Ch. 7: Objectives and Budgeting for
Promotional Programs
 Why should we establish objectives for promotional programs?

Marketing Objectives vs. IMC Objectives
 Marketing objectives are generally stated in the firm’s marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period.
 IMC objectives are statements of what various aspects of the IMC program will accomplish.

IMC Objectives: Sales vs. Communication
Perspective
 Sales-Oriented Objectives:
 Communication-Oriented Objectives:

Characteristics of Good Objectives


Concrete and measurable
Specify a well-defined audience
 Establish benchmark measures
 Specify a time period
 Attainable
 Realistic

Promotional Budget: Theoretical Issue
Assumptions:
1) sales are a direct measure of advertising and promotions efforts;
2) sales are determined solely by advertising and promotions.
Sales Sales
Ad expenditure

Promotional Budget: Practical Approach
Top-Down Budgeting
Top Management sets the spending limit
•
Affordable method
• Percentage of sales **
• Competitive parity
• Arbitrary allocation
Promotion budget set to stay within spending limit

Promotional Budget: Practical Approach
Build-up Budgeting
Promotion objectives are set
Activities needed to achieve objectives are planned
•
Objective and task method**
•
Payout planning
• Quantitative models
Costs of promotion activities are budgeted
Total promotion budget is approved by top management

Brand Positioning Strategy in IMC
Category Need
X
What is it?
Y
User
Who is it for?
Brand
Z
Benefit(s)
What does it offer?
Brand Attitude

X Options in the X-YZ Macromodel of
Positioning Location
(X = product category; options for brand = central or differentiated position within the product category)
Central Position Differentiated position
1. Pioneer or market leader 3. All other brands
2. Me-too brand if product category is such that attributes can be objectively matched by follower, with a large price savings
4. Including later metoo brands

Hierarchical Categorical Structure
Beverages
Nonalcoholic Alcoholic
Soft drinks Waters Coffee Milk Fruit juice Tea Other
Cola Noncola
Regular Diet

YZ Options in the X-YZ Macromodel of
Positioning Location
(Y = target audience; Z = brand benefits; options for brand = user-as-hero (Y) or product-as-hero (Z) positioning.)
User-as-hero (Y) Product-as-hero (Z)
1. Target product with novice target audience
2. Social approval product (social approval is the primary purchase motivation)
3. All other situations

Positioning in the I-D-U Mesomodel Based on Purchase Motivations
(Decision Rule: Position the brand on the primary (strongest) motive unless most brands are already positioned there; in which case, go to the secondary (next strongest) motive)
Negatively originated (informational) motivations
Positively originated
(transformational) motivations
1. Problem removal
2. Problem avoidance
3. Incomplete satisfaction
4. Mixed approach-avoidance
5. Normal depletion: omitted for positioning
6. Sensory gratification
7. Intellectual stimulation or mastery
8. Social approval

I-D-U Positioning Rule (Applied for the
High-Importance Benefits)


Emphasize the brand’s unique benefits
Mention its equal benefits
 And trade off or omit its inferior benefits

Multiattribute Strategies for Brand
Attitude
Attitude b
=

(B bi x E i
)
Qs: what strategy could we use to increase consumers’ attitude toward a brand?

The A-B-E Micromodel of Benefit Focus
4.
5.
6.
1.
2.
3.
Attribute focus
Benefit focus from an attribute: a  b
Benefit focus: b
Benefit focus from an emotion: e  b
Emotion focus from a benefit: b
 e +
Pure emotion focus: e +

Conditions in the A-B-E Micromodel of
Benefit Focus
Attribute (A) focus
 Expert target audience
 Intangible service
 As an alternative to emotion focus for homogeneous-benefit brands
Benefit (B) focus



Brand with hard-to-imitate benefit
Negatively motivated (informational) brand: e  b
“Logical” attack on entrenched emotional-based attitude: a  b
Emotion (E) focus



Brand with easy-to-imitate benefits
Positively motivated (transformational) brand brand: b  e + or e +
“Emotional” attack on entrenched attribute- or benefit-based attitude: e  b

Positioning Statement Format: “Long”
Version
1. To (the target audience, Y)/
2. _______ is the (central or differentiated) brand of
(category need, X)/
3. That offers (brand benefit or benefits, Z). The advertising for this brand: a. should emphasize (benefit or benefits, U, uniquely delivered) with (a, b, or e) focus, b. must mention (benefits or benefits, I, important
“entry tickets”) c. and will omit or trade off (benefit or benefits, D -, inferior-delivery benefits).