Lowes mediaplan

30,106 views
29,924 views

Published on

0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
30,106
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
849
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide

Lowes mediaplan

  1. 1. 2010 Lowe’s media plan Nick Ciffone, Franklin Kramer, Rose Osial, Christina Seiwert, Ryan Wahlheim
  2. 2. table of contents 3. Executive Summary 38. References PART 1: Situation Analysis 4. Company Background 6. Industry Information 7. Industry Competition 10. Recent Trends Facing the Industry 11. Current Users 12. Geographical Emphasis 13. Seasonality & Timing 14. Consumers & the Decision Process 15. SWOT Analysis PART 2: Primary Research 16. Our Research 17. Primary Target Audience 18. Secondary Target Audience 19. Ethnography Results PART 3: Media Plan 21. Media Mix & Media Objectives 22. Print 23. Television 24. Radio 26. Billboards/Transit 27. Online/Digital 28. Non-traditional Media 29. Media Schedule 30. Budget Overview PART 4: Creative Strategy 31. Current Advertising (Lowe’s and Competitor’s) 33. Creative Brief 34. Creative Requirements, Brainstorming, & Final Strategy 35. Print Advertisement #1 36. Print Advertisement #2 37. Print Advertisement #3 | 2
  3. 3. executivesummary Founded in 1946 in North Carolina, Lowe’s hardware store started as well, and the biggest age demographic is the 25- to 34-year- as a local establishment. Nearly 63 years later, it has grown into olds. Based on this research and others, we have made our primary one of the largest home improvement corporations in the United market the “Early Squatters” who are working, educated, new States. It is currently the second largest hardware store in America, home-owners. Their age range is 25-34 and are best put in the with Home Depot being first. They offer a variety of products middle to upper-middle class. They are comfortable with technol- within their 13 departments with their biggest sales in appliances, ogy and reliant on the internet, so using digital media is a must. lumber, paint, and flooring. Lowe’s separates themselves from Our secondary target market is “The Realized,” who are Hispanic their competitors with their customer service and clean “easy to individuals in the upper-middle class with disposable income. find what you need” store layout. Either they or their close relatives immigrated to the United States, and since then they have become successful. While fluent in both Although the current economic recession has created slow sales Spanish and English, they tend to speak Spanish in the home and in every aspect of the consumer market, Lowe’s is still expanding; are still very much submerged in the Hispanic world and culture. they will be opening 60-70 stores in the upcoming year. There are many economic, political, social, and cultural trends that affect this Our objectives are to increase brand awareness and preference industry. Obama currently has a plan to stimulate the economy, in both our markets, and change attitudes about Lowe’s, so that and the initiative toward energy-efficient products has a large it becomes perceived as a helpful hardware store, instead of just impact on the home improvement industry. an ordinary one. Lastly, we want to increase revenue. In order to accomplish these tasks, we will give the consumer promise, “Your Lowe’s is trying to reach the consumers that are shopping with dad could fix anything, you can’t. We’ll help you fix up your home, more convenient store locations and familiar advertising. While whether it’s tips, direction, or translation.” Our campaign is going most stores are located in the East and Midwest portions of the to have an honest, helpful, and welcoming tone implying that United States, there are Lowe’s located amongst metropolitan Lowe’s isn’t just a store, but a community as well. centers farther west as well. This may suggest that media dollars should target consumers who are unaware of Lowe’s. In current To accomplish this, we are going to use a wide variety of media, campaigns, Lowe’s has been using celebrities like NASCAR Driver including non-traditional media, such as the internet, advertis- Jimmy Johnson, to show that “do it yourself” is possible. Lowe’s ing on bus shelters, and hosting Lowe’s classes to educate the even offers step by step help on their website with instructional consumer, as well as a forum on our website where people can videos. They also present “Lowe’s Creative Ideas” to inspire hom- discuss projects and ask questions with employees being there eowners to make their living space their own. to help. And in addition to having traditional ads in Spanish for the Realized target market, we are also going to have Spanish to Currently there is a fairly even distribution of male and female English and English to Spanish handbooks with hardware terms, Lowe’s shoppers. Many of the consumers are post-graduate degree showing that we care about the Hispanic community. | 3
  4. 4. PART 1 Situation Analysis company overview L owe’s was founded in 1946, in North Carolina. It 85,000 square feet with some getting close to 120,000 square feet. began as a small local hardware store, and now it During this period Lowe’s started using their slogan, “everyday low is one of the largest home improvement retailers prices”, which supported their average “do it yourself” customer’s in the United States. It was incorporated as Lowe’s North budget (lowes.com) (http://www.fundinguniverse.com). Wilkesboro Hardware in 1952. Lowe’s has always been a suc- During the late 1990’s and early 2000’s Lowe’s was doing so well cessful company, from the time it went public through today. The that they were building a new store close to every week. While company went public in 1961 and was renamed Lowe’s Company. currently Lowe’s is not expanding at such a rapid rate, it is esti- Within the first 20 years there was a great increase in sales, due mated to build around 60-70 new stores in 2009 (Lowe’s Annual to the active housing market at the time and Lowe’s presence as Report). Lowe’s has also started to enter different markets outside a main hardware store. During this period, Lowe’s main target of the United States, with several stores in Canada and plans for was contractors and people involved in the construction industry. stores in Mexico as well. All of this success has allowed Lowe’s to Lowe’s first billion-dollar year was in 1982 and profits were at a become the second largest hardware store in the United States, record high (lowes.com) (http://www.fundinguniverse.com). only behind Home Depot. Lowe’s didn’t want to restrict business to those in the housing Like all other industries, our country’s current economic state has market, so they decided to expand to the everyday consumer that taken a toll on home improvement. In recent years Lowe’s, along had basic hardware needs, or the “do-it-yourself homeowners”. To with its competitors, stock prices have been dropping. In 2005 do this, Lowe’s needed to both change the style of their stores shares were slightly above $33.00, but at the end of 2008 shares and build more of them in order to reach the everyday consumer. finished at $21.52. The biggest drop was from 2006 to 2009, when Their main focus was adding more basic products. This way they shares dropped nearly $9.00 (lowes.com). Despite this, however, would no longer be seen as “just a lumber yard”. This idea led to according to the 2008 Lowe’s annual report, executives assured major success for Lowe’s. The layout of the current Lowe’s started stockholders and employees that their needs will be taken care in 1994. The stores became enormous; most new stores are at least of in this time of difficulty. situation analysis | 4
