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MARK 695A Integrated Marketing Communications (IMC) Case Study

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A case presented in Summer 2009 on the subject of Integrated Marketing Communications. An IMC campaign is developed for Subaru Canada's 2009 season with a target number of purchases of 1500 Subaru vehicles by the end of the year.

Published in: Business, Sports

MARK 695A Integrated Marketing Communications (IMC) Case Study

  1. 1. Phase 3: IMC Program Presented by: Hana Arjan Mark Bundang Alberto Palomino Carranza Karim Hassouna
  2. 2. Agenda <ul><li>Recap </li></ul><ul><ul><li>Target Demographic and Hierarchy of Effects </li></ul></ul><ul><ul><li>Message Strategy and Objective </li></ul></ul><ul><ul><li>Stakeholders – Purchase Cycle </li></ul></ul><ul><li>IMC Program </li></ul><ul><ul><li>IMC Campaign/tool </li></ul></ul><ul><ul><li>Geography and timing </li></ul></ul><ul><ul><li>Budget considerations </li></ul></ul><ul><ul><li>Overall IMC Campaign Evaluation </li></ul></ul>
  3. 3. <ul><li>Recap </li></ul>
  4. 4. Hierarchy of Effects
  5. 5. Hierarchy of Effects <ul><li>Target Demographic * : Upper-middle class or higher, 25-49 years of age, typically with a family. </li></ul><ul><li>Assumptions in deriving total target population from PMB data </li></ul><ul><li>Upper-middle class or higher, family = HH Income 75k+ </li></ul><ul><li>HH income data we have in the Hierarchy of Effects Table is distributed evenly across all age groups and language groups </li></ul><ul><li>Out of 288k demo figure, if we assume a 5-yr purchase cycle, 20% will be shopping for a new car this year. </li></ul>*Only includes non-francophone market
  6. 6. Our TM Purchase Objective Illustrated Desired Action
  7. 7. What are the Hurdles? SUBARU LOYAL Luxury Brands AUDI BMW LEXUS INFINITI STATUS PERFORMANCE FEATURES OPTIONS Entry Level cars Fully Loaded
  8. 8. What does our TM think of the Subaru brand now? <ul><li>The nature car </li></ul><ul><li>The rough & rugged choice </li></ul><ul><li>“ Eccentric” product line (eg: Baja) and weird representation </li></ul><ul><li>It’s expensive </li></ul>
  9. 9. What do we want them to think? <ul><li>Driving a Subaru makes you realize that the driving experience is all that matters. </li></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS” </li></ul></ul>
  10. 10. Message Strategy in Nutshell <ul><li>We want to persuade our target market to buy a Subaru priced at around 40k or above. </li></ul><ul><li>Our argument is that driving a Subaru makes you realize that the driving experience is all that matters. </li></ul><ul><li>Our Target Market Segment is: </li></ul><ul><li>Upper-middle class or higher, typically with a family </li></ul><ul><li>25-49 years of age </li></ul><ul><li>Currently owns a vehicle priced at 40k+, likely to be a luxury brand </li></ul><ul><li>The Subaru Package of Benefits consists of: </li></ul><ul><li>Models priced at 40k to 50k that are loaded with options + features not found in the luxury brands in that price range. </li></ul><ul><li>Freedom to experience active and/or exciting lifestyle </li></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS” </li></ul></ul>
  11. 11. Which models win for this Target Segment? THE LEGACY 2.5GT spec.B Sedan $41,995 THE FORESTER 2.5XT Limited with Multimedia Option $37,295 THE OUTBACK 3.0R Premier $43,595 THE TRIBECA Premier Package $48,195
  12. 12. Stakeholders and Cycle of Purchase
  13. 13. The Stakeholders Current Customers Friends and Family Auto Press Dealerships Sales Personnel Potential Customers 2 3 4 5 6 1
