Nick Ciffone, Franklin Kramer, Rose
Osial, Christina Seiwert, Ryan Wahlheim
table of contents
3. Executive Summary
PART 1: Situation Analysis
4. Company Background
6. Industry Information
7. Industry Competition
10. Recent Trends Facing the Industry
11. Current Users
12. Geographical Emphasis
13. Seasonality & Timing
14. Consumers & the Decision Process
15. SWOT Analysis
PART 2: Primary Research
16. Our Research
17. Primary Target Audience
18. Secondary Target Audience
19. Ethnography Results
PART 3: Media Plan
21. Media Mix & Media Objectives
28. Non-traditional Media
29. Media Schedule
30. Budget Overview
PART 4: Creative Strategy
31. Current Advertising (Lowe’s and Competitor’s)
33. Creative Brief
34. Creative Requirements, Brainstorming, & Final Strategy
35. Print Advertisement #1
36. Print Advertisement #2
37. Print Advertisement #3
Founded in 1946 in North Carolina, Lowe’s hardware store started as well, and the biggest age demographic is the 25- to 34-year-
as a local establishment. Nearly 63 years later, it has grown into olds. Based on this research and others, we have made our primary
one of the largest home improvement corporations in the United market the “Early Squatters” who are working, educated, new
States. It is currently the second largest hardware store in America, home-owners. Their age range is 25-34 and are best put in the
with Home Depot being first. They offer a variety of products middle to upper-middle class. They are comfortable with technol-
within their 13 departments with their biggest sales in appliances, ogy and reliant on the internet, so using digital media is a must.
lumber, paint, and flooring. Lowe’s separates themselves from Our secondary target market is “The Realized,” who are Hispanic
their competitors with their customer service and clean “easy to individuals in the upper-middle class with disposable income.
find what you need” store layout. Either they or their close relatives immigrated to the United States,
and since then they have become successful. While fluent in both
Although the current economic recession has created slow sales
Spanish and English, they tend to speak Spanish in the home and
in every aspect of the consumer market, Lowe’s is still expanding;
are still very much submerged in the Hispanic world and culture.
they will be opening 60-70 stores in the upcoming year. There are
many economic, political, social, and cultural trends that affect this Our objectives are to increase brand awareness and preference
industry. Obama currently has a plan to stimulate the economy, in both our markets, and change attitudes about Lowe’s, so that
and the initiative toward energy-efficient products has a large it becomes perceived as a helpful hardware store, instead of just
impact on the home improvement industry. an ordinary one. Lastly, we want to increase revenue. In order to
accomplish these tasks, we will give the consumer promise, “Your
Lowe’s is trying to reach the consumers that are shopping with
dad could fix anything, you can’t. We’ll help you fix up your home,
more convenient store locations and familiar advertising. While
whether it’s tips, direction, or translation.” Our campaign is going
most stores are located in the East and Midwest portions of the
to have an honest, helpful, and welcoming tone implying that
United States, there are Lowe’s located amongst metropolitan
Lowe’s isn’t just a store, but a community as well.
centers farther west as well. This may suggest that media dollars
should target consumers who are unaware of Lowe’s. In current To accomplish this, we are going to use a wide variety of media,
campaigns, Lowe’s has been using celebrities like NASCAR Driver including non-traditional media, such as the internet, advertis-
Jimmy Johnson, to show that “do it yourself” is possible. Lowe’s ing on bus shelters, and hosting Lowe’s classes to educate the
even offers step by step help on their website with instructional consumer, as well as a forum on our website where people can
videos. They also present “Lowe’s Creative Ideas” to inspire hom- discuss projects and ask questions with employees being there
eowners to make their living space their own. to help. And in addition to having traditional ads in Spanish for
the Realized target market, we are also going to have Spanish to
Currently there is a fairly even distribution of male and female
English and English to Spanish handbooks with hardware terms,
Lowe’s shoppers. Many of the consumers are post-graduate degree
showing that we care about the Hispanic community.
owe’s was founded in 1946, in North Carolina. It 85,000 square feet with some getting close to 120,000 square feet.
began as a small local hardware store, and now it During this period Lowe’s started using their slogan, “everyday low
is one of the largest home improvement retailers prices”, which supported their average “do it yourself” customer’s
in the United States. It was incorporated as Lowe’s North budget (lowes.com) (http://www.fundinguniverse.com).
Wilkesboro Hardware in 1952. Lowe’s has always been a suc-
During the late 1990’s and early 2000’s Lowe’s was doing so well
cessful company, from the time it went public through today. The
that they were building a new store close to every week. While
company went public in 1961 and was renamed Lowe’s Company.
currently Lowe’s is not expanding at such a rapid rate, it is esti-
Within the first 20 years there was a great increase in sales, due
mated to build around 60-70 new stores in 2009 (Lowe’s Annual
to the active housing market at the time and Lowe’s presence as
Report). Lowe’s has also started to enter different markets outside
a main hardware store. During this period, Lowe’s main target
of the United States, with several stores in Canada and plans for
was contractors and people involved in the construction industry.
stores in Mexico as well. All of this success has allowed Lowe’s to
Lowe’s first billion-dollar year was in 1982 and profits were at a
become the second largest hardware store in the United States,
record high (lowes.com) (http://www.fundinguniverse.com).
only behind Home Depot.
Lowe’s didn’t want to restrict business to those in the housing
Like all other industries, our country’s current economic state has
market, so they decided to expand to the everyday consumer that
taken a toll on home improvement. In recent years Lowe’s, along
had basic hardware needs, or the “do-it-yourself homeowners”. To
with its competitors, stock prices have been dropping. In 2005
do this, Lowe’s needed to both change the style of their stores
shares were slightly above $33.00, but at the end of 2008 shares
and build more of them in order to reach the everyday consumer.
finished at $21.52. The biggest drop was from 2006 to 2009, when
Their main focus was adding more basic products. This way they
shares dropped nearly $9.00 (lowes.com). Despite this, however,
would no longer be seen as “just a lumber yard”. This idea led to
according to the 2008 Lowe’s annual report, executives assured
major success for Lowe’s. The layout of the current Lowe’s started
stockholders and employees that their needs will be taken care
in 1994. The stores became enormous; most new stores are at least
of in this time of difficulty.
situation analysis | 4
(continued from previous page)
Official Website: Lowes.com
Lowes.com has 13 different departments including: appliances, building sup-
plies, flooring, hardware, heating and cooling, home décor and paint, lawn and
garden, lighting and fans, outdoor living, plumbing, storage, tools and then
finally windows and doors. Within these departments there are a bountiful
amount of different brands, styles, price options, etc. Many of their stores are
over 75,000 square feet and include the majority of the products shown on
the website. Although they offer a variety of products, their top four selling
products are appliances, lumber, paint, and flooring (lowes.com).