  5. 5. (continued from previous page) Official Website: Lowes.com Lowes.com has 13 different departments including: appliances, building sup- plies, flooring, hardware, heating and cooling, home décor and paint, lawn and garden, lighting and fans, outdoor living, plumbing, storage, tools and then finally windows and doors. Within these departments there are a bountiful amount of different brands, styles, price options, etc. Many of their stores are over 75,000 square feet and include the majority of the products shown on the website. Although they offer a variety of products, their top four selling products are appliances, lumber, paint, and flooring (lowes.com). One of Lowe’s slogans is “everyday low prices.” This slogan tells us that Lowe’s wants to be perceived as the hardware store with the best for your budget. However, in a competitive market, it is very hard to have prices that are that much different from your competition. Looking at consumer reviews, there is a mix of opinions on which home improvement stores give you the most for your money. All in all, it seems that Lowe’s is on the same level as their competition in pricing (http://www.bloggingstocks.com) (lowes.com). As of 2008 Lowe’s had 1,649 stores, 11 of which are located in Canada.. With over 1,600 stores in the United States, it is not difficult to find a Lowe’s store; they can be found in all 50 states. However, the stores in large metropolitan areas are bigger and have a wider selection. We can also see a higher concentration of stores in the Midwest and East Coast, compared to the West Coast (.com). Current Media Sources Lowe’s uses many different media sources in order to advertise. They use all the popular forms of media that you would expect, including TV, radio, internet, and billboards. One of their sponsors is NASCAR driver Jimmy Johnson. In commercials, he can be seen working on cars or helping construction workers using Lowe’s products. The ads make him appear as an everyday guy, making it look easy for those like him to accomplish all these home improvements with the help of Lowe’s. They also use direct marketing, which depends on the area that you live in and that area’s needs. Lowe’s website, Lowes.com, offers additional tips and other websites related to consumer’s projects. They have a “Lowe’s Creative Ideas” section which provides ideas on how to improve your home. There is also a portion with instructions on carrying out the improvements all with Lowe’s products. Another site is Lowe’s for Pros, which gives resources to professional contractors. Lowe’s includes a lot of instructional videos on most of their sites, which shows they are adapting to new media trends. Lowe’s also has an option to become a fan on Facebook. We also found that Lowe’s is not present in the mobile marketing, suggesting the need for creating mobile apps. They are also very involved in the communities where they are located. They donate millions of dollars each year to different charities, with their main charity being Lowe’s Charitable and Educational Foundation. For PR, Lowe’s will send repre- sentatives to help out in local areas to build or rebuild houses, etc. They also donate free tools to relief projects, schools and other groups that are in need of tools (lowes.com). situation analysis | 5
  6. 6. industryinformation Lowe’s belongs to the hardware industry. As mentioned earlier, it is number the worst is over, and the hous- two in sales in the United States, right behind Home Depot. Lowe’s sales in ing market should be improv- 2008 were around 48 million dollars, compared to Home Depot with 84 million. ing. Although new housing has They are currently number 48 on Fortune 500’s list. Like most industries in the been hit hard, many people are current economy, the hardware industry has seen a decrease in sales. People redoing their existing homes, are saving more and watching what they buy, especially when it comes to non- which still benefits hardware essential needs. Unfortunately, many people see hardware stores’ products companies (www.realtor.org). as non-essential. Another reason for the decrease in sales is that the housing All in all though, the sales do market is one of the largest markets for hardware stores. Unfortunately, the not compare to when the hous- housing market is also one of the hardest hit industries in today’s economy ing market is thriving. Compa- (realator.org) (www.nytimes.com). Because of this, hardware stores are selling nies are making cuts all over, less lumber, which normally make up a significant percentage of their sales including in their advertising. (http://money.cnn.com). In connection to the real estate market, if people Lowe’s reports cutting nearly aren’t building new houses, they don’t need appliances or paint to furnish 84 million dollars in advertising them. This decrease in sales affects the numbers of two of Lowe’s biggest sell- since 2006 (lowes.com). ers. Hardware companies have an optimistic outlook for the future, declaring situation analysis | 6
  7. 7. industrycompetition Overview Direct Competition Indirect Competition The home improvement industry is Lowe’s faces direct competition from The consumers, in conjunction with highly competitive and determined one major corporation, The Home the economy, can be viewed as indi- primarily by price, store location, cus- Depot. Smaller, direct competitors rect competition. The decision to tomer service, and merchandise sold. include Menards and Sears, and Roe- renovate one’s home or take on a In each individual market, there are buck & Company (refer to charts on home improvement project is depen- many minor competitors who con- following pages). Compiling informa- dent upon the amount of money and centrate on providing consumers with tion for Menards is difficult because time that consumers have available. products related to electrical projects, the data are privately held. Analyz- In recessionary times, home renova- plumbing issues, building materials, ing financial information for Sears, tions are generally not initiated due flooring, and lumber. Often discount Roebuck & Company is also difficult to unstable finances. stores, local hardware stores, inde- because it is owned by Sears Hold- Home furnishing stores can also be pendent building supply stores, or ing Corporation, the publicly traded considered indirect competitors to other retailers provide local competi- parent of both Kmart and Sears, Roe- Lowe’s. Homeowners who are look- tion within this industry. The home buck & Company. Their annual report ing to upgrade their living areas but improvement market in Champaign, encompasses spending and budget- don’t want to undertake large renova- IL, for example, includes large cor- ing for each of their divisions and the tions might choose to purchase new porations such as Lowe’s and Home exact amount allocated to their Home furniture to redecorate their space. Depot, as well as smaller businesses Services sector is unclear. like Menards, Round Barn True Value Lowe’s also faces minor competition Hardware, Illini Contractor Supply, from smaller, more specialized stores Hundman Lumber and RP Lumber including Ace Hardware, Lumber Incorporated. Liquidators, Builders First Source, While the home improvement indus- Sherwin-Williams, Stock Building try is considered “competitive,” sales Supply Inc., 84 Lumber Company, Do and market share are controlled by It Best Corporation, and CCA Global two major corporations: The Home Partners. Direct minor competition Depot and Lowe’s. The Home Depot varies between markets and many of lists itself as the industry leader, main- these companies do not operate in all taining a 20% market share as of the areas of the country. end of fiscal year 2008 (The Home Depot 2008 Annual Report). From a financial perspective, Lowe’s is the industry’s second most powerful cor- poration, directly behind The Home Depot (Yahoo! Finance). situation analysis | 7
