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Caliva: “A Higher State of Wellness”
Integrated Marketing Communications
Spring 2016
Team: High Five
KATE BUREAU
JOANNE CUA
NICK DUDLER
ARIEL MARTIN
CHAU NGUYEN
1
Table of Contents
I. SITUATION ANALYSIS…………………………………………………………………. 2
II. COMPETITIVE ANALYSIS….………………………………………………………….. 3
III. TARGET MARKETS……………………………………………………………………….. 5
IV. CORPORATE OBJECTIVES…………………………………………………………….. 5
V. MARKETING OBJECTIVES AND STRATEGIES…………...…………………….. 6
VI. IMC OBJECTIVES…………………………………………………………………………. 6
VII. IMC STRATEGY………………………………………………………………………….….7
VIII. TARGET AUDIENCE……………………………………..………………………..….…..7
IX. MESSAGE PLATFORM………………………………..………………………….……...9
X. TACTICS……………………………………………………………....……...…….………10
XI. TIMING AND CALENDAR OF EVENTS…………….………………..……………14
XII. BUDGETS…………………………………………………………………..………….……15
XIII. MEASUREMENT/BENCHMARK…………………………………………………..15
2
I. Situation Analysis
Caliva is a cannabis dispensary located in San Jose, California, that grows and sells
marijuana for medical use. Opened in the summer of 2015, Caliva is entering the cannabis
industry as marijuana is “emerging from the underground into a decidedly capitalist era.”
With recreational use legalized in four states and some form of medical use permitted in 23
states, marijuana sales hit $5.7 billion last year. By 2020, sales are expected to reach nearly
$23 billion. California could account for a large portion of these sales if the Adult Use
Marijuana Act is passed this fall. This act legalizes, regulates, and taxes recreational use of
non-medical marijuana for those who are 21 and older. With this opportunity, Caliva is
looking to dominate California’s anticipated recreational marijuana industry.
Currently, within the medical marijuana industry, Caliva’s focus is on higher standards. They
strive to offer consumers value and utility through high quality products, educated and
friendly staff, a clean and trendy facility, and a comfortable, easy buying experience thanks
to a high level of customer service. They are working to create a widespread brand
presence, defeat competition by raising industry standards, and gain the loyalty of medical
cannabis wholesalers and mainstream consumers. Caliva products are currently only
available in their store, but they are hoping to distribute their products to other
dispensaries in the future.
The typical cannabis products include flower, edibles, concentrates and topicals. Looking
into the future, these traditional products will likely stick around, and new ones of course
will be developed. Moreover, all of these products will become increasingly standardized,
regulated, branded and packaged in a professional and consistent manner. The brands
that can successfully brand these products into consistent, high-quality consumer
commodities will be the ones who have an upperhand. Some key issues moving forward in
branding these products are creating a memorable brand with consistently high-quality
products. Due to a lack of testing standards in the industry, a leading cannabis brand in the
marketplace will be defined as one that can practice safe and clean products with well-
established testing standards.
As Caliva prepares for the impending legalization of recreational marijuana use in
California, their goals include (1) dominating the future recreational market through
widespread brand presence, (2) establishing recognition as the name-brand that one can
find in any ‘weed store,’ (3) branding Caliva products to be as ubiquitous as Budweiser beer,
3
and (4) positioning Caliva as a recreational cannabis lifestyle brand throughout California
with big media, public relations, and marketing campaigns.
II. Competitive Analysis
Caliva must consider many direct competitors when developing its strategy and positioning
in the mind of its consumers. There are an estimated 5,000 businesses selling cannabis
products in the U.S. (not including black market sellers) and this number is expected to rise
drastically. There are six dispensaries within just two blocks of Caliva, indicating a high
density of alternatives for local consumers. Other dispensaries in San Jose within quick
driving distance of Caliva include Bloom Room, Lux, Herb’s Herbs, CA collective, among
others. The positioning of these collectives varies; several are positioned solely as a pain
relief product, while others position themselves as providers of wellness and productivity.
Common customer value propositions include convenience, quality, proof of safety and
licensing, and variety. Other direct competitors include black market sellers of marijuana
and drug dealers. The largest indirect competitors for Caliva are professional medical care
providers who provide other pain-relief drugs. Indirect competition is also found in
alternatives to marijuana for recreational use, including alcohol, drugs, and tobacco
products.
SWOT Analysis
Strengths
● One of the only dispensaries with
professional marketing
● Higher level of customer service
● Facility looks nice and is
approachable (clean, not sketchy)
● State of the art agriculture facility/
no middleman
● Wide variety of products - flower,
topicals, edibles, concentrates
● High markups, high gross profits
● Quality of Product
Weaknesses
● Competitors can offer similar
products quickly
● Limited flexibility in pricing/ high
price
● Less online presence from
advertising restrictions
● High cost of R&D
● Location constraints
4
Opportunities
● Recreational cannabis is going to be
legal in the future
● Position caliva as the “go-to”
recreational cannabis brand in CA
● Sell products online
● Delivery services
● Celebrity endorsements
● Loyalty programs
● Co-branding
● Partnering with a cafe to offer
marijuana edibles and beverages
under one roof
● Other states legalizing weed as an
opportunity for expansion
Threats
● Industry stigma
○ People are not
uncomfortable going to
dispensaries or buying weed
in general.
○ Marijuana is known as a
gateway drug.
● Many competitors pivoting towards
recreational use
● Social media/mass media
restrictions
● Other states legalizing cannabis
creates more competition
● Future regulations
● Product cannibalization
Strengths:
Caliva is one of the only dispensaries in the San Jose area that strive for a higher level of
customer service by creating a clean and approachable facility. They have also built a state
of the art agricultural facility, which is controlled by their highly educated scientists and
growers. With their own in-house products they are able to cut out the middleman,
ensuring a wide variety of quality products, including flower, topicals, edibles, and
concentrates.
Weaknesses:
Though Caliva has marketed itself as providing high quality products, competitors can offer
similar products which cost less. They are limited in price flexibility and may be unable to
provide customers with cheap and quality products. Since Caliva prides itself on providing
quality products, they also spend a lot of money on research and development in their
agricultural facility. In addition, because Marijuana is illegal in most states, there are many
restrictions in regards to online presence and advertising. A restriction also to take into
consideration is the zoning law that the city of San Jose has instituted.