One of Lowe’s slogans is “everyday low prices.” This slogan tells us that Lowe’s
wants to be perceived as the hardware store with the best for your budget.
However, in a competitive market, it is very hard to have prices that are that
much different from your competition. Looking at consumer reviews, there is a
mix of opinions on which home improvement stores give you the most for your
money. All in all, it seems that Lowe’s is on the same level as their competition
in pricing (http://www.bloggingstocks.com) (lowes.com).
As of 2008 Lowe’s had 1,649 stores, 11 of which are located in Canada.. With over
1,600 stores in the United States, it is not difficult to find a Lowe’s store; they
can be found in all 50 states. However, the stores in large metropolitan areas
are bigger and have a wider selection. We can also see a higher concentration
of stores in the Midwest and East Coast, compared to the West Coast (.com).
Current Media Sources
Lowe’s uses many different media sources in order to advertise. They use all the
popular forms of media that you would expect, including TV, radio, internet,
and billboards. One of their sponsors is NASCAR driver Jimmy Johnson. In
commercials, he can be seen working on cars or helping construction workers
using Lowe’s products. The ads make him appear as an everyday guy, making
it look easy for those like him to accomplish all these home improvements
with the help of Lowe’s.
They also use direct marketing, which depends on the area that you live in and
that area’s needs. Lowe’s website, Lowes.com, offers additional tips and other
websites related to consumer’s projects. They have a “Lowe’s Creative Ideas”
section which provides ideas on how to improve your home. There is also a
portion with instructions on carrying out the improvements all with Lowe’s
products. Another site is Lowe’s for Pros, which gives resources to professional
contractors. Lowe’s includes a lot of instructional videos on most of their sites,
which shows they are adapting to new media trends. Lowe’s also has an option
to become a fan on Facebook. We also found that Lowe’s is not present in the
mobile marketing, suggesting the need for creating mobile apps. They are
also very involved in the communities where they are located. They donate
millions of dollars each year to different charities, with their main charity being
Lowe’s Charitable and Educational Foundation. For PR, Lowe’s will send repre-
sentatives to help out in local areas to build or rebuild houses, etc. They also
donate free tools to relief projects, schools and other groups that are in need
of tools (lowes.com).
situation analysis | 5
Lowe’s belongs to the hardware industry. As mentioned earlier, it is number the worst is over, and the hous-
two in sales in the United States, right behind Home Depot. Lowe’s sales in ing market should be improv-
2008 were around 48 million dollars, compared to Home Depot with 84 million. ing. Although new housing has
They are currently number 48 on Fortune 500’s list. Like most industries in the been hit hard, many people are
current economy, the hardware industry has seen a decrease in sales. People redoing their existing homes,
are saving more and watching what they buy, especially when it comes to non- which still benefits hardware
essential needs. Unfortunately, many people see hardware stores’ products companies (www.realtor.org).
as non-essential. Another reason for the decrease in sales is that the housing All in all though, the sales do
market is one of the largest markets for hardware stores. Unfortunately, the not compare to when the hous-
housing market is also one of the hardest hit industries in today’s economy ing market is thriving. Compa-
(realator.org) (www.nytimes.com). Because of this, hardware stores are selling nies are making cuts all over,
less lumber, which normally make up a significant percentage of their sales including in their advertising.
(http://money.cnn.com). In connection to the real estate market, if people Lowe’s reports cutting nearly
aren’t building new houses, they don’t need appliances or paint to furnish 84 million dollars in advertising
them. This decrease in sales affects the numbers of two of Lowe’s biggest sell- since 2006 (lowes.com).
ers. Hardware companies have an optimistic outlook for the future, declaring
situation analysis | 6
Overview Direct Competition Indirect Competition
The home improvement industry is Lowe’s faces direct competition from The consumers, in conjunction with
highly competitive and determined one major corporation, The Home the economy, can be viewed as indi-
primarily by price, store location, cus- Depot. Smaller, direct competitors rect competition. The decision to
tomer service, and merchandise sold. include Menards and Sears, and Roe- renovate one’s home or take on a
In each individual market, there are buck & Company (refer to charts on home improvement project is depen-
many minor competitors who con- following pages). Compiling informa- dent upon the amount of money and
centrate on providing consumers with tion for Menards is difficult because time that consumers have available.
products related to electrical projects, the data are privately held. Analyz- In recessionary times, home renova-
plumbing issues, building materials, ing financial information for Sears, tions are generally not initiated due
flooring, and lumber. Often discount Roebuck & Company is also difficult to unstable finances.
stores, local hardware stores, inde- because it is owned by Sears Hold-
Home furnishing stores can also be
pendent building supply stores, or ing Corporation, the publicly traded
considered indirect competitors to
other retailers provide local competi- parent of both Kmart and Sears, Roe-
Lowe’s. Homeowners who are look-
tion within this industry. The home buck & Company. Their annual report
ing to upgrade their living areas but
improvement market in Champaign, encompasses spending and budget-
don’t want to undertake large renova-
IL, for example, includes large cor- ing for each of their divisions and the
tions might choose to purchase new
porations such as Lowe’s and Home exact amount allocated to their Home
furniture to redecorate their space.
Depot, as well as smaller businesses Services sector is unclear.
like Menards, Round Barn True Value
Lowe’s also faces minor competition
Hardware, Illini Contractor Supply,
from smaller, more specialized stores
Hundman Lumber and RP Lumber
including Ace Hardware, Lumber
Liquidators, Builders First Source,
While the home improvement indus- Sherwin-Williams, Stock Building
try is considered “competitive,” sales Supply Inc., 84 Lumber Company, Do
and market share are controlled by It Best Corporation, and CCA Global
two major corporations: The Home Partners. Direct minor competition
Depot and Lowe’s. The Home Depot varies between markets and many of
lists itself as the industry leader, main- these companies do not operate in all
taining a 20% market share as of the areas of the country.
end of fiscal year 2008 (The Home
Depot 2008 Annual Report). From
a financial perspective, Lowe’s is the
industry’s second most powerful cor-
poration, directly behind The Home
Depot (Yahoo! Finance).
situation analysis | 7
Lowe’s Home Depot
financial Market Capital 1: $31.1 billion Market Capital 1: $45.77 billion
information Employees 2: 228,000 Employees 2: 322,000
Revenue 3: $47.39 billion Revenue 3: $67.64 billion
Net Income 4: $1.88 billion Net Income 4: $2.38 billion
brand “Lets build something together.” Lowe’s stresses the importance “You can do it, we can help” The Home Depot builds and emotional
positioning of the consumer and makes efforts to simplify the shopping connection between brand and consumer through the notion
of “I did it” and a sense of accomplishment. The Home Depot is
experience, works to ensure stores are staffed with knowledge-
concentrating on improving customer service. They offer many
able employees, and makes efforts to ensure their supply chain is installation services and delivery options to help their customers
managed efficiently and to benefit the consumers’ needs. with their projects.