  8. 8. Lowe’s Home Depot financial Market Capital 1: $31.1 billion Market Capital 1: $45.77 billion information Employees 2: 228,000 Employees 2: 322,000 Revenue 3: $47.39 billion Revenue 3: $67.64 billion Net Income 4: $1.88 billion Net Income 4: $2.38 billion brand “Lets build something together.” Lowe’s stresses the importance “You can do it, we can help” The Home Depot builds and emotional positioning of the consumer and makes efforts to simplify the shopping connection between brand and consumer through the notion of “I did it” and a sense of accomplishment. The Home Depot is experience, works to ensure stores are staffed with knowledge- concentrating on improving customer service. They offer many able employees, and makes efforts to ensure their supply chain is installation services and delivery options to help their customers managed efficiently and to benefit the consumers’ needs. with their projects. promotions Free Delivery and Haul Away, Free ice maker with purchase of Emailed coupons, rebates, free shipping, “purchase select energy- Frigidaire, Lowe’s Cool Idea Products, Lowe’s Project Card, $39 saving products and you may be eligible to receive a federal tax credit,” weekly sales Installation on All Stainmaster Carpet, 72-hour installation on any in-stock carpet, $139 entire house carpet installation, Weekly Ads, Newer Lower Prices; Direct Mailing media Since 2006, Lowe’s has worked toward implementing more In fiscal 2008, The Home Depot reported an advertising expense vspending efficient marketing strategies, allowing them to cut annual of $1 billion. Television, radio, and print were the primary media outlets used. advertising expenses by $84 million. Reductions were made in mass media advertising as Lowe’s has gained national awareness and market share. They are placing a greater emphasis on spend- ing money to target consumers directly by using mail campaigns and affinity websites like Lowes.com and LowesCreativeIdeas. com. In 2008, advertising expenses amounted to $789 million. pricing Lowe’s remains committed to their Everyday Low Price strategy Remains competitive stating: “If any competitor tries, we’ll beat and also utilized a “Newer Lower Price Initiative” to build traffic their price by 10% guaranteed.” However, some pricing may be affected by labor costs, competition, speculation, government and increase sales. regulation, or delivery delays. Recently instituted a “Newer Lower Price” campaign where they lowered prices on items temporarily to increase sales. products Appliances, building supplies, flooring, hardware, heating/cool- Appliances, bath, building materials, décor, doors, windows, ing, home décor, paint, lawn/garden, lighting, fans, outdoor electrical, flooring, kitchen, lighting, fans, outdoors, paint, storage, tools, and hardware living, plumbing, storage, tools, windows, doors locations About 1,649 Stores located throughout the U.S. and Canada About 2,233 Stores located throughout U.S. including Common- wealth of Puerto Rico, the territories of the U.S. Virgin Islands and Guam, Canada, China, and Mexico. current They view their consumers as having low confidence levels with The Home Depot services three primary customer groups: Do- users regards to finances due to difficult economic times and high un- It-Yourself Customers who are typically home owners that need products for projects and installations, Do-It-For-Me Customers employment rates. Most of their current users are Do-It-Yourself, who are typically home owners that purchase materials and hire Do-It-For-Me, or Commercial Business Customers. Lowe’s places a third party to complete the project, and Professional Customers more emphasis than their competition on engaging female who are professional remodelers, general contractors, repairmen, consumers who are interested in redecorating and updating small business owners, and tradesmen. their homes. 1 Shares outstanding is taken from the 2008 annual report and Market Capital is calculated using shares outstanding. 2 Employee estimates were taken from 2008 annual reports for Lowe’s and The Home Depot. 3 Revenue is from 2008 as reported by www.finance.yahoo.com 4 Net Income is from 2008 as reported by www.finance.yahoo.com situation analysis | 8
  9. 9. Menards Sears, Roebuck, & Co. financial Market Capital1: n/a Sears, Roebuck, & Company is a privately held company. It’s parent information Employees: 40,000 company is Sears Holding Corporation. Net income for 2008 was Revenue: $7.8 billion $53 million. Appx. 15% ($8.7 million) of this was credited to the Net Income: n/a home appliance division. 2 brand “Save Big Money at Menards” Sears primarily carries Kenmore, Craftsman, DieHard, and Lands’ positioning “Dedicated to Service and Quality” End and believes its consumers are very brand loyal. They empha- “The Menards Guy” size customer service and have the Sears Blue Service Crew that is available 24/7 to assist customers. Their website is use-friendly and utilizes graphical elements. The icon of the Service Crew is the theme of the Home Services website. promotions Credit programs, rebates, EnergySTAR (tax credits for purchas- Weekly ads, e-mail savings, Shop Your Way, flat rates, delayed pay- ing energy-saving products, EnergySTAR for Kids, coupons, and ment options weekly ads media n/a Media spending is difficult to estimate for Sears because their spending financial statements encompass Sears as a corporation and does not breakdown by divisions. Advertising for Sears Corporation was cut by about $14 million. However, this says little about the total amount spent advertising the Sears Home Services division in particular. pricing Menards guarantees everyday competitive pricing. They will beat Competitive competitor’s prices by 11% on any identical item at any local retail competitor (www.menards.com). products Counter tops, doors, decking, roofing/siding, hardware, electrical, Appliances, automotive, tires, home services, lawn/garden, out- wall coverings, plumbing, housewares, cabinets, appliances door living, tools, heating/cooling, counter tops, cabinet refacing, exterior doors, garage doors, kitchen remodeling, siding, windows, installation services locations About 250 stores About 2,086 stores Located in 12 states, primarily in the Midwest U.S. Operates about 856 full-line stores, 872 Hometown Stores, 49 Home Appliance Showrooms, 110 Sears Hardware Stores, and 86 Orchard Supply Hardware Stores. current n/a Sears strives to create and maintain long-term relationships with users their customers. Their home improvement segment is primarily comprised of Do-It-Yourself customers. 1 Financial information for Menards was taken from reports on www.yahoo.finance.com. Reports are for the most current fiscal year, 2008. 2 Information was taken from 2008 annual reports for Sears Holding Corporation. situation analysis | 9
  10. 10. recent trends influencing the industry Economic Trends Sales for companies improvement industries. The plan places emphasis on developing environmentally within the home improvement industry importance on creating energy efficient friendly products has resulted from con- have been declining due to the economic alternatives to conserve natural resources sumer concern over global warming and recession that began in December 2007. as well as save money. The plan rewards other energy saving issues. “Going Green” Housing turnover was down 16% in 2008, taxpayers who have taken measures to has been an overwhelmingly influential and unemployment rose to 8.1% in Febru- reduce the amount of energy used in their movement that the home improvement ary 2009. Private residential construction homes by installing energy-efficient doors industry has needed to accommodate for spending decreased by 27% from Septem- and windows, insulation, air conditioners, (Home Improvement & Hardware Retail ber 2008 to September 2009. Also attrib- furnaces, heat pumps and boilers (Recov- Industry Trends, Hoovers). uting to the decline in home improve- ery.gov). Another cultural trend deals with shifting ment store revenues is the reduced pri- Additionally, designating funding toward gender roles. Women are taking more vate nonresidential construction budget. the construction sector was an important interest in the home improvement process. From September 2008 to September 2009, component of Obama’s plan. The U.S. Gen- For this reason it is important for retail- this budget was reduced by 20%. Non- eral Services Administration also report- ers to cater to the preferences of women residential construction refers to funding ed that since the implementation of the and create an attractive store layout that for the