** add CVP back in??Lets jump right in and take a look at the brand positioning of the product that we are pitching today. The target audience for H-80 is going to be women or housewives, a large portion being women who stay home during the day or still have control over maintaining the house. We are planning on setting ourselves apart for our distinct advantage because H80 is going to be used specifically for heavy scrubbing, especially because of the technology that is inside the product. This would be actively communicated to consumers by showing the convienence of the product and how easy it is to use. The slogan we came up with is “only the best to help you with the worst part of cooking”
In terms of where we would like to see H80 grow by the end of this year, we are hoping to obtain a 7% market share. And as most people know market share is achieved from trial, repeat, awareness and distribution. Another very specific goal is to have a 25% trial goal percentage after the first 3 months of product launch.
The budget that we will be working with is $37M for promotion and $18M for advertising.
As you can see here this is our promotional calendar, featured we have all four of our LDL brands: Ivory, Dawn, Joy and our newest product we are launching today H-80 on the far left in green. We are planning to do 9 months of various promotion techniques throughout the year. In terms of which months we chose to create a promotion, is based on the fact that many brand managers believe that in order to reduce cannibilization, 2 promotions should not be being placed against each other but rather only 1 or 3 or more is the best method.Touch on- trying to reduce cannibalizationWe have used a few strategies. In order to gain the following objectives: Distribution Awareness Trial Repeat
*Cost Trade Allowance= 105000*2.7 = $283,500Sampling = 30% coverage = $18,000,000Why?As sales had advised Garner, trade allowances are extremely important for the first three months as they help stimulate initial stocking, in-store displays and feature advertising.We are offering a high trade allowance of $2.70/statistical case to ensure the retailer carries our product as suggested by sales. Sampling is considered to be the most effective trail-producing promotion tool. We are using sampling to enable our potential consumers to try the product. Using the largest sample size available will generate the most effective and efficient trial levels for H-80.By having more than three events we are preventing cannibalization from occurring.
Why? In month two we continue having Trade Allowances to be able to initiate further stocking by our retailers. We continue to have a $2.70/statistical case trade allowance as suggested by sales. We send out individual coupons for H-80 to select members of our target market. This type of couponing has high impact and redemption rate. Garner believes that coupons should be used given its appeal to consumers.By sending out these coupons after sending free samples to our potential consumers we hope to induce high trial.By having three events we ensure minimal cannibalization of the brands. *CostTrade Allowance = 105000*2.7 = $283,500Big Coupon = Total number of coupons distributed=39,500,000 coupons. Cost- $6,303,805 **Trial #- 6186000/80000000= 7.7% 7.7%/2= 3.9%
Why?This is the last round of initial initiative for the retailer to carry our product.We continue offering a high trade allowance during this month as well. Garner suggests that coupons are highly effective given the broad usage of coupons for the LDL categories. We introduce the ‘small’ coupon whereby coupons for H-80 are mailed to target consumers with other product coupons. Although impact is not as high it is still extremely effective in inducing trial. We chose to have this in this month for two reasons. Firstly, March is one of the months where delivery time for these coupons is open. And secondly as we hope that after having a sampling promotion and an individual coupon promotion we will lessen the opportunity for H-80 coupons to be lost in between all the coupons. As we only have two events we risk having cannibalization*CostTrade Allowances- 280000*2.7Small Coupon – Total number of coupons distributed – 24,000,000 coupons. Cost- $1,584,960**Trail %- 3758000/80000000 = 4.7% 4.7/4- 1.2%
Why? As we have just finished a series of trade allowances with either sampling or couponing we wish for these promotional events to take effect. Further we wish to avoid cannibalization as much as possible.
Why? Premiums are extremely useful in stimulating impulse purchases.As we have ensured that retailers are carrying our product through trade allowances in months January- March we now wish to bring our product in front of our consumers in their retail stores. In Pack Premiums therefore generate further trial for our product while reinforcing our product in the mind of the consumer through in store displays. By having three events in this month we reduce the risk of cannibalization of the brands. *CostIn-Pack Premium = $950,000 (Total cost given in Exhibit 16)
Why? We chose not to have an promotional event in this month as cannibalization could occur. Also we wish for our previous promotional events to take effect.
