MAHARANA PRATAP GROUP OF INSTITUTIONS

KOTHI MANDHANA, KANPUR

(Approved by AICTE, New Delhi and Affiliated to Dr. AKTU, Lucknow)

Digital Notes
[Department of Business Administration]
Subject Name : Advertising Management

Subject Code : F010203T

Course : BBA
Branch : -
Semester : II
Prepared by : Mr. Rohit Verma

Reference No./BBA/RV/AM/BBAF010203T

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 UNIT-3
3.1 Promotional Objectives: Importance Determination of Promotional
Objectives
Promotional Objectives are goals of marketing communications such as advertising. Market promotion is an
integral part of marketing strategy. It is a powerful weapon used excessively by today’s’ marketers to achieve
marketing goals in a competitive environment. Market promotion is essentially a way to communicate with the
target market. Since the modern market is characterized by over-informed consumers, over-flooded products,
cut-throat competition, and rapid changes, the market promotion has a crucial role to play.

Main objectives of market promotion can be described with reference to below stated points:

1. To Stimulate Demand:- It is the primary objective of market promotion. Through the use of
appropriate means of market promotion, such as advertising, sales promotion, personal selling, and so
forth, the company can stimulate demand for the product. Market promotion efforts convert potential
buyers into actual buyers. Company, by highlighting product benefits, tries to match the product with
needs, wants, and expectations of buyers. As per need, various means of market promotion are used to
establish the information link with the target customers.

2. To Inform Consumers:- Promotion is aimed at informing consumers about features, qualities,

performance, price, and availability of firm’s products. Market promotion is also a valuable means to
inform consumers the changes made in the existing products and introduction of new products. In the
same way, market promotion, by various tools of market communication, is used for communicating the
special offers, price concession, utility of products, and incentives offered by the company.

3. To Persuade Consumers:- Market promotion is an effective way to persuade consumers the superiority
of product over competitors. A firm can communicate competitive advantages the product offers to
distinguish it from competitors’ products. Obviously, market promotion can assist the firm to convince
buyers that the firm’s product is the best solution to their unmet needs and wants. Advertising is one of
the most effective tools to distinguish the product from competitors’ products.

4. To Promote a New Product:- In a large and decentralized market, market promotion is an inevitable
medium to promote a new product. By suitable promotional strategies, a company can successfully
introduce a new product in the market as against existing products. Company can inform about
availability, distinct features, and price of newly launched product. In every stage of consumer adoption
of a new product, market promotion has critical role to play.

5. To Face Competition:- Market promotion enables the firm to face competition effectively. In today’s
market situation, it is difficult to stand without the suitable promotional efforts. In short, it can be said
that marketer can fight with competitors effectively, can prevent their entry, or can throw the competitor
away from the market by formulating and implementing effective market promotion strategies.

6. To Create or Improve Image:- Advertising, personal selling, and publicity and public relations – all
promotional tools – are capable to create or improve image and reputation of the firm. Many companies
have become popular in the market due to effective market promotion. Company can reach the
customers at every corner of the world through market promotion. Brand image is purely an outcome of
promotional efforts. For example, Hindustan Unilever, Colgate Palmolive, Sony, Philips, Hero Honda,
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 Ambuja Cement, and many national and multinational companies have made their permanent place in
the market due to successfully launching of market promotion programmes.

Thus, market promotion can help company realize various objectives. Company can increase sales,
improve its image, and maintain close and live contact with the market by suitable promotional efforts.
A company’s survival, growth, and development are based on how effectively it communicates with the
market.

3.2 Types of Promotion Objectives:-

The possible objectives for marketing promotions may include the following:-

(i) Build Awareness:- New products and new organizations are often unknown to a market, which means initial
promotional efforts must focus on establishing an identity. In this situation, the marketer must focus promotion
to: 1) ensure the message reaches customers, and 2) tell the market who they are and what they have to offer.

(ii) Create Interest:- Moving a customer from awareness of a product to making a purchase can present a
significant challenge. As we saw with our discussions of buying decisions made by consumers and businesses,
customers must first recognize they have a need before they actively start to consider a purchase. The focus on
creating messages that convince customers that a need exists has been the hallmark of marketing for a long time
with promotional appeals targeted at basic human characteristics such as emotions, fears, sex, and humor.

(iii) Provide Information:- Some promotion is designed to assist customers in the search stage of the
purchasing process. In some cases, such as when a product is so novel it creates a new category of product and
has few competitors, the information is simply intended to explain what the product is and may not mention any
competitors. In other situations, where the product competes in an existing market, informational promotion
may be used to help with a product positioning strategy. As we discuss in the Targeting Markets Tutorial,
marketers may use promotional means, including direct comparisons with competitor’s products, in an effort to
get customers to mentally distinguish the marketer’s product from those of competitors.