following private categories: lodg- American Recovery and Reinvestment Act appeals to this audience. ing, office, commercial, healthcare, edu- passed in February 2009, a total of more cational, religious, amusement and rec- “Empty nesters” and adults who are no than $1 billion has been invested in con- reation, transportation, communication, longer primary financial providers for struction. Much of this money has been power, and manufacturing. On the other their children are more likely to invest in spent on commercial building, transporta- hand, public nonresidential construction home renovations. Because they no longer tion improvements, and conservation and spending increased by 6.1% from during have the burden of educational expenses, development initiatives (Recovery.gov). the same time frame (U.S. Census Bureau, they now have time and money to allocate 2009). New homeowners are especially benefiting toward home improvement projects. from the Recovery Act, as the U.S. Depart- Political Trends More building material An article posted on HGTV’s website sug- ment of the Treasury declared in February suppliers and home improvement retail- gests that while home construction levels 2009 that first-time homebuyers are eli- ers are expanding their lines of certified may be low, homeowners may be more gible to receive up to an $8,000 tax break. wood products in response to consumer willing to renovate, resulting in stores As of August 2009, a mere six months later, demands. Environmental certification and offering more materials and labor services the Act has helped an estimated 50,000 labeling for wood products is a way to reas- than in previous years. A study of 5,000 rural families across the country become sure consumers that a store’s products are U.S. homeowners stated that the most homeowners (Recovery.gov). environmentally friendly and not harmful common renovation plans were for kitch- to the forest ecosystem. Social and Cultural Trends New technolo- ens and bathrooms (“New Survey Reveals gies associated with home improvement Homeowner Attitudes, Preferences Regard- President Obama’s stimulus plan has taken products and services are essentially cut- ing Remodeling Projects”). action to support the housing and home ting costs for consumers. In addition, an situation analysis | 10
  11. 11. currentusers As indicated by the MRI data, there cur- rently seems to be a fairly equal distribu- tion of male and female users. Of all people who have shopped at Lowe’s in the past 12 months, about 51% have been male, while 49% have been female. Additionally, about 44% of the people shopping at Lowe’s have a post-graduate degree, which is a greater percentage than any other catego- ry in terms of schooling. By far the lowest age demographic is the 18-24 year old market; only 7.51% of people in this cat- egory have visited Lowe’s in the past year, compared to more than double (16.61%) in the 25-34 bracket, who are probably first time home buyers. Even 14.2% of the 65+ demographic have visited it in the same period of time. Lowe’s also seems to heavily target work- ing, full-time employees. Just about 60% of this group has been at a Lowe’s in the past 12 months, while only 10% and 30% of people have visited working part time and not working at all, respectively. In addition, Lowe’s is attracting couples more than singles, widows, the separated, or the divorced; 66.96% of married individuals have visited, while only 23% have in the ladder category. Also, in terms of family, there seems to be a positive correlation between age of children and likelihood of visiting a Lowe’s. If someone has a child of less than two years, there is only a 7.32% chance they will have visited a Lowe’s. 2-5 years, 14.48%, 6-11 years, 19.32%, and 12-17 years, 20.62%. This data sug- gests that Lowe’s is especially attractive to couples, probably because building a home is something more commonly done with people with families. In terms of geographical location, our stronger areas are clear cut. In the North East, only 17.42% people have been in a Lowe’s the past year, while in the south, 44.21% of individuals have. Areas are com- parably low in the North East, Midwest, and West regions as well. situation analysis | 11
  12. 12. Regional Distribution Centers Existing Stores New Stores in 2008 Where are our current store locations? What is our distribution? geographical The highest population of Lowe’s stores can be found in Texas, emphasis with 140 stores. Florida follows closely with 117 stores, then North Carolina with 113 stores. However, the highest percentage of stores for its population is its home state of North Carolina. The distribution looks to push out from North Carolina with heavy density in surrounding states: Virginia, Ohio, Tennessee, Georgia, and Pennsylvania. Outside of this area stores grow continually sparse out west, with concentration of stores around major cities and population areas. In addition to having a presence in all 50 states, they have stores in Canada, and are even opening stores in Mexico. With a concentration around cities and suburban areas, Lowe’s store density reflects population density throughout the country. It is more skewed toward stores in the Mideast, and with scattered stores in some rural areas. Lowe’s has 1,649 stores as of 2008. situation analysis | 12
  13. 13. seasonality According to Google Finance, the three-month period with the highest sales for Lowe’s has been egies for these regions that relate to the types of projects that their weather allows. & timing the summer months of May to July, with 14.51 billion dollars in 2008 and 13.84 billon in 2009. The winter months also offer the biggest holi- day season of the year. With important celebra- August to October collected 11.73 billion in 2008 tions like Christmas, Hanukah, New Years, and and the slowest season was November to Janu- Kwanza, many families are spending their free ary with 9.98 billion in earnings. These numbers time together during this time. While on the one are probably due to the weather conditions asso- hand, the holidays allow many homeowners time ciated with these months. The most lucrative off from work, their vacation time is for friends season is in the summer, when weather is warm and family, not home improvement. Also, many enough for open air, or outdoor projects. During consumers do not want their house under con- this time contractors or even do-it-yourself hom- struction when they are having their loved ones eowners do not have to worry about harsh ele- over. The construction creates unneeded mess ments ruining or delaying their projects. The and anxiety for the homeowner when instead types of projects that we might see during this they would rather focus on bringing the family time would be building outdoor patios, building together. and entire home, finishing a driveway, putting new shingles on a roof, etc. All of these projects From anecdotal research, it seems that the busi- are dependent on the weather. If there is poor est days of the week for Lowe’s would be week- weather, these projects would be affected. This ends and holidays. While contractors may visit factor would be particularly troubling in regions Lowe’s any weekday for their profession, most where weather is more variable. In the south, adults have to work on these days and don’t have particularly in the west, weather is usually not a time to go to the store. They therefore go on factor in home improvement, unless it is too hot weekends when they have more time. On week- to work. However, in the Midwest, East Coast, ends, lines are generally longer, and more staff etc weather can be more questionable areas. is available for the higher traffic of customers. Therefore, we will have different marketing strat- situation analysis | 13
