AJC 2011 Presentation - Building a Successful Marketing Strategy and Budget

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In today's competitive world, you must stand out - but don't let it overwhelm you. A strategic marketing plan and budget can help you avoid hasty decisions, organize your objectives and determine how and where to advertise. In this presentation, we discuss strategies and tools for creating successful plans for local businesses.

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AJC 2011 Presentation - Building a Successful Marketing Strategy and Budget

  1. 1. Presentation covers content from NAA’s 2010 Newspaper Advertising Planbook
  2. 2. Your Speaker• Nate Kristy, Market Development Manager Kristy at The Atlanta Journal-Constitution | Cox Media Group• Consults and collaborates with local businesses on strategic marketing campaign development Head shot image• 10+ years experience in B2B and B2C marketing across a variety of business sizes and industries in the Atlanta market
  3. 3. Why Build A Marketing Plan? • Serves as your business roadmap. • Invokes analysis of your business business, customers and competitors. • Helps define your objectives, tactics and timing timing. • Uncovers best media for your budget and needs. • Positions you to understand return on investment (ROI). Manta, an online community for promoting and connecting small b i ti ll business, recently f d th t tl found that nearly half (47%) of polled small business owners have prioritized marketing and sales as their top spend. p p Source: Manta Pulse of Small Business 2011 Survey
  4. 4. Getting Started On A PlanDraft a “big picture” document with annual, big picture annualquarterly, monthly goals.Study your sales trends/cycle/history – yy y yallocate ad dollars and strategy accordingly.Analyze your inventory – considerpromoting items based on time of year time-of-yeardemand, product cycles/lines, etc.Set a schedule to revisit plan and repeat p panalysis.
  5. 5. Critical Components for Analysis• Your customers/target market g• Your competitors• Your selling environment• Your d t / Y products/servicesi Including key timeframes for creating awareness and pricing strategy.• Your advertising budget• Suggested Min. = 3% of gross sales• Your key messages for consumers consumers.
  6. 6. Marketing Pitfalls & Misconceptions Mi ti • “I don’t have a target audience.” • “I can save some money if I do advertising myself.” • “I ran an ad, it didn’t work.” • “What’s “Wh t’ a call t action?” ll to ti ?” • “I don’t need a budget.” • “I spend where I get the best rate ” I rate. • “I can do one ad that appeals to everyone.” • p “I advertise there because it’s the cheapest.”
  7. 7. Why Budget for Marketing?• Puts you in control of your spend and ROI.• Saves time.• Makes it easy to eliminate poorly-timed/weaker promotions.• Uncovers cost-saving (or free!) ad opportunities opport nities (e.g. co-op advertising through product manufacturer)• Generates better consumer response and revenue results!
  8. 8. Budgeting Pitfalls• Basing it on past habits habits, personal experience or just whatever ‘cash is cash in the register.’ • F ili t strategize Failing to t t i around evolving audiences, audiences advertising options and markets.
  9. 9. Simple Budgeting Guidelines• D Determine projected sales and then apply a i j d l d h l percentage of sales for your advertising.• Make one budget for your entire company or create separate budgets for each department/product line.• Analyze your sales by quarter or month for seasonality, ups and downs, etc. to distribute your , y budget accordingly.
  10. 10. Charting An Ad BudgetShould Look Like Like… NOT… NOT
  11. 11. Simple Four-Step Ad Plan Four Step 1. Forecast your annual sales. 2. Forecast your monthly sales. 3. Forecast your monthly advertising spend. 4. Determine ad schedule and option for each month.
  12. 12. Step 1 Forecasting Annual Sales ia. Find the average sales for y industry according g your y g to store square footage (see chart).b. Determine your store square footage and multiple it by sales-per-square-foot figure.c. Use resulting figure as your annual sales forecast.