(iv) Stimulate Demand:- The right promotion can drive customers to make a purchase. In the case of products
that a customer has not previously purchased or has not purchased in a long time, the promotional efforts may
be directed at getting the customer to try the product. This is often seen with mobile apps, where software
companies offer free limited versions of their products. For products with an established customer-base,
promotion can encourage customers to increase their purchasing by providing a reason to purchase products
sooner or purchase in greater quantities than they normally do. For example, a pre-holiday newspaper
advertisement may remind customers to stock up for the holiday by purchasing more than they typically
purchase during non-holiday periods.

(v) Reinforce the Brand:- Once a purchase is made, a marketer can use promotion to help build a strong
relationship that can lead to the purchaser becoming a loyal customer. For instance, many retail stores now ask
for a customer’s email address so that follow-up emails containing additional product information or even an
incentive to purchase other products from the retailer can be sent in order to strengthen the customer-marketer
relationship.

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3.3 Setting Objective DAGMAR
The DAGMAR approach of advertising was devised by Mr Russell Colley who was much appreciated for his
work, as till date, DAGMAR is a concept used in advertising to set advertising objectives and goals. DAGMAR
is an abbreviation for “Defining advertising goals to measure advertising results”.

The 2 core things on which the DAGMAR Model stood were

1. Creation of a communication task to achieve goals

2. Defining the objective of the communication tasks in a manner that the results can be measured.

(A) The communication tasks involved in the DAGMAR approach:- A marketing task is a combination of
an advertising activity, a branding activity and possibly a customer service activity. The work of marketing
is holistic and hence it has to look at the whole organization. The work of Advertising is more individualist ic
and hence the organization is not considered.

To measure that a task assigned to advertising, is later on measured only in advertising terms, Russell colley
designed the communication tasks. Creating a communication task, which involves communications between
the company and the consumer, was solely the responsibility of the Advertising department.

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3.4 The goal of the communication tasks in DAGMAR was as follows:-

 Awareness: Communication tasks involved making the consumer aware of the brand or the product.
 Comprehension: These tasks also helped the consumer in understanding the attributes and the features
of the product and what the product will do for the consumer.
 Conviction: The communication task convinced the customer that this product was meant for them
 Action: Ultimately, after conviction, the customer was to be enticed to take action.

(B) Defining objectives in the DAGMAR approach:- The second most important task of
DAGMAR was defining the objectives of advertising or of the communication tasks which were to be
created. Once you defined the objectives, then the measuring of advertising results was comparatively
easier. With this move, Russell colley also gave more responsibilities to the advertising department.
Not only were they responsible for the ads made, they were also responsible for how well they
understood the objective of advertising, and how they incorporated these objectives in their
communication tasks.

The objectives of advertising in DAGMAR (which are used to create communication tasks) are as follows

 Concrete and measurable tasks: The tasks need to be a precise statement of what the advertiser wants
to achieve through the communication. Does he want to strengthen the brand image, maximise the brand
presence, penetrate new markets or increase overall sales?
 Define the target audience: Before the communication task commences, the target audience needs to
be defined as precisely as possible. Are you targeting youngsters, adults, elderly? Any of the various
forms of segmentation can be used to define the target audience.
 Degree of change sought: What level of perception, attitude or awareness of the customer do you want
to change? If a customer is aware of the product, do you want his negative attitude to change to positive?
Or if the market is completely unaware, do you want the whole market to be aware or only partially the
target group itself? These degrees of change which are going to be the objective of the communication
task need to be defined in advance.
 Time period: To achieve the objectives of the communication tasks, how much time are you ready to
allot. If you think that in a month, the product can create awareness in the complete market, then you are
very wrong. That’s why major advertisers try to introduce the product for 3 months, and then
communicate the features and benefits in the next 3 months so that the brand recall is high and the brand
acceptance is high as well. A defined time period gives better measurability.

. The DAGMAR approach is used by many promotional planners to set plans of advertising and marketing. This
approach is also used to set advertising objectives and to measured the results against the plan. Russell coley’s
work has led to the improvement of the advertising world, because these communication tasks were not only
sales driven, they achieved various goals of the organization only through Advertising.

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3.5 Importance of Advertising Budget:- An advertising budget is an estimate of a company’s promotional
expenditures over a certain time period.
The term ‘advertising budget’ in essence is nothing but planning the advertising expediture. The amount of
money to be utilized for advertising purpose is charged to the profit and loss account of the co. and therefore is
of vital importance both to the co. and to the advertising agency that handles advertiser’s account. Advertising
costs money & before spending, it is necessary to ensure its proper investment.

Every ad is a long term investment in the personality of a brand. Therefore, when advertising is recognized as a
type of future investment, care must be taken today to make it more effective with proper planning of
advertising budget.

Importance:-

1. Check on advertising expenditure:- Advertising budget helps to have a check on advertising

expenditure. Depending upon the budget, the advertiser will utilize the right funds to achieve the advt.
objectives. There will be no wastage of funds by over spending on advertising the right amount will be spent
to achieve the advertising objectives.