Why?*Same time as 2 other promotions—promoting at same time lessens cannibalizationJuly 4th is a big cooking holiday, will result in consumers needing to clean dishes*****Garner skeptical of whether additional trade allowances would be necessary, but higher margins for retailers would insure they stock H-80 for July 4th holidayCoupon will provide incentive for consumers to buy H-80 to clean their holiday dishesTrade Allowances & Coupons are always offered together to provide incentives to both retailers and customers*Although in case it suggests trade allowance should be 4th event, we chose to make it our 5th as we have trade allowances for the first three months and believe the consecutive trade allowances to begin the year will encourage suppliers to stock our product. By having it as our 5th we ensure suppliers who did not stock our product initially are able to benefit from another promotion and stock our product for the summer. ** Connect to Advertising happening.“Spend more time with your family and less time scrubbing your dishes with our new product!”or “H-8- will take care of your dishes so that you can take care if what really matters”***Although promoting two or more of the company’s LDLs is generally tried to be avoided, some sales managers believe that promoting multiple brands at once “would lessen cannibalization among the brands by minimizing switching resulting from promotion”**** Cost Trade Allowance- 420000*2.7= $1,134,000Small Coupon -Total number of coupons distributed – 24,000,000 coupons. Cost- $1,584,960
Why?Low-risk, low-cost method for customer to try H-80Only promotion in August for LDL productsNo competition or cannibalizationPrice Packs has highest rated Consumer Ratings100% liking very much/fairly well100% used in past 3 monthsPrice packs cannot be run until after month 6 (August is month 8)We are using the self liquidator premium in order to gain brand loyalty amongst our consumers. We have introduced this in the latter part of the year as a majority of our target market would have tried our product. This will act as an incentive to continue buying H- 80.*CostPre-Priced Pack (High Value)- (.50*5,000,000) + (.50*5,000,000) = $350, 0000Self Liquidator Premium- (Fixed rate given in Exhibit 16)- $200,000
Why?Limit cannibalization with 3 promotionsPrice Packs effective in retaining users and encouraging repeat purchasesAfter promotion and trial phases, starting to want repeat customersImpulse purchases could be effective with Labor Day cookouts popular in September*Cost Price Pack- (0.3*350000)+(0.5*350000) = $280,000
Why?Only 1 other promotion, running simultaneously could induce competition and cannibalizationNo major events or holidays in October to inspire cooking-related purchasesBreak between Summer promotions and the end-of-year/holiday promotions
Why?Beginning of heavy cooking seasonThanksgiving, ensuing December holidaysCrucial to have one of the most effective promotions during this time 3 or more promotions limits cannibalizationPremiums attract attention at point-of-sale and stimulate impulse purchasesMost effective premium in achieving marketing objectives (obtains 4 out of the 5)Repeat Purchase, Obtain in-store displays, Increase Advertisement Readership, and Copy/Product Reinforcement*Cost Free mail in for multi-proofs – $2,200,000 (Given in Exhibit 16)
Why?Low-cost distributionWeak trial device, but not trying to gain trial in last month of yearGarner believes bonus pack would be effective in second half of introductory year“Strong purchase incentive to consumer who had purchased and liked product before”*CostBonus Pack ( 8oz.) - 6.1*490,000 cases = $2,989,000
1999- Primetime slots between $290,000- $475,000Average TV show between 30,000-165,000
Advertising will help express both functional and self-expressive benefits*According to http://faculty.washington.edu/baldasty/Feb3.htm "ABC average rate of $165K, Fox $150K, WB $53K and UPN, $29K"in 1999. Taken into account inflation, increased number of viewers, the popularity of televisionat the time (or the lack thereof), and the ad price spike due to increased competition for TV adspaces, we believe $80,000 is a fair estimate.Daytime Soaps: Dallas, Knots Landing, Dynasty, Falcon Crest, LA Law80,000 X 7 days X 15 weeks7 days x 15 weeks = 105 advertisements80,000 x 105 advertisements = 8,400,000
Focus ads on family theme, helping people spend less time in kitchen and more time with loved ones around the holidaysNighttime: The Cosby Show, Cheers, Family Ties, Growing Pains, Whose the Boss80,000 X 5 days/week X 13 weeks5 days x 13 weeks = 65 advertisements5,200,000*Same explanation as above. However, niche market and lower viewership justifies pricedifference (20% lower)