  13. 13. ANNUAL SALES PER SQUARE FOOT OF STORES IN US SHOPPING CENTERS Super Regional Shopping  Regional Shopping  U.S. Super Community /  Neighborhood Shopping  Centers Centers Community Shopping Centers Median  Median  Median Sales  Median GLA  Sales Per Sq.  Median GLA  Sales Per Sq.  Median GLA  Median Sales  Median GLA  Median Sales Median GLA Sales Per Sq Median GLA Sales Per Sq Median GLA Median Sales Median GLAType of Store Per Sq. Ft. in Sq. Ft. Ft. in Sq. Ft. Ft. in Sq. Ft. Per Sq. Ft. in Sq. Ft.General Merchandise $166.70 137,000 $137.95 114,000 $149.50 20,000 $102.97 8,000Food $431.81 1,000 $462.27 1,100 $412.21 39,400 $430.05 32,000Food Service $628.27 800 $568.97 1,100 $314.12 2,400 $266.65 1,800Clothing and Accessories $366.18 3,700 $347.11 4,000 $232.68 4,600 $155.59 4,000Shoes $359.63 2,300 $344.36 2,700 $192.73 3,300 $141.51 3,000Home Furnishings $370.03 3,600 $325.57 8,600 $209.28 6,700 4,200Home Appliances/Music $371.82 3,100 $414.66 3,500 $302.20 2,600 2,400Building Materials/Hardware $388.65 8,100 4,100Automotive 21,000 $237.92 $ 6,000 $386.92 $ 4,000Hobby/Special Interest $395.04 2,200 $384.05 2,200 $219.85 3,200 $199.45 1,700Gifts/Specialty $287.22 2,500 $206.32 4,000 $170.42 4,500 $127.08 4,000Jewelry $958.99 1,300 $902.40 1,200 $303.37 1,600 $317.37 1,500Liquor $396.27 3,100 3,200Drugs $341.40 $341 40 6,800 6 800 $429.07 $429 07 11,000 11 000 $429.47 $429 47 12,500 12 500Other Retail $496.64 1,200 $401.25 1,700 $247.53 2,000 $217.25 2,100Personal Services $302.17 1,200 $262.55 1,500 $176.87 1,500 $162.50 1,400Entertainment/Community $94.11 19,600 $77.46 26,300 $76.61 4,200 3,000Financial 60 1,400 2,300 1,500Source: Dollars & Cents of Shopping Centers / The SCORE 2008, Urban Institute, 2008. pp g / , ,Square‐foot figures (rounded to nearest hundred).Definitions:Gross Leasable Area (GLA) ‐ the total floor area designated for the tenants occupancy and exlcusive useSuper‐regional shopping center: typical mall, usually about 1 million square feet, with three or more large anchor storesRegional center: smaller mall, typically 500,000 square feet with one or two anchor storesCommunity center: strip center with 100,000 to 300,000 square feetNeighborhood center: typical strip center, built around a supermarket, with a norm of less than 100,000 square feet
  14. 14. Step 1: Forecasting Annual Sales Kristy Family Jewelry Store K i F il J l Sa. Average Sales Per Square Foot (Per Chart) $317.37b. Store Square F tb St S Footage (Measured) (M d) 60 x 25 Ft. = 1,500 Sq. Ft.c.c Annual Sales $317.37 x 1,500 = $476,055
  15. 15. Step 2Forecasting Monthly Sales i a. a Use chart to get the monthly percentage by store type; multiply each month’s month s percentage by the forecasted annual sales figure from step 1. b. Resulting figure is your monthly sales forecast. c. Repeat for each month.