5
Opportunities:
Recreational cannabis is going to be legal in California in the near future, so this is an
opportunity for Caliva to cement themselves as the most prominent recreational cannabis
brand in California. Other states legalizing marijuana is also seen as an opportunity for
Caliva to expand to new locations. It is also possible for Caliva to sell cannabis online and
have delivery services that would be advantageous to individuals who feel uncomfortable
going to dispensaries or purchasing marijuana from drug dealers. Caliva could also create
loyalty programs, celebrity endorsements, and collaborate with other brands in order to
grow their audience.
Threats:
Caliva’s biggest threat is other dispensaries who are also pivoting towards the recreational
use of cannabis. Another threat would be the stigma attached to the cannabis industry–
many individuals are uncomfortable purchasing weed and marijuana is also known as a
gateway drug. Additionally, this stigma is the reason for the constraints in social media and
mass media advertisements. One more threat is that more competition will arise as other
states legalize marijuana, and when this happens, there will be new regulations that may
complicate the industry.
III. Target Markets
Young Professionals
The primary target market Caliva plans on pursuing is young professionals. This market
would include people who we would describe as trendy young adults who are in their mid-
twenties through late-thirties. More and more today we see young adults, especially in the
Silicon Valley, who are consumed by their jobs with no time to destress and relax. This
group of individuals tend to support local, artisanal products and believe companies should
adopt values which embody corporate social responsibility. They care about companies
being transparent and honest about where their products come from and how they are
acquired. But they also demand high quality products and a high level of customer service.
With the market of young professionals ages 25-40, we predict that in the beginning, they
will tend to buy products that they are more accustomed to. However, once they feel more
comfortable with the product, they will eventually branch out and want to try new
variations of the product. These variations include flower, which is generally smoked
through bongs, pipes, and joints, and edibles, which are food products that have cannabis
6
infused into them. These products will provide the young professional with an avenue to
destress and relax in a fun and sociable environment.
Aging Population Seeking Pain Relief
The fastest-growing population of cannabis users in America is the elderly. Therefore, one
of Caliva’s target markets are individuals who are 40-70 years old. These individuals are
open to using cannabis products, but may want to consume it in ways other than smoking
such as lotions, tinctures, and edibles. Marijuana helps with some of the typical problems
of aging, such as chronic pain from arthritis, appetite issues, and headaches. Elderly people
using cannabis are using fewer narcotics and fewer over-the-counter pain medications.
However, some elderly may not be comfortable with the psychoactive effects of marijuana.
These people may choose to purchase Cannabidiol (CBD), a non-psychoactive compound of
cannabis, or a strain of marijuana that has a low THC level.
IV. Corporate Objectives
● Consolidate Caliva’s position as market leader in the cannabis industry in California.
● Persuade hesitant consumers to believe that cannabis products are both safe and
beneficial.
● Create and market a high quality product throughout all product lines.
● Enter the recreational cannabis market as regulations are lifted in California.
● Create a seamless customer experience for discerning customers through
knowledgeable staff and a friendly buying environment.
V. Marketing Objectives and Strategies
Objectives:
● Increase Caliva membership of young professionals by 20% by the end of 2016.
● Increase sales of flower by 20% by September 2016.
● Increase sales of creams and lotions by 25% to adults over 60 years old by
September 2016.
● Capture a market share of 3% in the San Jose medical cannabis industry before June
2017.
● Introduce three innovative cannabis products by the end of 2017.
7
Strategies:
● Communicate the benefits of marijuana and compare cannabis products favorably
to direct competition including alcohol or cigarettes.
● Create a discount campaign that rewards customers for trying new or seasonal
products or products in different product categories.
● New research and development of new flavors and edibles in order to bring new
product offerings to repeat customers.
VI. IMC OBJECTIVES
Objectives:
● Increase number of new customers that come into Caliva for a trial purchase by 15%
by end of year 2016.
● Increase participation in weekly vendor events by 20% by December 2016.
● To increase social media page visits across all social media platforms by 30% by the
end of 2016.
● To increase sales of weekly product offerings by 20%.
● Increase clickthroughs on Caliva’s website by 30% by end of 2016.
● Increase traffic to Caliva store by 40% by the end of 2017.
VII. IMC STRATEGY
Overarching IMC Strategy for Primary Target Market:
An affinity strategy that attracts consumers with a common interest in trendiness, style,
and artisanal products.
VIII. TARGET AUDIENCE
Primary Audience
Our primary audience is young professionals aged 20-30 because of several key psychographic and
sociographic criteria:
8
● Young professionals in this age group are more likely to travel, try new things, and
act spontaneously without the burden of children or other commitments.
● 20-30 year olds search for social acceptance and follow trends. Cannabis products
are a rising trend.
● 20-30 year olds find ways to de-stress.
● 20-30 year olds often prioritize money for social activities.
● The use setting will be 2-3 times per week because they may be concerned about
productivity.
● The audience values product quality, diversity, and sourcing. Constituents focus on
sustainable or alternative shopping, and often shop at farmers markets or stores
like Whole Foods.
Secondary Audience
Our secondary audience consists of Baby-boomers and Generation X aged 40-75 years old. This audience is
ideal because of the following psychographic and sociographic criteria:
● They seek pain relief from typical aging problems (i.e. arthritis, appetite issues,
headaches) and cannabis products can solve these.
● They have stable jobs or are retiring in the middle or high income bracket and thus
have a steady income.
● The target audience may be open to using new cannabis products that are similar to
products they are already using, such as lotions or other ointments for pain care.
● They may not be comfortable with psychoactive effects of marijuana.
● Curious about cannabis in the form of lotions, tinctures, and edibles.
● Gets information through traditional mass media advertising (news, newspaper, TV
commercials).
● The use setting would be situational for the younger end of the age range (seeking
relief after physical activity) and daily for the older end of the age range (seeking
relief from daily pain).
9
Primary Persona
(25-39 years old)
● Lives in San Jose
● Shops at select grocery stores
● Drives often
● Appreciates local events,
breweries, and concerts
● Works full workweeks
● Spends money on clothes,
leisure, fashion
● Travels for business
● Yoga, other relaxation
techniques
● Has trouble sleeping
● Still has the freedom to try new
things
Secondary Persona #1
(40-59 years old)
● Wants relief from the effects of
aging
● Still active - outdoors activities
(skiing, biking, hiking, etc.)
