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					     Value of Objectives
Focus and Coordination
   They help to orient everyone involved
    toward one, common goal.
Plans and Decisions
   They serve as criteria for developing
    plans and making decisions.
Measurement and Control
   They provide the standards and
    benchmarks for evaluating results.
  Measuring Advertising

    Competition               Technology

                                        The Economy
Advertising           SALES


       Distribution             Price
Problems With Sales Objectives
 Many other variables may influence sales.
 Advertising has a lagged effect.
 Sales objectives offer little guidance to creative
 and media people.
Where Sales Objectives May Work
In order of appropriateness:
    Direct response
Where Sales Objectives May Work
In order of appropriateness:
    Direct response
    Retail special event
Where Sales Objectives May Work
In order of appropriateness:
    Direct response
    Retail special event
    Mature & very stable
Communications Objectives
    Hierarchy of Effects Pyramid

      Regular Use
      20% Trial
    25% Preference
      40% Liking
  70% Comprehension
    90% Awareness
  Communications Objectives

Objective 1: Create brand awareness among 90% of
the target audience.
Objective 2: Create understanding of key brand
benefits among 70% of the target audience.
Objective 3: Create positive feelings about the brand
among 40% and preference among 25% of the target
Objective 4: Obtain trial among 20% of the target
Objective 5: Develop and maintain regular use
among 5% of the target audience.
The DAGMAR Approach
      Goals for
Characteristics of Objectives
   Specific Communications Objectives
   Concrete Measurable Tasks
   Well-Defined Target Audience
   Existing Benchmark Measure
   Degree of Change Sought
   Specific Time Period
          Critique of Objectives
         DAGMAR Difficulties
Legitimate Problems             Questionable Objections
Response Hierarchy              Sales Objectives Are
Problems                        Needed
   Doesn't always define the      Sales are all that really
    process people use to           counts, not
    reach purchase/use.             communications objectives.
Attitude - Behavior             Costly and Impractical
Relationship                       The research and efforts
                                    cost more then the results
   Attitude change doesn't
                                    are worth.
    always lead to change in
    actions or behavior.        Inhibition of Creativity
                                   Too many rules and too
                                    much structure curb genius.
Theoretical Issues in Budgeting
Concave-Downward Response Curve
Theoretical Issues in Budgeting
S-Shaped Response Curve
 Theoretical Issues in Budgeting
             Marginal Analysis

                Sales                        Gross Margin
Sales in $

                                         Ad. Expenditure


                        Point A
              Advertising / Promotion in $
Problems with Marginal
    Sales are the principal objective of
     advertising and/or promotion.

    Sales are the result of advertising and
     promotion and nothing else.
   Budgeting - Top Down

 Historical Method    •May be based on last year’s with a
                      percentage increase.

                      •Allocates whatever is left over to
Affordable Method     advertising.

                      •Compares total sales with the total
Percentage-of-Sales   promotion budget during a previous
                      or projected time period.
    Budgeting-Top Down

Arbitrary Allocation   •Budgeting by fiat.

                       •Matching the competition’s
Competitive Parity     percentage-of-sales expenditures.
Examples of ad-to-sales ratios
Airlines                       1.2 % of sales
Soft drinks                    5.3
Cable TV                       1.3
Dolls                         15.2
Food & kindred products       10.2
Steel works and blast furnaces 1.9
Watches, clocks and parts     13.7
Wine and brandy               11.3
Records, audiotape, disk      13.4
Plastic, resins                0.5
      Budgeting-Bottom Up

Objective & Task Method    •Looks at objectives set for each
                           activity, and determines the cost of
                           accomplishing each objective.

1. Isolate Objectives
2. Determine Tasks Required
3. Estimate Required Capital Expenditures
4. Monitor
5. Reevaluate Objectives