Ch. 7: Objectives and Budgeting for Promotional Programs

1
Ch. 7 Objectives and Budgeting for
Promotional Programs

• Why should we establish objectives for
  promotional programs?

2
Marketing Objectives vs. IMC Objectives

• Marketing objectives are generally stated in the
  firms 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.

3
IMC Objectives Sales vs. Communication
Perspective

• Sales-Oriented Objectives
• Communication-Oriented Objectives

4
Characteristics of Good Objectives

• Concrete and measurable
• Specify a well-defined audience
• Establish benchmark measures
• Specify a time period
• Attainable
• Realistic

5
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
6
Promotional Budget Practical Approach

• Top-Down Budgeting

• Affordable method
• Percentage of sales
• Competitive parity
• Arbitrary allocation

Top Management sets the spending limit
Promotion budget set to stay within spending
limit
7
Promotional Budget Practical Approach

• Build-up Budgeting

Promotion objectives are set

• Objective and task method
• Payout planning
• Quantitative models

Activities needed to achieve objectives are
planned
Costs of promotion activities are budgeted
Total promotion budget is approved by top
management
8
Brand Positioning Strategy in IMC
X
Category Need
Y
What is it?
User
Brand Awareness
Who is it for?
Z
Brand
Benefit(s)
What does it offer?
Brand Attitude
9
X Options in the X-YZ Macromodel of Positioning
Location
(X product category options for brand central or differentiated position within the product category) (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 me-too brands
10
Hierarchical Categorical Structure
Beverages
Nonalcoholic
Alcoholic
Soft drinks Waters Coffee Milk
Fruit juice Tea Other
Cola Noncola
Regular Diet
11
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.) (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 3. All other situations
2. Social approval product (social approval is the primary purchase motivation)
12
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) (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
13
I-D-U Positioning Rule (Applied for the
High-Importance Benefits)

• Emphasize the brands unique benefits
• Mention its equal benefits
• And trade off or omit its inferior benefits

14
Multiattribute Strategies for Brand Attitude

• Attitudeb ? (Bbi x Ei)
• Qs what strategy could we use to increase
  consumers attitude toward a brand?

15
The A-B-E Micromodel of Benefit Focus

1. Attribute focus
2. Benefit focus from an attribute a ? b
3. Benefit focus b
4. Benefit focus from an emotion e- ? b
5. Emotion focus from a benefit b ? e
6. Pure emotion focus e

16
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

17
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).