promotions Free Delivery and Haul Away, Free ice maker with purchase of Emailed coupons, rebates, free shipping, “purchase select energy-
Frigidaire, Lowe’s Cool Idea Products, Lowe’s Project Card, $39 saving products and you may be eligible to receive a federal tax
credit,” weekly sales
Installation on All Stainmaster Carpet, 72-hour installation on
any in-stock carpet, $139 entire house carpet installation, Weekly
Ads, Newer Lower Prices; Direct Mailing
media Since 2006, Lowe’s has worked toward implementing more In fiscal 2008, The Home Depot reported an advertising expense
vspending efficient marketing strategies, allowing them to cut annual of $1 billion. Television, radio, and print were the primary media
advertising expenses by $84 million. Reductions were made in
mass media advertising as Lowe’s has gained national awareness
and market share. They are placing a greater emphasis on spend-
ing money to target consumers directly by using mail campaigns
and affinity websites like Lowes.com and LowesCreativeIdeas.
com. In 2008, advertising expenses amounted to $789 million.
pricing Lowe’s remains committed to their Everyday Low Price strategy Remains competitive stating: “If any competitor tries, we’ll beat
and also utilized a “Newer Lower Price Initiative” to build traffic their price by 10% guaranteed.” However, some pricing may be
affected by labor costs, competition, speculation, government
and increase sales.
regulation, or delivery delays. Recently instituted a “Newer Lower
Price” campaign where they lowered prices on items temporarily
to increase sales.
products Appliances, building supplies, flooring, hardware, heating/cool- Appliances, bath, building materials, décor, doors, windows,
ing, home décor, paint, lawn/garden, lighting, fans, outdoor electrical, flooring, kitchen, lighting, fans, outdoors, paint, storage,
tools, and hardware
living, plumbing, storage, tools, windows, doors
locations About 1,649 Stores located throughout the U.S. and Canada About 2,233 Stores located throughout U.S. including Common-
wealth of Puerto Rico, the territories of the U.S. Virgin Islands and
Guam, Canada, China, and Mexico.
current They view their consumers as having low confidence levels with The Home Depot services three primary customer groups: Do-
users regards to finances due to difficult economic times and high un- It-Yourself Customers who are typically home owners that need
products for projects and installations, Do-It-For-Me Customers
employment rates. Most of their current users are Do-It-Yourself,
who are typically home owners that purchase materials and hire
Do-It-For-Me, or Commercial Business Customers. Lowe’s places a third party to complete the project, and Professional Customers
more emphasis than their competition on engaging female who are professional remodelers, general contractors, repairmen,
consumers who are interested in redecorating and updating small business owners, and tradesmen.
Shares outstanding is taken from the 2008 annual report and Market Capital is calculated using shares outstanding.
Employee estimates were taken from 2008 annual reports for Lowe’s and The Home Depot.
Revenue is from 2008 as reported by www.finance.yahoo.com
Net Income is from 2008 as reported by www.finance.yahoo.com
situation analysis | 8
Menards Sears, Roebuck, & Co.
financial Market Capital1: n/a Sears, Roebuck, & Company is a privately held company. It’s parent
information Employees: 40,000 company is Sears Holding Corporation. Net income for 2008 was
Revenue: $7.8 billion $53 million. Appx. 15% ($8.7 million) of this was credited to the
Net Income: n/a home appliance division. 2
brand “Save Big Money at Menards” Sears primarily carries Kenmore, Craftsman, DieHard, and Lands’
positioning “Dedicated to Service and Quality” End and believes its consumers are very brand loyal. They empha-
“The Menards Guy” size customer service and have the Sears Blue Service Crew that
is available 24/7 to assist customers. Their website is use-friendly
and utilizes graphical elements. The icon of the Service Crew is the
theme of the Home Services website.
promotions Credit programs, rebates, EnergySTAR (tax credits for purchas- Weekly ads, e-mail savings, Shop Your Way, flat rates, delayed pay-
ing energy-saving products, EnergySTAR for Kids, coupons, and ment options
media n/a Media spending is difficult to estimate for Sears because their
spending financial statements encompass Sears as a corporation and does
not breakdown by divisions. Advertising for Sears Corporation
was cut by about $14 million. However, this says little about the
total amount spent advertising the Sears Home Services division
pricing Menards guarantees everyday competitive pricing. They will beat Competitive
competitor’s prices by 11% on any identical item at any local
retail competitor (www.menards.com).
products Counter tops, doors, decking, roofing/siding, hardware, electrical, Appliances, automotive, tires, home services, lawn/garden, out-
wall coverings, plumbing, housewares, cabinets, appliances door living, tools, heating/cooling, counter tops, cabinet refacing,
exterior doors, garage doors, kitchen remodeling, siding, windows,
locations About 250 stores About 2,086 stores
Located in 12 states, primarily in the Midwest U.S. Operates about 856 full-line stores, 872 Hometown Stores, 49
Home Appliance Showrooms, 110 Sears Hardware Stores, and 86
Orchard Supply Hardware Stores.
current n/a Sears strives to create and maintain long-term relationships with
users their customers. Their home improvement segment is primarily
comprised of Do-It-Yourself customers.
Financial information for Menards was taken from reports on www.yahoo.finance.com. Reports are for the most current fiscal year, 2008.
Information was taken from 2008 annual reports for Sears Holding Corporation.
situation analysis | 9
Economic Trends Sales for companies improvement industries. The plan places emphasis on developing environmentally
within the home improvement industry importance on creating energy efficient friendly products has resulted from con-
have been declining due to the economic alternatives to conserve natural resources sumer concern over global warming and
recession that began in December 2007. as well as save money. The plan rewards other energy saving issues. “Going Green”
Housing turnover was down 16% in 2008, taxpayers who have taken measures to has been an overwhelmingly influential
and unemployment rose to 8.1% in Febru- reduce the amount of energy used in their movement that the home improvement
ary 2009. Private residential construction homes by installing energy-efficient doors industry has needed to accommodate for
spending decreased by 27% from Septem- and windows, insulation, air conditioners, (Home Improvement & Hardware Retail
ber 2008 to September 2009. Also attrib- furnaces, heat pumps and boilers (Recov- Industry Trends, Hoovers).
uting to the decline in home improve- ery.gov).
Another cultural trend deals with shifting
ment store revenues is the reduced pri-
Additionally, designating funding toward gender roles. Women are taking more
vate nonresidential construction budget.
the construction sector was an important interest in the home improvement process.
