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Cofidis

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PPT created by Kulin Marketing founder Elizabeth Kulin and her graduate school classmates.

PPT created by Kulin Marketing founder Elizabeth Kulin and her graduate school classmates.

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  • 1. Papttraporn Chaochotechuang Maria Hashemi Elizabeth Kulin Susanne Meier MKT 307 Sales Promotion and Sponsorships, Spring 2008 April 10, 2008
  • 2. Company Background
        • Case plays in 2000:
          • Offspring of French clothing catalog marketer 3 Suisses Int.
        • 1983 First gross profit benchmark
        • 1079 employees in France, 373 abroad (1452 total)
        • Specializes in “Distance selling of credit, with a focus on revolving credit”
        • First European leader to sell credit over the phone
        • 2000: 6.5 million customers in 6 European markets (France, Belgium, Spain, Portugal, UK & Italy) + Argentina
  • 3.
        • 1982 – 1986 Core business: credit loans through Direct Mail/Catalogs
        • 1986 entered into Revolving Credit (to later become 60% of revenues)
        • 1. New Brand line titled “ Libravou ”
        • - cash reserve similar to bank overdraft
        • - unsecured loan
        • Easy sign up
          • phone, mail or internet: minimal information needed; Minimal Information needed; Contract mailed same day
          • Cofidis generates revenue through interest rates on credit & loans
          • Customer needed to have a bank account because payments were drawn directly from the customers account every month.
        • Easy to use
          • Reserve available upon request by phone
          • Payment put into customer ’ s bank account or a check was mailed.
        • 2. 1997 Introduced “ Modulable Loans ”
          • Conventional personal loans with customizable terms
          • house and car purchasing.
          • 3. Carte 4 Etoiles
    Industry & Products
  • 4.
        • Crowded marketplace
        • Banks
          • 70 % of customers credit granted by bank
        • Other Specialized Companies
          • 14 % of the market share
        • 16% retail stores
    Competition Company Cofidis Sofinoga Finaref Cetelem Product Revolving credit Revolving credit Personal loan Non-revolving loans Revolving credit & others APR % 16 10.52 10.90- 14.96 15.3 Outstanding (FF Billion) 25.9 43 n/a 114.8 # Customers 6.5 m. 150,000 n/a n/a Loan amount (FF) 5,000 – 25,000 Up to 30,000 20,000- 150,000 10,000 – 80,000 n/a
  • 5.
        • Freedom, Life, Strength, Independence, Simplicity, Rapidity, Discretion
        • Logo – CREDIT IS LIFE
    Brand Image
  • 6.
        • Sports Sponsorship
          • Bicycling team
            • Brand Awareness Building: Location, popularity & image
            • Leveraging Sales opportunities as a platform
            • Leveraging Marketing opportunities
    Sports Sponsorship 3. Sponsored Lance Armstrong in 1998 & grew brand awareness 3. Sponsorship- Tour de France in 1997 - Aided brand awareness growth from 30% to 70% in 2 yrs. - Increased sales revenues over 1billion after 1998 & 1999 Tour de France
  • 7. SWOT
    • Strength
    • Product positioning
    • Brand positioning
    • Customer relationship
    • Easy fund accessibility
    • Easy application process
    • 3 Suisses database
    • Weakness
    • Unsecured loan
    • Limited product line
    • Limited consumer information
    • Small advertising budget
    • No star for the bicycle team
    • Underdeveloped Web sites
    SWOT
  • 8. SWOT
    • Opportunity
    • Prospecting
    • Scoring and deal making
    • Managing the unpaid
    • Increase response rate
    • Collect new database
    • Expand target markets
    • Co-branding
    • Create new brand concept
    • Threat
    • Rise of the internet
    • Neglectful customer
    • Cultural differences
    • Competition
    • Macroeconomic environment
    SWOT
  • 9. 1. No Branch offices to integrate into operating system or cost 2. No channel conflict 3. 3 Suisses database Significant Factors 4. Consumer Attitude towards credit & cultural difference 1 . British- credit as cash 2. Italy- pay with cash 5. Differentiation Edge opposite to Multi products, multi channels competition
    • Advertising & Marketing
    • Direct marketing from 3 SUISSES database
    • 2. Print
    3. Sponsorship Sponsorship
  • 10.
    • IT trend & Sales
    • - 50% loan initiate via online, voicemail, minitel
    • - Low cost of switching
    • Neglectful customer
    • - 11.4% of doubtful loans outstanding
    • - 56.51% 1 – 5 years to pay off
    Significant Factors - cont…
  • 11.
    • Sport sponsorship
    • - Profitable & increase awareness
    • - Lost Lance Armstrong