Promote awareness throughout first half of year by using jingles such as “Is dishwashing tough for you? Be touch with dishwashing. Use H-80!”$200 x 15 times/day= $3000 a day/station$3,000/day * 15 stations = $45,000/day for all 15 stations$45,000 x 450 times = $675,00015 times a day * 450 times per month = 6,750 ads per month per station$3000/day x 450 times = 1,350,000 (per month per station)2,700 ads
Appeal to emotional and self-expressive benefits of women through magazinesOne page ad in a popular magazine between $10,000-$30,000 dollars$16,000 (once a week) x 46 weeks = 736,000 (one magazine)736,000 x 4 magazines = 2,944,000
Brand Management: P&G Product Launch Case
PROCTOR & GAMBLEPRODUCT LAUNCH OF H80 ALEXANDRA GLAZER ZACHARY GOLDEN FERNANDO SADDI YA S H O M AT I S A H U W A L A
BRAND POSITIONING “Only the best to help you with the worst part of cooking” Target Audience: Women, Housewives Actively H80 Communicate: Distinct Easy to use, Advantage: Gets dirtiest heavy dishes clean scrubbing quick
OBJECTIVES• Expected Market Share Objectives 7% Market Share $4.2 Million Cases Sold $71.4 Million estimated sales• Trial Goal Trial Goal Percentage: 25% 80,000,000 households Trial goal- 20,000,000 households• Awareness 65% consumer awareness 3 months after introduction• Distribution 70% distribution in stores 90%:48 oz, 85%:32 oz, 90%:22 oz, 75%:12 oz Market Share = Trial *Repeat * Awareness * Distribution
JANUARY Trade Allowances Sampling (Distribution) (Trial) • Stimulate stocking • Most effective trial • Cost 2.70/Case producer • Largest sampling size usedCost (Trade Allowance+ Sampling = Total Cost)$283,500 + $18,000,000 = $18,283,500Trial Goal: 25.5%
FEBRUARY Trade Allowances Coupon (Distribution) (Trial) • High impact • Stimulate stocking • High redemption rate • Cost 2.70/Case • Used after sampling to create high trialCost: Trade Allowance + Big Coupon = Total Cost$283,500 + 6,303,805 = $6,587,305Trial Goal: 3.9%
MARCH Trade Allowances Coupon (Distribution) (Trial) • High impact • Stimulate stocking • High redemption rate • Cost 2.70/Case • Used after sampling to create high trialCost (Trade Allowances + Small Coupon = Total Cost )$756,000 + $1,584,960 = $2,340,960Trial Goal: 1.2%
JULY Trade Coupon Allowances (Trial) (Distribution) • High impact • Offered with coupon to • High provide redemption rate incentive • Used after sampling to create high trialCost (Trade Allowance + Coupon =Total Cost)$1,134,000+$1,584,960= $2,718,960
AUGUST Pre-Priced Pack Self Liquidator (Repeat) Premium (Repeat) • High Value • Gain brand • Low Risk & Cost loyalty • Highest rated • Incentive to consumer ratings continue buyingCost: (Pre-Priced Pack + Self Liquidator Premium= Total Cost)$350,000+$200,000= $550,000
SEPTEMBER Price Pack ( Repeat) • High Value • Retaining users • Repeat purchases • Impulse purchasesCost = $280,000
MEDIA, 1983 • Television • Radio • Magazine AdsTV Commercial Radio Magazine Commercials • ~$200/20 • $20,000/one • ~$80,000/ 30 seconds of air page ad in seconds of time popular primetime TV magazine • ~$60,000/per 30 seconds of less popular TV
TELEVISION Television Campaign #1 Advertising (Awareness)• Mid February- April • Television Campaign #1 • $80,000 per 30 second ad • Portraying Functional and Self- • 7 days a week, during 15 weeks Expressive benefits (3.5 months) • To be featured during daytime soap • Total: 105 advertisements for operas to target housewives/mothers $8,400,000 • Featured on daytime soap operas
TELEVISION Television Campaign #2 Advertising (Awareness)October - December • Less time in kitchen to spend • $60,000 per 30 second ad more time with family, connection • 5 days a week, during 13 weeks to holiday season (3 months) • Total: 65 advertisements for $4,225,000 • Featured on nighttime family sitcoms
RADIO Radio Ads • Mid February to December • 15 radio stations • $200 per 20 second clip • $7,500/day (all stations), 37.5 ads/day (all stations) • 1,125 ads (all stations)/ month for 6 months • Total: 6,750 ads for $1,350,000
MAGAZINES Magazine Ads • Mid February to December • $16,000 per one page ad • Once a week, during 46 weeks (10.5 months) • Total: 46 advertisements for $2,944,000 • To be featured in these eight magazines: Good Housekeeping, House and Garden, Family Circle, Woman’s Day, Ladies’ Home Journal, Better Homes & Gardens, McCall’s, Redbook
TOTAL ADVERTISING BUDGET Months Advertising CostFebruary – April Television Campaign 1 $ 8,400,000October – December Television Campaign 2 $4,225,000February – July Radio $1,350,000February - December Magazines $2,944,000 $16,919,000.00