  14. 14. consumers & the decision process Consumers seem to have a fairly good idea of what the home improvement product category is. Certain things are just known to be at hardware stores, such as lawn mowers, tools, insulation, nails, and lumber. Based on anecdotal research, it seems that most people don’t know the difference between Lowe’s and its competitors; it is often the case of whichever hardware store is closer. Many people, however, will want to avoid hardware stores altogether if they don’t consider themselves “hardware people.” They would rather find someone who knows what they are doing or even hire a third party to fix things for them. Between Lowe’s and Home Depot, which is its main competitor, there is a lot of discussion (most of the information gathered was discussion on online forums; links are at the end of this section. In order to minimize bias, discussion was taken into consideration from different websites. Everything else in this section is based on informal interviews). Based on my observations, it seems that the majority think that Lowe’s is cleaner than Home Depot and better organized. For example, when asked which store he prefers, user “Skivvywaver” writes, “Lowe’s for me. Lowe’s tends to stock more at night so I am not dodging fork lifts as much. Wider aisles than depot also. For most things I go to Lowe’s. For what Lowe’s doesn’t carry I’ll go to depot but I really hate that place” (http://forums.techguy.org/random-discussion/582987-home- pensive items, like nails or nuts, where the customer is looking depot-lowes.html). One user even writes, “I prefer Lowe’s - I like for a specific thing they know beforehand, and will not ask for the layout and the blue color rather than HD’s orange and white help unless they need help finding where it is. wire cage-shelves” ” (www.city-data.com). It also seems that the When discussing the Consumer Decision Process, it again varies majority of people think that the customer receives better ser- significantly from consumer to consumer, as we are not offering a vice at Lowe’s than Home Depot, which is definitely significant. single product but a store that offers a wide selection of products. For example, one user, “TampaKaren”, writes, “I’m lucky to have I suppose the best place to begin is with “preference”, as they both nearby. I picked Lowe’s because their staff seems to be first have to choose which store to go to in order to purchase a more friendly and able to answer my questions better. I’ve had specific item. As stated above, it is often a case of which one is people at my local Home Depot avoid eye contact and turn in closer. This might be because the “search” is generally thought to another direction” (http://www.city-data.com/forum/shopping- be better at Lowe’s, which is seen as having better organization. consumer-products/806774-lowes-vs-home-depot-2.html). On Selection is not as one-sided, although there seems to be a slight another forum, OPie160 writes, “My answer is based on my own perception that Home Depot caries more (again, this is based experience, and with that said, Home Depot has a lot of stuff, on research from online forums). All of the other steps of the but Lowe’s personnel were friendly, and very, very helpful, more decision making process depend on the item being purchased. so than Home Depot’s people” (http://www.bookrags.com/qa/ The wide variety of potential points in the consumer decision viewanswers.php?msg=79). making process means that we must focus on the part of the Both timing and purpose for many products in home improve- decision making process that we can make a biggest impact on ment stores affect sales. Some items, like lawn mowers, are prob- through advertising. While many people currently just choose ably a one-time purchase that might include comparison shop- a store on factors such as distance, with the help of advertising ping and going to different stores. Other items, like hammers, are we can ideally build a real preference, where someone might also not very frequent but do not require as much research for drive the extra distance to Lowe’s if they truly feel like they have the average consumer. A consumer might ask a sales associate a better connection with them. for help, but not necessarily. And then there are extremely inex- need • awareness • preference • search •selection • purchase • use • satisfaction situation analysis | 14
  15. 15. SWOTanalysis STRENGTHS WEAKNESSES OPPORTUNITIES THREATS • High geographic • Slowed expansion, es- • Lowe’s has recently • The instability of the penetration across the pecially in the western recognized opportuni- current economy United States, espe- United States ties to expand interna- - international relations cially in the South tionally and has plans with Mexico consider- • Lack of mobile apps to open five stores in ing our expansion into • Offers their website marketing. Canada and two stores their borders in multiple languages in Mexico to cater to a diverse • Price per share has • Competition of small, customer base declined over the past • Because Lowe’s is not locally owned business- few years heavily concentrated in es that has emotional • Recent growth in the western part of the ties with their consum- market share as stated • Experience lower United States, opening ers or consumers who in their 2008 annual sales in the winter be- stores in this region is are loyal to them report cause home improve- an opportunity ment projects are not • Contributions toward generally initiated dur- • In recessionary times, philanthropic events ing the holiday season above average custom- and community in- er service is a competi- volvement • Contractors are more tive advantage to any likely to purchase sup- company. By educating plies from The Home their employees, Lowe’s Depot has the opportunity to improve their service and the customer’s experience. • Promoting energy- efficient products may attract more environ- mentally-conscious customers situation analysis | 15
  16. 16. PART 2 Primary Research & Audience Analysis our research R esearch was conducted with ethnographies at two loca- results are natural and unbiased. We also wanted to avoid social tions: Champaign and Bloomington, Illinois. It was per- desirability bias, because we could observe how people really formed over a two-week period ranging from October acted rather than how they may have told us they act. 24 until November 4, 2009. Researchers observed on location While observing customers was a very important part of our in pairs and went twice to both Lowe’s and its main competitor, research, we also wanted to see other differences in the physi- Home Depot. We wore normal college student attire (as both of cal stores. We looked at geographical locations, store layouts, our locations are located in campus towns) in order to blend in advertising within the store, and overall shopping experience. with the environment. Our ethnography methods gave us the opportunity to see the While in the store we used the “fly on the wall” strategy. This store as a customer does. We thought that a guided tour would method was chosen in order to gain customer insight and par- have given us a completely different experience. ticular shopping habits. The researchers documented typical It was very important for us to observe in both Lowe’s and Home customer behavior, such as how often they asked questions, how Depot. Being the two largest home improvement stores in their many people were in a group, or how often they needed help. If category, we wanted to be able to understand the similarities they did need help, we noted how long it took to find an employee. and differences between them. By understanding these unique All of our findings were qualitative data and some results were characteristics, we are able to more accurately determine how to estimated. We also observed the type of customers that we saw reach our target markets for our brand. We also chose to go to in the stores. We documented general demographics such as age, two different cities in order to see if there was any difference in race, and gender. We thought that this method of research was the communities shopping at the stores. effective for our purposes because our presence had no effect on the consumers’ behaviors. Many times with interviews and Finally, we chose to conduct our observations on both weekdays surveys, subjects change their responses in order to please the and weekends. We wanted to see if the consumer demographics interviewer, or they don’t understand the question, etc. Thus, our and traffic patterns differed depending on the day of week. primary research | 16