    Significant Factors - cont… 1998 With Lance Armstrong 1999 Without Lance Armstrong Percent change TV Visual Volume 754 538 - 29% Name Mention Volume (times) 244 118 - 52% Brand appearance (seconds) 8536 5530 - 35% Visibility Rating Among Sponsors (ranks ) # 5 # 9 - 4
  • 12.
    • How to preserve our competitive edge in the future?
    • Does the rise of the Internet represent a threat or opportunity? Ideal features for national Web sites?
    • Brand Image: Should we customize per market location or become centralized?
    • Sponsorship value- is budgeting cost worth the payback generated from sponsoring sporting events?
    Main Problems
  • 13.
    • Growth - Market share (from 4% to 7% within 1 year) ,
    • Sales: $6.5 m
    • Revenue: ?
    • Successfully compete in marketplace
    • To build loyal customers (LTV)
    • To set unique positioning strategy in each market
    Cofidis’ Goals
  • 14.
    • Keep current business model
    • Make strategic use of the internet
    • Focus on two customer segments:
          • “ Enthusiasts ”
          • “ Specialists ”
    • Continue building the Cofidis brand image:
          • Through bicycle race sponsorship
          • Through other sales promotion activities
    Summary RCAs
  • 15.
    • Remain specialized on revolving credits
    • Expand into more countries: Do market research on existing national attitudes toward revolving consumer credit
    • Focus on customization of offerings and channels:
    • E.g. customization of national advertising, re-naming of products.
    RCAs
    • Keep current business model
  • 16.
        •  Flanker Defense
          • Decrease APR to be in Middle Price Range: 14% APR
            • Offer a better price than some competition without jeopardizing the strong brand equity & value proposition image
            • First 6 months free APR always
            • First year free APR during promotions
    RCAs
  • 17. RCAs - cont…
    • Make strategic use of the Internet
    • Status of Web site development in 2000:
      • Good Cofidis company Web sites only in France and in Belgium
      • Other countries’ Web sites are still rudimentary (Argentina; Spain, Portugal, U.K., Italy)
    • Customize Web site for each local market
        • Budget – 1% of forecasted revenues OR 150k/year
          • Web Design, Web Programmer, Security, Maintenance
        • Value
          • Database information gathering tool
          • Platform for promotions (such as sweepstakes)
          • Easier sign up for customers
          • Online customer service
        • Marketing Research platform for Cofidis internally
  • 18. RCAs - cont…
    • Customer Segment Focus Desired Target Market: “Cofidis Consumer Segments”
    • Focus on Enthusiasts and Specialists
    • Do research on Receptives’ demographics & psychographics
    Same target as competition - Stricter acceptance policy
  • 19.
      • Bicycle racing is no neutral event  LIFE
      • Aligned with Cofidis brand image of family , warmth , affluence and financial venture
      • Potential value:
      • Brand awareness increase
      • Direct revenue generating
    RCAs - cont…
    • Continue building the Cofidis brand image
    • Bicycling Race Sponsorship as a platform for further promotional activities
    • Build up a star racer in Cofidis team
  • 20.
        • 1997 -1998, Budget 5% (of revenues)
          • 50m:Cost = 1B:Revenue
            • 20m: Advertisement
            • 30m: Sponsorship
        • NOW, Budget 10% (of forecasted minimum revenues)
          • 100m:Cost = 1-2B: Revenue
            • 30m: Advertisement – print, PR, merchandise
            • 70m: Sports Sponsorship
    Budget
  • 21.
    • Promotional activities:
    RCAs - cont…
    • Increase brand awareness and build brand image:
    • Print posters and display in urban areas
    • Place print advertising in sports journals and business journals
    • Place Cofidis girls in financial districts
    • Sponsor and get involved in selected events around bicycle racing
    • Acquire guest list databases of events, such as the Tour de France VIP opening , and follow-up with direct mail
    • Organize Cofidis City bicycle races to build awareness in other markets [ London/Munich/Zurich]
    • Make strategic use of local TV presenters  Infomercials
  • 22.
    • Promotional activities:
    RCAs - cont…
    • Provide Incentives:
    • Every 50th person to sign up for a Cofidis credit loan wins free VIP tickets to the Tour de France sporting event
    • Organize Sweepstakes:
    • 1st Prize -- Meet Cofidis Star Racer, for example….
    • Organize “Signing-helmets” sessions
    • with star racer  give-away helmets
  • 23. Thank you for your attention! - Any questions? - Our Group Picture