From September 2008 to September 2009,
component of Obama’s plan. The U.S. Gen- For this reason it is important for retail-
this budget was reduced by 20%. Non-
eral Services Administration also report- ers to cater to the preferences of women
residential construction refers to funding
ed that since the implementation of the and create an attractive store layout that
for the following private categories: lodg-
American Recovery and Reinvestment Act appeals to this audience.
ing, office, commercial, healthcare, edu-
passed in February 2009, a total of more
cational, religious, amusement and rec- “Empty nesters” and adults who are no
than $1 billion has been invested in con-
reation, transportation, communication, longer primary financial providers for
struction. Much of this money has been
power, and manufacturing. On the other their children are more likely to invest in
spent on commercial building, transporta-
hand, public nonresidential construction home renovations. Because they no longer
tion improvements, and conservation and
spending increased by 6.1% from during have the burden of educational expenses,
development initiatives (Recovery.gov).
the same time frame (U.S. Census Bureau, they now have time and money to allocate
2009). New homeowners are especially benefiting toward home improvement projects.
from the Recovery Act, as the U.S. Depart-
Political Trends More building material An article posted on HGTV’s website sug-
ment of the Treasury declared in February
suppliers and home improvement retail- gests that while home construction levels
2009 that first-time homebuyers are eli-
ers are expanding their lines of certified may be low, homeowners may be more
gible to receive up to an $8,000 tax break.
wood products in response to consumer willing to renovate, resulting in stores
As of August 2009, a mere six months later,
demands. Environmental certification and offering more materials and labor services
the Act has helped an estimated 50,000
labeling for wood products is a way to reas- than in previous years. A study of 5,000
rural families across the country become
sure consumers that a store’s products are U.S. homeowners stated that the most
environmentally friendly and not harmful common renovation plans were for kitch-
to the forest ecosystem. Social and Cultural Trends New technolo- ens and bathrooms (“New Survey Reveals
gies associated with home improvement Homeowner Attitudes, Preferences Regard-
President Obama’s stimulus plan has taken
products and services are essentially cut- ing Remodeling Projects”).
action to support the housing and home
ting costs for consumers. In addition, an
situation analysis | 10
As indicated by the MRI data, there cur-
rently seems to be a fairly equal distribu-
tion of male and female users. Of all people
who have shopped at Lowe’s in the past 12
months, about 51% have been male, while
49% have been female. Additionally, about
44% of the people shopping at Lowe’s
have a post-graduate degree, which is a
greater percentage than any other catego-
ry in terms of schooling. By far the lowest
age demographic is the 18-24 year old
market; only 7.51% of people in this cat-
egory have visited Lowe’s in the past year,
compared to more than double (16.61%)
in the 25-34 bracket, who are probably first
time home buyers. Even 14.2% of the 65+
demographic have visited it in the same
period of time.
Lowe’s also seems to heavily target work-
ing, full-time employees. Just about 60%
of this group has been at a Lowe’s in the
past 12 months, while only 10% and 30%
of people have visited working part time
and not working at all, respectively. In
addition, Lowe’s is attracting couples more
than singles, widows, the separated, or the
divorced; 66.96% of married individuals
have visited, while only 23% have in the
ladder category. Also, in terms of family,
there seems to be a positive correlation
between age of children and likelihood of
visiting a Lowe’s. If someone has a child of
less than two years, there is only a 7.32%
chance they will have visited a Lowe’s.
2-5 years, 14.48%, 6-11 years, 19.32%,
and 12-17 years, 20.62%. This data sug-
gests that Lowe’s is especially attractive
to couples, probably because building a
home is something more commonly done
with people with families.
In terms of geographical location, our
stronger areas are clear cut. In the North
East, only 17.42% people have been in a
Lowe’s the past year, while in the south,
44.21% of individuals have. Areas are com-
parably low in the North East, Midwest,
and West regions as well.
situation analysis | 11
Regional Distribution Centers
New Stores in 2008
Where are our current store locations? What is our distribution?
geographical The highest population of Lowe’s stores can be found in Texas,
emphasis with 140 stores. Florida follows closely with 117 stores, then North
Carolina with 113 stores. However, the highest percentage of
stores for its population is its home state of North Carolina. The
distribution looks to push out from North Carolina with heavy
density in surrounding states: Virginia, Ohio, Tennessee, Georgia,
and Pennsylvania. Outside of this area stores grow continually
sparse out west, with concentration of stores around major cities
and population areas. In addition to having a presence in all 50
states, they have stores in Canada, and are even opening stores in
Mexico. With a concentration around cities and suburban areas,
Lowe’s store density reflects population density throughout the
country. It is more skewed toward stores in the Mideast, and with
scattered stores in some rural areas.
Lowe’s has 1,649 stores as of 2008.
situation analysis | 12
seasonality According to Google Finance, the three-month
period with the highest sales for Lowe’s has been
egies for these regions that relate to the types of
projects that their weather allows.
& timing the summer months of May to July, with 14.51
billion dollars in 2008 and 13.84 billon in 2009.
The winter months also offer the biggest holi-
day season of the year. With important celebra-
August to October collected 11.73 billion in 2008
tions like Christmas, Hanukah, New Years, and
and the slowest season was November to Janu-
Kwanza, many families are spending their free
ary with 9.98 billion in earnings. These numbers
time together during this time. While on the one
are probably due to the weather conditions asso-
hand, the holidays allow many homeowners time
ciated with these months. The most lucrative
off from work, their vacation time is for friends
season is in the summer, when weather is warm
and family, not home improvement. Also, many
enough for open air, or outdoor projects. During
consumers do not want their house under con-
this time contractors or even do-it-yourself hom-
struction when they are having their loved ones
eowners do not have to worry about harsh ele-
over. The construction creates unneeded mess
ments ruining or delaying their projects. The
and anxiety for the homeowner when instead
types of projects that we might see during this
they would rather focus on bringing the family
time would be building outdoor patios, building
and entire home, finishing a driveway, putting
new shingles on a roof, etc. All of these projects From anecdotal research, it seems that the busi-
are dependent on the weather. If there is poor est days of the week for Lowe’s would be week-
weather, these projects would be affected. This ends and holidays. While contractors may visit
factor would be particularly troubling in regions Lowe’s any weekday for their profession, most
where weather is more variable. In the south, adults have to work on these days and don’t have
particularly in the west, weather is usually not a time to go to the store. They therefore go on
factor in home improvement, unless it is too hot weekends when they have more time. On week-
to work. However, in the Midwest, East Coast, ends, lines are generally longer, and more staff
etc weather can be more questionable areas. is available for the higher traffic of customers.
Therefore, we will have different marketing strat-
situation analysis | 13
consumers & the
Consumers seem to have a fairly good idea of what the home
improvement product category is. Certain things are just known
to be at hardware stores, such as lawn mowers, tools, insulation,
nails, and lumber. Based on anecdotal research, it seems that
most people don’t know the difference between Lowe’s and its
competitors; it is often the case of whichever hardware store is
closer. Many people, however, will want to avoid hardware stores
altogether if they don’t consider themselves “hardware people.”
They would rather find someone who knows what they are doing
or even hire a third party to fix things for them.
