Establishing Objectives and Budgeting for Promotion

This chapter emphasizes on the planning and design of IMC program within a stipulated budget. Achieving these goals to reach the objectives, which are defined categorically, is important to survive. To know the degree of achievement one must benchmark.

Promotional mix elements play roles in the marketing program; the success of all develops a campaign which actually sells more products. The most common measure is the sales data, even with the limitations it presents.

The factors which affect allocations relates to interactions in the various departments. The finance department would argue for generating an ROI of the money spent on marketing. Schedules of production may be mightily disturbed with the marketing plans. Budget allocation is considered as a mix of market size and potential objectives may differ for different departments. Sharing objectives in the hierarchy, as the basis for setting goals is done in order move to the views of marketing communications. Zero-based communications planning focuses on tasks that need to be done, which communication functions are to be used.

Zero Based Marketing- How it works

ZBB starts off with practically nothing on which to base one's budget assumptions. This is totally in contrast with the general traditional method,where managers and supervisors calculate their projections using the data from the past. Documentation needed is huge, justification of the cost and the purpose, plus the presentation of alternative course of action, which should be justified in a similar way. 

Communications effects Pyramid: The bottom is the easiest to convert. However as we move up the ladder the frequency of conversion will reduce drastically

Traditional View on Advertising is now experiencing a shift with the process becoming two way and the acting on consumers becoming both ways.

Assessment of DAGMAR

The DAGMAR approach to setting objectives has had considerable influence on the advertising planning process. Many promotional planners use this model as a basis for setting objectives and assessing the effectiveness of their promotional campaigns. DAGMAR also focused advertisers’ attention on the value of using communications based rather than sales-based objectives to measure advertising effectiveness and encouraged the measurement of stages in the response hierarchy to assess a campaign’s impact. Colley’s work has led to improvements in the advertising and promotional planning process by providing a better understanding of the goals and objectives toward which planners’ efforts should be directed. This usually results in less subjectivity and leads to better communication and relationships between client and agency.

The budget is limited with economic models, demonstrating the effects on sales directly however other elements of marketing mix are ignored. The budget appropriation is to tie the measures of effectiveness to communications objectives rather than broader marketing.

The following are the factors needed to be taken in to consideration:

1.       Market size and Potential

2.       Agency Policies

3.       Preferences of management