● Wants to keep up with their kids
● Tries to eat healthy
● Gets up early
Secondary Persona #2
(60-75 years old)
● Wants pain relief, especially from
medical conditions
● Spends time with grandchildren
● Tries to maintain an active
lifestyle
● Enjoys gardening and going on
walks
10
IX. Message Platform
Vision Statement
● Caliva aims to dominate the cannabis industry in the Bay Area by presenting
cannabis products as a gateway to heightened well-being.
Value Proposition
● The trustworthy cannabis collective that offers a comfortable buying experience for
locally-grown, quality products so you can achieve a higher state of wellness.
Value Drivers
● Caliva provides (a) a product of the highest quality in the industry, (b) a welcoming
store-front that combines professionalism and hospitality, and (c) an emphasis on
transparency through shared knowledge of product attributes and growing
conditions.
11
Campaign Messages
● Providing a wide selection of high-quality, locally-grown cannabis products for
trendy young professionals looking to socialize and destress.
● Providing trustworthy cannabis products in the form of familiar pain relief to
alleviate the effects of aging.
Positioning Statement
● Caliva is a contemporary collective that combines a comprehensive offering of
quality cannabis products with expert customer service. Caliva cultivates a sense of
well-being.
Tag-Line
● A higher state of wellness.
X. Tactics
SOCIAL MEDIA:
Caliva will maintain an active presence on social media platforms to generate awareness of
our collective and engage our target audience. Specifically, we will utilize Facebook,
Instagram, and Twitter. Our primary target market, young professionals, commonly gather
on these platforms, and thus this tactic will allow us to not only reach a large number of
young professionals but also to encourage mutual engagement and participation.
Given the regulations Facebook, Instagram, and Twitter have on cannabis-related content,
which includes the prohibition of cannabis advertisements, we will not post promotional
pictures of Caliva products. Instead, we will use these platforms to deliver brand messages,
share Caliva news, post information about community events, and participate in any
cannabis-related discussions. Our photos will follow the same style of the current
photographer’s work that is posted on Caliva’s website–clean, artsy, and stylish–and any
text will be conversational and informative in nature. Examples of social media posts
include: Instagram photos of our involvement in trade shows as well as photos of CSR
events and Facebook posts before, during, and after major cannabis or related events, such
as HempCon in San Jose and California Roots Festival in Monterrey.
12
Using social media as a tool to develop a strong loyalty between consumers and Caliva is
possible by generating a variety of engaging content such as posting interesting facts about
employees from all segments of the business (growers, sales associates, CEO, R&D
scientists), lifestyle tips that users can relate to, and teasers of new and upcoming products
before they are released to give consumers a sneak peak on what Caliva has in store for
them. Having a variety of these types of posts will make users look forward to seeing
Caliva’s posts on their social media feeds and increase Caliva’s following.
RADIO:
Caliva will advertise on My Mix106.5, a San Jose radio station. My Mix106.5’s listener base is
18-49 years of age and includes “Working Women and Moms, Contemporary Men, and 20-
somethings.” These consumers are advancing professionally, and they enjoy spending on
clothing and leisure, such as “lifestyle” items like entertainment and dining out. These
characteristics are also true of Caliva’s primary target audience. Our advertisements will air
during commuting hours in the morning and evening, as our primary target audience is
most likely to be listening to the radio while commuting to work. The use of radio as an IMC
tool works towards our objective of bringing prospective customers into our store for trial
purchases. Ultimately, by driving new customers to Caliva’s store, radio advertising will
achieve our marketing objective of increasing membership of young professionals.
NEWSPAPER ADVERTISING:
To help achieve our IMC objective of bringing traffic to Caliva’s store, we will advertise in the
San Jose Mercury News in the weekday print edition. We chose this media option because
our secondary target audience, the aging population, is likely to read a newspaper on a
daily basis, and the Mercury will be effective in reaching local readers. We plan to center
these Caliva-branded advertisements on images and information pertaining to creams and
lotions, as we anticipate these to be the most popular products among our secondary
target audience. By addressing this audience through a familiar media form, we believe we
will not only bring awareness to Caliva but also encourage our secondary target audience
to come into our store for a trial purchase. By encouraging store visits and product trial, we
believe these newspaper advertisements will contribute to our marketing objective of
stimulating sales of creams and lotions to adults over 60 years old.
We will also advertise on the San Jose Mercury News’s digital website in order to reach our
primary audience--that is, young professionals aged 25-40. Our primary audience is more
13
likely to read the news in a digital form. These advertisements are likely to be placed in
news stories about leisure or lifestyle and will include a picture of a use situation as well as
the tagline “A Higher State of Wellness.” Our target audience will be drawn to the
advertisement because it displays the lifestyle associated with Caliva’s products. By
stimulating interest, digital advertising in the San Jose Mercury will achieve our IMC
objective of increasing clickthroughs to Caliva’s website and ultimately our marketing
objective of increasing membership among young professionals.
TRADE SHOWS:
Over the course of the year, we will register for 3 trade shows: CannabisCup, HempCon,
and California Roots Festival. The CannabisCup is a festival in San Francisco that focuses on
educating and entertaining cannabis enthusiasts. HempCon is a similar event in San
Francisco that caters to medical marijuana users. California Roots Festival is a music festival
in Monterey designed for cannabis enthusiasts. By registering and managing a booth at
these events, we will reach a wide audience of potential consumers within the primary
target audience. This will help achieve the IMC objective of increasing new customers that
come into the Caliva store, while also helping achieve our marketing objective of increasing
Caliva membership among the primary target audience.
SEASONAL FLAVORS:
In order to create buzz about Caliva and encourage audience engagement, we will create
an interactive campaign around seasonal products. This campaign will provide the public
with the opportunity to submit new strain flavor and product name ideas based on
holidays or seasons. From these submissions, Caliva will choose their top two favorites to
create, which the public will then try and vote on their favorite. By allowing consumers to
actively participate in the creation of Caliva products in store, this tactic will increase in-
store traffic leading to increases in trial purchases as well as sales. Social media will be
heavily utilized throughout this campaign as people will want to voice their opinion and
spread the word. We would promote the contest through our social media channels,
specifically Facebook, Twitter, and Instagram.
