Hugo Boss Business Challenge - IE
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Marketing strategy to relaunch Hugo, a fragrance of Hugo Boss.
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Hugo Boss Business Challenge - IE
- 1. business challenge Marketing, Master in Management, Section F3 – Group B, IE Business School #whatsnext
- 2. PART 1 Understand Value: Market Analysis Marketing, Master in Management, Section F3 – Group B, IE Business School
- 3. PART 1 UNDERSTAND VALUE – 1. Customers 1. CUSTOMERS Total Available Market Service Available Market Service Obtainable Market 5,367,538,512€ 585,343,192€ 285,008,355 € MEGA- TREND: Aging Population
- 4. PART 1 UNDERSTAND VALUE – 1. Customers Perception Process Selective retention: • 62% neglect TV ads • 67% neglect digital ads • 70% neglect press ads Elaboration Likelihood Model Central route: • high involvement: smell, price • cognitive processing on details: WOM, store recommendations, internet opinions CONSUMER BEHAVIOR
- 5. Decision making process PART 1 UNDERSTAND VALUE – 1. Customers Out of stock 52% WOM 41% Store recommendation 21% Internet opinions Smell: 100% Price: 78% are price sensitive Size: 70% prefers +100ML Promotions: 32% attracted by GWP 80% take decision in store Frequency: 1.1 per year National chains 1. Need Recognition 2. Information Seeking 3. Evaluation of alternatives 4. Purchase NON-COMPENSATORY
- 6. PART 1 UNDERSTAND VALUE – 2. Company 2. COMPANY • Coty strives to become a global beauty industry leader. • “We celebrate and liberate the diversity of beauty for our consumers” • Hugo Boss launched its first fragrance, Boss Number One, followed by Hugo in 1995 • Coty purchased the Hugo Boss fragrance brand from Procter & Gamble in 2015
- 7. PART 1 UNDERSTAND VALUE – 3. Competitors 3. COMPETITORS Other competitors: Armani (compete in premium) Loewe (compete in premium) Dior (luxury) Direct, actual competitor: Paco Rabanne (Puig) → Key Competitor!
- 8. PART 1 UNDERSTAND VALUE – 4. Collaborators 4. COLLABORATORS Department stores National chains Regional chains Independent stores ecommerce Fragrance sales
- 9. PART 1 UNDERSTAND VALUE – 5. Context 5. CONTEXT January 2017: Spanish unemployment rate falls to 7-year low of 18.63%
- 10. PART 1 UNDERSTAND VALUE – 5. Context
- 11. PART 1 UNDERSTAND VALUE – 5. Context CAGR +0.5% Fragrance market CAGR +0.8% Male fragrances +29% Growth in sales in the fragrance market in Spain
- 12. Marketing, Master in Management, Section F3 – Group B, IE Business School PART 2 Create Value: Marketing Strategy
- 13. PART 2 CREATE VALUE – 1. Segmentation 1. SEGMENTATION Spanish male 18-34 with interest in perfume, pursuing a self-image of being elegant, confident while adventurous and open to try new things Spanish male 18-34 pursuing a attractive, physically strong and seductive self-image Spanish male 35-50 with interest in perfume and adventures, pursuing a elegant, confident and successful image 1 2 3