  14. 14. Customer Purchase Cycle I AM IN THE MARKET Search for options Visit Dealerships Test Drive ROUND II Research options Consult Family and friends Visit Dealership Test Drive Purchase Service
  15. 15. Who does our IMC campaign touch? Auto press , blogs, internet Family and friends Current customers Dealerships I AM IN THE MARKET Search for options Visit Dealerships Sales Personnel Test Drive ROUND II Research options Auto press , blogs, internet Consult Family and friends Family and friends Current customers Visit Dealership Test Drive Dealerships Sales Personnel Purchase Service
  16. 16. <ul><li>IMC Program Overview </li></ul>
  17. 17. IMC Tools Objectives Overview Awareness Comprehension Conviction Action Overall Goal toward Potential Customers 201,600 aware of our message 115,200 understand our message 14,400 go to the dealership, motivated by our message 1,500 buy a Subaru in the 40k+ range Advertising X Sales Promotion X X Public Relations X X X Direct Marketing X X X Internet X X Personal Selling X X
  18. 18. IMC Tools Mix The Amazing Simpkins Grid Advertising Sales Promo Public Relations Direct Marketing Personal Selling Internet Potential Customers X X X X X X Current Customers X X X X Friends and Family X X Auto Press X X X Dealerships X Sales Personnel
  19. 19. The IMC Tools
  20. 20. Advertising at a glance ** All those made aware of our message will be directed to a Subaru micro-site. Tactics Metrics Cost Advertising <ul><li>Internet Banners </li></ul><ul><li>Print Advertising </li></ul><ul><li>Displays </li></ul>Via Micro-site ** survey: …where did you hear about the campaign? Business card <ul><li>$195,000 </li></ul><ul><li>$72,000 </li></ul><ul><li>$80,000 </li></ul>
  21. 21. IMC Tool: Advertising <ul><li>Internet: </li></ul><ul><ul><li>Banner placement on the financial pages of major news websites </li></ul></ul><ul><ul><li>CTV </li></ul></ul><ul><ul><li>Global </li></ul></ul><ul><ul><li>CBC </li></ul></ul><ul><ul><li>Globe and Mail – Business page website </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  22. 22. IMC Tool: Advertising <ul><li>Print Media: Niche target </li></ul><ul><ul><li>Canadian Lawyers magazine (270,000 law professionals subscribers 80% in English Canada) </li></ul></ul><ul><ul><li>Canadian family physicians (45,000 physicians across Canada) </li></ul></ul><ul><ul><li>Canadian accountants (50,000) </li></ul></ul><ul><ul><li>Canadian Architect (65,000) </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  23. 23. IMC Tool: Advertising <ul><li>Displays: Get a real feel of the car </li></ul><ul><ul><li>Top office building locations </li></ul></ul><ul><ul><li>Open display in high end malls - 8 major Canadian cities </li></ul></ul><ul><ul><li>Total number of displays = 8 (lasting one month each) </li></ul></ul><ul><ul><li>A “drop your business card to win the car” point </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  24. 24. Public Relations at a glance Tactics Metrics Cost Public Relations <ul><li>Subaru Insider Events </li></ul><ul><li>Sponsorship Association-driven Events </li></ul><ul><li>10 Press Conferences </li></ul><ul><li>Questionnaire with Raffle at the seven sites selected </li></ul><ul><li>Number of publications or reviews after the events </li></ul><ul><li>$500,000 </li></ul><ul><li>$70,000 </li></ul><ul><li>$30,000 </li></ul>Create comprehension at the level of 115,200 people
