Advertising Budget Method by wyk39763


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									          Ch.7: Strategic Planning
                Key Points

• Differentiate between objectives, strategies,
  and tactics in strategic planning

• Identify the six basic decisions in an
  advertising plan

• Explain how account planning works
Objectives, Strategies, and Tactics

 •Objectives: What you want to accomplish
 •Strategies: How to accomplish the objectives
 •Tactics: Make the plan come to life

 ** Example:
        Objectives: To increase baking soda consumption
            •Adding new target market
            • Increase repeated purchase by loyal consumers
            •Introducing new ways of using a product

        Big Picture: a three-tiered process

Business Plan              Marketing Plan                       Plan

Figure 7.1: Strategic Planning from Top to Bottom (p. 182)
      Basic Strategic Planning Decisions

• Annual advertising or                Typical Plan Outline
  IMC plan                          I. Situation analysis
   – Outlines all the advertising
     or marketing                   II. Key strategic
     communication activities            decisions
• Plansbook
                                    III. Media strategy
• Campaign plan
   – More tightly focused on
                                    IV. Message strategy
     solving a particular           V. Other tools
     marketing communication
     problem                        VI. Evaluation of
             Outline of an Advertising Campaign
I. Situation Analysis
         •Background Research:
              •Company and product history
              •Product analysis and previous advertising analysis
              •Consumer analysis
              •Competitive analysis and their advertising analysis
         •SWOT Analysis (Strengths, Weakness, Opportunities and Threats)
         •Identify Key Problems and Opportunities

    II. Key Strategic Decisions

         •Advertising/IMC Objectives and Strategies
         •Target Audience Selection
         •Brand Position: brand’s competitive advantage
         •Brand Image and Personality
            Outline of an Advertising Campaign

       Budget: Total budget for the campaign:
          •Media placement cost
          •Production cost,
          •Research cost,
          •Any other promotional cost

          •Set aside 10% Contingency fund: for any unexpected situation

 Several Ways of Setting Budget

1. Historical Method
   •     based on last year’s advertising spending,
   add some inflation or other factor.
Several Ways of Setting Budget Budget
      Several Ways of Setting

 2. Percentage-of-sales Method
    •   set advertising $ as certain portion of sales.(average
    •   sales number/situation will determine how much people
        can spend on advertising. - Any problem with this
 3. Competitive Method
    •   look at major competitors’ advertising budget and try to
        match its own advertising budget with it.
    •   share of voice concept: $ advertising spent by a brand in
        a medium vs. $ advertising spent by all brands in the
        product category.
                Several Ways of Setting Budget
 Several Ways of Setting Budget

4. Task-Objective Method
   •Based on objectives set for the whole campaign, agencies
   come up with the cost to accomplish each objective, add them
   up, and set the total budget.
   •Best method for agencies, however, can be too costly
5. “All you can afford” Method
   •worst method: Spend all necessary costs before you set aside
   $ for advertising,
   •then if they have extra $, take whatever left over and use
   them for advertising campaign
Account Planner: The Creative Brief/Platform

                      • Explains the consumer
                        insight and summarizes
                        the basic strategy
                      • Six major parts:
                         –   Marketing objective
                         –   Product
                         –   Target audience
                         –   The promise and support
                         –   Brand personality
                         –   Strategy statement

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