Ch. 7: Objectives and Budgeting for Promotional Programs n Why should we establish objectives for promotional programs?

Marketing Objectives vs. IMC Objectives n Marketing objectives are generally stated in the firm’s marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period. n IMC objectives are statements of what various aspects of the IMC program will accomplish.

IMC Objectives: Sales vs. Communication Perspective n Sales-Oriented Objectives: n Communication-Oriented Objectives:

Characteristics of Good Objectives n Concrete and measurable n Specify a well-defined audience n Establish benchmark measures n Specify a time period n Attainable n Realistic

Promotional Budget: Theoretical Issue Assumptions: 1) sales are a direct measure of advertising and promotions efforts; 2) sales are determined solely by advertising and promotions. Sales Ad expenditure Sales

Promotional Budget: Practical Approach Top-Down Budgeting Top Management sets the spending limit Promotion budget set to stay within spending limit Affordable method Percentage of sales ** Competitive parity Arbitrary allocation

Promotional Budget: Practical Approach Build-up Budgeting Promotion objectives are set Activities needed to achieve objectives are planned Costs of promotion activities are budgeted Total promotion budget is approved by top management Objective and task method** Payout planning Quantitative models

Brand Positioning Strategy in IMC Category Need User Brand Benefit(s) X Y Z Brand Awareness What is it? Who is it for? What does it offer? Brand Attitude

X Options in the X-YZ Macromodel of Positioning Location (X = product category; options for brand = central or differentiated position within the product category) Central PositionDifferentiated position 1. Pioneer or market leader3. All other brands 2. Me-too brand if product category is such that attributes can be objectively matched by follower, with a large price savings 4. Including later me- too brands

Hierarchical Categorical Structure Beverages NonalcoholicAlcoholic Soft drinks Waters Coffee Milk Fruit juice Tea Other Cola Noncola Regular Diet

YZ Options in the X-YZ Macromodel of Positioning Location (Y = target audience; Z = brand benefits; options for brand = user-as-hero (Y) or product-as-hero (Z) positioning.) User-as-hero (Y)Product-as-hero (Z) 1. Target product with novice target audience 3. All other situations 2. Social approval product (social approval is the primary purchase motivation)

Positioning in the I-D-U Mesomodel Based on Purchase Motivations (Decision Rule: Position the brand on the primary (strongest) motive unless most brands are already positioned there; in which case, go to the secondary (next strongest) motive) Negatively originated (informational) motivations Positively originated (transformational) motivations 1. Problem removal 2. Problem avoidance 3. Incomplete satisfaction 4. Mixed approach-avoidance 5. Normal depletion: omitted for positioning 6. Sensory gratification 7. Intellectual stimulation or mastery 8. Social approval

I-D-U Positioning Rule (Applied for the High-Importance Benefits) n Emphasize the brand’s unique benefits n Mention its equal benefits n And trade off or omit its inferior benefits

Multiattribute Strategies for Brand Attitude Attitude b =  (B bi x E i ) Qs: what strategy could we use to increase consumers’ attitude toward a brand?

The A-B-E Micromodel of Benefit Focus 1. Attribute focus 2. Benefit focus from an attribute: a  b 3. Benefit focus: b 4. Benefit focus from an emotion: e -  b 5. Emotion focus from a benefit: b  e + 6. Pure emotion focus: e +

Conditions in the A-B-E Micromodel of Benefit Focus Attribute (A) focus n Expert target audience n Intangible service n As an alternative to emotion focus for homogeneous-benefit brands Benefit (B) focus n Brand with hard-to-imitate benefit n Negatively motivated (informational) brand: e -  b n “Logical” attack on entrenched emotional-based attitude: a  b Emotion (E) focus n Brand with easy-to-imitate benefits n Positively motivated (transformational) brand brand: b  e + or e + n “Emotional” attack on entrenched attribute- or benefit-based attitude: e -  b

Positioning Statement Format: “Long” Version 1. To (the target audience, Y)/ 2. _______ is the (central or differentiated) brand of (category need, X)/ 3. That offers (brand benefit or benefits, Z). The advertising for this brand: a. should emphasize (benefit or benefits, U, uniquely delivered) with (a, b, or e) focus, b. must mention (benefits or benefits, I, important “entry tickets”) c. and will omit or trade off (benefit or benefits, D -, inferior-delivery benefits).