  25. 25. IMC Tool: Public Relations <ul><li>Subaru Insider Events </li></ul><ul><ul><li>Leads generated from Web drive/referral program will be engaged in a special event invitation </li></ul></ul><ul><ul><li>Selection of 10 good locations near city: Expo location within urban areas </li></ul></ul><ul><ul><li>$250 value per person event including dinner (bring spouse/partner event) </li></ul></ul><ul><ul><li>Car displays, test drives, goodies bag </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  26. 26. IMC Tool: Public Relations <ul><li>Press Conferences </li></ul><ul><ul><li>10 press conferences </li></ul></ul><ul><ul><li>Built around the Subaru Insider Events </li></ul></ul><ul><ul><li>Invite local and national auto press writers </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  27. 27. IMC Tool: Public Relations <ul><li>Sponsorship of specific association </li></ul><ul><ul><li>Key professional association events (golf tournaments, network building events, seminars etc…) </li></ul></ul><ul><ul><li>Car display </li></ul></ul><ul><ul><li>Manned booth </li></ul></ul><ul><ul><li>Brochures and sales people at events </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  28. 28. Associations to Target The Canadian college of family physicians Canadian Accountants
  29. 29. <ul><li>Sales Promotion </li></ul>
  30. 30. Sales Promotion at glance Tactics Metrics Cost Sales Promotion <ul><li>Subaru referral program </li></ul><ul><li>Special discounts to be provided to associations and insider events </li></ul><ul><li>Raffles </li></ul><ul><li>Number of potential leads that visit dealership because of the referral program </li></ul><ul><li>Redemption rate of special coupons </li></ul><ul><li>$175,000 </li></ul><ul><li>$150,000 </li></ul><ul><li>$105,000 </li></ul>
  31. 31. IMC Tool: Sales Promotion <ul><li>Subaru Referral Program: Mobilize your following </li></ul><ul><ul><li>You love your Subaru (loyal following) – </li></ul></ul><ul><ul><li>Refer a friend. If he/she buys you will win $500 worth of gear (Ski racks, bike racks, or camping gear) </li></ul></ul><ul><ul><li>Utilize your data base </li></ul></ul><ul><ul><li>Aim to promote until we receive up to 350 referrals who actually buy </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  32. 32. IMC Tool: Sales Promotion <ul><li>Special Promotion ($500 dollars worth of accessories) </li></ul><ul><ul><li>Encourage members of the professional associations to make the leap </li></ul></ul><ul><ul><li>Aim to provide discount to 300 cars </li></ul></ul><ul><ul><li>Distribute 15,000 and gauge effect </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  33. 33. IMC Tool: Sales Promotion <ul><li>Raffle prizes </li></ul><ul><ul><li>To collect information at events </li></ul></ul><ul><ul><li>To entice people to attend events </li></ul></ul><ul><ul><li>People to drop Business cards at Mall </li></ul></ul><ul><ul><li>To engage on the web for specific activities </li></ul></ul><ul><ul><li>1 Legacy and 1 Outback model </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  34. 34. <ul><li>Direct Marketing </li></ul>
  35. 35. Direct Marketing at glance * Direct marketing efforts are used to supplement the advertising tool. ** All those made aware of our message will be directed to a Subaru micro-site. Tactics Metrics Cost Direct Marketing <ul><li>8 follow up email and communication mails </li></ul><ul><li>4 waves on follow-up mails and 2 waves of calls </li></ul>Questionnaire on web that monitors source of awareness   Sales discount will be provided by mail for those attending our sponsorship events or insider events <ul><li>$188,240 </li></ul>
  36. 36. Internet
