Exam 11: Setting the Campaign Budget

Jones' data on TV ad quality indicate that low quality ads are better than not advertising at all.

The brand manager has to set and justify budgets for specific brand-item campaigns and ensure that these budgets will be sufficient to meet the respective sales goals.

If the largest competitor's SOV is below SOM, this signals an opportunity for our brand to attack.

FMCG categories tend to use relatively low A/S ratios.

The task method of campaign budget setting depends greatly on accurate estimates of the conversion ratios.

Consumer product companies can achieve a large increase in market share if they increase their adspend during recessionary periods.

Schroer's method assumes that the product category is in the growth stage of the product category life cycle.

An increase in adspend of 10% that results in a unit sales increase of only 1.4% can still be profitable.

A 25% direct price-off promotion will result in a loss of profit unless the unit profit margin is higher than 25%.

The first step in the task method is to break down the sales goal into the number of purchasers or triers required and how often they are likely to repeat during the month.