Sunday, October 7, 2012
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.
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| 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.
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
Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations - Part 2
In this section we will review the various Ad agencies in detail:
Types of Ad Agencies:
Other lesser known type of agencies:
An advertising agency assists the
organizations in developing, preparing, and executing their promotional
programs. An ad agency is a service organization that specializes in planning
and executing advertising programs for its clients. The organizations go for
these sorts of agencies because of the expert resources that are available with
these agencies as shown in the image. The agencies have access to artists,
writers, researchers, analysts, photographers and other skilled personnel who
are experts in their own fields and some even for specific industries such as
Mentus Inc. is an agency that specializes in integrated marketing
communications for the high-technology, e-commerce, and bioscience industries.
An outside agency can also provide an objective viewpoint of the market and its
business that is not subject to internal company policies, biases, or other
limitations. For Example, Crispin Porter + Bogusky advertised the Mini in the
following way:
Types of Ad Agencies:
- Full Services Agencies: The full-service agency is made up of departments that provide the activities needed to perform the various advertising functions and serve the client, as shown in the figure.
- Account Services
Account services, or account management,
are the link between the ad agency and its clients. Depending on the size of
the client and its advertising budget, one or more account executives serve as
liaison. The account executive is responsible for understanding the
advertiser’s marketing and promotions needs and interpreting them to agency
personnel.
Other Services Provided:
Other lesser known type of agencies:
Creative Boutiques: A creative boutique is
an agency that provides only creative services. These specialized companies
have developed in response to some clients’ desires to use only the creative
talent of an outside provider while maintaining the other functions internally.
The client may seek outside creative talent because it believes an extra
creative effort is required or because its own employees do not have sufficient
skills in this regard. The special features are:
- Provides only creative services
- May be sub contracted by the full service agencies
- Ability to turn out inventive creative work quickly
Media Specialist Companies:
- Specializes in buying media, especially broadcast time
- Agencies and clients develop media strategies
- Media buying agencies are responsible for implementing the strategy and buying time and space
Methods of compensation for agencies:
There are three major mechanisms for
compensating an agency which are:
Losing Clients?
The following are some of the reasons that
result in ad agencies losing out clients:
Gaining New Clients:
Activities performed by Specialist
Marketing Firms:
Should you go for integrated communication
services then?
Pros
- Greater synergies
- Convenience
- Single unified image for product and service
Cons
- Budget Politics
- Poor communication
- Lack of synergy
Why are companies unable to implement an
IMC plan properly?
Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations
"Advertising is the
greatest art form of the 20th century." - Marshal McLuhan
Advertising is fast becoming a tool that is being used not only to promote the product but also to differentiate it from the horde of other similar products. It entails knowledge of the industry, of the structure and the functions of the organizations involved in the process. Of late, there has been a change in the way advertisers communicate with the target market as they search for better ways to catch and hold the attention of the consumers.
Participants
in the IMC Process:
Who performs the Marketing Activities?
Decentralized system on the other hand is
more suitable for companies having a diverse portfolio of products and services
which are of different kinds and hence a single manager cannot effectively
communicate the brand message for all of the products. Such organizations have
different product managers for each of the products who handle all of the
activities of the marketing department for that product. Examples are Proctor
and Gamble, Nestle and Gillette where it is also observed that the
products of the same company compete with their own products. This is possible
only because each of the products has its own product manager and its own team
for advertising and promotion.
Advertising is fast becoming a tool that is being used not only to promote the product but also to differentiate it from the horde of other similar products. It entails knowledge of the industry, of the structure and the functions of the organizations involved in the process. Of late, there has been a change in the way advertisers communicate with the target market as they search for better ways to catch and hold the attention of the consumers.
This section deals with the
various agencies involved in the process of IMC as well as their roles,
responsibilities and relation to each other which will be explained using the
example of the IMC methods followed by the international brand Nike.
Participants
in the IMC Process:
- Clients: Clients are the key participants in the IMC process since it is their product/service or idea which is to be marketed and also since it is their funds to be utilized for the advertising and the promotions. They are also the final authority on the marketing plan as well as the final advertising and promotional programs to be employed.
- Advertising agency: it is the specialist, external agency employed for the creation, production and/or the placement of the communication message for the promotion or advertising of the product or service in question. It is a common practice for big firm to have multiple
Media Organizations: These organizations
play an important role by way of providing an apt environment for the firms
marketing message. For example, in the
case of the SX4 ad that wanted to target specifically men, the following print
ad was used. The medium’s primary objective is to sell itself for companies to
reach their target markets with their messages effectively. This was done
effectively by the said ad.
Specialist Marketing Firms: They include
direct-marketing agencies, sales promotion agencies, interactive agencies, and
public relations firms. These organizations provide services in the areas of
their expertise.
Collateral Services: These are
organizations that provide support services to the advertisers, media
organizations and the specialized marketing firms.
Who performs the Marketing Activities?
In the current organization, we see
everyone from the finance to the IT department is responsible for the marketing
activities. But traditionally, there are 3 kinds of organizational systems
under which the marketing activities can be performed.
Centralized System is characterized by
division of the work along functional lines where advertising is placed within
the marketing domain alongside sales, promotion, research and product planning.
In such organizations, the marketing manager will control and monitor the
entire promotion operation including budgeting, creation, production, placement
of ads, media schedules and sales promotion plans for all the products and
services of the company.
The specific activities are:
- Planning and Budgeting
- Administration and execution
- Coordination with other departments
- Coordination with outside agencies and services
Decentralized system on the other hand is
more suitable for companies having a diverse portfolio of products and services
which are of different kinds and hence a single manager cannot effectively
communicate the brand message for all of the products. Such organizations have
different product managers for each of the products who handle all of the
activities of the marketing department for that product. Examples are Proctor
and Gamble, Nestle and Gillette where it is also observed that the
products of the same company compete with their own products. This is possible
only because each of the products has its own product manager and its own team
for advertising and promotion.
Some organizations also include a category
management system placed above the brand managers which is responsible for
collating and managing the data of all the products. The diagram is an example
of the category management system being used at Proctor and Gamble.
Advantages and Disadvantages of
Decentralized system:
In-house agencies are the third kind of
marketing system that an organization could have. It is a characteristic of
organizations that want to save costs by setting up their own advertising
agencies internally. It is an agency that is set up, owned and operated by the
advertiser and is generally given a separate identity. Examples of such
organizations are The Gap, Avon, Calvin Klein and Benetton. Some companies use
in house agencies in tandem with the external agencies.
Advantages and Disadvantages of using this
format are:
