Campaign Critique

BUS302

Establishing objectives and budgeting for IMC

campaigns

Learning objectives

• How to set achievable marketing objectives, and how this is influenced by the hierarchy-of-effects model

• The nature and importance of IMC budgeting and the practical considerations that guide budgeting

• The legal and regulatory issues associated with advertising and interactive marketing communications

Profit = Revenue – Expenses

Revenue = Price x Volume

Volume = Trial + Repeat

Putting advertising in perspective

• Increase advertising and/or discount prices

• Suitable for: breakfast cereals, cars, household appliances

• Price discounting

• Suitable when branding switching is high, consumer goods

• Spend more on advertising

• Most suitable for cosmetics, designer labels, home furnishing

• Maintain status quo

• Most suitable when consumers have well- established preferences

Neither price-

elastic nor advertising

-elastic

More advertising-

elastic

Both price- and

advertising- elastic

More price- elastic

Appropriate strategy considering elasticity

Digital marketing communication on the rise

• Media breakdown spend 2015 vs. 2016 in Australia

Marketing communication functions and process

Informing

Persuading

Reminding

Adding value

Assisting other company efforts

An expression of marketing

management consensus

Guide the budgeting, message and media aspects of a brand’s advertising strategy

Provide standards against which results

can be measured

Setting marketing communication objectives

Moving consumers from one goal to the next

Brand loyalty

• Highest tier of the hierarchy-of-effects model

• No guarantee that consumers will move to this level

• Create a preference for the brand; reduce a consumer‘s brand switching tendency

• Generating consumer loyalty requires:

providing a brand that satisfies consumers’ needs

continuous advertising to reinforce consumers’ brand-related beliefs and attitudes.

Include a precise statement of who,

what and when

Be quantitative and measurable

Specify the amount of change

Be realistic Be internally

consistent Be clear and put it

in writing

Setting achievable advertising objectives

Sales increase

Market share

ROI

Awareness

Influence expectations

Enhance attitudes

Advertising objective (a more recent approach)

• A more recent view focuses on accountability.

• Measurables include the traditional and alternative approaches.

MC

= (Change in total cost)

(Change in quantity)

= TC/Q

MR

= (Change in total revenue)

(Change in quantity)

= TR/Q

Budgeting for marketing communications

• The optimal level of any investment is the level that maximises profits (MR = MC).

• Advertisers should continue to increase their advertising investment as long as it is profitable to do so.

Competitor’s advertising

activity

Factors when establishing an advertising budget

Practical budgeting methods

Percentage-of-sales budgeting

Competitive parity method

The objective-and-task method

Affordability method

Legal and regulatory issues in advertising management

• The regulatory environment is premised on protecting consumers from unscrupulous practices.

• Competition and Consumer Act 2010. The Act deals with:

Price fixing

Primary and secondary boycotts

Misuse of market power

Exclusive dealing

Resale price maintenance

Anti- competitive behaviour

Misleading and

deceptive conduct

Liability of advertisers and marketers

• One of the most simple yet powerful sections of the Australian Consumer Law (ACL) states:

The corporation shall not, in trade or commerce, engage in conduct which is misleading or deceptive or liable to mislead or deceive.

• Sections 29–33 cover misrepresentation regarding goods.

• Sections 20–22 cover penalties for engaging in unconscionable conduct in trade or commerce.

Electronic marketing and intellectual property

• Trademarks and domain names

Trademarks in Australia can be registered under the Commonwealth Trade Marks Act 1995.

• Copyright and websites

Australian copyright law is set out in the Copyright Act 1968.

Electronic marketing and intellectual property

• Packaging and labelling

Packaging must comply with various industry-specific laws.

• Self-regulation

Controlling bodies for managing self-regulation in the marketing communications environment include:

the Australian Association of National Advertisers (AANA)

the Advertising Federation of Australia (AFA).

Learning objectives

• How to set achievable marketing objectives, and how this is influenced by the hierarchy-of-effects model

• The nature and importance of IMC budgeting and the practical considerations that guide budgeting

• The legal and regulatory issues associated with advertising and interactive marketing communications