- 14. PART 2 CREATE VALUE – 2. Target 2. TARGET Spanish male population 18-34 years old Personality: confident, adventurous, innovator, sociable, passionate, elegant. Interests: sports, outdoors, travelling, music, posting on social media, hanging out with friends GEOGRAPHIC DEMOGRAPHIC PSYCHOGRAPHIC •Attractiveness: 285,008,355 € •Competitive retaliation: high degree due to fragmented market and low brand penetration and loyalty •Internal resources: strong brand and relationships with distributors (2,289 stores), Facebook page with 439,619 followers Perfume user but not Hugo customer BEHAVIORAL
- 15. Targeted consumers don’t feel represented by Hugo: too formal, … , unrealistic Targeted consumers are not buying Hugo Hugo is the fragrance that represents me I will buy Hugo since it is part of me Hugo is the fragrance that represent elegant, self confident young man who likes having adventures PART 2 CREATE VALUE – 3. Repositioning 3. REPOSITIONING DESIRED BELIEFCURRENT BELIEF CURRENT BEHAVIOR DESIRED BEHAVIOR CONSUMER PROPOSITION
- 16. Marketing, Master in Management, Section F3 – Group B, IE Business School PART 3 Deliver Value: Product, Price, Place, Promotion
- 17. PART 3 DELIVER VALUE – 1. Product 1. PRODUCT • Entry segment • Defined in market research as elegant, fresh and urban; followed by young and classic • Marketing efforts focus on the 125 ML size because 70% of young male interviewed reported they buy or would buy a fragrance bigger than 100ML • Changing its communication can be considered product innovation
- 18. PART 3 DELIVER VALUE – 2. Place: Channel Strategy 2. PLACE: CHANNEL STRATEGY PUSH STRATEGY National distributors 88% of consumers purchase in a national chain with incentives to be the first to be recommended (41% influenced by in store recommendation) and training of sale assistants. Focus on 125 and 200 ML 70% buy or would buy a fragrance bigger than 100ML.
- 19. PART 3 DELIVER VALUE – 2. Place: Channel Strategy 3. PRICE: PRICING STRATEGY Value-based pricing strategy: Problem: Price-sensitivity of the customers, average purchase is between 50 and 69€ Create consumer surplus based on our new relaunching strategy by changing the customer perception
- 20. PART 3 DELIVER VALUE – 4. Promotion: Communication Strategy 4. PROMOTION: COMMUNICATION STRATEGY
- 21. TARGET Potential targeted customers GOAL Awareness Change attitude Customer lifetime value MESSAGE Hugo will bring you to your next adventure WHAT’S NEXT? Digital Advertising in Social Media Public Relations Sales Promotions Printed Advertising MEDIA MIX PART 3 DELIVER VALUE – 4. Promotion: Communication Strategy
- 22. Action 1: promoting our event in social media CHANGE ATTITUDE: Hugo will take you to your next adventure AWARENESS: Paid promotions WOM: Prices to grab selective attention and make it shareable 52% influenced by WOM PART 3 DELIVER VALUE – 4. Promotion: Communication Strategy
- 23. PART 3 – 4. Promotion: Communication Strategy
- 24. AWARENESS: Newsworthy “Share a picture to get a ruffle ticket !” CHANGE ATTITUDE: Music, friends, prizes (trips, concert tickets) to connect with target’s world ENGAGING: It is an experience INFLUENCING DECISION MAKING: Ruffle ticket is a tester Action 2: organizing our event PART 3 DELIVER VALUE – 4. Promotion: Communication Strategy
- 25. PART 3 DELIVER VALUE – 4. Promotion: Communication Strategy Action 3: printed ad in the store and social media
