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DAGMAR: An Approach A
To Setting Objectives
M
BY: Parth
G
Kotadia A
09MBA014
D
 R
Designing A
Advertising M
Goals G
A
For measured D
Advertising
Results

Setting Objectives – effective

communications

Success or failure

Hierarchical Model of Communication

 Characteristics of Objectives
• Concrete, Measurable tasks
Ø Appealing
R
Ø Appropriate copy
A
• Target audience M
Ø Usage rates (Molson Canadian)
G
• Benchmark & degree of change sought
Ø
Response variables like awareness, knowledge, image, intentions, etc.
A
• Specified time period
D
Ø Awareness, repositioning takes different time periods
Ø E.g. Marlboro cigarettes
 Criticisms of DAGMAR
R
A
M
Problems with response hierarchy G
Sales Objectives A
Practicality & Costs
Inhibition of Creativity
D
 Zero-based communications planning
• Which comm. Function should be used? To what extent?
• Promotional mix R
A
M
G
A
D
 Test your Knowledge
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Q. Does achieving communications objectives
lead to an increase in sales? A
a. NO
b. YES
M
c. MAY BE OR MAY NOT BE G
d. NOT RELATED AT ALL A
D
Please Justify..??
 Establishing & allocating the
promotional budget R
A
Establishing the budget
M
• Communications budgets are an expense – a false beliefG
of managers
• Never lower your Ad – campaigns even at the cost of A
recession
• E.g. Coca-cola, Revlon, Chevrolet, Kodak, Wrigley D
 Theoretical issues in budget setting
Marginal Analysis: R
A
M
G
A
D
Two Assumptions of Marginal Analysis
R
1.
A
Sales are a direct measure of adv. & Pro.
Efforts M
2. Sales are determined solely by adv. &
Pro. G
A
D
 Sales Response Models
Concave-downward function S-shaped response function

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Second level
Second level ● Third level
● Third level ● Fourth level
● Fourth level ● Fifth level
● Fifth level

High potential buyers will buy

at first exposure
 Budgeting Approaches

Top Down Approaches Build Up Approaches

Affordable method Objective & Task method

Arbitrary allocation Payout Planning
Percentage of Sales Quantitative Models
Competitive parity
ROI
 Top Down approaches
The Affordable method: R
• Priority to more important areas
• Unaware of the promotional activities
A
Arbitrary Allocation:
• Weak method
M
• Management decides what it felts to be necessary G
Percentage of Sales method:
Straight % of sales % of unit cost A
2002 Total sales Rs. 10 lakhs manu. Cost per bottle Rs. 4
% of sales @ 10% Rs. 1 lakh Adv. Unit cost Rs. 1
D
Forecasted sales 1 lakh units
Adv. Budget (1 lakh * Rs. 1) Rs. 1 lakh
 Top Down approaches (cont.)
R
Competitive Parity:
• Match the competitor’s %-of-sales expenditure
A
ROI method:
• Advertising & Promotions = investments
M
G
A
D
 Build Up approaches
Objective & Task method:
R
• Obj. setting & budgeting go hand in hand
3 steps involved:
A
ü Establish Obj. (create awareness) M
ü Determine tasks (adv. In TV, radio, newspapers)
ü Estimate costs G
Quantitative Models:
• Multiple Regression analysis
A
Payout plan: D
 R
A
Allocating the Budget
M
G
A
D