Between Lowe’s and Home Depot, which is its main competitor,
there is a lot of discussion (most of the information gathered was
discussion on online forums; links are at the end of this section. In
order to minimize bias, discussion was taken into consideration
from different websites. Everything else in this section is based
on informal interviews). Based on my observations, it seems
that the majority think that Lowe’s is cleaner than Home Depot
and better organized. For example, when asked which store he
prefers, user “Skivvywaver” writes, “Lowe’s for me. Lowe’s tends to
stock more at night so I am not dodging fork lifts as much. Wider
aisles than depot also. For most things I go to Lowe’s. For what
Lowe’s doesn’t carry I’ll go to depot but I really hate that place”
(http://forums.techguy.org/random-discussion/582987-home- pensive items, like nails or nuts, where the customer is looking
depot-lowes.html). One user even writes, “I prefer Lowe’s - I like for a specific thing they know beforehand, and will not ask for
the layout and the blue color rather than HD’s orange and white help unless they need help finding where it is.
wire cage-shelves” ” (www.city-data.com). It also seems that the
When discussing the Consumer Decision Process, it again varies
majority of people think that the customer receives better ser-
significantly from consumer to consumer, as we are not offering a
vice at Lowe’s than Home Depot, which is definitely significant.
single product but a store that offers a wide selection of products.
For example, one user, “TampaKaren”, writes, “I’m lucky to have
I suppose the best place to begin is with “preference”, as they
both nearby. I picked Lowe’s because their staff seems to be
first have to choose which store to go to in order to purchase a
more friendly and able to answer my questions better. I’ve had
specific item. As stated above, it is often a case of which one is
people at my local Home Depot avoid eye contact and turn in
closer. This might be because the “search” is generally thought to
another direction” (http://www.city-data.com/forum/shopping-
be better at Lowe’s, which is seen as having better organization.
Selection is not as one-sided, although there seems to be a slight
another forum, OPie160 writes, “My answer is based on my own
perception that Home Depot caries more (again, this is based
experience, and with that said, Home Depot has a lot of stuff,
on research from online forums). All of the other steps of the
but Lowe’s personnel were friendly, and very, very helpful, more
decision making process depend on the item being purchased.
so than Home Depot’s people” (http://www.bookrags.com/qa/
The wide variety of potential points in the consumer decision
making process means that we must focus on the part of the
Both timing and purpose for many products in home improve- decision making process that we can make a biggest impact on
ment stores affect sales. Some items, like lawn mowers, are prob- through advertising. While many people currently just choose
ably a one-time purchase that might include comparison shop- a store on factors such as distance, with the help of advertising
ping and going to different stores. Other items, like hammers, are we can ideally build a real preference, where someone might
also not very frequent but do not require as much research for drive the extra distance to Lowe’s if they truly feel like they have
the average consumer. A consumer might ask a sales associate a better connection with them.
for help, but not necessarily. And then there are extremely inex-
need • awareness • preference • search •selection • purchase • use • satisfaction
situation analysis | 14
STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
• High geographic • Slowed expansion, es- • Lowe’s has recently • The instability of the
penetration across the pecially in the western recognized opportuni- current economy
United States, espe- United States ties to expand interna- - international relations
cially in the South tionally and has plans with Mexico consider-
• Lack of mobile apps to open five stores in ing our expansion into
• Offers their website marketing. Canada and two stores their borders
in multiple languages in Mexico
to cater to a diverse • Price per share has • Competition of small,
customer base declined over the past • Because Lowe’s is not locally owned business-
few years heavily concentrated in es that has emotional
• Recent growth in the western part of the ties with their consum-
market share as stated • Experience lower United States, opening ers or consumers who
in their 2008 annual sales in the winter be- stores in this region is are loyal to them
report cause home improve- an opportunity
ment projects are not
• Contributions toward generally initiated dur- • In recessionary times,
philanthropic events ing the holiday season above average custom-
and community in- er service is a competi-
volvement • Contractors are more tive advantage to any
likely to purchase sup- company. By educating
plies from The Home their employees, Lowe’s
Depot has the opportunity to
improve their service
and the customer’s
• Promoting energy-
efficient products may
attract more environ-
situation analysis | 15
Primary Research & Audience Analysis
esearch was conducted with ethnographies at two loca- results are natural and unbiased. We also wanted to avoid social
tions: Champaign and Bloomington, Illinois. It was per- desirability bias, because we could observe how people really
formed over a two-week period ranging from October acted rather than how they may have told us they act.
24 until November 4, 2009. Researchers observed on location
While observing customers was a very important part of our
in pairs and went twice to both Lowe’s and its main competitor,
research, we also wanted to see other differences in the physi-
Home Depot. We wore normal college student attire (as both of
cal stores. We looked at geographical locations, store layouts,
our locations are located in campus towns) in order to blend in
advertising within the store, and overall shopping experience.
with the environment.
Our ethnography methods gave us the opportunity to see the
While in the store we used the “fly on the wall” strategy. This store as a customer does. We thought that a guided tour would
method was chosen in order to gain customer insight and par- have given us a completely different experience.
ticular shopping habits. The researchers documented typical
It was very important for us to observe in both Lowe’s and Home
customer behavior, such as how often they asked questions, how
Depot. Being the two largest home improvement stores in their
many people were in a group, or how often they needed help. If
category, we wanted to be able to understand the similarities
they did need help, we noted how long it took to find an employee.
and differences between them. By understanding these unique
All of our findings were qualitative data and some results were
characteristics, we are able to more accurately determine how to
estimated. We also observed the type of customers that we saw
reach our target markets for our brand. We also chose to go to
in the stores. We documented general demographics such as age,
two different cities in order to see if there was any difference in
race, and gender. We thought that this method of research was
the communities shopping at the stores.
effective for our purposes because our presence had no effect
on the consumers’ behaviors. Many times with interviews and Finally, we chose to conduct our observations on both weekdays
surveys, subjects change their responses in order to please the and weekends. We wanted to see if the consumer demographics
interviewer, or they don’t understand the question, etc. Thus, our and traffic patterns differed depending on the day of week.
primary research | 16
Early Squatters Our primary target market Bureau, 2008). These consumers may have experienced. Financial security and
is comprised of young, educated, and be generalized as a “Generation Y” adult success are among the priorities of these
employed new homeowners, who we call cohort and were born between 1974 and new homeowners who are more concerned
“Early Squatters.” This group is between 1984. They share similar values and life- with having fiscal power than their parents
25 and 34 years old and has income levels styles and are sometimes referred to as or grandparents were (Tharp, 301).
categorized as middle- to upper-middle “Echo Boomers.” They are technologically
We chose to target adults 25 to 34 because
class. According to the U.S. Census in comfortable and reliant on the internet to
the brand loyalty of new homeowners may
2008, the median income for Americans discover information, make purchasing
not yet be established. Inexperienced,
in this age group was $29,484. The 2008 decisions, and interact socially. They also
independent homeowners are highly
U.S. census estimated that this age sector live in media-saturated worlds and spend
impressionable and may become brand
comprises 14% of the entire population large amounts of time consuming media.
loyal within the first few years of ownership.