● Halloween - Black Cat (Blackberry)
● Thanksgiving - Smoked Turkey (Pumpkin Spice Latte, Cranberry, Apple Pie)
● Christmas - It’s Lit, Under the Mistletoe (Peppermint, Eggnog, Gingerbread)
● New Years - Champagne Pop (Champagne)
14
● Valentine’s Day - XOXO, Hearts of Blaze (Conversational Hearts, Chocolate-Dipped
Strawberries)
● 4th of July - Firecrackers, S’mokes (S’mores)
YOUTUBE SERIES:
Utilize YouTube influencers by sponsoring them to create a variety of videos with different
styles such as vlogs and formal educational video that will help the market make better
informed decisions (e.g. Q&A videos for those who are curious about cannabis, covering
how to use it and its benefits). These influencers will be beneficial to Caliva’s business since
they already have a pre-established audience who are receptive to their ideas and
recommendations. Millennials are notoriously known for being difficult to engage with, so it
is advantageous that influencers already have a built-in level of trust with their followers,
one that’s incredibly difficult for a brand to build. YouTubers in particular have a special
bond with their viewers thanks to their ability to produce original content that feels
genuine. They can help create the right content that really meets the consumer's needs
because they have relatable experiences and perspectives. Although traditional advertising
such as TV commercials may still dominate in terms of views and reach, the catalyst for
creating buzz must start on social media platforms such as YouTube. Ultimately, the
YouTube series will help achieve our marketing objective of increasing the clickthrough rate
to Caliva’s website.
We recommend Caliva pursues Timothy de la Ghetto as a potential influencer for its brand.
Timothy de la Ghetto has the ability to convince Caliva’s primary target market that
cannabis products are safe, trendy, and beneficial through his authenticity, charm, and
shamelessness.
Influencer Statistics
Name: Tim Chantarangsu
YouTube Channel: theTimothyDeLaGhetto
Age: 30
Location: Paramount, California
Occupation: Rapper, comedian, actor, and internet
personality
YouTube Views: 26,347,539
YouTube Subscribers: 3,227,582
15
XI. TIMING AND CALENDAR OF EVENTS
XII. BUDGET
Media Channel
# Per
Year
Total
Budget
Percentage of
Budget Notes
Radio
2x per day
for 7
months $200,000 41%
Cost for advertisements
on radio
Social Media
Every 2-3
days, year-
round $5,000 1%
Third Party Management
for Facebook, Twitter, and
Instagram
YouTube Series 3 $20,000 4%
Costs for a motion
graphic marketing video
including acting, cameras,
editing, etc.
Trade Shows 3 $60,000 12%
Cost for booth materials,
admission
16
Digital News Media
3x per
week for 4
months $200,000 41%
Cost for advertisements
on San Jose Mercury
News website
Seasonal Flavor
Campaign 5 $2000 <1%
Cost for in-store displays,
signage, and social media
postings
TOTAL BUDGET $487,000 100%
XIII. Measurement/Benchmarks
SOCIAL MEDIA:
To measure our social media marketing success, we will use brand search volume. Brand
search volume measures the number of times that the “Caliva” search term is used in
search engines. This metric can be measured with Google Insights. Our desired benchmark
for brand search volume will not be measured by a number but rather by the increase in
searches. Our desired growth of brand search volume is a 10% increase per quarter. We
will also use the social media interaction rate, which includes the number of comments or
shares of online content, to measure engagement on Caliva’s social media. The social
media interaction rate is found by dividing the number of unique interactions by the
number of reached users. “Interaction” includes but is not limited to commenting on a post,
sharing a post, answering a question, RSVP’ing to a page’s event, mentioning the page in a
post, and tagging the page in a photo. The social media interaction rate is useful because it
can compare Caliva to its competition, whether they are a smaller or larger company. The
desired interaction rate is 5%. In achieving the benchmarks for these two metrics, Caliva
can achieve its IMC Objective of increasing social media page visits across all of its social
media platforms.
YOUTUBE:
To measure the success of our use of influencers, we will use statistics provided by
YouTube, such as number of video views, likes, and dislikes. Our benchmarks for these
17
statistics are 100,000 views and 10,000 likes per video. We will also track the number of
shares per video to measure engagement. Through YouTube, viewers are able to share
YouTube videos on 13 different social media platforms. We hope to reach 5,000 shares per
video. On a broader scale, we will look at Caliva’s sales to see if influencer content led to
sales. One way we will measure this is by having the influencer share a secret code at the
end of the video that the viewer can bring to a Caliva sales associate to receive a discount
(i.e. 10% of their entire purchase). Our benchmark for this is 50 purchases per video.
Achieving the benchmarks for these metrics will contribute to Caliva achieving its IMC
objectives of increasing the number of new customers, increasing clickthroughs on the
Caliva website, and increasing traffic to the Caliva store.
WEBSITE:
To measure how many customers use our website, we will use clickthrough rate as our
metric for success. These clickthroughs will primarily come from our social media
platforms, news media content, and influencer content, such as YouTube videos and blog
posts. We will keep information for the number of clickthroughs from each of these
sources to determine which are most effective to driving traffic to Caliva’s website. We will
define success by setting a benchmark of a 8% clickthrough rate. This is the average
clickthrough rate for retailers who operate digitally. By increasing the clickthrough rate to
Caliva’s website through our social media postings and digital newspaper advertisements,
we will achieve our IMC Objective of increasing clickthroughs to Caliva’s website by the end
of 2016.
STORE:
An evaluation method for our objective of bringing new customers into our store will be to
keep a running count of the number of new customers that walk into Caliva. We will also
keep metrics on frequency of store visits by repeat customers. When the number of new
customers making a first-time purchase has increased 15% from our previous benchmark,
we will have achieved this IMC objective. Furthermore, we will also use data from in-store
surveys to measure customer satisfaction with service inside the Caliva store. The
anonymous survey will include questions relevant to the in-store service, product offerings,
and product quality. Possible answers will include “buzzkill,” “fine,” and “in the clouds.” Our
benchmark for a successful in-store experience will be when no greater than 20% of
surveys are returned with one or more “buzzkill.” By meeting this benchmark, we will work
18
to achieve our corporate objective of creating a seamless customer experience for
customers in-store.
SALES:
We will measure sales by tracking inventory turnover rate, sales by category, and sales per
customer. We will also use statistics that track the number of times that products that have
been introduced within the last six months are purchased by consumers. Finally, we will
keep customer profiles to track how many different products each customer is purchasing
and from what categories they are buying. Our primary benchmark is a 20% increase in
sales for each product. Our secondary benchmark is an average of a 25% increase in sales
per customer. Our final benchmark, to measure the diversity of sales, is an average of two
new product trials (purchasing a product they have not yet tried) per returning customer.