  17. 17. PRIMARY target audience Early Squatters Our primary target market Bureau, 2008). These consumers may have experienced. Financial security and is comprised of young, educated, and be generalized as a “Generation Y” adult success are among the priorities of these employed new homeowners, who we call cohort and were born between 1974 and new homeowners who are more concerned “Early Squatters.” This group is between 1984. They share similar values and life- with having fiscal power than their parents 25 and 34 years old and has income levels styles and are sometimes referred to as or grandparents were (Tharp, 301). categorized as middle- to upper-middle “Echo Boomers.” They are technologically We chose to target adults 25 to 34 because class. According to the U.S. Census in comfortable and reliant on the internet to the brand loyalty of new homeowners may 2008, the median income for Americans discover information, make purchasing not yet be established. Inexperienced, in this age group was $29,484. The 2008 decisions, and interact socially. They also independent homeowners are highly U.S. census estimated that this age sector live in media-saturated worlds and spend impressionable and may become brand comprises 14% of the entire population large amounts of time consuming media. loyal within the first few years of ownership. (total of 39,868,000 citizens). About 47% These young adults are career driven as a of this segment owns homes (U.S. Census result of the economic inconsistency they A Day in the Life of Sarah Johnson, an Early Squatter Sarah is a 27-year-old financial analyst who graduated from the University of Wiscon- sin-Madison in 2004 with a Bachelor’s degree in Finance. She recently moved out of a small condo in the heart of Chicago’s financial district, married her long-term boyfriend Brian, and together purchased an unfurnished, three bedroom/two and a half bathroom house in Naperville, one of Chicago’s thriving suburbs. On weekdays, Sarah wakes up in time to shower, get ready, grab breakfast, and be out the door to catch the 6:00 A.M. train to Chicago. During the thirty-five minute ride, she is likely to either listen to her iPod Touch or flip though the latest edition of Self Magazine. Upon settling at her desk, Sarah skims though the online news sites, particularly the New York Times and Chicago Tribune. Her day is often packed with meetings, but when she is at her computer working on proj- ects she is likely to be streaming radio from Chicago’s Adult Contemporary station 105.9, The Fresh. When she has time to leave the office for a lunch break, Sarah enjoys meeting up with friends who work in close proximity. At 6:00 P.M., Sarah tries to leave work and catch the 6:50 P.M. train out of Union Station. On her commute back to Naperville she listens to music while preparing herself for the next day. When Sarah finally returns home it is already 7:15 P.M. She and Brian switch off cooking dinner, which is usually quick and requires little preparation. Sometimes they decide to eat at a restaurant in Naperville’s downtown area where there are lot of other young adults also dine out. Together they enjoy watching television shows like CSI, 30 Rock, Dancing with the Stars, and The Office either live or through their DVR. Sarah also enjoys checking her Facebook (which is restricted at work) and sending personal emails to family and friends. Sarah would best fit into the PRIZM categorization “Up-and- Comers” who are 25 to 44-years-old without kids. “Up-and- Comers” are college graduates with professional careers earning a median income of $49,787, which is significantly higher than the average (PRIZM Market Segmentation). primary research | 17
  18. 18. SECONDARY target audience The Realized We have named our second- The Realized are fairly acculturated into the Most importantly, the Realized are hom- ary target audience the “Realized,” because US life but still have deep roots in their His- eowners. Lowe’s is currently expand- they had dreams when coming to America panic culture and heritage. While they are ing their stores to Mexico (http://www. and were lucky enough to live them out. almost always fluent in English, they also lowes.com/lowes2/AboutLowes/Mexico/ Our audience is Hispanic, lives in the upper- look to Spanish resources and still interact Mexico_en.html), and now would be an middle class, and has disposable income. with media where the Spanish language excellent time to also expand our audience They have immigrated to the United States is primarily spoken. Hispanics also tend to to Hispanics here as well. While most of and have become successful here, and are find Spanish ads more effective and memo- the people in our audience have accultur- likely to have children and have started a rable than English ads (Nielsen, Consumer ated to the US culture, they still heavily family. They belong to the PRIZM group Insights), although this might be different empathize with other Hispanic Americans “American Dreams,” in which the residents within our specific target audience that is and Hispanics in their home country, and live in multilingual neighborhoods. Most more acculturated. as such will respond positively to well- of the Hispanic adults here are middle executed Hispanic-targeted media. And Overall, there is an estimated 46.9 mil- aged, and their kids live in the comforts because Hispanics tend to use word-of- lion number of Hispanics in the United of upper middle class. The Hispanics here mouth frequently, positive associations States, making them the largest minority. are mostly homeowners and often have with Lowe’s have the potential to spread Between July of 2007-2008 Hispanics were families. The median household income among the group. Hispanics are a quickly- the fastest growing minority group as well. for the group is $55,497, compared to the growing market (Faura 5), and as of now are There was 1.6 million Hispanic-owned busi- median income of all Hispanic households largely ignored in home improvement store nesses in 2002, and, based on the rate of of $38,679. They shop at stores like Old marketing. Here we are presented with a growth, the number is likely to be signifi- Navy, they read Latina Magazine, watch great opportunity that we must act upon. cantly higher now. In that same year, 43% Telefutura, and they may own a Toyota. of those firms operated in construction (US Most of these individuals are college edu- Census). cated (claritas.com). A Day in the Life of Roberto Cisneros, a “Realized” Roberto Cisneros is a 35-year-old male living in Aurora, Illinois. Although Roberto is originally from Mexico City, his family moved to Chicago when he was very young. His grandmother and many of his cousins are still living in Mexico, and he tries to visit them once a year. Roberto speaks English and Spanish fluently. He attended the Illinois State University, where he studied to become a Spanish teacher for high school students. Roberto is married and has two children. His wife Alejandra is from Monterrey, Mexico and also has family still living in Mexico, along with relatives in Chicago. Alejandra did not go to college, and she works at the nearby hospital as a receptionist. The Cisneros children attend the public schools in the area, and they speak mainly Spanish in the home with their family. On a normal day Roberto goes to school around 7:30 am. He drives the 20 minutes to school while listening to Radio Unica. At school he has a full schedule and teaches all levels of Spanish. At 3:30 he attends the school’s soccer practice, as he is the Varsity Assistant Coach. Roberto is a huge soccer fan, and loves to help the kids learn more about the fundamentals of the game. It reminds him of playing with his cousins in Mexico City as a kid. When he returns home, Alejandra is cooking fajitas con arroz. The family sits down for a nice meal (after saying grace) and talks about their day. After dinner, Roberto and Alejandra watch CSI and then they tuck in the children for bed. Roberto and his family still are very involved in Mexican culture, and they celebrate many native holidays. They are devout Catholics and attend mass every Sunday at their local church, where the priest speaks Spanish. They socialize with their Span- ish speaking friends, but they are also friendly with the English speaking parents of their two children. Alejandra will usually read Latina magazine in bed, while Roberto checks his email and the latest Mexican Fútbol Standings. The Cisneros’ live in a home that has some wear and tear. However, Roberto is fairly good with his hands and his brother in law, Jamie, works in construction. There are three bedrooms and one and a half baths. Roberto and Jamie are currently in the process of redoing the kitchen. The appliances are old and faulty, and the cabinets are extremely out of fashion. primary research | 18