(total of 39,868,000 citizens). About 47% These young adults are career driven as a
of this segment owns homes (U.S. Census result of the economic inconsistency they
A Day in the Life of
Sarah Johnson, an Early Squatter
Sarah is a 27-year-old financial analyst who graduated from the University of Wiscon-
sin-Madison in 2004 with a Bachelor’s degree in Finance. She recently moved out
of a small condo in the heart of Chicago’s financial district, married her long-term
boyfriend Brian, and together purchased an unfurnished, three bedroom/two and
a half bathroom house in Naperville, one of Chicago’s thriving suburbs.
On weekdays, Sarah wakes up in time to shower, get ready, grab breakfast, and be out
the door to catch the 6:00 A.M. train to Chicago. During the thirty-five minute ride,
she is likely to either listen to her iPod Touch or flip though the latest edition of
Self Magazine. Upon settling at her desk, Sarah skims though the online news
sites, particularly the New York Times and Chicago Tribune. Her day is often
packed with meetings, but when she is at her computer working on proj-
ects she is likely to be streaming radio from Chicago’s Adult Contemporary
station 105.9, The Fresh. When she has time to leave the office for a lunch
break, Sarah enjoys meeting up with friends who work in close proximity.
At 6:00 P.M., Sarah tries to leave work and catch the 6:50 P.M. train out of
Union Station. On her commute back to Naperville she listens to music
while preparing herself for the next day.
When Sarah finally returns home it is already 7:15 P.M. She
and Brian switch off cooking dinner, which is usually quick and
requires little preparation. Sometimes they decide to eat at a
restaurant in Naperville’s downtown area where there are lot of
other young adults also dine out. Together they enjoy watching
television shows like CSI, 30 Rock, Dancing with the Stars, and
The Office either live or through their DVR. Sarah also enjoys
checking her Facebook (which is restricted at work) and sending
personal emails to family and friends.
Sarah would best fit into the PRIZM categorization “Up-and-
Comers” who are 25 to 44-years-old without kids. “Up-and-
Comers” are college graduates with professional careers earning
a median income of $49,787, which is significantly higher than
the average (PRIZM Market Segmentation).
primary research | 17
The Realized We have named our second- The Realized are fairly acculturated into the Most importantly, the Realized are hom-
ary target audience the “Realized,” because US life but still have deep roots in their His- eowners. Lowe’s is currently expand-
they had dreams when coming to America panic culture and heritage. While they are ing their stores to Mexico (http://www.
and were lucky enough to live them out. almost always fluent in English, they also lowes.com/lowes2/AboutLowes/Mexico/
Our audience is Hispanic, lives in the upper- look to Spanish resources and still interact Mexico_en.html), and now would be an
middle class, and has disposable income. with media where the Spanish language excellent time to also expand our audience
They have immigrated to the United States is primarily spoken. Hispanics also tend to to Hispanics here as well. While most of
and have become successful here, and are find Spanish ads more effective and memo- the people in our audience have accultur-
likely to have children and have started a rable than English ads (Nielsen, Consumer ated to the US culture, they still heavily
family. They belong to the PRIZM group Insights), although this might be different empathize with other Hispanic Americans
“American Dreams,” in which the residents within our specific target audience that is and Hispanics in their home country, and
live in multilingual neighborhoods. Most more acculturated. as such will respond positively to well-
of the Hispanic adults here are middle executed Hispanic-targeted media. And
Overall, there is an estimated 46.9 mil-
aged, and their kids live in the comforts because Hispanics tend to use word-of-
lion number of Hispanics in the United
of upper middle class. The Hispanics here mouth frequently, positive associations
States, making them the largest minority.
are mostly homeowners and often have with Lowe’s have the potential to spread
Between July of 2007-2008 Hispanics were
families. The median household income among the group. Hispanics are a quickly-
the fastest growing minority group as well.
for the group is $55,497, compared to the growing market (Faura 5), and as of now are
There was 1.6 million Hispanic-owned busi-
median income of all Hispanic households largely ignored in home improvement store
nesses in 2002, and, based on the rate of
of $38,679. They shop at stores like Old marketing. Here we are presented with a
growth, the number is likely to be signifi-
Navy, they read Latina Magazine, watch great opportunity that we must act upon.
cantly higher now. In that same year, 43%
Telefutura, and they may own a Toyota.
of those firms operated in construction (US
Most of these individuals are college edu-
A Day in the Life of Roberto Cisneros, a “Realized”
Roberto Cisneros is a 35-year-old male living in Aurora, Illinois. Although Roberto is originally from Mexico City, his family moved to
Chicago when he was very young. His grandmother and many of his cousins are still living in Mexico, and he tries to visit them once
a year. Roberto speaks English and Spanish fluently. He attended the Illinois State University, where he studied to become a Spanish
teacher for high school students. Roberto is married and has two children. His wife Alejandra is from Monterrey, Mexico and also has
family still living in Mexico, along with relatives in Chicago. Alejandra did not go to college, and she works at the nearby hospital as a
receptionist. The Cisneros children attend the public schools in the area, and they speak mainly Spanish in the home with their family.
On a normal day Roberto goes to school around 7:30 am. He drives the 20 minutes to school while listening to Radio Unica. At school
he has a full schedule and teaches all levels of Spanish. At 3:30 he attends the school’s soccer practice, as he is the Varsity Assistant
Coach. Roberto is a huge soccer fan, and loves to help the kids learn more about the fundamentals of the game. It reminds him of
playing with his cousins in Mexico City as a kid. When he returns home, Alejandra
is cooking fajitas con arroz. The family sits down for a nice meal (after saying grace)
and talks about their day. After dinner, Roberto and Alejandra watch CSI and then
they tuck in the children for bed.
Roberto and his family still are very involved in Mexican culture, and they celebrate
many native holidays. They are devout Catholics and attend mass every Sunday at
their local church, where the priest speaks Spanish. They socialize with their Span-
ish speaking friends, but they are also friendly with the English speaking parents
of their two children. Alejandra will usually read Latina magazine in bed, while
Roberto checks his email and the latest Mexican Fútbol Standings.
