Utilising problem solving methods and drivers in media planning and strategy

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O N E STEP AH EAD

2. 2
A P R I L 2 0 2 0C H E P R O X I M I T Y
M E D I A P R O D UC T F U N D A M E N T A L S

3. 3
Media Product Fundamentals
Week 2 – Identifying the problem
April - 2020

5. “But why?”

6. A problem half stated
is a problem half solved

7. Remember last week we
spoke about the process …

9. And how it was more like an
interconnected team sport
rather than a relay.

11. Every function has specific
problems they are trying to solve,
but the group needs a common
problem to ensure alignment.

12. Step 1: Defining the problem

13. “We need to run some
activity in June”

14. “We want to try some
new things”

15. “We need to improve market
share by 3%”

16. “We need to spend $1m in June”

17. Let’s try one …

18. My café is not profitable

20. There are 3 approaches
I like to use to get my
head around a problem

21. Issue Analysis Tree
Hypothesis Tree
Decision Tree

22. Why is this important?
It creates alignment and ensures
focus and resource is deployed in
the one area

23. This can cause some discomfort

25. Resist the urge to
rush to a solution

26. At the same time, proceed with
momentum to analyse the parts
of the problem that matter.

27. “Can I
have it
by end
of day?”
“4-6
weeks”

28. 48-72 hours is the period from
receipt of brief, to completion of
initial analysis

29. Issue Analysis Tree

30. My café is not profitable
Let’s try one …

31. •Break the issue into
component parts
•Builds on alignment of
problem with alignment
of root causes
Problem
Statement
Issue/Hypothesis
Issue/Hypothesis
Issue/Hypothesis
Sub-issue
Sub-issue
Sub-issue
Sub-issue
Sub-issue
Sub-issue
Develop an issue analysis

32. My café is not
profitable
Decrease
expenses
Increase
revenue
Increase volume
of customers
Increase pricing
per unit
Reduce Rent
Reduce staff costs
Reduce
materials costs
Change location
Renegotiate commercials
Reduce salary levels
Reduce redundant roles
New supplier
Renegotiate terms
Reduce stock waste
Remove low margin products
Advertising
New Product Development
Promotional Activity
Cuisine change
Increase frequency
of customers
Loyalty Program
Engagement Scheme
Develop an issue analysis

33. Once the issues are structured,
you can size and evaluate each
for feasibility

34. My café is not
profitable
Decrease
expenses
Increase
revenue
Increase volume
of customers
Increase pricing
per unit
Reduce Rent
Reduce staff costs
Reduce
materials costs
Change location
Renegotiate commercials
Reduce salary levels
Reduce redundant roles
New supplier
Renegotiate terms
Reduce stock waste
Remove low margin products
Advertising
New Product Development
Promotional Activity
Cuisine change
Increase frequency
of customers
Loyalty Program
Engagement Scheme
Develop an issue analysis
Review Quality

35. Issue Analysis Tree
• Good for splitting issues into exclusive areas
• Helpful for analyzing below the surface
• A good way to open up the problem
• Helpful with multiple people and perspectives
• Good way to understand a business

36. Hypothesis Tree

37. Remember our initial problem
My café is not profitable

38. A Hypothesis Tree works the
same as an Issue Analysis tree …
but instead of working through
sub-issues, you work through
hypotheses to solve the problem

39. My café needs
to increase daily
item volume
Café can increase
consumption per
customer
Café can increase
opening hours
Café can open 2
hours earlier
Café can
implement delivery
Café can
lower prices
Café can discount
on 2 or more items
Café can stock
new lines
Café can
close later
Café can initiate
mandatory upsell
Café can hire
own resource
Café can use
external platform
Café can replace with
cheaper items
Café can find brand
new products
Café can diversify
existing products
Café can reduce price
of existing items

40. My café needs
to increase daily
item volume
Café can increase
consumption per
customer
Café can increase
opening hours
Café can open 2
hours earlier
Café can
implement delivery
Café can
lower prices
Café can discount
on 2 or more items
Café can stock
new lines
Café can
close later
Café can initiate
mandatory upsell
Café can hire
own resource
Café can use
external platform
Café can replace with
cheaper items
Café can find brand
new products
Café can diversify
existing products
Café can reduce price
of existing items

