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Figure 7-8 The San Diego Zoo sets objectives for various promotional elements

Advertising

Objectives: Drive attendance to Zoo and Wild Animal Park. Uphold image and educate target audience and inform them of new attractions and special events and promotions.

Audience: Members and nonmembers of Zoological Society. Households in primary and secondary geographic markets consisting of San

Diego County and 5 other counties in southern California. Tertiary markets of 7 western states. Tourist and group sales markets. Timing: As allowed and determined by budget. Mostly timed to coincide with promotional efforts.

Tools/media: Television, radio, newspaper, magazines, direct mail, outdoor, tourist media (television and magazine).

Sales Promotions

Objectives: Use price, product, and other variables to drive attendance when it might not otherwise come. Audience: Targeted, depending on co-op partner, mostly to southern California market. Timing: To fit needs of Zoo and Wild Animal Park and cosponsoring partner.

Tools/media: Coupons, sweepstakes, tours, broadcast tradeouts, direct mail: statement stuffers, fliers, postcards.

Public Relations

Objectives: Inform, educate, create, and maintain image for Zoological Society and major attractions; reinforce advertising message.

Audience: From local to international, depending on subject, scope, and timing.

Timing: Ongoing, although often timed to coincide with promotions and other special events. Spur-of-the-moment animal news and information such as acquisitions, births, etc.

Tools/media: Coverage by major news media, articles in local, regional, national and international newspapers, magazines and other publications such as visitors' guides, tour books and guides, appearances by Zoo spokesperson Joanne Embery on talk shows (such as "The Tonight Show").

Cause Marketing/Corporate Sponsorships/Events Underwriting

Objectives: To provide funding for Zoological Society programs and promote special programs and events done in cooperation with corporate sponsor. Must be win-win business partnership for Society and partner. Audience: Supporters of both the Zoological Society and the corporate or product/service partner.

Timing: Coincides with needs of both partners, and seasonal attendance generation needs of Zoo and Wild Animal Park.

Tools: May involve advertising, publicity, discount co-op promotions, ticket trades, hospitality centers. Exposure is directly proportional to amount of underwriting by corporate sponsor, both in scope and duration.

Direct Marketing

Objectives: Maintain large powerful base of supporters for financial and political strength.

Audience: Local, regional, national and international. Includes children's program (Koala Club), seniors (60+), couples, single memberships, and incremental donor levels. Timing: Ongoing, year-round promotion of memberships.

Tools: d irect mail and on-grounds visibility.

Group Sales

Objectives: Maximize group traffic and revenue by selling group tours to Zoo and Wild Animal Park.

Audience: Conventions, incentive groups, bus tours, associations, youth, scouts, schools, camps, seniors, clubs, military, organizations, domestic and foreign travel groups. Timing: Targeted to drive attendance in peak seasons or at most probable times such as convention season.

Tools: Travel and tourism trade shows, telemarketing, direct mail, trade publication advertising.

Internet

Objectives: Provide information regarding the zoo, programs, memberships and public relations activities.

Audience: All audiences interested in acquiring more information about the zoo.

Timing: Ongoing, updated frequently over time.

Tools: Website, including videos, shop zoo and zoo calendar.

Belch: Advertising and IV. Objectives and 7. Establishing Objectives © The McGraw-Hill

Promotion, Sixth Edition Budgeting for Integrated and Budgeting for the Companies, 2003

Marketing Promotional Program Communications Programs is strong evidence that exactly the opposite should occur, as Exhibit 7-10 argues. Moreover, the decision is not a one-time responsibility. A new budget is formulated every year, each time a new product is introduced, or when either internal or external factors necessitate a change to maintain competitiveness.

While it is one of the most critical decisions, budgeting has perhaps been the most resistant to change. A comparison of advertising and promotional texts over the past 10 years would reveal the same methods for establishing budgets. The theoretical basis for this process remains rooted in economic theory and marginal analysis. (Advertisers also use an approach based on contribution margin—the difference between the total revenue generated by a brand and its total variable costs. But, as Robert Steiner says, marginal analysis and contribution margin are essentially synonymous terms.)27 We begin our discussion of budgeting with an examination of these theoretical approaches.

Theoretical Issues in Budget Setting Most of the models used to establish advertising budgets can be categorized as taking an economic or a sales response perspective.

Marginal Analysis Figure 7-9 graphically represents the concept of marginal analysis. As advertising/promotional expenditures increase, sales and gross margins also increase to a point, but then they level off. Profits are shown to be a result of the gross margin minus advertising expenditures. Using this theory to establish its budget, a firm would continue to spend advertising/promotional dollars as long as the marginal revenues created by these expenditures exceeded the incremental advertising/promotional costs. As shown on the graph, the optimal expenditure level is the point where marginal costs equal the marginal revenues they generate (point A). If the sum of the advertising/promotional expenditures exceeded the revenues they generated, one would conclude the appropriations were too high and scale down the budget. If revenues were higher, a higher budget might be in order. (We will see later in this chapter that this approach can also be applied to the allocation decision.)

While marginal analysis seems logical intuitively, certain weaknesses limit its usefulness. These weaknesses include the assumptions that (1) sales are a direct result of advertising and promotional expenditures and this effect can be measured and (2) advertising and promotion are solely responsible for sales. Let us examine each of these assumptions in more detail.

Exhibit 7-10 The AAAA promotes the continued use of advertising in a recession

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Advertising With Circulars

Advertising With Circulars

Co-op Mailing means that two or more businesses share in the cost and distribution of a direct mail campaign. It's kind of like having you and another non-competing business split the cost of printing, assembling and mailing an advertising flyer to a shared same market base.

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