  37. 37. Internet at glance Tactics Metrics Cost Internet <ul><li>Microsite </li></ul><ul><li>Development </li></ul><ul><li>Content enrichment </li></ul><ul><li>Optimization </li></ul><ul><li>Ranking the success of site from Google analytics </li></ul><ul><li>$75,000 </li></ul><ul><li>$20,000 </li></ul><ul><li>$50,000 </li></ul>
  38. 38. www.subaru.ca/ thedrive comprehension micro-site <ul><li>Develop a virtual community with; </li></ul><ul><li>User content (owners blogs) </li></ul><ul><li>Press releases and reviews </li></ul><ul><li>Calendar of future activities </li></ul><ul><li>Records of previous insider events </li></ul><ul><li>Registration of yourself & your Subaru </li></ul><ul><li>Referral forms and prizes </li></ul><ul><li>Nature favorite escapades </li></ul><ul><li>Accessories for your Subaru </li></ul><ul><li>Maintenance tips </li></ul><ul><li>Car service information </li></ul>
  39. 39. Personal Selling at glance Tactics Metrics Cost Personal Selling <ul><li>Sales Meeting prior to campaign </li></ul><ul><li>Test Drive from home </li></ul><ul><li>NA </li></ul><ul><li>$60,000 </li></ul><ul><li>$20,000 </li></ul>
  40. 40. IMC Tool: Personal selling <ul><li>Communication meeting with dealership and sales teams </li></ul><ul><ul><li>Communicate about the campaign </li></ul></ul><ul><ul><li>Get feedback </li></ul></ul><ul><ul><li>Involve </li></ul></ul><ul><ul><li>Train people if need be </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  41. 41. IMC Tool: Personal selling <ul><li>Test Drive from home </li></ul><ul><ul><li>If you have attended the insider event or you were referred by a owner… we’ll bring you the car home if you cant make it </li></ul></ul><ul><ul><li>Incentive for sales force to implement with customers </li></ul></ul><ul><ul><li>Expected to be offered to a maximum of 500 customers </li></ul></ul><ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul></ul>
  42. 42. Time and Geography
  43. 43. Canadian Largest Urban Centers City Population 1 Toronto 4,551,800 2 Montreal 3,256,300 3 Vancouver 1,836,500 4 Calgary 938,300 5 Ottawa 863,000 6 Edmonton 812,400 7 Hamilton 645,100 8 Quebec 643,200 9 Winnipeg 637,900 10 Kitchener-Waterloo 422,514 11 St. Catherines - Niagara 308,596 12 Victoria 304,683
  44. 44. Car Industry Seasons in Canada Stats Canada
  45. 45. Tactics Blocking Chart Part I
  46. 46. Tactics Blocking Chart Part II
  47. 47. Budget Setting
  48. 48. Budgetary Evaluation <ul><li>% of Incremental A&P as percentage of Sales is above </li></ul>*1,500 cars X $40,000 per car = $60 million ** Sources: Canada Post and Stats Canada Subaru IMC Campaign Industry Sales $60,000,000 * $54,600,000,000 ** Advertising / Promotional / etc. Costs $ 1,840,240 $1,240,000 $1,136,000,000 ** (campaign as is) (to match industry norm) % 3.0% 2.1% 2.1%
  49. 49. Scenario one : Sticking to Industry ratio <ul><li>Risk is not reaching an effective threshold </li></ul>IMPACT Incremental gross margin from selling 1500 units $3,000,000 Total cost of the campaign determined at industry average of 2.08% $1,240,000 Total gain in the coming 12 months $1,760,000
  50. 50. Scenario two: Three year perspective In $000’ Year 1 Year 2 Year 3 Incremental Sales (Average selling price 40,000) $60,000 $80,000 $90,000 Incremental gross Margin $3,000 $4,000 $4,500 Incremental IMC Budget $1,840 $1,750 $1,872 A&P Ratio of Sales 3.0% 2.2% 2.08% Net Gain +$1,210 +$2,250 +$2,628
  51. 51. Summary of IMC Costs
  52. 52. Additional costs <ul><li>Additional cost of $50,000 for IMC Evaluation </li></ul><ul><li>Total cost is $1,840,000 </li></ul>
  53. 53. Evaluation of Overall IMC campaign
