Chapters Six and Nine
Objectives, Budgeting,
and Advertising
Management
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Review: Chapter 1
All marketing communications should be:
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2
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
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3
Budgeting Considerations
in Practice
• What is the Ad objective?
• How much are competitors spending?
• How much money is available?
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Budgeting Methods
• Percent-of-Sales Budgeting
• Objective-and-Task Method
• Competitive Parity Method
(match competitors method)
• Affordability Method
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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
Why?
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Objective-and-Task Method
• The most sensible and defensible
advertising budgeting method
• Specify:
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The Competitive Parity Method
• Sets the ad budget by basically
following what competitors are
doing
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Affordability Method
• Only the funds that remain after
budgeting for everything else are
spent on advertising
• Who does this?
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Advertising Functions
Informing
Influencing
Reminding
Adding Value
Assisting Other Company Efforts
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Advertising Functions
Informing
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Informing
Quaker Oats
Target
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Advertising Functions
Influencing
• Influences customers to try
advertised products and services
• Primary demand• Secondary demand13
Influencing
Gillette MACH3
Target:
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Advertising Functions
Reminding
• Keeps a company’s brand fresh in the
consumer’s memory
• Influences brand switching by:
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Advertising Objectives
Kellogg’s Special K
Target
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Advertising Functions
Adding Value
• Three basic ways by which companies
can add value:
»
• Advertising adds value to brands by:
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Advertising Functions
Assisting Other Company Efforts
• Advertising is just one member of the
marketing communications team
• Sometimes, an assister that facilitates
other company efforts in the marketing
communications process
• Examples?
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The Advertising Management Process
Advertising Strategy
• Setting Objectives
•Formulating Budgets
•Creating Ad messages
•Selecting Ad Media and Vehicles
Strategy Implementation
Assessing Ad Effectiveness
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Research Workshop:February 17
Conducting Consumer Research
» Secondary research: Plenty of resources online
» Library Resources Link on website: Dr.Song, BEL
» Primary research: Planning ahead
• Focus groups, surveys, observations
• Plan your questions ahead in detail
• Select sample(s) carefully (target audience)
• Sensitivity, confidentiality, ethics
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