These are benchmarks toward our IMC objective of increasing sales of weekly product
offerings.

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Caliva Report- Integrated Marketing Communication

  • 1. Caliva: “A Higher State of Wellness” Integrated Marketing Communications Spring 2016 Team: High Five KATE BUREAU JOANNE CUA NICK DUDLER ARIEL MARTIN CHAU NGUYEN
  • 2. 1 Table of Contents I. SITUATION ANALYSIS…………………………………………………………………. 2 II. COMPETITIVE ANALYSIS….………………………………………………………….. 3 III. TARGET MARKETS……………………………………………………………………….. 5 IV. CORPORATE OBJECTIVES…………………………………………………………….. 5 V. MARKETING OBJECTIVES AND STRATEGIES…………...…………………….. 6 VI. IMC OBJECTIVES…………………………………………………………………………. 6 VII. IMC STRATEGY………………………………………………………………………….….7 VIII. TARGET AUDIENCE……………………………………..………………………..….…..7 IX. MESSAGE PLATFORM………………………………..………………………….……...9 X. TACTICS……………………………………………………………....……...…….………10 XI. TIMING AND CALENDAR OF EVENTS…………….………………..……………14 XII. BUDGETS…………………………………………………………………..………….……15 XIII. MEASUREMENT/BENCHMARK…………………………………………………..15
  • 3. 2 I. Situation Analysis Caliva is a cannabis dispensary located in San Jose, California, that grows and sells marijuana for medical use. Opened in the summer of 2015, Caliva is entering the cannabis industry as marijuana is “emerging from the underground into a decidedly capitalist era.” With recreational use legalized in four states and some form of medical use permitted in 23 states, marijuana sales hit $5.7 billion last year. By 2020, sales are expected to reach nearly $23 billion. California could account for a large portion of these sales if the Adult Use Marijuana Act is passed this fall. This act legalizes, regulates, and taxes recreational use of non-medical marijuana for those who are 21 and older. With this opportunity, Caliva is looking to dominate California’s anticipated recreational marijuana industry. Currently, within the medical marijuana industry, Caliva’s focus is on higher standards. They strive to offer consumers value and utility through high quality products, educated and friendly staff, a clean and trendy facility, and a comfortable, easy buying experience thanks to a high level of customer service. They are working to create a widespread brand presence, defeat competition by raising industry standards, and gain the loyalty of medical cannabis wholesalers and mainstream consumers. Caliva products are currently only available in their store, but they are hoping to distribute their products to other dispensaries in the future. The typical cannabis products include flower, edibles, concentrates and topicals. Looking into the future, these traditional products will likely stick around, and new ones of course will be developed. Moreover, all of these products will become increasingly standardized, regulated, branded and packaged in a professional and consistent manner. The brands that can successfully brand these products into consistent, high-quality consumer commodities will be the ones who have an upperhand. Some key issues moving forward in branding these products are creating a memorable brand with consistently high-quality products. Due to a lack of testing standards in the industry, a leading cannabis brand in the marketplace will be defined as one that can practice safe and clean products with well- established testing standards. As Caliva prepares for the impending legalization of recreational marijuana use in California, their goals include (1) dominating the future recreational market through widespread brand presence, (2) establishing recognition as the name-brand that one can find in any ‘weed store,’ (3) branding Caliva products to be as ubiquitous as Budweiser beer,
  • 4. 3 and (4) positioning Caliva as a recreational cannabis lifestyle brand throughout California with big media, public relations, and marketing campaigns. II. Competitive Analysis Caliva must consider many direct competitors when developing its strategy and positioning in the mind of its consumers. There are an estimated 5,000 businesses selling cannabis products in the U.S. (not including black market sellers) and this number is expected to rise drastically. There are six dispensaries within just two blocks of Caliva, indicating a high density of alternatives for local consumers. Other dispensaries in San Jose within quick driving distance of Caliva include Bloom Room, Lux, Herb’s Herbs, CA collective, among others. The positioning of these collectives varies; several are positioned solely as a pain relief product, while others position themselves as providers of wellness and productivity. Common customer value propositions include convenience, quality, proof of safety and licensing, and variety. Other direct competitors include black market sellers of marijuana and drug dealers. The largest indirect competitors for Caliva are professional medical care providers who provide other pain-relief drugs. Indirect competition is also found in alternatives to marijuana for recreational use, including alcohol, drugs, and tobacco products. SWOT Analysis Strengths ● One of the only dispensaries with professional marketing ● Higher level of customer service ● Facility looks nice and is approachable (clean, not sketchy) ● State of the art agriculture facility/ no middleman ● Wide variety of products - flower, topicals, edibles, concentrates ● High markups, high gross profits ● Quality of Product Weaknesses ● Competitors can offer similar products quickly ● Limited flexibility in pricing/ high price ● Less online presence from advertising restrictions ● High cost of R&D ● Location constraints
  • 5. 4 Opportunities ● Recreational cannabis is going to be legal in the future ● Position caliva as the “go-to” recreational cannabis brand in CA ● Sell products online ● Delivery services ● Celebrity endorsements ● Loyalty programs ● Co-branding ● Partnering with a cafe to offer marijuana edibles and beverages under one roof ● Other states legalizing weed as an opportunity for expansion Threats ● Industry stigma ○ People are not uncomfortable going to dispensaries or buying weed in general. ○ Marijuana is known as a gateway drug. ● Many competitors pivoting towards recreational use ● Social media/mass media restrictions ● Other states legalizing cannabis creates more competition ● Future regulations ● Product cannibalization Strengths: Caliva is one of the only dispensaries in the San Jose area that strive for a higher level of customer service by creating a clean and approachable facility. They have also built a state of the art agricultural facility, which is controlled by their highly educated scientists and growers. With their own in-house products they are able to cut out the middleman, ensuring a wide variety of quality products, including flower, topicals, edibles, and concentrates. Weaknesses: Though Caliva has marketed itself as providing high quality products, competitors can offer similar products which cost less. They are limited in price flexibility and may be unable to provide customers with cheap and quality products. Since Caliva prides itself on providing quality products, they also spend a lot of money on research and development in their agricultural facility. In addition, because Marijuana is illegal in most states, there are many restrictions in regards to online presence and advertising. A restriction also to take into consideration is the zoning law that the city of San Jose has instituted.