- 26. ENGAGING: Each Hugo bottle is paired with a code to join the “Hugo Man” community on Social Media Gift with purchase because 30% are interested CLV: “Hugo Man” community delivers additional value-content aiming at increasing customers’ retention Action 4: Hugo Man community for customers PART 3 DELIVER VALUE – 4. Promotion: Communication Strategy
- 27. PART 3 DELIVER VALUE – 5. Budget and timing 5. BUDGET AND TIMING
- 28. PART 3 DELIVER VALUE – 5. Budget and timing
- 29. Marketing, Master in Management, Section F3 – Group B, IE Business School PART 4 Measure Value
- 30. PART 4 MEASURE VALUE – 1. KPIs 𝐶𝑜𝑚𝑚𝑒𝑛𝑡𝑠 𝐼𝑚𝑝𝑟𝑒𝑠𝑖𝑜𝑛𝑠 𝑆ℎ𝑎𝑟𝑒𝑠 𝐼𝑚𝑝𝑟𝑒𝑠𝑖𝑜𝑛𝑠 𝑁𝑒𝑤 𝐹𝑜𝑙𝑙𝑜𝑤𝑠 𝐼𝑚𝑝𝑟𝑒𝑠𝑖𝑜𝑛𝑠 CPC = 𝐶𝑙𝑖𝑐𝑘𝑠 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 CPS = 𝑆ℎ𝑎𝑟𝑒𝑠 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 CPF = 𝑁𝑒𝑤 𝐹𝑜𝑙𝑙𝑜𝑤𝑠 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 Social Media Public Relations Sales Promotions & Push Strategy CLV Strategy Inventory turnover 𝑃𝑒𝑜𝑝𝑙𝑒 𝑗𝑜𝑖𝑛𝑖𝑛𝑔 𝐻𝑢𝑔𝑜 𝑀𝑎𝑛 𝐶𝑜𝑚𝑚𝑢𝑛𝑖𝑡𝑦 𝑈𝑛𝑖𝑡𝑠 𝑠𝑜𝑙𝑑 𝑤𝑖𝑡ℎ 𝑝𝑎𝑠𝑠𝑤𝑜𝑟𝑑 𝑡𝑜 𝑎𝑐𝑐𝑒𝑠𝑠 𝑖𝑡 Nº participants Nº media articles about it 𝑆𝑜𝑐𝑖𝑎𝑙 𝑚𝑒𝑑𝑖𝑎 𝑝𝑢𝑏𝑙𝑖𝑐𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑏𝑜𝑢𝑡 𝑖𝑡 𝑁º 𝑜𝑓 𝑝𝑎𝑟𝑡𝑖𝑐𝑖𝑝𝑎𝑛𝑡𝑠
Editor's Notes
- TAM → Spanish male population*annual average income SAM → Spanish male population between 18 – 34 years*annual average income*% of cosmetic budget over household consumption SOM → Spanish male population between 18 – 34 years with direct or indirect interest in perfumes (92%)*annual average income*average % of cosmetic budget spent on perfume TAM → 22,707,629*24,120= € 5,367,538,512,50 SAM → 4,236,092*14,100*0,98% = € 585,343,192 SOM → 3,897,204 *14,100*0,52% = € 285,008,355 Trend: due to aging of population the target size will diminish with the years (2029) by 13,4%
- From our market research, consumers do not seem to retain the messages of advertisements means (i.e. TV, digital and press) due to the overload of information. By engaging consumers through our communication we aim at increasing retention. Consumers present a central route likelihood model. Indeed, consumers demonstrate high involvement on detail and attributes (i.e. 100% evaluate alternatives on smell and 78% on price) and prefer gaining information through cognitive processing (i.e. 52% are influenced by WOM, 44% by sale assistant recommendations, 21% by opinions on the internet, etc.) rather than absorbing peripheral information from advertisements.
- The decision making process starts with identifying the need. Consumers identify the need of fragrance mostly when out of stock. Whenever they are buying a new fragrance, (and therefore are not seeking information internally based on previous experience) information is sought externally (52% Word of mouth; 41% in store recommendation; 21% opinions on the internet). It is not surprising how no means of advertisements appears in the information seeking, coherently with the perception process (low retention). When evaluating alternatives, there are attributes that are not compensatory as the smell and the price (respectively 100% and 80% important when evaluating). This underlines the decision making rule. Finally, the purchasing decision is done 80% of the time in store, while the frequency of purchase is of 1.1 per customer in a year and the purchases happen 86% of the times at national chains.