  54. 54. Evaluation of the Overall IMC Campaign <ul><li>Pre-testing of current perception of the Subaru brand by sampling the target market </li></ul><ul><li>Concept testing </li></ul><ul><li>Post testing of perception (1 year later) </li></ul><ul><li>Test awareness, perception and attitudes towards purchase </li></ul><ul><li>“ THE DRIVE IS ALL THAT MATTERS: Subaru.ca” </li></ul>
  55. 55. Any Questions? Please do not hesitate to ask any of the members of your dedicated Subaru Team! Hana Arjan Mark Bundang Alberto Palomino Carranza Karim Hassouna
  56. 56. <ul><li>Appendix </li></ul>
  57. 57. Competitive Landscape Subaru Models Type Sedan 40-50K Sedan 40-50K SUV SUV Crossover Model Subaru Legacy 2.5GT spec.B Sedan Subaru Impreza STI Sport-tech Package Subaru Tribeca Premier Package Forester 2.5XT Limited with Multimedia Option Outback 3.0R Premier Price $41,995 $45,995 $48,195 $37,295 $43,595 hp 246 hp @ 6,000 rpm 300 hp @ 6,000 rpm 256 hp @ 6,000 rpm 224 hp @ 5,200 rpm 245 hp @ 6,000 rpm Leather Leather Interior Leather interior Leather interior Leather interior Leather interior Wheels 18&quot; aluminum alloy wheels 18&quot; BBS aluminum alloy wheels 18&quot; aluminum alloy wheels 17&quot; aluminum alloy wheels 17&quot; aluminum alloy wheels Navigation Navigation system Multimedia Centre with navigation system Navigation system Navigation system Navigation system Music Harman Kardon speaker system AM/FM/6CD/MP3/WMA Premium audio system Premium audio system with XM® Satellite Radio Premium audio system with XM® Satellite Radio Harman Kardon speaker system Extra entertainment Bluetooth® hands-free system SIRIUS® Satellite Radio Bluetooth® hands-free system SIRIUS® Satellite Radio DVD entertainment system DVD entertainment system SIRIUS® Satellite Radio
  58. 58. Competitive Landscape Sedans Brand SUBARU AUDI LEXUS BMW INFINITI Type sedan 40-50K sedan 40-50K sedan 50K+ sedan 50K+ sedan 50K+ sedan 50K+ Model Subaru Legacy 2.5GT spec.B Sedan Subaru Impreza STI Sport-tech Package Audi A4 3.2 FSI Quattro Lexus GS 350 RWD 335i Xdrive AWD Infiniti M35x AWD Price $41,995 $45,995 $50,900 $52,450 $51,500 $54,900 hp 246 hp @ 6,000 rpm 300 hp @ 6,000 rpm 265 hp @ 6500 rpm 303 @ 6200 rpm 300 @ 6200 rpm 303 HP @ 6,800 rpm wheels 18&quot; aluminum alloy wheels 18&quot; BBS aluminum alloy wheels 17&quot; aluminum alloy wheels 17&quot; aluminum alloy wheels 17&quot; aluminum alloy wheels 18&quot; aluminum alloy wheels navigation Navigation system Multimedia Centre with navigation system Not Included Not Included Not Included Not Included music Harman Kardon speaker system AM/FM/6CD/MP3/WMA Premium audio system Bang & Olufsen premium sound system AM/FM Stereo Cassette, Compact Disc Autochanger CD Player, MP3 HiFi 10-speaker sound system, incl. 2 subwoofers Precision Phasing audio system with, XM® Satellite Radio, single-feed 6-disc CD, MP3,WMA Extra entertainment Bluetooth® hands-free system SIRIUS® Satellite Radio Bluetooth® hands-free system SIRIUS® Satellite Radio Satellite radio preparation* Satellite Radio Ready Satellite Radio 12 montha subscription Bluetooth® hands-free system
