q

Objectives provide a benchmark against

A

which performance of IMC can be measured & evaluated.

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6
Q

Many companies fail to set specific IMC objectives &

therefore

A

compromise the budgeting & planning of the promotional mix.

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7
Q

Marketing Objectives

A

• 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 realistic and
attainable to be effective

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8
Q

Communications Objectives

A

• 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

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9
Q

Sales-oriented Objectives

A

Many managers feel advertising (& other promotional) money
should produce measurable results such as increase in sales or mkt share.

Required to produce quantifiable sales results

Some managers confuse mktg objectives with advertising
(& promotional) objectives.

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10
Q

Limitations of Sales-oriented Objectives

A

a) If a sales goal or mkt share goal is not met, it is
possible that the problem lies in one of the other
areas of the mktg mix (4 Ps).

b) advtg can make consumers aware, but may not
be able to create sales because of high price,
intense competition, inferior product, etc.

c) “Nothing will kill a poor product faster than good
advertising. ”

d) Another problem with sales-oriented objectives is
that advertising has a lagged (carryover) effect.

e) These objectives also do not provide any specific
operational guidelines for planning & executing the
IMC program.

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11
Q

sales-oriented objectives are appropriate in cases of

A

direct action promotions, direct-response advtg, retail advtg, etc.

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12
Q

Pyramid of Communications Effects

A

Conative
Affective
Cognitive

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13
Q

Conative

A

Realm of thoughts
Ads provide information
and facts.

70% Knowledge
90% Awareness

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14
Q

Affective

A

Realm of emotions
Ads change attitudes
and feelings.

25% Preference
40% Liking

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15
Q

Cognitive

A

Realm of motives
Ads stimulate or direct
desires.

5% Use
20% Trial

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16
Q

Some mkters recognize that the primary role of IMC

programs is to

A

communicate & hence planning & budgeting for promotional mix should be based on communications objectives.

17
Q

Objectives could include creating or increasing

A

brand awareness, interest, favorable attitudes,

purchase intentions, etc.

18
Q

“Communications Effects Pyramids” are used to

A

determine promotional objectives.

19
Q

Limitations of Communications Objectives

A

a) Sometimes it can be difficult to translate a sales
goal into a specific communications objective.

b) There are no easy formulas as to what
constitutes adequate levels of awareness,
knowledge, liking, preference or conviction.

c) No direct formulas or guidelines

20
Q

The DAGMAR Approach

A 
Define
Advertising
Goals for
Measuring
Advertising
Results
Communications effects
are the logical basis for
advertising goals and
objectives to measure
success or failure
21
Q

DAGMAR requires that the communications tasks be based on a hierarchical model with 4 stages:

A
  • Awareness
  • Comprehension
  • Conviction
  • Action
22
Q

DAGMAR requires that good objectives meet 4 important

criteria:

A
  • ‘Concrete & Measurable’ tasks.
  • Well defined ‘Target Audience’.
  • ‘Benchmark’ & degree of change sought.
  • Specified ‘time period’.
23
Q

Balancing Objectives and Budgets

A

What we’re
willing and
able to spend

VS

What we need
to achieve our
objectives

24
Q

Establishing the Budget with Marginal Analysis

A

• Increase in advertising/promotional expenditures increases sales and gross margins to a point, after
which they level off.

• Weaknesses—Assumes that sales are:
– A direct measure of advertising and promotions efforts
– Determined solely by advertising and promotion

25
Q

Advertising/Sales Response Functions

A

A. Concave-Downward
Response Curve

B. S-Shaped Response Function

26
Q

Top-Down Budgeting

A

Top management sets the spending limit

Promotion budget set to stay within the spending limit

27
Q

Bottom-Up Budgeting

A

Promotion objectives are set

Activities needed to achieve objectives are planned

Costs of promotion activities are budgeted

Total promotion budget is approved by top management

28
Q

Top-Down Budgeting Methods

A 
Arbitrary Allocation
Competitive Parity
Percentage of Sales
Affordable Method
Return on Investment
29
Q

Alternative Methods for Computing Percentage of

Sales

A

Method 1: Straight Percentage of Sales

Method 2: Percentage of Unit Cost

30
Q

Budgeting Approaches

A

Top-Down Approaches

a) The Affordable Method.
b) Arbitrary Allocation.
c) Percentage of Sales.
d) Competitive Parity.
e) Return On investment (ROI).

Build-Up Approaches

a) Objective & Task Method.
b) Payout Planning.
c) Quantitative Models.

31
Q

Objective and Task Method

A

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…)

32
Q

Payout Planning

A

Determines the investment value of the advertising
and promotion appropriation

Projects the revenues a product will generate, as
well as the costs it will incur

Better and logical approach to budget setting than
the top-down approaches

33
Q

Marketing Investments __ __ in Later Years

A

Pay Off

34
Q

Quantitative Models

A

Employ computer simulation models involving

statistical techniques

35
Q

Computer simulation models:

A

Help determine the
relative contribution of the advertising budget to
sales

36
Q

High Competitor’s Share of Voice

Low Your Share of Market

A

Decrease–find a Defensible Niche

37
Q

Low Competitor’s Share of Voice

Low Your Share of Market

A

Attack With Large SOV Premium

38
Q

High Competitor’s Share of Voice

High Your Share of Market

A

Increase to Defend

39
Q

Low Competitor’s Share of Voice

High Your Share of Market

A

Maintain Modest Spending Premium

Advertising and Promotional Strategy (12 decks)

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