- Coty, Inc. (Coty) was founded in Paris in 1904 by François Coty as a fragrance company and today, is one of the leading global beauty companies with a revenue of around $9 billion. The company mainly produces fragrances, color cosmetics and skin & body care products and is one of the global leaders in these fields. Coty employs over 20,000 people in more than 130 countries worldwide and operates with almost 80 different brands in its portfolio. Coty purchased the Hugo Boss fragrance brand from Procter & Gamble in 2015 but does not make an appearance as Coty when selling Hugo Boss fragrances. Nevertheless, Coty will be the company that provides the resources for our following marketing strategy. Therefore, we based our 5C company analysis on Coty. Organizational structure, Products and Competences Coty is divided into three divisions: Coty Consumer Beauty, Coty Luxury, and Coty Professional Beauty. Each of the three is specialized on their own categories and channels. The company describes itself as leanly organized to enable quick decision-making in terms of investments and communication with their consumers. - “Coty Consumer Beauty” operates in the color business, such as color cosmetics, retail hair coloring, and products for styling (i.e. body care and mass fragrances). This divisions mainly provides innovative products for the mass market. The brand portfolio consists of i.e. Adidas, Max Factor, Katy Perry, David Beckham, Wella, and Rimmel (amongst others). - “Coty Luxury” operates in the Luxury Beauty market across all global regions. The company holds one of the leadership positions in the prestigious fragrance and skincare market. Brands include Marc Jacobs, Bottega Veneta, Calvin Klein, Chloé, Gucci, and Hugo Boss (amongst others). - “Coty Professional Beauty” provides services to professional hair care, beauty, and nail care salon owners. The professional brand portfolio includes i.e. Clairol Professional, Nioxin, OPI, Sassoon Professional, Sebastian Professional, and Wella Professionals (amongst others). Corporate goals and culture Coty strives to become a global beauty industry leader. The company’s main goals are creating inspiring brands that delight their customers and result in a sustainable long-term shareholder value. Corporate culture The company describes an exceptional company culture as its engine of success. “Our culture is about the people who make Coty what it is; the ways in which we celebrate and liberate the diversity of beauty for our consumers, and how we work with and win with customers, licensors, suppliers and partners.” Hugo Boss fragrance Hugo Boss is a German luxury company that was founded in 1923. The company has a revenue of around $ 3 billion (60% in Europe) and employs 14,000 employees in 125 countries. In 1985, Hugo Boss launched its first fragrance, Boss Number One, followed by Hugo in 1995 and Boss Bottled in 1998. Since then fragrance category has become an important part of the company. Hugo Boss male portfolio consists mainly of 3 key brand lines: (1) Hugo (Hugo Man, Hugo Red, Hugo Just Different), (2) Boss Bottled (Bottled, Night, Unlimited, Intense), and (3) The Scent. The three different brands are segmented by product quality and consumer preference (entry segment Hugo, medium segment Boss Bottled, and luxury segment The Scent).
- Paco Rabanne is the key competitor. It belongs to the company Puig, a large conglomerate comparable to Coty. Its male fragrances are 1 Million, Invictus, Black XS for him, Classics. 10 years ago this brand was very weak in the category but innovative proposals and strong communication activities have taken One Million and Invictus to the category podium. It is a very active player in communications (always share of voice leader in key consumption periods) and always perfect in‐store execution (high visibility on shelves). Other indirect, potential competitors, are Armani (Code, Acqua de Gio), Loewe (Esencia, Solo) and Dior (Sauvage). All these brand lines have been at the top 10 of male fragrance market for many years. Supporting activities differ according to the type of the brand: - Luxury Brands (Dior): Quality of media existence is given more importance when compared to quantity of media existence. New products are launched every 3‐4 years. - Premium Brands (Armani, Loewe, Hugo Boss, Paco Rabanne): Quantity of media existence is given more importance when compared to quality of media existence. New products are launched almost every year. These brands have limited shelf space.
- Main collaborators are the distribution channels. Fragrance products are sold through 5 different distribution channels: Department stores, national chains (local and international), regional chains, independent stores and e‐commerce. E‐Commerce accounts only for the 1% of total category sales. Most of these channels are selling both online and offline.
