CHAPTER 7

Establishing
Objectives and
Budgeting for the
Promotional
Program

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written consent of McGraw-Hill Education.

Value of Objectives
Communications
Objectives facilitate coordination of the
various groups

Planning and decision making

Objectives guide decision making and
development of the integrated marketing
communications plan

Measurement and evaluation of results

Objectives provide a benchmark to
measure success or failure
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Marketing Objectives versus Integrated Marketing

Communications Objectives

Marketing objectives
Identify what is to be

Integrated marketing
communications objectives
Statements of what various

accomplished by the overall

aspects of the IMC program

marketing program

will accomplish

Defined in terms of specific

Based on the particular

and measurable outcomes

communications tasks

Must be quantifiable,
realistic, and attainable

required to deliver the

appropriate messages to the
target audience
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Sales-Oriented Objectives
Aim to increase sales
Require economic justification
Required to produce quantifiable
results
Based on the achievement of sales
results

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Figure 7.1 - Factors Influencing Sales

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Problems with Sales Objectives

Successful implementation requires all

marketing elements to work together

Advertising has carryover effect

Carryover effect: Monies spent on advertising do
not have immediate impact on sales
It is difficult to determine precise relationship
between advertising and sales

Do not offer much guidance for planning

and developing promotional program
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Communications Objectives
Set using models wherein consumers
pass through three stages
Cognitive
Affective
Conative

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Communications Objectives

Conative
(behavioral)
Ads stimulate or
direct desires

Purchase
Purchase intentions

Affective (feeling)
Ads change attitudes
and feelings

Favorable attitudes
and image

Cognitive (thinking)
Ads provide
information and facts

Brand knowledge
and interest
Brand awareness

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Communications Effects Pyramid

5% Use
20% Trial
25% Preference
40% Liking
70% Knowledge/comprehension
90% Awareness

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Problems with Communications Objectives

Translating sales goals into
communications objectives
Promotional planners have difficulty
estimating what constitutes adequate
levels of awareness, knowledge, liking,
preference, or conviction
No formulas or guidelines

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Characteristics of Objectives

Concrete,
measurable tasks

Well-defined
audience

Benchmark
measures

Specified
time period
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Zero-Based Communications Planning

Involves determining:
What tasks need to be done
Which marketing communications
functions should be used and to what
extent

Focuses on the task to be done and

searches for the best ideas and media
to accomplish

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Figure 7.5 - Objectives and Strategies in the Social

Consumer Decision Journey

Source: Expert interviews; McKinsey analysis

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Example of Communications Objective

Statements

Figure 7-6
: The San Diego Zoo Sets Objectives for
Various Promotional Elements

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Type of Objectives
Marketing Objectives
Sales Objectives
Communication Objectives
Communication Effects Pyramid

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Balancing Objectives and Budgets

What were
willing and
able to spend

What we need
to achieve our
objectives

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Top-Down vs. Bottom-Up Budgeting

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Top-Down Budgeting Methods

All-you-can-afford
Advertising causes
sales

Return on
Investment

Competitive
Parity
Base on
competitors' spending

Affordable
Method

What is felt
to be necessary

Top
Management

Arbitrary
Allocation

Percentage
of Sales
Base on sales
of product

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Build-Up Approaches
Objective and Task Method: Figure 7-18

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Implementing the Objective and Task Approach

Isolate objectives
Determine tasks required

Estimate required expenditures

Monitor
Reevaluate objectives
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Budgeting

Top Down

Build Up

1.
2.
3.
4.
5.

1.

Affordable Method
Arbitrary Allocation
Percentage of Sales
Competitive Parity
Return on Investment

Objective
and Task
Approach

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Steps to Develop and Implement the Budget

Employ comprehensive strategy

Develop strategic planning framework that employs an
integrated marketing communications philosophy

Develop contingency plans

Focus on long-term objectives
Evaluate effectiveness of programs have to
be consistently
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Other Budget Allocation Factors

Budgeting Factors
Client/agency policies
Market size
Market potential
Market share goals

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Figure 7.24 - The Share of Voice (SOV)

Effect and Ad Spending: Priorities in Individual Markets

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Organizational Characteristics
Factors that influence advertising and
promotion budgets
Organizational structure
Power and politics
Use of expert opinions
Characteristics of the decision maker
Approval and negotiation channels
Pressure on senior managers to arrive
at the optimal budget
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