  • 6. 5 Opportunities: Recreational cannabis is going to be legal in California in the near future, so this is an opportunity for Caliva to cement themselves as the most prominent recreational cannabis brand in California. Other states legalizing marijuana is also seen as an opportunity for Caliva to expand to new locations. It is also possible for Caliva to sell cannabis online and have delivery services that would be advantageous to individuals who feel uncomfortable going to dispensaries or purchasing marijuana from drug dealers. Caliva could also create loyalty programs, celebrity endorsements, and collaborate with other brands in order to grow their audience. Threats: Caliva’s biggest threat is other dispensaries who are also pivoting towards the recreational use of cannabis. Another threat would be the stigma attached to the cannabis industry– many individuals are uncomfortable purchasing weed and marijuana is also known as a gateway drug. Additionally, this stigma is the reason for the constraints in social media and mass media advertisements. One more threat is that more competition will arise as other states legalize marijuana, and when this happens, there will be new regulations that may complicate the industry. III. Target Markets Young Professionals The primary target market Caliva plans on pursuing is young professionals. This market would include people who we would describe as trendy young adults who are in their mid- twenties through late-thirties. More and more today we see young adults, especially in the Silicon Valley, who are consumed by their jobs with no time to destress and relax. This group of individuals tend to support local, artisanal products and believe companies should adopt values which embody corporate social responsibility. They care about companies being transparent and honest about where their products come from and how they are acquired. But they also demand high quality products and a high level of customer service. With the market of young professionals ages 25-40, we predict that in the beginning, they will tend to buy products that they are more accustomed to. However, once they feel more comfortable with the product, they will eventually branch out and want to try new variations of the product. These variations include flower, which is generally smoked through bongs, pipes, and joints, and edibles, which are food products that have cannabis
  • 7. 6 infused into them. These products will provide the young professional with an avenue to destress and relax in a fun and sociable environment. Aging Population Seeking Pain Relief The fastest-growing population of cannabis users in America is the elderly. Therefore, one of Caliva’s target markets are individuals who are 40-70 years old. These individuals are open to using cannabis products, but may want to consume it in ways other than smoking such as lotions, tinctures, and edibles. Marijuana helps with some of the typical problems of aging, such as chronic pain from arthritis, appetite issues, and headaches. Elderly people using cannabis are using fewer narcotics and fewer over-the-counter pain medications. However, some elderly may not be comfortable with the psychoactive effects of marijuana. These people may choose to purchase Cannabidiol (CBD), a non-psychoactive compound of cannabis, or a strain of marijuana that has a low THC level. IV. Corporate Objectives ● Consolidate Caliva’s position as market leader in the cannabis industry in California. ● Persuade hesitant consumers to believe that cannabis products are both safe and beneficial. ● Create and market a high quality product throughout all product lines. ● Enter the recreational cannabis market as regulations are lifted in California. ● Create a seamless customer experience for discerning customers through knowledgeable staff and a friendly buying environment. V. Marketing Objectives and Strategies Objectives: ● Increase Caliva membership of young professionals by 20% by the end of 2016. ● Increase sales of flower by 20% by September 2016. ● Increase sales of creams and lotions by 25% to adults over 60 years old by September 2016. ● Capture a market share of 3% in the San Jose medical cannabis industry before June 2017. ● Introduce three innovative cannabis products by the end of 2017.
  • 8. 7 Strategies: ● Communicate the benefits of marijuana and compare cannabis products favorably to direct competition including alcohol or cigarettes. ● Create a discount campaign that rewards customers for trying new or seasonal products or products in different product categories. ● New research and development of new flavors and edibles in order to bring new product offerings to repeat customers. VI. IMC OBJECTIVES Objectives: ● Increase number of new customers that come into Caliva for a trial purchase by 15% by end of year 2016. ● Increase participation in weekly vendor events by 20% by December 2016. ● To increase social media page visits across all social media platforms by 30% by the end of 2016. ● To increase sales of weekly product offerings by 20%. ● Increase clickthroughs on Caliva’s website by 30% by end of 2016. ● Increase traffic to Caliva store by 40% by the end of 2017. VII. IMC STRATEGY Overarching IMC Strategy for Primary Target Market: An affinity strategy that attracts consumers with a common interest in trendiness, style, and artisanal products. VIII. TARGET AUDIENCE Primary Audience Our primary audience is young professionals aged 20-30 because of several key psychographic and sociographic criteria:
  • 9. 8 ● Young professionals in this age group are more likely to travel, try new things, and act spontaneously without the burden of children or other commitments. ● 20-30 year olds search for social acceptance and follow trends. Cannabis products are a rising trend. ● 20-30 year olds find ways to de-stress. ● 20-30 year olds often prioritize money for social activities. ● The use setting will be 2-3 times per week because they may be concerned about productivity. ● The audience values product quality, diversity, and sourcing. Constituents focus on sustainable or alternative shopping, and often shop at farmers markets or stores like Whole Foods. Secondary Audience Our secondary audience consists of Baby-boomers and Generation X aged 40-75 years old. This audience is ideal because of the following psychographic and sociographic criteria: ● They seek pain relief from typical aging problems (i.e. arthritis, appetite issues, headaches) and cannabis products can solve these. ● They have stable jobs or are retiring in the middle or high income bracket and thus have a steady income. ● The target audience may be open to using new cannabis products that are similar to products they are already using, such as lotions or other ointments for pain care. ● They may not be comfortable with psychoactive effects of marijuana. ● Curious about cannabis in the form of lotions, tinctures, and edibles. ● Gets information through traditional mass media advertising (news, newspaper, TV commercials). ● The use setting would be situational for the younger end of the age range (seeking relief after physical activity) and daily for the older end of the age range (seeking relief from daily pain).