- For the first time in a 7 year period Spain’s unemployment rate fell to a low of 18.63%. The rate then rose to 18.75 percent in the following months from 18.63. It was the first increase in jobless rate in a year, as the number of unemployed rose in all sectors, mainly in services, while the number of employed fell. However, the reason for this is that the first quarter of the year is traditionally a tougher one for jobs, as people hired over the Christmas period get laid off. The overall results are optimal, considering how in January 2016 the rate was recorded at around 21%. OECD projected that in 2017 the average unemployment rate would return to its pre-crisis level nearly 10 years after the global financial crisis erupted to just under 18%. Over the past years, in particular the last two, the situation in Spain has continuously improved. GDP growth picked up in 2014 to strengthen even more in 2016 (+3.2%), which resulted in significant job creation. The total employment (as a percentage of the population aged 15-74) has increased by around 3% since the last quarter of 2013 to reach 60.82% in the first quarter of 2017.
- Consumer Spending in Spain increased to 160735 EUR Million in the fourth quarter of 2016 from 158471 EUR Million in the third quarter of 2016. Consumer Spending in Spain averaged 123701.59 EUR Million from 1995 until 2016, reaching an all time high of 160735 EUR Million in the fourth quarter of 2016 and a record low of 67275 EUR Million in the first quarter of 1995. The general trend from 2014 to 2017 is very positive, going from an average of 148000 to more than 160000. The average actual salary in Spain is of 2010.73 Eur/Month, and it has grown of +10% compared to the average salary in the last quarter of 2016 (1804.01 Euro). In the period between 2000 and 2016 there has been a peek of 2016.14 Eur/Month of salary in January 2016 and a low peek of 1264.36.
- Despite the high level of unemployment and the country being one of those worst affected by the Eurozone crisis, new findings indicate a need for Spanish consumers to occasionally treat themselves with luxury products such as fragrances. With a value of CAGR of 0.5%, fragrance is set to be one of the five fastest-growing health and beauty sectors in Spain in 2017. It lies ahead of more mature sectors such as skin care and hair care, but behind the more indispensable oral hygiene and feminine hygiene sectors. It is predicted for the male fragrance sector to display the highest volume growth, at CAGR of 0.8%. Sales of fragrances in Spain have risen by 29% since 2000 making Spain the second largest retail market for fragrances in the EU, exceeded only by the French. In 2004, fragrances accounted for 72% of the cosmetic products market value and have shown considerably faster growth than cosmetics since 2000. Moreover, the rise of the metrosexual male with high propensity to spend on appearance and personality enhancing products trend, is one of the main drivers that lead to a revenue growth in the market.
- From the statistics and information we acquired in the market research, we developed three main segments. Chosen target is number 1. It avoids brand cannibalization of the product of Boss bottled and the Scent, maintaining the wide variety of Hugo Boss’s product portfolio. It also differentiates Hugo from the biggest competitor Paco Rabbane which represents a seductive and physically strong image. Our target population are mainly students or young professionals. They have a relatively low purchasing power but care about their self-image and are interested in perfume, which fits in Hugo category. Moreover, according to the investigation, we knew that 54.3% of female have bought male fragrance for male family member or partner and 63% of those who never bought would like to buy it in the future. Hence, we have our secondary target which is Spanish female from 18-34 who purchase perfume for a man as a gift.
- The target chosen is the segment perfectly suitable to the product and product’s features. Moreover, the target was also chosen to avoid possible (and actual) cannibalization among Hugo Boss’s perfumes available on the market (i.e The Scent,Boss Bottled). The target, as the whole market, presents a high degree of competitive retaliation due to its fragmented structure which implies low brand penetration and loyalty. This means that by simply having a better marketing strategy (i.e. higher advertising budget, product innovation, better communication etc.) you can earn important market shares. That’s why we decided work also on customer lifetime value trying to increase retention
- The new positioning is: - Consumers based: the positioning delinates a specific attitude and lifestyle present in or aspired by most of the target - Clear: the positioning does not leave any doubt - Competitive: the positioning is different from any of the main competitors in the spanish market
- Given the circumstances of the business challenge, we cannot change anything about the product. Nevertheless, changing its communication and perception with a relaunch strategy can be considered product innovation.