The Cisneros’ live in a home that has some wear and tear. However, Roberto is fairly
good with his hands and his brother in law, Jamie, works in construction. There are
three bedrooms and one and a half baths. Roberto and Jamie are currently in the
process of redoing the kitchen. The appliances are old and faulty, and the cabinets
are extremely out of fashion.
primary research | 18
Location The two stores are located less than a mile boasts that they will match all competitors’ prices. We
from each other in Champaign. Both are located off concluded that it seemed like Lowe’s had a larger selec-
of Prospect Avenue, one of the busier streets in Cham- tion of products and also that their shelves were more
paign. While there are many other retail stores in the stocked. The appliance department at Lowe’s was one
area, Lowe’s location is better because it is located area in particular that Lowe’s seemed to carry a greater
right in the middle of these retail stores and also right number of different products. Prior to our observa-
in the middle of a lot of restaurants. This has potential tions we were under the impression that Lowe’s had a
to generate higher traffic and more visibility. larger product selection. Upon gathering our research,
we are confident that Lowe’s does indeed have more
Layout and Product Selection When we went into the
heavily stocked shelves with a larger, easier-to-find
two different stores, we each noticed that there were
selection of products.
a lot of similarities between the two. One of the first
things we noticed was that at both, the flooring and Customer Service and Workers Immediately after
lighting were very similar. Both had gray floors and walking into the Lowe’s store an employee greeted us
industrial lighting, which would be expected at a home with “hello, how are you?” For the most part no one
improvement store. Also, they both had a return desk really came up and asked if we needed help, especially
and a customer service desk located near the fronts when we were just standing observing
of the stores. Lowe’s seemed larger, as we counted
other customers. However, there were a couple times
around 51 aisles compared to 32 at Home Depot. In
at Home Depot, when walking by a worker, we got
addition, the aisles also seemed bigger and more
stopped and asked if we needed help finding anything.
organized at Lowe’s. Home Depot had eye-catching,
This was different from Lowe’s where we usually only
orange-colored items at the beginning of the aisles
got a smile or a hello from a worker. There seemed to
as well as miscellaneous orange banners throughout
be plenty of workers available at both stores so that if
the store. The reason we noticed this is because Home
you did need help you could easily find an employee.
Depot’s logo is orange, so all the orange products
When we went to Lowe’s on a weekend, it was more
matched well with it. One other interesting observa-
difficult to find a worker due to an increased amount
tion we noticed was that Lowe’s had a lot more cash
of shoppers. The age of the workers varied, but Lowe’s
registers, suggesting an easier check-out process and
had the widest range that we saw. Some employees
possibly shorter, more efficient lines.
appeared to be teenagers while others looked to be
Both stores offered standard home improvement in their 60s or 70s. For the most part the workers were
products and carried major name brand products. white males. We estimated that there were about 65%
For example, at Lowe’s we picked out a GE dishwasher male workers and 35% female workers. We did not,
and a GE microwave, and copied down the product however, see any Hispanic workers, which, while we
information and proceeded to check whether or not found slightly disappointing, makes sense consider-
Home Depot carried the same products at the same ing the ethnic makeup of the area. On neither trip did
prices. Home Depot did carry the same products and we see any workers who looked Hispanic and we are
the prices were very similar at both places. Lowe’s also unsure of the number of Spanish-speaking workers.
primary research | 19
Weekend vs. Weekday and Customers There were some major
differences between the observations we made on the weekend
compared to the weekday. First, the crowd was much larger on the
weekend for both places. We went on a Saturday morning and the
parking lots of both places were at least half full. On the other hand,
when we went on a Tuesday night, the two parking lots were close
to empty. Also, on the weekend there was a lot more staff at both
places because of the larger crowds. This made it a bit harder to
locate a worker. We did note that on both the weekday and weekend,
the Lowe’s parking lot had more cars than The Home Depot’s. After
observing the parking lot we went into the store to see what kind of
customers were at the two different stores. For the most part both
stores had very similar customers. On Saturday we saw what looked
to be retired couples, older couples, middle-aged couples, young
couples, men and women who appeared to be there by themselves,
Bloomington, IL and even a handful of teenagers. Most of the couples didn’t have
children with them. The customers on the weekday were not as
Champaign, IL varied, mainly because there were very few customers at the two
stores. Home Depot, during both visits, probably only had ten cus-
tomers, while Lowe’s probably had around twenty-five. Most looked
to be single males but we did notice one young couple at Lowe’s
that looked like they were accompanied by one of their parents. We
only saw one family with kids at Lowe’s and none at Home Depot.
During the week we only saw a limited number of different races;
at Lowe’s we saw one African American woman and one Hispanic
man. The weekend was more diverse but for the most part it was
mainly white men and women.
Bloomington vs Champaign As expected, the layout of the stores
was very similar in Bloomington and Champaign. However, one
major issue was the location of the two different stores in Blooming-
ton. Lowe’s is located in the middle of Bloomington in a very good
location, while Home Depot is located farther out of the city and
much further away from where most people live. Also, it is located
right across from a new Menards, which gives it a lot more compe-
tition then Lowe’s has. The customers we noticed in Bloomington
at both stores were very similar, probably because Champaign and
Bloomington are similar in size, Champaign around 78,000 and
Bloomington 73,000. Also, they are similar in median income, with
Champaign having a median income of $39,000 and Bloomington
$55,000. Their ethnic makeups are similar as well, with Champaign
being around 5% Hispanic and Bloomington being around 4 (USCen-
Overall Experience Overall, we saw a lot of similarities between the
two stores with regards to size, product selection, and the custom-
ers that each stores attracted. We were a little disappointed that we
didn’t see more young couples because that is our target market.
On the other hand, this gives us reason to implement our campaign
and create an effective strategy that attracts them. We saw very few
Hispanics at the store, which we expected because of the small
percentage of Hispanics that make up this area.
primary research | 20
media mix we designed incorporates many different
mediums to together create a successful campaign. We
took into consideration the age group and media prefer-
ences of our primary and secondary target audiences while creat-
ing this plan. We provide tentative media schedules, a breakdown
of the $35 million budget, and a discussion of measurement and television
evaluation to determine the effectiveness of our plan.
Media Objectives The following represent the media objec-
tives associated with implementing our media mix:
• Increase Lowe’s brand awareness among both our primary radio
and secondary target audiences
• Build brand loyalty, especially among new homeowners
• Increase reach, especially among the Hispanic market
• Utilize an efficient media mix to continuously reach our billboard/
market throughout the year transit
• Distinguish a separate brand identity from other stores
in the industry
media plan | 21
Nearly half of all home improvers (45%) cited magazines as their Top Hispanic/Latino Titles by Circulation Comida Y Familia
primary source of motivation for beginning a new home improve- (936,000), People en Español (469,000), Latina (400,000), Selecciones
ment project. In addition, magazines perform best overall at (355,000), Hispanic (290,000), TV Y Novelas (176,000), Vanidades
influencing consumers to start a search for merchandise online. (155,000) (Audit Bureau of Circulations, 2006).
39% of adults they surveyed reported that a magazine prompted
Primary Target Market According to a research report on www.
them to search online for merchandise (Magazines: The Medium
magazine.org, adults under 35 years old read more issues per
of Action, a Comprehensive Guide and Handbook, 2009).
month than adults who are over 35. Therefore, younger adults
Secondary Target Market Hispanics report magazines to be the are more likely to be in the top quintile of magazine readership.
medium that provides the most practical advice and is best at The median number of magazines read by adults 25-34 in the past
informing them about new products or services. month was 7.1. Adults 25-34 are 25% more likely than the general
population to read a magazine (www.magazine.org).