  • 10. 9 Primary Persona (25-39 years old) ● Lives in San Jose ● Shops at select grocery stores ● Drives often ● Appreciates local events, breweries, and concerts ● Works full workweeks ● Spends money on clothes, leisure, fashion ● Travels for business ● Yoga, other relaxation techniques ● Has trouble sleeping ● Still has the freedom to try new things Secondary Persona #1 (40-59 years old) ● Wants relief from the effects of aging ● Still active - outdoors activities (skiing, biking, hiking, etc.) ● Wants to keep up with their kids ● Tries to eat healthy ● Gets up early Secondary Persona #2 (60-75 years old) ● Wants pain relief, especially from medical conditions ● Spends time with grandchildren ● Tries to maintain an active lifestyle ● Enjoys gardening and going on walks
  • 11. 10 IX. Message Platform Vision Statement ● Caliva aims to dominate the cannabis industry in the Bay Area by presenting cannabis products as a gateway to heightened well-being. Value Proposition ● The trustworthy cannabis collective that offers a comfortable buying experience for locally-grown, quality products so you can achieve a higher state of wellness. Value Drivers ● Caliva provides (a) a product of the highest quality in the industry, (b) a welcoming store-front that combines professionalism and hospitality, and (c) an emphasis on transparency through shared knowledge of product attributes and growing conditions.
  • 12. 11 Campaign Messages ● Providing a wide selection of high-quality, locally-grown cannabis products for trendy young professionals looking to socialize and destress. ● Providing trustworthy cannabis products in the form of familiar pain relief to alleviate the effects of aging. Positioning Statement ● Caliva is a contemporary collective that combines a comprehensive offering of quality cannabis products with expert customer service. Caliva cultivates a sense of well-being. Tag-Line ● A higher state of wellness. X. Tactics SOCIAL MEDIA: Caliva will maintain an active presence on social media platforms to generate awareness of our collective and engage our target audience. Specifically, we will utilize Facebook, Instagram, and Twitter. Our primary target market, young professionals, commonly gather on these platforms, and thus this tactic will allow us to not only reach a large number of young professionals but also to encourage mutual engagement and participation. Given the regulations Facebook, Instagram, and Twitter have on cannabis-related content, which includes the prohibition of cannabis advertisements, we will not post promotional pictures of Caliva products. Instead, we will use these platforms to deliver brand messages, share Caliva news, post information about community events, and participate in any cannabis-related discussions. Our photos will follow the same style of the current photographer’s work that is posted on Caliva’s website–clean, artsy, and stylish–and any text will be conversational and informative in nature. Examples of social media posts include: Instagram photos of our involvement in trade shows as well as photos of CSR events and Facebook posts before, during, and after major cannabis or related events, such as HempCon in San Jose and California Roots Festival in Monterrey.
  • 13. 12 Using social media as a tool to develop a strong loyalty between consumers and Caliva is possible by generating a variety of engaging content such as posting interesting facts about employees from all segments of the business (growers, sales associates, CEO, R&D scientists), lifestyle tips that users can relate to, and teasers of new and upcoming products before they are released to give consumers a sneak peak on what Caliva has in store for them. Having a variety of these types of posts will make users look forward to seeing Caliva’s posts on their social media feeds and increase Caliva’s following. RADIO: Caliva will advertise on My Mix106.5, a San Jose radio station. My Mix106.5’s listener base is 18-49 years of age and includes “Working Women and Moms, Contemporary Men, and 20- somethings.” These consumers are advancing professionally, and they enjoy spending on clothing and leisure, such as “lifestyle” items like entertainment and dining out. These characteristics are also true of Caliva’s primary target audience. Our advertisements will air during commuting hours in the morning and evening, as our primary target audience is most likely to be listening to the radio while commuting to work. The use of radio as an IMC tool works towards our objective of bringing prospective customers into our store for trial purchases. Ultimately, by driving new customers to Caliva’s store, radio advertising will achieve our marketing objective of increasing membership of young professionals. NEWSPAPER ADVERTISING: To help achieve our IMC objective of bringing traffic to Caliva’s store, we will advertise in the San Jose Mercury News in the weekday print edition. We chose this media option because our secondary target audience, the aging population, is likely to read a newspaper on a daily basis, and the Mercury will be effective in reaching local readers. We plan to center these Caliva-branded advertisements on images and information pertaining to creams and lotions, as we anticipate these to be the most popular products among our secondary target audience. By addressing this audience through a familiar media form, we believe we will not only bring awareness to Caliva but also encourage our secondary target audience to come into our store for a trial purchase. By encouraging store visits and product trial, we believe these newspaper advertisements will contribute to our marketing objective of stimulating sales of creams and lotions to adults over 60 years old. We will also advertise on the San Jose Mercury News’s digital website in order to reach our primary audience--that is, young professionals aged 25-40. Our primary audience is more
  • 14. 13 likely to read the news in a digital form. These advertisements are likely to be placed in news stories about leisure or lifestyle and will include a picture of a use situation as well as the tagline “A Higher State of Wellness.” Our target audience will be drawn to the advertisement because it displays the lifestyle associated with Caliva’s products. By stimulating interest, digital advertising in the San Jose Mercury will achieve our IMC objective of increasing clickthroughs to Caliva’s website and ultimately our marketing objective of increasing membership among young professionals. TRADE SHOWS: Over the course of the year, we will register for 3 trade shows: CannabisCup, HempCon, and California Roots Festival. The CannabisCup is a festival in San Francisco that focuses on educating and entertaining cannabis enthusiasts. HempCon is a similar event in San Francisco that caters to medical marijuana users. California Roots Festival is a music festival in Monterey designed for cannabis enthusiasts. By registering and managing a booth at these events, we will reach a wide audience of potential consumers within the primary target audience. This will help achieve the IMC objective of increasing new customers that come into the Caliva store, while also helping achieve our marketing objective of increasing Caliva membership among the primary target audience. SEASONAL FLAVORS: In order to create buzz about Caliva and encourage audience engagement, we will create an interactive campaign around seasonal products. This campaign will provide the public with the opportunity to submit new strain flavor and product name ideas based on holidays or seasons. From these submissions, Caliva will choose their top two favorites to create, which the public will then try and vote on their favorite. By allowing consumers to actively participate in the creation of Caliva products in store, this tactic will increase in- store traffic leading to increases in trial purchases as well as sales. Social media will be heavily utilized throughout this campaign as people will want to voice their opinion and spread the word. We would promote the contest through our social media channels, specifically Facebook, Twitter, and Instagram. ● Halloween - Black Cat (Blackberry) ● Thanksgiving - Smoked Turkey (Pumpkin Spice Latte, Cranberry, Apple Pie) ● Christmas - It’s Lit, Under the Mistletoe (Peppermint, Eggnog, Gingerbread) ● New Years - Champagne Pop (Champagne)
