Marketing Communications Chapter 8

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Questions and Answers

What is the primary focus of setting marcom objectives?

To create a hierarchy of marcom effects

To determine the integration of advertising and direct product experience

To set suitable requirements for good objectives (correct)

To increase sales

What is the relevance of the hierarchy-of-marcom effects model in setting marcom objectives?

It sets the sales targets for a product

It measures the return on investment (ROI) of marcom campaigns

It provides a framework for understanding the effects of marcom on customers (correct)

It helps determine the budget allocation for advertising

What is the purpose of the Integrated Information Response Model?

To measure the effectiveness of advertising campaigns

To determine the optimal budget allocation for marcom campaigns

To set sales targets for a product

To understand how advertising and direct product experience interact under different levels of involvement (correct)

What is the relationship between a brand's share of market (SOM) and its share of voice (SOV)?

SOM is directly proportional to SOV Signup and view all the answers

What is the main drawback of using sales as a marcom objective?

It is precisely wrong Signup and view all the answers

What guides practical budgeting in marcom?

Rules of thumb, or heuristics Signup and view all the answers

What is the primary way to gain loyalty from consumers?

By meeting consumers' needs and reinforcing brand image Signup and view all the answers

What is a key component of setting good marketing communication objectives?

Statements about what a particular marketing communication is intended to accomplish Signup and view all the answers

What is the first step in setting marketing communication objectives?

Identifying the target audience Signup and view all the answers

According to the Hierarchy of Marcom Effects Model, which of the following is not a potential objective?

Customer satisfaction Signup and view all the answers

What is a criticism of the Hierarchy of Effects Model?

It does not consider the role of personal experience Signup and view all the answers

What is an attitude?

A consumer's emotional response to a brand Signup and view all the answers

What is the primary goal of a marcom programme?

To yield bottom-line results Signup and view all the answers

What is the purpose of establishing a budget in marcom?

To evaluate actual results against objectives Signup and view all the answers

What is the ideal scenario for budget setting according to economic theory?

When marginal revenue equals marginal cost Signup and view all the answers

What is a critical factor to consider in budget setting?

The marcom objective Signup and view all the answers

What is the ultimate goal of measuring pre-sales effects?

To tie pre-sales effects to product trial and loyalty Signup and view all the answers

What is the main challenge in employing the profit-maximisation rule for budget setting?

Knowing the advertising-sales response function Signup and view all the answers

What is the primary function of a budget in marcom?

To express a financial plan in physical and monetary units Signup and view all the answers

What is the outcome of increasing accountability in marcom?

A greater demand for marcom programmes that yield bottom-line results Signup and view all the answers

What is the ultimate purpose of marcom according to the heretical view?

To generate sales Signup and view all the answers

What is claimed to be 'precisely wrong' in the heretical view?

Indirect objectives, such as increases in brand awareness levels Signup and view all the answers

Why is the effect of marcom on sales difficult to measure?

Because of the many factors that influence brand sales Signup and view all the answers

What is the consequence of having many factors that influence brand sales?

It is difficult to measure the effect of marcom on sales Signup and view all the answers

What is the main issue concerning marcom objectives according to the heretical view?

The right versus wrong objective Signup and view all the answers

What is the argument in favour of stating objectives in terms of sales?

Sales is always the right objective Signup and view all the answers

How can indirect objectives, such as brand awareness, be measured?

Using post-awareness minus pre-awareness evaluations Signup and view all the answers

What is the contrast between sales measures and indirect objectives according to the heretical view?

Sales measures are vaguely right, while indirect objectives are precisely wrong Signup and view all the answers

What is the outcome of having a higher share of voice (SOV) in a highly competitive market?

Higher share of market Signup and view all the answers

What is the criticism of the percentage-of-sales budgeting method?

It reverses the logical relationship between sales and advertising Signup and view all the answers

What is the primary goal of the objective-and-task method of budgeting?

To establish specific marketing objectives and allocate budget accordingly Signup and view all the answers

What is the disadvantage of small companies spending disproportionately large amounts on advertising?

It may not be sustainable in the long run Signup and view all the answers

What is the relationship between share of voice (SOV) and share of market (SOM)?

Higher SOV is often related to higher SOM Signup and view all the answers

What is the first step in the objective-and-task method of budgeting?

Establish specific marketing objectives Signup and view all the answers

What is the main advantage of the objective-and-task method of budgeting?

It is based on specific marketing objectives Signup and view all the answers

What is the primary challenge faced by small companies in highly competitive markets?

Spending disproportionately large amounts on advertising Signup and view all the answers

Study Notes

Overview of Marcom Objective Setting and Budgeting

Marcom objective setting involves understanding the process of setting objectives and the requirements for good objectives
The hierarchy of marcom effects model helps determine the integration of advertising and direct product experience under different levels of involvement

The Hierarchy of Marcom Effects Model

Questions and criticisms of the model include:
- Which comes first, attitude or behavior?
- Which is more important, advertised information or personal experience?
- Is brand loyalty guaranteed?
The model provides a framework for setting objectives, such as awareness, expectations, trial, and reinforcing beliefs

Setting Marcom Objectives

Requirements for setting good marcom objectives include:
- Who (target audience)
- What (specific goal)
- Where and when (relevant time frame)
- How often
Marcom objectives should be dependent on the individual brand's situation

Should Marcom Objectives be Stated in Terms of Sales?

The heretical view argues that marcom objectives should be stated in terms of sales, as sales is the ultimate goal of marcom
This view holds that indirect objectives, such as increases in brand awareness, are "precisely wrong" and sales measures are "vaguely right"
The issue of right versus wrong concerns the marcom objective, with the heretical view contending that sales is always the right objective

Marcom Budgeting

Establishing a budget is critical for any business, as it provides a financial plan and assists management in carrying out the firm's plans
A budget performs specific functions, including:
- Future quantitative financial plan
- Assists management in carrying out the firm's plans
- Establishes budgetary control

Marcom Budgeting in Theory

The economic theory approach to budgeting involves investing in advertising as long as the marginal revenue exceeds the marginal cost
Profits are maximized when marginal revenue equals marginal cost
However, this approach is non-operational, as knowledge of the advertising-sales response function is rarely available

Practical Budgeting Methods

Factors to consider in budgeting setting include:
- Marcom objective
- Competitive marcom activity
- Share of voice (SOV) and share of market (SOM)
SOV is the percentage of total product advertising by a specific brand, and SOM is the market share commanded by a specific brand
Generally, higher SOV is related to higher SOM

Practical Budgeting Methods (cont.)

Percentage-of-Sales Budgeting involves setting the advertising budget as a fixed percentage of past or anticipated sales
This method is criticized for reversing the logical relationship between sales and advertising
The Objective-and-Task Method involves setting objectives and then setting budgets accordingly, and is used most frequently by both consumer and industrial companies

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Description

This quiz covers the concepts of objective setting and budgeting in marketing communications. It includes topics such as setting marcom objectives, hierarchy of marcom effects, and budgeting in theory and practice.