  16. 16. TOTAL RETAIL SALES BY TYPE OF STORE TOTAL RETAIL SALES BY TYPE OF STORE Percentage of Years Sales Each Month by Type of StoreStore Type JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DECAppliances, TV and Other Electronics Stores 8.0 8.1 7.7 7.3 8.2 7.9 8.1 8.4 7.4 7.1 9.4 12.4Automobile Dealers 8.6 9.0 9.9 9.3 9.5 8.7 8.7 8.9 7.7 6.9 6.0 6.7Automotive Parts, Accessories and Tire Stores 7.4 7.6 8.2 8.4 8.7 8.8 9.0 8.6 8.4 8.9 7.9 8.1Beer, Wine and Liquor StoresBeer Wine and Liquor Stores 6.7 67 7.0 70 7.5 75 7.6 76 8.7 87 8.3 83 8.9 89 8.8 88 8.0 80 8.5 85 8.6 86 11.3 11 3Bookstores 13.5 6.8 6.0 5.9 6.8 6.3 6.6 14.5 8.9 6.2 6.2 12.1Building Materials and Supplies Dealers 7.1 7.0 7.9 9.2 9.9 9.4 9.5 8.7 8.5 8.7 7.2 6.9Clothing Stores, Family 6.3 6.7 8.0 7.6 8.5 7.8 8.5 9.1 7.3 8.0 9.5 12.8Clothing Stores, Mens 7.2 7.1 8.1 8.4 9.0 8.5 7.4 7.9 7.6 8.0 8.5 12.2Clothing Stores, Womens 6.6 7.2 8.7 8.9 9.4 8.3 7.7 8.1 7.9 7.9 8.5 10.9Computer and Software StoresComputer and Software Stores 8.0 7.9 8.2 7.5 7.4 7.9 8.0 8.1 7.4 7.7 9.3 12.7Department Stores, Conventional and National Chain 6.4 7.2 7.9 7.7 8.4 7.7 7.4 8.0 6.9 7.6 10.1 14.7Department Stores, Discount 6.9 7.2 8.0 7.4 8.4 8.2 8.0 8.4 7.0 7.9 9.6 13.1Drinking Places 7.2 7.4 8.3 8.1 8.6 8.4 9.4 9.2 8.4 8.6 8.1 8.4Furniture Stores 8.6 8.7 8.7 8.3 8.8 8.0 8.4 8.9 7.9 7.7 7.9 8.0Gasoline Stations 7.7 7.5 8.4 8.7 9.7 10.0 10.3 9.7 8.9 8.0 5.9 5.1 yGrocery Stores 8.1 7.8 8.3 8.0 8.7 8.3 8.7 8.6 8.1 8.4 8.4 8.6Home Furnishing Stores 7.6 7.4 7.9 7.9 8.5 8.4 8.9 8.4 7.9 8.2 8.8 10.2Jewelry Stores 6.1 8.8 7.1 7.0 9.3 7.4 7.5 7.7 6.6 6.9 7.9 17.7Pharmacies and Drug Stores 8.3 8.2 8.4 8.1 8.5 8.1 8.2 8.1 8.1 8.5 8.1 9.4Restaurants, Full Service 7.7 7.9 8.6 8.2 8.9 8.5 8.6 8.9 7.9 8.2 8.0 8.6Restaurants, Limited Service 7.7 7.7 8.4 8.3 8.8 8.5 8.8 8.9 8.1 8.5 8.0 8.3Shoe Stores 6.5 7.5 8.6 8.3 8.9 7.9 8.2 10.7 7.3 7.7 8.1 10.3Sporting Goods Stores 6.3 6.6 8.1 8.1 8.9 9.3 9.0 9.7 7.4 6.7 7.6 12.4Warehouse Clubs and Superstores 7.3 7.5 8.1 7.7 8.8 8.4 8.4 8.6 7.6 8.1 8.9 10.6Source: Monthly Retail and Food Service Sales, 2008 Sales, http//www.censusgov/retail/mrts/www/data/excel/mrtssales92‐09.xls
  17. 17. Step 2: Forecasting Monthly Sales Kristy F il J K i t Family Jewelry Store l Sta. January Percentage of Year’s Sales (Per Chart) = 6.1% 6 1%b. Annual Sales (Per Step 1) = $476,055c. Monthly Sales Jan: $476,055 x .061 = $29,040 (Repeat for Each Month through Dec)
  18. 18. Step 3 Forecasting Monthly Ad Investmenta.a Find corresponding ad to sales ratio for your store/industry ad-to-sales (see chart).b. Multiply your forecasted sales per month by the ratio.c. Repeat for each month.