2. Approval from top management:- The framing of advertising budget will enable the advertising manager to
obtain approval from the top management. If the top management feels that the budget amount is more, then the
advertising manager may have to provide necessary justification for higher budgets.

3. Balanced focus:- The ad budget is prepared taking into consideration the requirements of the products that
are to be advertised. The right product is to be allocated the right amount of money. Again, there will be proper
focus on the right place & the right period of advertising.

4. Facilitates Planned Execution:- The right amount will be spent on the right product in the right media at
the right period and place. This will enable the advertiser to achieve ad objectives.

5. Provides direction for drafting of Ads:- The Ad budget provides a proper direction for drafting of ads.
Depending upon the budget, the ads will be filmed or drafted. When there is a large budget ,the advertiser may
think of selecting popular personalities, shooting the film at exclusive locations, using sophisticated computer
graphics & so on.

6. Selection of Media:- When advt. budget is large, the advertiser can select rich media mix which includes
television channels, various magazines, newspapers & even outdoor media. However, if the budget is small, the
advertiser has to be very selective in the choice of media.

3.6 Establishing the Budget:- A common way to prepare a budget is to present the different types of
expenses (cost categories) and income (funds available, or needing to be raised) on a simple spreadsheet (e.g.
Microsoft Excel). Large-scale campaigns, or specific donor requirements, may call for more complicated
presentations using several interlinked spreadsheets.

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 What to Include in a Budget?

1. Anticipated Expenses

 Staff,e. everyone who is paid to work on the campaign. A distinction can be made between direct costs
(salaries) and indirect costs (e.g. taxes and insurance you pay for staff).
 Investments,e. equipment purchased for long-term use in the campaign, e.g. electronic devices such as
cameras and cell-phones. For effective accountability, an inventory should be prepared and regularly
updated, i.e. a list detailing all equipment, where it is kept and what purposes it may be for. Written
agreements should be made as to which organization keeps the equipment after the end of the campaign.
 Operational costs. the costs directly related to running the campaign that are not staff costs or
investments. Examples would be printing costs for campaign materials, billboard rental, fees for radio
air-time, and transport costs for a travelling street theatre group.
 Administration. day-to-day expenses related to campaign management (e.g. office rent, electricity,
stationery, telephone bills)
 In addition, a separate heading may detail sub-contracts, e.g. if a design firm has been hired to design
campaign posters, or a consultant to write a research report.

2. Projected Income

 Institutional donor grants (per donor)

 Donations from businesses, local charity, churches, professional networks and other organization that
are not institutional donors
 Donations from individuals
 Subscriptions or membership fees
 Profit from sale of campaign items and other income-generating activities
 Other income

3.7 Actual income and expenditure

Often, the anticipated expense may be more or less than expected, or the projected income may fall short of
what may be needed to implement the campaign strategy. It is helpful for a budget to also track the actual
amounts that end up being raised and spent, and use this as a comparison against projected amounts. It is also a
means to determine if adjustments may need to be made as the campaign progresses in terms of resource
mobilization and allocation.

Important points to note when creating a budget

1. In large and complex campaigns, it is advisable to prepare a separate budget sheet for each set of
activities, e.g. for (i) formative research, (ii) production costs of TV public service announcements
(PSA), (iii) broadcasting costs for PSAs, (iv) production of print materials, (v) campaign web-site design
and maintenance, (vi) fundraising activities, and so forth, each sheet with its separate cost categories and
any activity-specific income. A summary sheet should bring together these different sub-budgets on one
page, to show overall campaign income and expenses.
2. For effective financial monitoring, the budget should be broken up into phases. For example, in a
campaign lasting 2 years, additional columns in the spreadsheet could show expenses every six months
for the 1st, 2nd, 3rd and 4th years respectively. For effective financial management, budgets need to be
reviewed regularly and adjusted swiftly if any major changes occur, e.g. changed campaign activities or
an unexpected drop in projected income.

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 3. All budget revisions should be formally approved by the campaign team, and distributed among all
relevant stakeholders. To prevent confusion and financial mismanagement, it is essential to include the
approval date on the budget sheet and to mark draft budget drafts as DRAFTS that have not yet been
approved.

3.8 Approaches Allocation of Budget:- We are discussing here 2 approaches to budgeting. They have
their advantage and disadvantage.
(i) Top-Down Approach:- It is called top-down approach because the budgets are made by the top executed
and then the money is passed down the line to various departments. This approach is applied in affordable
method percentage of sales, competitive parity method and Return On Investments (ROI) method of budgeting.

(ii) Bottom-up Budgeting:- In this method promotion adjectives are set for the tasks to be performed. All the
necessary activities to achieve the objectives are planned. The cost of these activities are as certained and
budgeted. The total promotion budget is then approved by top management. This is also know as the build-up
approach of budgeting.

“Money is the backbone of all organization. Your budget should be in accordance with your objectives
and the chosen Media”

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