36 Questions
What is the primary focus of setting marcom objectives?
To set suitable requirements for good objectives
What is the relevance of the hierarchy-of-marcom effects model in setting marcom objectives?
It provides a framework for understanding the effects of marcom on customers
What is the purpose of the Integrated Information Response Model?
To understand how advertising and direct product experience interact under different levels of involvement
What is the relationship between a brand's share of market (SOM) and its share of voice (SOV)?
SOM is directly proportional to SOV
What is the main drawback of using sales as a marcom objective?
It is precisely wrong
What guides practical budgeting in marcom?
Rules of thumb, or heuristics
What is the primary way to gain loyalty from consumers?
By meeting consumers' needs and reinforcing brand image
What is a key component of setting good marketing communication objectives?
Statements about what a particular marketing communication is intended to accomplish
What is the first step in setting marketing communication objectives?
Identifying the target audience
According to the Hierarchy of Marcom Effects Model, which of the following is not a potential objective?
Customer satisfaction
What is a criticism of the Hierarchy of Effects Model?
It does not consider the role of personal experience
What is an attitude?
A consumer's emotional response to a brand
What is the primary goal of a marcom programme?
To yield bottom-line results
What is the purpose of establishing a budget in marcom?
To evaluate actual results against objectives
What is the ideal scenario for budget setting according to economic theory?
When marginal revenue equals marginal cost
What is a critical factor to consider in budget setting?
The marcom objective
What is the ultimate goal of measuring pre-sales effects?
To tie pre-sales effects to product trial and loyalty
What is the main challenge in employing the profit-maximisation rule for budget setting?
Knowing the advertising-sales response function
What is the primary function of a budget in marcom?
To express a financial plan in physical and monetary units
What is the outcome of increasing accountability in marcom?
A greater demand for marcom programmes that yield bottom-line results
What is the ultimate purpose of marcom according to the heretical view?
To generate sales
What is claimed to be 'precisely wrong' in the heretical view?
Indirect objectives, such as increases in brand awareness levels
Why is the effect of marcom on sales difficult to measure?
Because of the many factors that influence brand sales
What is the consequence of having many factors that influence brand sales?
It is difficult to measure the effect of marcom on sales
What is the main issue concerning marcom objectives according to the heretical view?
The right versus wrong objective
What is the argument in favour of stating objectives in terms of sales?
Sales is always the right objective
How can indirect objectives, such as brand awareness, be measured?
Using post-awareness minus pre-awareness evaluations
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
What is the outcome of having a higher share of voice (SOV) in a highly competitive market?
Higher share of market
What is the criticism of the percentage-of-sales budgeting method?
It reverses the logical relationship between sales and advertising
What is the primary goal of the objective-and-task method of budgeting?
To establish specific marketing objectives and allocate budget accordingly
What is the disadvantage of small companies spending disproportionately large amounts on advertising?
It may not be sustainable in the long run
What is the relationship between share of voice (SOV) and share of market (SOM)?
Higher SOV is often related to higher SOM
What is the first step in the objective-and-task method of budgeting?
Establish specific marketing objectives
What is the main advantage of the objective-and-task method of budgeting?
It is based on specific marketing objectives
What is the primary challenge faced by small companies in highly competitive markets?
Spending disproportionately large amounts on advertising
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
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.
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