  19. 19. ethnographyresults Location The two stores are located less than a mile boasts that they will match all competitors’ prices. We from each other in Champaign. Both are located off concluded that it seemed like Lowe’s had a larger selec- of Prospect Avenue, one of the busier streets in Cham- tion of products and also that their shelves were more paign. While there are many other retail stores in the stocked. The appliance department at Lowe’s was one area, Lowe’s location is better because it is located area in particular that Lowe’s seemed to carry a greater right in the middle of these retail stores and also right number of different products. Prior to our observa- in the middle of a lot of restaurants. This has potential tions we were under the impression that Lowe’s had a to generate higher traffic and more visibility. larger product selection. Upon gathering our research, we are confident that Lowe’s does indeed have more Layout and Product Selection When we went into the heavily stocked shelves with a larger, easier-to-find two different stores, we each noticed that there were selection of products. a lot of similarities between the two. One of the first things we noticed was that at both, the flooring and Customer Service and Workers Immediately after lighting were very similar. Both had gray floors and walking into the Lowe’s store an employee greeted us industrial lighting, which would be expected at a home with “hello, how are you?” For the most part no one improvement store. Also, they both had a return desk really came up and asked if we needed help, especially and a customer service desk located near the fronts when we were just standing observing of the stores. Lowe’s seemed larger, as we counted other customers. However, there were a couple times around 51 aisles compared to 32 at Home Depot. In at Home Depot, when walking by a worker, we got addition, the aisles also seemed bigger and more stopped and asked if we needed help finding anything. organized at Lowe’s. Home Depot had eye-catching, This was different from Lowe’s where we usually only orange-colored items at the beginning of the aisles got a smile or a hello from a worker. There seemed to as well as miscellaneous orange banners throughout be plenty of workers available at both stores so that if the store. The reason we noticed this is because Home you did need help you could easily find an employee. Depot’s logo is orange, so all the orange products When we went to Lowe’s on a weekend, it was more matched well with it. One other interesting observa- difficult to find a worker due to an increased amount tion we noticed was that Lowe’s had a lot more cash of shoppers. The age of the workers varied, but Lowe’s registers, suggesting an easier check-out process and had the widest range that we saw. Some employees possibly shorter, more efficient lines. appeared to be teenagers while others looked to be Both stores offered standard home improvement in their 60s or 70s. For the most part the workers were products and carried major name brand products. white males. We estimated that there were about 65% For example, at Lowe’s we picked out a GE dishwasher male workers and 35% female workers. We did not, and a GE microwave, and copied down the product however, see any Hispanic workers, which, while we information and proceeded to check whether or not found slightly disappointing, makes sense consider- Home Depot carried the same products at the same ing the ethnic makeup of the area. On neither trip did prices. Home Depot did carry the same products and we see any workers who looked Hispanic and we are the prices were very similar at both places. Lowe’s also unsure of the number of Spanish-speaking workers. primary research | 19
  20. 20. Weekend vs. Weekday and Customers There were some major differences between the observations we made on the weekend compared to the weekday. First, the crowd was much larger on the weekend for both places. We went on a Saturday morning and the parking lots of both places were at least half full. On the other hand, when we went on a Tuesday night, the two parking lots were close to empty. Also, on the weekend there was a lot more staff at both places because of the larger crowds. This made it a bit harder to locate a worker. We did note that on both the weekday and weekend, the Lowe’s parking lot had more cars than The Home Depot’s. After observing the parking lot we went into the store to see what kind of customers were at the two different stores. For the most part both stores had very similar customers. On Saturday we saw what looked to be retired couples, older couples, middle-aged couples, young couples, men and women who appeared to be there by themselves, Bloomington, IL and even a handful of teenagers. Most of the couples didn’t have children with them. The customers on the weekday were not as Champaign, IL varied, mainly because there were very few customers at the two stores. Home Depot, during both visits, probably only had ten cus- tomers, while Lowe’s probably had around twenty-five. Most looked to be single males but we did notice one young couple at Lowe’s that looked like they were accompanied by one of their parents. We only saw one family with kids at Lowe’s and none at Home Depot. During the week we only saw a limited number of different races; at Lowe’s we saw one African American woman and one Hispanic man. The weekend was more diverse but for the most part it was mainly white men and women. Bloomington vs Champaign As expected, the layout of the stores was very similar in Bloomington and Champaign. However, one major issue was the location of the two different stores in Blooming- ton. Lowe’s is located in the middle of Bloomington in a very good location, while Home Depot is located farther out of the city and much further away from where most people live. Also, it is located right across from a new Menards, which gives it a lot more compe- tition then Lowe’s has. The customers we noticed in Bloomington at both stores were very similar, probably because Champaign and Bloomington are similar in size, Champaign around 78,000 and Bloomington 73,000. Also, they are similar in median income, with Champaign having a median income of $39,000 and Bloomington $55,000. Their ethnic makeups are similar as well, with Champaign being around 5% Hispanic and Bloomington being around 4 (USCen- sus.com) Overall Experience Overall, we saw a lot of similarities between the two stores with regards to size, product selection, and the custom- ers that each stores attracted. We were a little disappointed that we didn’t see more young couples because that is our target market. On the other hand, this gives us reason to implement our campaign and create an effective strategy that attracts them. We saw very few Hispanics at the store, which we expected because of the small percentage of Hispanics that make up this area. primary research | 20
