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ESTABLISHING OBJECTIVE AND BUDEGETING FOR IMC CAMPAIGN, Appropriate…
ESTABLISHING OBJECTIVE AND BUDEGETING FOR IMC CAMPAIGN
Putting advertising in perspective
Profit = Revenue – Expenses
Revenue = Price x Volume
Volume = Trial + Repeat
Investment in advertising requires that incremental revenue exceeds advertising expense.
Decreasing advertising expenses will increase profits, if all other expenses are held constant.
PROCESS
Marketing communication
Set objective
Formulate budget
Create a message
Select ad media and vehicle
Strategy Implementation
Assessing ad effectiveness
Setting objectives
Make consumers aware of a new brand
Influence consumers’ expectations about a brand’s attributes and benefits
Encourage consumers to try the brand
Setting achievable advertising objectives
Be quantitative and measurable
Specify the amount of change
Be realistic
Be internally consistent
Be clear and put it in writing
Include a precise statement of who, what and when
Budgeting for marketing communications
The optimal level of any investment is the level that maximises profits (MR = MC)
Factors when establishing an advertising budget
Ad objective
Competitor’s advertising activity
Funds available
Practical budgeting methods
Competitive parity method (ngang giá cạnh tranh)
Objective-and-task method
Affordability method (khả năng chi trả)
Appropriate strategy considering elasticity
Neither price- elastic nor advertising -elastic
Maintain status quo
Most suitable when consumers have well- established preferences
More advertising- elastic
Spend more on advertising
Most suitable for cosmetics, designer labels, home furnishing
More price- elastic
Price discounting
Suitable when branding switching is high, consumer goods
Both price- and advertising- elastic
Increase advertising and/or discount prices
Suitable for: breakfast cereals, cars, household appliances
FUNCTIONS
Informing
Persuading
Reminding
Adding value
Assisting other company efforts