Establishing Objectives (DAGMAR)

EG: Porche

Types of Objectives
Marketing Objectives
Statements of what is to be accomplished by the overall marketing program within a given time period.
Need to be quantifiable such as sales volume, market share, profits, or ROI. Need to be realistic, measurable and attainable

IMC Objectives
Statements of what various aspects of the IMC program will accomplish based on communication tasks required to deliver appropriate messages to the target audience.

Function of Objectives
Operate as communication and coordination devices Provide a criteria for decision making among alternative campaigns Evaluation of results

SALES AS OBJECTIVE ARE UNOPERATIONAL

Many factors affect sales

Role of advtg is long run

Not all Ads are Designed to Achieve Sales

Problems With Sales Objectives

Sales are a function of many factors, not just advertising and promotion. Effects of IMC tools such as advertising often occur over an extended time period. Sales objectives provide little guidance to those responsible for planning and developing the IMC program

Many Factors Influence Sales

Product Quality

packaging

Competition

Technology

SALES

Distribution

The Economy Advertising

Price Policy

Consumer tastes

When Sales Objectives Are Appropriate

For promotional efforts that are direct action in nature and can induce an immediate behavioral response.
Sales promotion Direct response advertising

Retail advertising for sales or special events

When advertising plays a dominant role in a firms marketing program and other factors are relatively stable When sales effects of an IMC variable can be isolated.

TOWARDS OPERATIONAL OBJECTIVES

1. Who is the target segment? (people who are unaware of the brand or are not
convinced that brand or product has key attributes, have not yet developed a positive attitude, etc)

2.

What is the behavior within that segment that advertising is attempting to influence, change. Trial purchases, loyaly maintenance, more positive use
experience, reducing time b/w puchases ,increasing use up rate or decision to visit retailer

LTV exceeding cost of acquiring new customer NEO CUSTOMER SEGMENT (diagram)
O segment: find ad targeting at O segment E segment: ABC INVENTORY RULE (NIKE,CAMPBELL SOUP) N segment: Pepsi (cofee to pepsi rather than coke to pepsi), dannon yogurt vs sour cream on basked potato, maruti 800, nano

TOWARDS OPERATIONAL OBJECTIVES

Increasing SOR (Share of requirements)- multiple brands of credit cards, biscuits, soaps, hotels, etc. are simultaneously used- advt should make customer aware of real brand advantage.

Increasing brand loyalty, reducing attrition and price elasticity

Reduce the flow from E to O, Reminding and reinforcing existing customers (fare and lovely) using consumer promotions like premiums requiring multiple usage proof

Increasing usage- specially in food and beverage (eggs in summers, dabur honey), kodak film, energizer batteries, scotch tape fro decoration as well as conventional purpose, chewing gum for double chin

Behavioral or action objectives- counting of cent off coupons, enquiries generated on the day of advt.

TOWARDS OPERATIONAL OBJECTIVES

3. What is the process that will lead to desired behavior and what is the role of advtg in the process?
Is it necessary to create awareness, communicate information about brand, create image or attitude, build long term brand equity and associations or associate feelings or a type of user personality with a brand

Communication Objectives
The primary goal of an advertising is to communicate and planning should be based on communications objectives such as
brand awareness: increase familiarity and top of mind awareness Knowledge & interest (brand comprehension): eg windows / android phones Brand image and personality : type of associations a brand develops with a type of person or another product (charlie perfumes specific female lifestyle,apple computer- user friendly Brand attitudes: like / dislike towards a brand purchase intention: associating feelings with brands or use experiences

The DAGMAR Approach

Define Advertising Goals for Measuring Advertising Results

Advertising goals should be written measurable task involving a starting point a defined audience and a fixed time period

Characteristics of Objectives

Good Objectives Should Include:

Concrete, Measurable Communication Tasks
Have an Existing Benchmark Measure: president Lincoln: if we could first know where we are
and whither we are tending, we could better judge what to do and how to do it

Well-Defined Target Audience Specify Degree of Change Sought Specific Time Period

Hierarchy of effects model of communication process

The DAGMAR Approach2

1
Target audience pass sequentially through set of steps

Unaware Aware

AIDA A- Attract attention I gain interest D- create a desire

Comprehension and image Attitude

Action

A precipitate action

Hierarchy model by Robert Lavidge and Gary Steiner

Related behavioral dimensions Movement toward purchase Types of promotions and advertising at each step

Conative
Realm of motives. Ads stimulate or direct desires.

