Advertising and promotional programs are the fuel that consumers strive on. Without advertising, consumers would not be aware of the products/services available, they would have a lack of knowledge about what a specific product can do to benefit or help them, they would not know what to like vs. dislike, their preferences would not be fully developed, they would have to rely on a trial and error process that is through other communication (not advertising and promotional tactics) and the likelihood that they purchase or even re-purchase a particular product is slim if advertising techniques are not apparent to remind consumers that this product exists and is beneficial.
During economic downturns, the advertising and promotional budget is the first to get slashed. From a sales-oriented objective perspective, this may happen because sales-oriented managers "spend money on advertising and promotional to sell its product or service" (Belch 219). They focus on how advertising/promotion can benefit the SALES of the product instead of how these tactics can benefit the consumer's purchase behavior cycle. Sales-oriented managers often expect an immediate impact on their sales if they focus on advertising but instead, the carry-over effect occurs, which means that money spent on advertising does not have an immediate impact on the percentage of sales (Belch 220). While this may sound understandable through a business student's eyes, it also means that sales-oriented companies may slash their advertising and promotional budgets because they are not meeting the goals they hoped to strive for at an immediate pace. This is not the best strategy to follow because advertisements have the main purpose of educating consumers which will hopefully and positively impact sales in the long run.
Cutting advertising and promotional plans also poorly impacts IMC objectives that a company creates to follow as a guideline. Any quantifiable marketing goals (goals that have a specific time frame) need advertising and promotion to help achieve that goal. These objectives are usually "realistic" and "attainable" and include advertising/promotion as well as production, pricing, and distribution of a specific product (Belch 219). If there were a lack of advertising and promotion, companies would have a difficult time striving to accomplish their objectives.
Advertising and promotional expenses do not always have to be the first to go. In a top-down budgeting approach, management creates a budget limit and the advertising and promotional costs must remain within that limit. Belch describes a top-down approach as "the affordable method" where a budget is once again created but then the rest of the money is allocated to promotional costs. However, spending limits can sometimes skyrocket and then the company would be in financial trouble. Or spending limits can be under the budget and not enough sales will cover for the company's losses (239).
Another strategy that helps promotional costs remain an integral part of an IMC plan is bottom-up budgeting where the promotional budget is created first and then specific, attainable, measurable objectives are created to later be achieved and then the overall promotional budget "is approved by top management" (239). This is also a smart way to include advertising/promotional tactics into the budget and confirm that sales will increase and consumers will be aware and knowledgeable about the product or service.
The DAGMAR model (Defining Advertising Goals for Measured Advertising Results) is a useful model to follow in a company. However, companies have issues with following the basic hierarchy: awareness, comprehension, conviction, and action. If companies cannot abide by this model, they cannot understand what they are doing right or wrong. Sales-oriented companies often ignore the DAGMAR approach, leading to a cut in the advertising and promotional budget because DAGMAR lacks in "practicality and costs" and "inhibits creativity" (Belch 229). These are important tactics when advertising is involved because an ad should be generated to send a clear message to the consumer by using creative and qualitative tactics.
If a company focuses on communications objectives, it is determining specific, measurable, and obtainable objectives for the advertising and promotional goals that the company hopes to achieve. This is a healthy mindset in terms of companies who want to have a long-lasting impact on consumers and their purchase behavior. Cutting advertising/promotional budgets can negatively impact sales, negatively impact the relationship between the company and its ad agency, and negatively impact the end goals for a company which are outlined in an obtainable objective list that helps guide the company towards success.
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