- From our survey, 88% of the interviewees purchased fragrances in a national chain store, while 45% purchased one in El Corte Inglés and 82% has never bought a fragrance online. We chose a push strategy to win over competition (in a really fragmented market without brand penetration where the purchase is done in the store). In store strong presence is essential as also being recommended from sales assistants (41% of young male interviewed reported being influenced by in store recommendation). To motivate sales assistant a good training must be implemented as also alignment of goals to ease agency problem (i.e. margin retained from distributors increased in percentage of sales increase). When selected the number of product lines they will have, we decided to focus on the 125 and 200 ML sizes.
- Given the circumstances of the business challenge, we cannot change anything about the pricing. Nevertheless, our pricing strategy is value based pricing in order to increase the consumer surplus, hence, the perceived value of Hugo Man. This will be achieved based on our subsequent relaunch strategy and a change in the customer perception of our product. At this point, it does not make sense to increase the consumer surplus based on price discrimination, variable cost reduction, or an increase of prices since we do not have any specific information about the pricing. Furthermore, competitive pricing should never be an option. Prices are already very competitive and we do not want to engage into a price war, as low priced products do not go in line with a premium/luxurious segment. We will focus entirely on relaunching and creating a new perception of our product, taking into account that targeted customers are price sensitive according to our market research (78% of them care about price when evaluating alternatives) and the average purchase value was between 50 € and 69 €, we will focus marketing efforts in the 125ML and 200ML (preferred sizes), priced by retailers and 55€ and 65€.
- Target: potential customers, because 75% of the target market still doesn’t know Hugo, and a lot that know it do not connect with the brand Objectives: Awareness (75% of the target market still doesn’t know Hugo), Change attitude towards the brand (from too formal and too luxurious to elegant, confident and adventurous) and Improve Customer Lifetime Value and retention. Message: We now you are an elegant, confident and adventurous guy and Hugo will take you to your next adventure. In line with this, our tagline for the campaign is: “What’s next?” Media Mix: Digital Advertising in Social Media to achieve visibility and create awareness: Facebook: presence in Facebook is mandatory because 71% of Spanish Internet users are in Facebook according to the IAB Spain Annual Social Media Study 2016, which makes it the channel with the biggest reach. According to this same study, it is associated to entertainment and friends. Instagram: we have chosen it because the main part of its community is between 16 and 30 years old and it is growing very fast. 44% of the Spanish internet users between 16 and 30 years old are on Instagram according to IAB Study versus 26% of older adults. YouTube: 75% of the Spanish internet users between 16 and 30 years old watches YouTube more than 3 hours per week according to IAB Study. Spotify: main user is men between 16 and 39 years old and the time they spent in the network is growing, reaching over 4 hours per week according to IAB Study. Also, music is one of the main interests of our target customer. Public Relations: we have chosen public relations, specifically event planning; in order to create an experience that is newsworthy, causes word of mouth and becomes shareable, since 52% of customers interviewed in our market research reported being very influenced by recommendations from friends and family. Printed Advertising: our printed advertising is the visual way in which we show our repositioning in the store, since customers take the decision at the physical store. Sales Promotions: customers take the decision at the physical store and 32% of the ones interviewed in our market research reported being very attracted by gifts with purchase and gift sets promotions.
- We will promote a Hugo event in social media during two months with paid promotions that will reach our target according to its demographic and psychographic characteristics: during the first month we will create mystery and hype by showing the incentives and prices that will be given at the event in order to catch the selective attention of the target and make it shareable: 52% of customers interviewed in our market research reported being very influenced by recommendations from friends and family. During the second month we will reveal the location and date of the event and promote the assistance. All the content will be align with the message “Hugo will take you to your next adventure” that aims to change the perception of the brand from too formal to adventurous and daring.
- THIS SLIDE IS A VIDEO AND WILL ONLY PLAY IN THE .PPTX FILE INCLUDED WITH THE VIDEO ITSELF IN THE SAME “PPT PRESENTATION F3-B” FOLDER, NOT IN THE PDF The video designed as a sample of the content is consistent with the brand current image (color palette, font, minimal graphic design) and current voice. It is also aligned with the personal values of the target (elegant, confident, daring, adventurous) and connects with its world, interests and lifestyle (music, friends, traveling).