41. Hypothesis Tree
• Good ‘what if’ framework
• Helpful for quickly looking
at hypothesis feasibility
• Fast way to focus
• Multiple perspectives help
• Broadens thinking
• Breaks up a problem

42. Decision Tree

43. Remember our initial problem
My café is not profitable

44. A Decision Tree is a bit pointier and I find when
used upfront can lead you down tactical media
paths too quickly.

45. Invest $100k
Marketing and
Promotions
Refurbish café
and kitchen
New oven
2% interest
Improved display
Place in bank
Additional staff
Advertising
Promotion/Reward
Chef
1x FTE
Faster food preparation,
improvement in quality,
improvement in size.
More product visible,
enhanced demonstration
No risk, protected.
Widen exposure, promote
range and pricing
Tangible incentive, increased
sale volume
Improved food, improved
quality, new products
Increased service capacity,
speed, customer relations
High upfront cost to purchase,
install cost, training cost
Disruption, capital outlay
Low upside, no benefit
factoring in CPI
High cost, no tangible asset
Margin erosion, no guarantee
of efficacy
Employment obligation, cost of
hire, labour cost of hiring process
Increased liability, super,
insurance

46. Decision Tree
• Probably too early at this stage of process
• Very good usage when it comes to making
investment decisions
• We will revisit later

47. Benefit: In 48-72 hours we have really
scratched below the surface of
the problem we have to solve

48. Benefit: And the key stakeholders in
solving the problem have a
wide perspective on it.

49. The café example

50. The café example – initial challenge
My café is not profitable

51. The café example – what has been uncovered
Increase volume
of customers
Reduce Rent
Reduce staff costs
Reduce materials costs
Increase frequency
of customers
Renegotiate
commercials
Reduce redundant roles
New supplier
Reduce stock waste
Loyalty Program
Engagement Scheme
Review quality
Café can increase
consumption per
customer
Café can increase
opening hours
Café can implement
delivery
Café can lower prices
Café can hire own
resource
Café can use external
platform
Café can reduce price
of existing items
Café can replace with
cheaper items
Café can find brand
new products
Café can diversify
existing products

52. Next step: Evaluate and consider each
option methodically and at
speed. Dispose of
illogical/immaterial ones …
keep/develop the
robust/logical ones

53. My advice: In 48-72 hours discuss with
decision maker and get a steer
on where you’re landing.
Do not show the process, make
it quick and show the key areas
backed up with 2-3 compelling
data points.

54. An example:

55. Café can increase
opening hours
Reduce Rent
• Foot traffic data shows high volume
6-7am, and 4-5pm
• Large volume of residential traffic, as
well as corporate
• Compared with peak times, traffic in
closed window is 90%
• Extrapolated out, this could create up to
$800 in revenue per hour.
• No surrounding competitor is operating
during this time.
• Residential traffic presents new audience
and revenue opportunity.
• Data shows rent per sq. m is 15%
more than surrounding businesses
• Overall rental yield in area has been
declining YOY
• Occupancy levels down 10% L12M
• Rental agreement allows 90 day exit
• Significant leverage to recalibrate rent
to market competitive level – potential
saving = $90k PA

56. Reduce materials costs
Reduce stock waste
Increase frequency
of customers
• Wastage audit presented $2100 per
week in average food waste L4W
• Core reason due to incorrect preparation
levels being used, prepared stock being
disposed of with no recovery
• Partial reason (20%) due to food expiring
at levels faster than best practice
• $100k+ annual saving to be explored
through revised forecast, time based
discounts, repair to refridgeration
• Coffee card audit showed a year on year
individuals using coffee cards, by 15% but a
year on year decrease on frequency by 15%
• Average customer is visiting twice per week,
compared to 2.3 times a week in 2019
• Material upside to be explored from further
closer investigation into causes of this

57. Next week: Media realisation and maximisation.
Understanding the complexity of
message, the role of channel in audience
acquisition, and the most suitable
channels to blend these two areas.

58. Thank you.

59. Please join us next
Wednesday 6 May for
‘Media realisation
and maximisation’