  19. 19. ADVERTISING TO SALES RATIOS % of Annual Sales  % of Annual Sales  % of Annual Sales  % of Annual Sales  Spent on  Spent on  Spent on  Spent on Commodity or Class of Business Advertising Commodity or Class of Business Advertising Commodity or Class of Business Advertising Commodity or Class of Business Advertising Engineering, Accounting, Research, Air Courier Services (1) 0.9% Management and Related Services (1) 0.2 Jewelry Stores (1) 5.4 Shoe Stores (1) 2.3Amusement and Recreation Services (1) 5.0 Family Clothing Stores (1) 1.9 Leather and Leather Products (1) 2.1 Skilled Nursing Care Facilities (1) 0.4 Lumber and Other Building Materials (Retail) Apparel and Accessory Stores (1) 5.2 Furniture Stores (1) 8.7 (1) 1.7 Sporting Goods Stores (6) pp ( )Appliance and Electronics (2) Grocery Stores (1) y ( ) 0.8 Malt Beverages (1) g ( ) 10.0 Full Line, <$2 Million , $ 2.0 Hardware, Plumbing, Heating Equipment  Appliance Dealers  3.2 (Wholesale) (1) 0.1 Mortgage Bankers and Loan Correspondents  1.3 Full Line, $2 ‐ $5 Million 1.6 Electronics Dealers 3.8 Hardware Stores (4) Motion Picture Theaters (1) 1.0 Full Line, >$5 Million 2.6Appliance and Electronics Dealers 3.4 <$500,000 2.4 Musical Instruments (1) 2.2 Specialty, <$500,000 3.3Auto Dealers, Gas Stations (1) 0.8 $500,000 ‐ $1 Million 2.7 Office Furniture, Excluding Wood (1) 0.6 Specialty, $500,000 ‐ $999,999 2.7Auto and Home Supply Stores (1) 1.9 $1 ‐ $2 Million 2.5 Office of Physicians (1) 1.2 Specialty, $1 ‐ $2 Million 2.6Bakery Products (1) 0.7 >$2 Million 2.2 Ophthalmic Goods (1) 3.5 Specialty, >2 Million 3.0Beverages (1) 6.7 Hobby, Toy and Game Shops (1) 2.9 Paints, Varnishes, Lacquers (1) 2.1 Television Broadcast Stations (1) 8.3Bicycle Dealers (3) 3.1 Home Centers (4) Perfume, Cosmetic, Toilet Preparations (1) 19.2 Tires and Inner Tubes (1) 2.2Books, Publishing and Printing (1) 3.8 <$2 Million 1.3 Photographic Equipment and Supplies (1) 1.4 Tobacco Products (1) 4Building Materials, Hardware, Garden (Retail) (1) 2.1 $2 ‐ $3 Million 1.0 Racing, including Track Operations (1) 3.3 Variety Stores (1) 1.5 Radio, TV and Consumer Electronic Stores Cable and Other Pay TV Services (1) 7.3 $3 ‐ $6 Million 1.1 (1) 2.4 Video Tape Rental (1) 4.7Carpets and Rugs (1) 0.8 >$6 Million 0.8 Real Estate Agents and Managers (1) 2.7 Womens Clothing Stores (1) 3.7Catalog, Mail‐Order Houses (1) 3.5 Home Health Care Services (1) 1.1 Restaurants (5)Child Day Care Services (7) 0.9 Hospitals (1) 0.6 Full Service, <$15 2.0Computer and Office Equipment (1) 0.6 Hotels and Motels (1) 1.4 Full Service, $15 ‐ $24.99 1.8Convenience Stores (1) 0.1 Household Appliances (1) 1.9 Full Service, >$25 2.2Department Stores (1) 5.1 Household Audio and Video Equipment (1) 6.5 Limited Service 1.6Direct‐Mail Advertising Services (1) 1.7 Household Furniture (1) 6.1 Security Brokers and Dealers (1) 0.5 g p y ( )Drug and Proprietary Stores (1) 0.7 Insurance Agents, Brokers and Service (1) g , ( ) 0.4Educational Services (1) 12.8 Investment Advice (1) 1.6Sources(1) Schonfeld & associates Inc. Advertising Rtes & Budgets, June (2) North American Retail Dealers Association, Cost of Doing Business Survey Report, 2007(3) National Bicycle Dealers Association, The Cost of Doing Business, 2006‐2007(4) National Retail Hardware Association, Cost of Doing Business Study, 2007(5) National Restaurant Association, Restaurant Industry Operations Report, 2007‐2008(6) National Sporting Goods Association, Cost of Doing Business Survey, 2006‐07(7) Schonfeld & Associates Inc. Advertising Ratios & Budgets, June 2007(7) Schonfeld & Associates Inc Advertising Ratios & Budgets June 2007
  20. 20. Step 3: Forecasting Monthly Ad Investment Kristy Family Jewelry Storea. Advertising-to-Salesa Ad ertising to Sales Ratio (Per Chart) 5.4%b.b Forecasted Sales Per Month (Per Step 2) Jan: $29,040c.c Monthly Ad Investment Jan: $29,040 x .054 = $1,568 ( p (Repeat for each month.))
  21. 21. Step 3 Alternative One-Minute Budget TestResults Interpretation:• 4-7 Points Approx. 3-4% of sales.• 8-11 Points Approx. 4-5% of sales.• 12 Points Approx. 5-7% of sales Approx
  22. 22. Step 3 Alternative: 1-Min Budget Test Nate’s Window Installation i i Results Interpretation: 4-7 Points = 3-4% Sales 3 8-11 Points = 4-5% Sales. 12 Points = 5-7% of Sales 3 1 Nate’s budget should be g 4-5% of estimated 2 or previous year’s sales. 9
  23. 23. Sample 4-Step Ad Plan Chart 4 Step Monthlyy Monthly % Monthly y Monthly M thl % Store Sales of A f Annual Ad l Ad Budget Annual Sales (Annual Sales x Spend (Column 2 x Step 2 Column 1) (Step 3) Column 3) JanuaryFebruary MarchQQ1 Totals
  24. 24. Sample 4-Step Ad Plan Chart Kristy Family Jewelry Store Monthly % Monthly M thl % Monthly M thl of A f Annual Ad l Monthly M thl Annual Sales Store Sales Spend Ad Budget ($476,055) ($68,552 x Col 1) (Col 2) (Col 2 x 3) January 6.1% $29,040 5.4% $1,568February 8.8% $41,893 5.4% $2,262 March 7.1% $33,800 5.4% $1,825QQ1 Totals $ , $104,733 $ , $5,655
  25. 25. Step 4 Determining Monthly Ad Scheduling• Choose an advertising consultant Preferably one with multi-media capabilities and local market knowledge.• Write out your monthly y y ad plan on a year-long calendar.• Execute!
  26. 26. Key Considerations for Monthly Planning iWhen?• Popular paydays (e g Social Security major companies etc ) (e.g. Security, companies, etc.)• Heavy store-traffic days and/or those with special hours.• In synch with national/local merchandising events (i.e. co-op opportunities)• Around known flux in prices and inventory.Why?• Ad frequency builds awareness• Your competitors are doing it – or doing it better.• You’re expanding products or departments. You re departmentsWhat Else?• S Strategic integration of advertising media ( i online, di i i i f d i i di (print, li direct marketing, etc.) k i )
  27. 27. Learn More• Nate Kristy, Market Development Manager @ AJC: nkristy@ajc.com • ajcmediakit com ajcmediakit.com • NAA.org • advertising.yahoo.com

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