- We will organize two events simultaneously in Madrid and Barcelona, since they are the most populated cities and the ones that concentrate the biggest number of young professionals. The event will connect the brand with the world and lifestyle of the target by providing music, entertainment and prices. Price will allow them to take over their next adventure: 1 trip to New York, 4 trips to Formentera, 10 bungee jumping experiences, 30 Primavera Sound festival tickets, 100 free drinks at Madrid and Barcelona rooftops. To join the event ruffle, participants have to upload a picture of them in the event into social media with the hashtag #whatsnext. This action creates also Word of Mouth (52% of the customers researched reported being influenced by this). Ruffle tickets will be Hugo fragrance testers, since 100% of the customers researched reported the smell as the key element in decision making.
- Our printed ad shows a real young man getting ready for work after a party in line with #whatsnext: we now you are an elegant, confident and adventurous guy and Hugo will take you to your next adventure. Next to the ad, a real mirror allows customers to see themselves as this man and think about #whatsnext in their life. The visual is consistent with the brand current image (color palette, font, graphic design) and current voice. It is also aligned with the personal values of the target (elegant, confident, daring, adventurous) and uses the Gestalt figure and background perception theory to make the bottle the protagonist of the picture: the bottle is the only element of the image that has a different and more intense color.
- As sales promotions, we will provide a gift with purchase, because 30% of the customers researched reported being attracted by this kind of promotion. Also with the purchase, we will provide a code to join “Hugo Man” community on social media: only Hugo customers can join this community and they will get extra value in this group such as entertainment proposals, hotel and flight discounts, early bird concert tickets, etc. The goal is to improve customer retention and customer life time value.
- Due to budget constraints, we have decided to make use of our campaign funds throughout the months February to June. This makes sense because January is right after the main season before Christmas. We have to invest our money wisely and have concluded that January is ineffective. February: At the beginning of this month we kick-off our campaign. We begin with digital advertising in order to promote the events that we organize in April. In February, we still do not mention the name of the event to build up on this and create a hype around the event. At the same time we start our push strategy in stores in order to obtain a 2nd national slot location. March: We continue with digital advertising but start mentioning our event (refer to trailer in this presentation). Additionally, we continue with the push strategy and start giving out GWPs in store. April: Main month of our activity. The events take place at the same time and on the same day, Saturday April 14 and are open-air events with drinks, and live DJs in a relaxed atmosphere. One event will take in Madrid and one in Barcelona. These events are organized for up to 5,000 visitors each. Raffle tickets have the form of HUGO MAN testers (10,000 testers) and prizes worth 23,000 € can be won (for details for the cost allocation of the prizes, please see below). May and June: We continue with our in-store push and GWP activities. Cost allocation for the prizes at the events: 1 x Trip to New York (1 week for two people, inc. hotel and flights): 5,000 € 4 x Trip to Formentera (4 x 1 week for two people, inc. hotel and flights): 12,000 € total 10 x Bungee Jumps close to Madrid and Barcelona: 750 € total 30 x Tickets to the Primavera Sound Festival in Barcelona: 4,500 € total 100 x Free Drinks at renowned rooftop bars in Madrid and Barcelona: 750 € total
- We plan to keep under control a series of KPIs during our marketing campaign and we want to outline the importance of Comments over Impression, Shares over Impressions and Cost per Share, and why we haven’t included Number of Reactions (Likes) in our KPIs. These days hitting "like" on a post is a passive, mindless action. Likes are good and you definitely want them, but sharing is a conscious decision. When someone shares your post (or retweets, re-vines, etc.) they are giving a personal recommendation to their friends, colleagues, and family; and 52% of our market research reported being influenced by recommendations of friends and family. Because of this, shares are a great indication of the quality of your work.