Top 10 Titles read by Hispanics/Latinos People, People en Espa-
ñol, National Geographic, Cosmopolitan, Sports Illustrated, Latina, Magazines that target our primary market: People, Self, Health,
Better Homes & Gardens, Selecciones, Maxim, Readers’ Digest (MRI, In Style, BusinessWeek, Details, Maxim, Sports Illustrated.
Magazine Audience Total Paid Total Aud. Total Readers in Notes
and Verified Primary Target
People A25-34 3,615,858 43,528,000 8,966,000 Median HHI: $67,129
Self Women, Media age 35 1,516,075 6,078,000 n/a Median HHI: $85,671
BusinessWeek small business owners 921,423 n/a n/a targets professional adults; average household
Maxim Men, 25-34 2,537,130 12,969,000 4,943,000 median household income: $69,381
Sports Illustrated primarily men 3,252,298 n/a n/a average income: $60,913
Total Readers in
People en Español F: 63%, M: 37%; median age 34 567,583 6,175,000 6,175,000 43% of readers own homes; Average HH size:
4.2; Median HHI: $40,047
Hispanic ave age-38, ave HHI: $98,500 183,931 1,449,000 1,449,000 average HHI: $98,500; 65% own homes
Magazine Full Page, 1x Half Page, 1x Full: Disc. Half Disc. Size # Issues $ per Issue Added Value
People $266,780 $256,109 Full 4 $1,024,435 editorial content
$180,110 $172,906 Half 4 $691,622 editorial content
Self $141,480 $95,500 $135,821 $91,680 Full 4 $543,283 editorial content
BusinessWeek $112,200 $70,200 $107,712 $67,392 Half 4 $269,568 editorial content
Maxim $241,756 $145,056 $232,086 $139,254 Full 4 $928,343 editorial content
People en Español $67,000 $43,550 $64,320 $41,808 Full 5 $321,600 editorial content
Sports Illustrated $336,000 $322,560 Full 3 $662,976 Full page in SI Homeowner edition
published on Apr 6
$230,200 $220,992 Half 3 $662,976
Hispanic $21,750 $13,594 $20,880 $13,050 Half 5 $65,251 editorial content
The above pricing was taken from each of the magazine’s current media kits.
TOTAL 16 $5,170,055
We assumed about a 4% discount for advertising within multiple issues during the year.
In addition, we will try to negotiate any Added Value available. % of BUDGET 14.77%
media plan | 22
Hispanic Television Television is a very important medium for the we will estimate an allocation of $300,000 to place spots on the
Hispanic culture and a has the potential to reach many Hispanic nine Telemundo stations for 25 weeks. Assuming costs per spot
consumers. Nielsen estimates that for the 2009-2010 TV year, are on average between $200 and $300 per spot, the following
the Hispanic market will be the fastest growing TV audience in chart summarizes our local television buys that will reach our
America. For this reason, television is an important medium to secondary target market.
use when trying to reach our secondary market. In order to keep
National Television The U.S. Census projects that in 2010 there will
advertising expenses down, we will not use a national campaign
be 83,095,000 Americans between the ages of 25 and 44. Because
that is specifically directed toward Hispanic consumers. Rather,
of the large size of our target market, we will advertise nationally
we will focus on areas labeled as High Density Hispanic Areas
on some of the highest rated shows in America.
(HDHA) and place spots in the top nine largest Hispanic markets,
as reported by a 2006 Synovate U.S. Diversity Markets Report: Choosing Format and Day-part The shows that we will advertise
Los Angeles, New York, Miami, Chicago, Houston, San Francisco, on a national level are: Dancing with the Stars, CSI, The Mentalist,
Dallas/Fort Worth, Phoenix, and San Antonio. and NBC Sunday Night Football because each is currently listed
in the top 10 of the highest rated shows in broadcast television
Choosing Format and Day-Part We will primarily place local
(Nielsen, 2009). We are also going to advertise on national late
spot commercials during prime-time programs on Telemundo,
night news because 50% of our primary target market still reports
a primarily Spanish-speaking network. Because exact costs are
getting their news via television (people-press.org).
unknown for placing local spots in the top nine Hispanic markets,
national tv buy
Program Netwk Rtg Viewers $/spot spots/wk CPP CPM tot cost/wk # wks tot. spots total run cost
Dancing With the Stars ABC 11.2 17,622,000 $198,647 1 $17,736.34 $11.27 $198,647 7 7 $1,390,529
CSI CBS 10.9 17,380,000 $198,647 1 $18,224.50 $11.43 $198,647 7 7 $1,390,529
The Mentalist CBS 10.4 16,169,000 $198,647 1 $19,100.67 $12.29 $198,647 7 7 $1,390,529
NBC Sun. Night Football NBC 13.7 22,392,000 $339,700 1 $24,795.62 $15.17 $339,700 7 7 $2,377,900
Net TV-L Nite/L News - - - $20,843 3 - - $62,529 25 75 $1,563,225
TOTALS: $956,484 7 - - $998,170 53 103 $8,112,712
Rates based off article: http://adage.com/article?article_id=139923 and handout given in lecture by Professor Nelson
local tv buy
Market Station Owner Channel ID Daypart $/spot sp/wk Total $/wk # wks tot. spts total run cost
Los Angeles KEVA-CH52 NBC Universal Telemundo Primetime $300 6 $1,800 25 150 $45,000
New York WNJU-CH47 NBC Universal Telemundo Primetime $300 6 $1,800 25 150 $45,000
Miami-Ft. Lauderdale WSCV-CH51 NBC Universal Telemundo Primetime $250 6 $1,500 25 150 $37,500
Houston KTMD-CH47 NBC Universal Telemundo Primetime $250 6 $1,500 25 150 $37,500
Chicago WSNS-CH44 NBC Universal Telemundo Primetime $250 6 $1,500 25 150 $37,500
Dallas-Ft. Worth KXTX-CH39 NBC Universal Telemundo Primetime $200 6 $1,200 25 150 $30,000
San Antonio KDVA-CH60 NBC Universal Telemundo Primetime $150 6 $900 25 150 $22,500
Phoenix KTAZ-CH39 NBC Universal Telemundo Primetime $150 6 $900 25 150 $22,500
San Francisco KSTS-CH48 NBC Universal Telemundo Primetime $150 6 $900 25 150 $22,500
TOTALS: $2,000 54 $12,000 225 1350 $300,000
tv summary Rates based off article: http://adage.com/article?article_id=139923
Total Spots Total Cost
Hispanic Spots 1,350 $300,000
National Spots 103 $7,485,128
Annual Cost $8,112,712
% of Budget 23.18%
media plan | 23