  59. 59. Competitive Landscape SUVs Brand Subaru AUDI LEXUS BMW INFINITI Type SUV SUV SUV 50K+ SUV 40-50K SUV 40-50K SUV 40-50K Model Subaru Tribeca Premier Package Forester 2.5XT Limited with Multimedia Option Audi Q7 3.6 FSI Quattro Lexus RX 350 X3 Xdrive 30i AWD Infiniti FX 35 AWD Price $48,195 $37,295 $55,000 $46,900 $45,300 $51,800 hp 256 hp @ 6,000 rpm 224 hp @ 5,200 rpm 280 hp @ 6200 rpm 275 @ 6200 rpm 260 @ 6200 rpm 303 HP @ 6,800 rpm Leather Leather interior Leather interior Leather interior Leatherette Leatherette Leather interior wheels 18&quot; aluminum alloy wheels 17&quot; aluminum alloy wheels 18&quot; aluminum alloy wheels 18&quot; aluminum alloy wheels 17&quot; aluminum alloy wheels 18&quot; aluminum alloy wheels navigation Navigation system Navigation system Not Included Not Included Not Included Not Included music Premium audio system with XM® Satellite Radio Premium audio system with XM® Satellite Radio Bang & Olufsen premium sound system AM/FM Stereo 6-Disc CD Changer MP3 Audio Capability CD Player, MP3 HiFi 10-speaker sound system, incl. 2 subwoofers 11-speaker Bose® premium audio system with Burr-Brown DAC, AM/FM/CD with MP3 playback capability and Radio Data System (RDS) In-dash, single-feed 6-disc CD changer Extra entertainment DVD entertainment system DVD entertainment system Satellite radio preparation* Satellite Radio Ready Satellite Radio 12 month subscription Bluetooth® hands-free system
  60. 60. www.subaru.ca/ thedrive comprehension micro-site <ul><li>Develop a virtual community with; </li></ul><ul><li>User content (owners blogs) </li></ul><ul><li>Press releases and reviews </li></ul><ul><li>Calendar of future activities </li></ul><ul><li>Records of previous insider events </li></ul><ul><li>Registration of yourself & your Subaru </li></ul><ul><li>Referral forms and prizes </li></ul><ul><li>Nature favorite escapades </li></ul><ul><li>Accessories for your Subaru </li></ul><ul><li>Maintenance tips </li></ul><ul><li>Car service information </li></ul>
  61. 61. IMC Program Design Approach <ul><li>Aligned our IMC tools and tactics with the DAGMAR Approach in conjunction with the numbers from the Hierarchy of Effects Model </li></ul>Create Awareness of Message Induce Comprehension of Message Conviction – Passionate about Message Drive to Action DAGMAR Hierarchy of Effects % of TM Purchase 0.5% 1,500 Test Drive 1.5% 4,320 Visit Dealer 5.0% 14,400 Resonance 40.0% 115,200 Awareness 70.0% 201,600 Reach 90.0% 259,200 Population (Target Market) 100.0% 288,000 Population (Target Demo) 3,834,000
  62. 62. Hierarchy of Effects <ul><li>Target Demographic * : Upper-middle class or higher, 25-49 years of age, typically with a family. </li></ul>*Only includes non-francophone market Price of currently owned car % of TM TOTAL 50k and + 40k - 49k Purchase a Subaru 0.5% 1,500 667 833 Test Drive a Subaru 1.5% 4,320 1,920 2,400 Visit Dealer b/c of Message 5.0% 14,400 6,400 8,000 Resonance (of Subaru Message) 40.0% 115,200 51,200 64,000 Awareness (of Subaru Message) 70.0% 201,600 89,600 112,000 Reach (if restricted to Major metro areas) 90.0% 259,200 115,200 144,000 Population (Target Mkt Segment = Demo w/ current car in 40k+ price range) 100.0% 288,000 128,000 160,000 Population (Target Demo) 3,834,000    
  63. 63. Approach to creating Awareness Internet Advertising 130,000 clicks Print Advertising 70,000 people Displays 30,000 people Objective: Create Awareness in 210,600
  64. 64. # of luxury cars sold in Canada in 2008 Assuming the 5-year purchase cycle, we can multiply this 86,000 by 5 to get 430,000. This could be used as an approximate number of luxury brand owners there are in Canada at this point in time. That figure is 339,700 if we exclude the francophone market (21% of CA pop.) Our PMB-derived 288,000 Target Market is well within that figure. Source: Autonet.ca 86236 3,513 Volvo 1,452 Saab 5,236 Cadillac 10,297 Acura 16,967 BMW 8,136 Lexus 12,644 Subaru 8,002 Audi 4,696 Infiniti 15,293 Mercedes Sold in 2008 Brand

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