  • 15. 14 ● Valentine’s Day - XOXO, Hearts of Blaze (Conversational Hearts, Chocolate-Dipped Strawberries) ● 4th of July - Firecrackers, S’mokes (S’mores) YOUTUBE SERIES: Utilize YouTube influencers by sponsoring them to create a variety of videos with different styles such as vlogs and formal educational video that will help the market make better informed decisions (e.g. Q&A videos for those who are curious about cannabis, covering how to use it and its benefits). These influencers will be beneficial to Caliva’s business since they already have a pre-established audience who are receptive to their ideas and recommendations. Millennials are notoriously known for being difficult to engage with, so it is advantageous that influencers already have a built-in level of trust with their followers, one that’s incredibly difficult for a brand to build. YouTubers in particular have a special bond with their viewers thanks to their ability to produce original content that feels genuine. They can help create the right content that really meets the consumer's needs because they have relatable experiences and perspectives. Although traditional advertising such as TV commercials may still dominate in terms of views and reach, the catalyst for creating buzz must start on social media platforms such as YouTube. Ultimately, the YouTube series will help achieve our marketing objective of increasing the clickthrough rate to Caliva’s website. We recommend Caliva pursues Timothy de la Ghetto as a potential influencer for its brand. Timothy de la Ghetto has the ability to convince Caliva’s primary target market that cannabis products are safe, trendy, and beneficial through his authenticity, charm, and shamelessness. Influencer Statistics Name: Tim Chantarangsu YouTube Channel: theTimothyDeLaGhetto Age: 30 Location: Paramount, California Occupation: Rapper, comedian, actor, and internet personality YouTube Views: 26,347,539 YouTube Subscribers: 3,227,582
  • 16. 15 XI. TIMING AND CALENDAR OF EVENTS XII. BUDGET Media Channel # Per Year Total Budget Percentage of Budget Notes Radio 2x per day for 7 months $200,000 41% Cost for advertisements on radio Social Media Every 2-3 days, year- round $5,000 1% Third Party Management for Facebook, Twitter, and Instagram YouTube Series 3 $20,000 4% Costs for a motion graphic marketing video including acting, cameras, editing, etc. Trade Shows 3 $60,000 12% Cost for booth materials, admission
  • 17. 16 Digital News Media 3x per week for 4 months $200,000 41% Cost for advertisements on San Jose Mercury News website Seasonal Flavor Campaign 5 $2000 <1% Cost for in-store displays, signage, and social media postings TOTAL BUDGET $487,000 100% XIII. Measurement/Benchmarks SOCIAL MEDIA: To measure our social media marketing success, we will use brand search volume. Brand search volume measures the number of times that the “Caliva” search term is used in search engines. This metric can be measured with Google Insights. Our desired benchmark for brand search volume will not be measured by a number but rather by the increase in searches. Our desired growth of brand search volume is a 10% increase per quarter. We will also use the social media interaction rate, which includes the number of comments or shares of online content, to measure engagement on Caliva’s social media. The social media interaction rate is found by dividing the number of unique interactions by the number of reached users. “Interaction” includes but is not limited to commenting on a post, sharing a post, answering a question, RSVP’ing to a page’s event, mentioning the page in a post, and tagging the page in a photo. The social media interaction rate is useful because it can compare Caliva to its competition, whether they are a smaller or larger company. The desired interaction rate is 5%. In achieving the benchmarks for these two metrics, Caliva can achieve its IMC Objective of increasing social media page visits across all of its social media platforms. YOUTUBE: To measure the success of our use of influencers, we will use statistics provided by YouTube, such as number of video views, likes, and dislikes. Our benchmarks for these
  • 18. 17 statistics are 100,000 views and 10,000 likes per video. We will also track the number of shares per video to measure engagement. Through YouTube, viewers are able to share YouTube videos on 13 different social media platforms. We hope to reach 5,000 shares per video. On a broader scale, we will look at Caliva’s sales to see if influencer content led to sales. One way we will measure this is by having the influencer share a secret code at the end of the video that the viewer can bring to a Caliva sales associate to receive a discount (i.e. 10% of their entire purchase). Our benchmark for this is 50 purchases per video. Achieving the benchmarks for these metrics will contribute to Caliva achieving its IMC objectives of increasing the number of new customers, increasing clickthroughs on the Caliva website, and increasing traffic to the Caliva store. WEBSITE: To measure how many customers use our website, we will use clickthrough rate as our metric for success. These clickthroughs will primarily come from our social media platforms, news media content, and influencer content, such as YouTube videos and blog posts. We will keep information for the number of clickthroughs from each of these sources to determine which are most effective to driving traffic to Caliva’s website. We will define success by setting a benchmark of a 8% clickthrough rate. This is the average clickthrough rate for retailers who operate digitally. By increasing the clickthrough rate to Caliva’s website through our social media postings and digital newspaper advertisements, we will achieve our IMC Objective of increasing clickthroughs to Caliva’s website by the end of 2016. STORE: An evaluation method for our objective of bringing new customers into our store will be to keep a running count of the number of new customers that walk into Caliva. We will also keep metrics on frequency of store visits by repeat customers. When the number of new customers making a first-time purchase has increased 15% from our previous benchmark, we will have achieved this IMC objective. Furthermore, we will also use data from in-store surveys to measure customer satisfaction with service inside the Caliva store. The anonymous survey will include questions relevant to the in-store service, product offerings, and product quality. Possible answers will include “buzzkill,” “fine,” and “in the clouds.” Our benchmark for a successful in-store experience will be when no greater than 20% of surveys are returned with one or more “buzzkill.” By meeting this benchmark, we will work
  • 19. 18 to achieve our corporate objective of creating a seamless customer experience for customers in-store. SALES: We will measure sales by tracking inventory turnover rate, sales by category, and sales per customer. We will also use statistics that track the number of times that products that have been introduced within the last six months are purchased by consumers. Finally, we will keep customer profiles to track how many different products each customer is purchasing and from what categories they are buying. Our primary benchmark is a 20% increase in sales for each product. Our secondary benchmark is an average of a 25% increase in sales per customer. Our final benchmark, to measure the diversity of sales, is an average of two new product trials (purchasing a product they have not yet tried) per returning customer. These are benchmarks toward our IMC objective of increasing sales of weekly product offerings.