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Objectives and budgeting ((DAGMAR (Criticisms ((Problems with the response…

- - - - The difference between the total revenue generated by a brand and its total variable costs
    - - A principle of resource allocation that balances incremental revenues against incremental costs
        
        Weaknesses
        
        Assumption that sales are a direct measure of advertising and promotion efforts
        
        Assumption that sales are determined solely by advertising and promotion
    - - an advertising/sales response function that views the incremental effects of advertising on sales as decreasing
      - budgeting under this model suggests that fewer advertising dollars may be needed to create the optimal influence on sales
    - - a sales response model that attempts to show sales responses to various levels of advertising and promotional expenditures
      - projects and s-shaped response function to the budget outlay (measured in sales).
    - - budgeting approaches in which the budgetary amount is established at the executive level and monies are passed down to the various departments -- management makes the budget and promotion has to stay within this spending limit
    - - 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
    - - affordable method
        
        the firm determines the amount to be spent in various areas such as production and operations then allocates whats left to advertising and promotion considering this to be the amount it can afford
      - Arbitrary allocation method
        
        no theoretical basis is considered and the budgetary amount is often set by a fiat. The budget is determined by management solely on the basis of what is felt to be necessary.
      - Percentage of sales method
        
        the advertising and promotions budget is based on sales of the product -- management determines the amount by either (1) taking a percentage of the sales dollars or (2) assigning a fixed amount o the unit product cost to promotion and multiplying this amount bu the number of units sold.
    - - clips competitors ads from local print media allowing the company to work backward to determine the cumulative costs of the ads placed
    - - where managers establish budget amounts by matching the competitors percentage of sales expenditures --> ignores the fact that advertising and promotions are designed to accomplish specific objectives by addressing certain problems and opportunities and it also assumes that because firms have similar expenditures their programs will be equally effective
    - - advertising and promotion are considered investments. Advertising and promotion are expected to earn a certain return
    - - defines the communications objectives to be accomplished
        
        determines the specific strategies and tasks needed to attain them
        
        estimating the costs associated with performance of these strategies and tasks
- - - - technology
      - competition
      - advertising and promotion
      - distribution
      - price
      - product quality
      - the economy
  - - - awareness
      - knowledge
      - liking
      - preference
      - conviction
      - purchase
    - - specific and measureable
        
        Can be performed by and attributed to advertising rather than to a combination of several marketing factors
        
        Awareness - making the consumer aware of the existence of the brand or company
        
        Comprehension - developing an understanding of what the product is and what it will do for the consumer
        
        Conviction - developing a mental disposition in the consumer to buy the product
        
        Action - getting the consumer to purchase the product
  - - - Problems with the response hierarchy
        
        Sales objectives
        
        Practicality and costs
        
        Inhibition of creativity
  - - - Focuses on what the marketer wants to say, when the marketer wants to say it, about the things the marketer believes are important about his or her brand, and in the media forms the marketer wants to use.
    - - Starts with the customer and builds backward to the brand
    - - Two way interaction
        
        the flow between the communications analysis and budget determination
      - Zero based communications planning
        
        Involves determining what tasks need to be done and which marketing communications functions should be used and tasks need to be done and which marketing communications functions should be used and to what extent -- focuses on the tasks to be done and searches for the best ideas and media to accomplish it