Purchase

Point of purchase Retail store ads, Deals Last-chance offers Price appeals, Testimonials

Conviction Preference Liking

Competitive ads Argumentative copy Image copy Status, glamour appeals Announcements Descriptive copy Classified ads Slogans, jingles, skywriting Teaser campaigns

Affective
Realm of emotions. Ads change attitudes and feelings

Cognitive
Realm of thoughts. Ads provide information and facts.

Knowledge

Awareness

Inverted Pyramid of Communications Effects

90% Awareness

70% Knowledge
40% Liking

25% Preference
20% Trial 5% Use

DAGMAR Difficulties
Legitimate Problems
Response Hierarchy Problems (noise)
Doesn't always define the process people use to reach purchase/use. Many factors besides advertising affect awareness. Eg: competitive promotion or unplanned publicity

Questionable Objections
Sales Goal
Sales are all that really counts, not communications objectives. If awareness does not affect sales, why bother to measure it?

Practicability
Implementation difficulties The research and efforts cost more then the results are worth.

Measurement problems:
Attitude, awareness, brand comprehension etc are abstract things to measure.

Attitude - Behavior Relationship

Attitude change doesn't always lead to change in actions or behavior. Action may also precede attitude formation and even comprehension.

Inhibition of Creativity
DAGMAR is rational, planned approach. Too many rules and structure curb genius.

The Leo Burnett Program

CAPP- continuous advertising planning program

CDP consumer demand profile

Preference

Equality

Total users

Brand Awareness

Brand Brand Acceptance Bought last

Brand satisfaction

General Motors approach

Awareness Buying class Consideration class

First choice

Advertising-Based View of Communications

Advertising Through Media One-Way

Attitudes

Knowledge

Preference

Conviction

Purchase Behavior

Linear
Acting on Consumers

Budgeting Decisions
Budgeting decisions involve determining how much money will be spent on advertising and promotion each year and how the monies will be allocated

Two major decisions Establishing the size of the budget Allocating the budget

Problems with Marginal Analysis

Assumption:
Sales are the principal objective of advertising and/or promotion.

Assumption:
Sales are the result of advertising and promotion and nothing else.

Advertising Sales/Response Functions

A. Concave-Downward Response Curve B. S-Shaped Response Function

Incremental Sales

Incremental Sales

Advertising Expenditures

Range A

Advertising Expenditures

Initial Spending Little Effect

Range B

Middle Level High Effect

Range C

High Spending Little Effect

Top-Down Budgeting

Top Management Sets the Spending Limit

The Promotion Budget Is Set to Stay Within the Spending Limit

Top-Down Approaches

The Affordable Method

What we have to spare. What's left to spend.

No system. Seemed like a good idea at the time. Set percentage of sales or amount per unit. Match competitor or industry average spending. Spending is treated as a capital investment.

Arbitrary Allocation Method

Percentage of Sales Method Competitive Parity Method

Return on Investment Method

Bottom-Up Budgeting
Total Budget Is Approved by Top Management
Cost of Activities are Budgeted Activities to Achieve Objectives Are Planned

Promotional Objectives Are Set

Objective and Task Method

Establish Objectives (create awareness of new product among 20 percent of target market) Determine Specific Tasks (advertise on market area television and radio and local newspapers) Estimate Costs Associated with Tasks (create awareness of new product among 20 percent of target market)

Payout Planning
To determine how much to spend, marketers develop a payout plan that determines the investment value of the advertising and promotion appropriation
Example of a three-year payout plan (Rs. millions)
Year 1 15.0 7.5 15.0 (7.5) (7.5) Year 2 35.50 17.75 10.50 7.25 (0.25) Year 3 60.75 30.38 8.50 21.88 21.63

Product sales Profit contribution (@$.50 per case) Advertising/promotions Profit (loss) Cumulative profit (loss)

Allocating the IMC Budget

Factors Affecting Allocation to Various IMC Elements
Client/Agency Policies Size of Market

Market Potential Market Share Goals Market Share and Economies of Scale Organizational Characteristics

Share of Voice and Ad Spending