Selecciones - Webs

226
Part Four Objectives and Budgeting for Integrated Marketing
Communications Programs
Belch: Advertising and
Promotion, Sixth Edition
Figure 7-19 Share of
advertising/sales
relationship (two-year
summary)
IV. Objectives and
Budgeting for Integrated
Marketing
Communications Programs
7. Establishing Objectives
and Budgeting for the
Promotional Program
© The McGraw−Hill
Companies, 2003
The major disadvantage of this method is the difficulty of determining which tasks
will be required and the costs associated with each. For example, specifically what tasks
are needed to attain awareness among 50 percent of the target market? How much will it
cost to perform these tasks? While these decisions are easier to determine for certain
objectives—for example, estimating the costs of sampling required to stimulate trial in a
defined market area—it is not always possible to know exactly what is required and/or
how much it will cost to complete the job. This process is easier if there is past experience
to use as a guide, with either the existing product or a similar one in the same product
category. But it is especially difficult for new product introductions. As a result,
budget setting using this method is not as easy to perform or as stable as some of the
methods discussed earlier. Given this disadvantage, many marketing managers have
stayed with those top-down approaches for setting the total expenditure amount.
The objective and task method offers advantages over methods discussed earlier
but is more difficult to implement when there is no track record for the product. The
following section addresses the problem of budgeting for new product introductions.
Payout Planning The first months of a new product’s introduction typically require
heavier-than-normal advertising and promotion appropriations to stimulate higher levels
of awareness and subsequent trial. After studying more than 40 years of Nielsen
figures, James O. Peckham estimated that the average share of advertising to sales
ratio necessary to launch a new product successfully is approximately 1.5:2.0. 35 This
means that a new entry should be spending at approximately twice the desired market
share, as shown in the two examples in Figure 7-19. For example, in the food industry,
A. New Brands of Food Products
Brand
101
102
103
104
105
Average share
of advertising
4
3
8
16
34%
B. New Brands of Toiletry Products
Brand
401
402
403
404
405
406
407
408
409
410
411
412
Average share
of advertising
7
6
6
30%
25
20
12
16
19
14
10
10
Attained share
of sales
12.6%
10.0
7.6
2.6
2.1
Attained share
of sales
19.5%
16.5
16.2
9.4
8.7
7.3
7.2
6.0
6.0
5.9
5.9
5.2
Ratio of share
of advertising
to share of sales
2.7
1.6
1.1
1.5
1.4
Ratio of share
of advertising
to share of sales
1.5
1.5
1.2
1.3
1.8
2.6
1.9
1.7
1.2
1.0
1.7
1.2