  21. 21. PART 3 Media Plan mediamix T media mix we designed incorporates many different mediums to together create a successful campaign. We took into consideration the age group and media prefer- ences of our primary and secondary target audiences while creat- online ing this plan. We provide tentative media schedules, a breakdown of the $35 million budget, and a discussion of measurement and television evaluation to determine the effectiveness of our plan. Media Objectives The following represent the media objec- tives associated with implementing our media mix: nontraditional • Increase Lowe’s brand awareness among both our primary radio and secondary target audiences • Build brand loyalty, especially among new homeowners print • Increase reach, especially among the Hispanic market • Utilize an efficient media mix to continuously reach our billboard/ market throughout the year transit • Distinguish a separate brand identity from other stores in the industry media plan | 21
  22. 22. print Nearly half of all home improvers (45%) cited magazines as their Top Hispanic/Latino Titles by Circulation Comida Y Familia primary source of motivation for beginning a new home improve- (936,000), People en Español (469,000), Latina (400,000), Selecciones ment project. In addition, magazines perform best overall at (355,000), Hispanic (290,000), TV Y Novelas (176,000), Vanidades influencing consumers to start a search for merchandise online. (155,000) (Audit Bureau of Circulations, 2006). 39% of adults they surveyed reported that a magazine prompted Primary Target Market According to a research report on www. them to search online for merchandise (Magazines: The Medium magazine.org, adults under 35 years old read more issues per of Action, a Comprehensive Guide and Handbook, 2009). month than adults who are over 35. Therefore, younger adults Secondary Target Market Hispanics report magazines to be the are more likely to be in the top quintile of magazine readership. medium that provides the most practical advice and is best at The median number of magazines read by adults 25-34 in the past informing them about new products or services. month was 7.1. Adults 25-34 are 25% more likely than the general population to read a magazine (www.magazine.org). Top 10 Titles read by Hispanics/Latinos People, People en Espa- ñol, National Geographic, Cosmopolitan, Sports Illustrated, Latina, Magazines that target our primary market: People, Self, Health, Better Homes & Gardens, Selecciones, Maxim, Readers’ Digest (MRI, In Style, BusinessWeek, Details, Maxim, Sports Illustrated. Fall 2006). magazine selection Magazine Audience Total Paid Total Aud. Total Readers in Notes and Verified Primary Target Circulation People A25-34 3,615,858 43,528,000 8,966,000 Median HHI: $67,129 Self Women, Media age 35 1,516,075 6,078,000 n/a Median HHI: $85,671 BusinessWeek small business owners 921,423 n/a n/a targets professional adults; average household income: $95,306 Maxim Men, 25-34 2,537,130 12,969,000 4,943,000 median household income: $69,381 Sports Illustrated primarily men 3,252,298 n/a n/a average income: $60,913 Total Readers in Secondary Target People en Español F: 63%, M: 37%; median age 34 567,583 6,175,000 6,175,000 43% of readers own homes; Average HH size: 4.2; Median HHI: $40,047 Hispanic ave age-38, ave HHI: $98,500 183,931 1,449,000 1,449,000 average HHI: $98,500; 65% own homes magazine buy Magazine Full Page, 1x Half Page, 1x Full: Disc. Half Disc. Size # Issues $ per Issue Added Value People $266,780 $256,109 Full 4 $1,024,435 editorial content $180,110 $172,906 Half 4 $691,622 editorial content Self $141,480 $95,500 $135,821 $91,680 Full 4 $543,283 editorial content BusinessWeek $112,200 $70,200 $107,712 $67,392 Half 4 $269,568 editorial content Maxim $241,756 $145,056 $232,086 $139,254 Full 4 $928,343 editorial content People en Español $67,000 $43,550 $64,320 $41,808 Full 5 $321,600 editorial content Sports Illustrated $336,000 $322,560 Full 3 $662,976 Full page in SI Homeowner edition published on Apr 6 $230,200 $220,992 Half 3 $662,976 Hispanic $21,750 $13,594 $20,880 $13,050 Half 5 $65,251 editorial content The above pricing was taken from each of the magazine’s current media kits. TOTAL 16 $5,170,055 We assumed about a 4% discount for advertising within multiple issues during the year. In addition, we will try to negotiate any Added Value available. % of BUDGET 14.77% media plan | 22
  23. 23. television Hispanic Television Television is a very important medium for the we will estimate an allocation of $300,000 to place spots on the Hispanic culture and a has the potential to reach many Hispanic nine Telemundo stations for 25 weeks. Assuming costs per spot consumers. Nielsen estimates that for the 2009-2010 TV year, are on average between $200 and $300 per spot, the following the Hispanic market will be the fastest growing TV audience in chart summarizes our local television buys that will reach our America. For this reason, television is an important medium to secondary target market. use when trying to reach our secondary market. In order to keep National Television The U.S. Census projects that in 2010 there will advertising expenses down, we will not use a national campaign be 83,095,000 Americans between the ages of 25 and 44. Because that is specifically directed toward Hispanic consumers. Rather, of the large size of our target market, we will advertise nationally we will focus on areas labeled as High Density Hispanic Areas on some of the highest rated shows in America. (HDHA) and place spots in the top nine largest Hispanic markets, as reported by a 2006 Synovate U.S. Diversity Markets Report: Choosing Format and Day-part The shows that we will advertise Los Angeles, New York, Miami, Chicago, Houston, San Francisco, on a national level are: Dancing with the Stars, CSI, The Mentalist, Dallas/Fort Worth, Phoenix, and San Antonio. and NBC Sunday Night Football because each is currently listed in the top 10 of the highest rated shows in broadcast television Choosing Format and Day-Part We will primarily place local (Nielsen, 2009). We are also going to advertise on national late spot commercials during prime-time programs on Telemundo, night news because 50% of our primary target market still reports a primarily Spanish-speaking network. Because exact costs are getting their news via television (people-press.org). unknown for placing local spots in the top nine Hispanic markets, national tv buy Program Netwk Rtg Viewers $/spot spots/wk CPP CPM tot cost/wk # wks tot. spots total run cost Dancing With the Stars ABC 11.2 17,622,000 $198,647 1 $17,736.34 $11.27 $198,647 7 7 $1,390,529 CSI CBS 10.9 17,380,000 $198,647 1 $18,224.50 $11.43 $198,647 7 7 $1,390,529 The Mentalist CBS 10.4 16,169,000 $198,647 1 $19,100.67 $12.29 $198,647 7 7 $1,390,529 NBC Sun. Night Football NBC 13.7 22,392,000 $339,700 1 $24,795.62 $15.17 $339,700 7 7 $2,377,900 Net TV-L Nite/L News - - - $20,843 3 - - $62,529 25 75 $1,563,225 TOTALS: $956,484 7 - - $998,170 53 103 $8,112,712 Rates based off article: http://adage.com/article?article_id=139923 and handout given in lecture by Professor Nelson local tv buy Market Station Owner Channel ID Daypart $/spot sp/wk Total $/wk # wks tot. spts total run cost Los Angeles KEVA-CH52 NBC Universal Telemundo Primetime $300 6 $1,800 25 150 $45,000 New York WNJU-CH47 NBC Universal Telemundo Primetime $300 6 $1,800 25 150 $45,000 Miami-Ft. Lauderdale WSCV-CH51 NBC Universal Telemundo Primetime $250 6 $1,500 25 150 $37,500 Houston KTMD-CH47 NBC Universal Telemundo Primetime $250 6 $1,500 25 150 $37,500 Chicago WSNS-CH44 NBC Universal Telemundo Primetime $250 6 $1,500 25 150 $37,500 Dallas-Ft. Worth KXTX-CH39 NBC Universal Telemundo Primetime $200 6 $1,200 25 150 $30,000 San Antonio KDVA-CH60 NBC Universal Telemundo Primetime $150 6 $900 25 150 $22,500 Phoenix KTAZ-CH39 NBC Universal Telemundo Primetime $150 6 $900 25 150 $22,500 San Francisco KSTS-CH48 NBC Universal Telemundo Primetime $150 6 $900 25 150 $22,500 TOTALS: $2,000 54 $12,000 225 1350 $300,000 tv summary Rates based off article: http://adage.com/article?article_id=139923 Total Spots Total Cost Hispanic Spots 1,350 $300,000 National Spots 103 $7,485,128 Annual Cost $8,112,712 % of Budget 23.18% media plan | 23

×