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This Week’s Agenda

Integrated Marketing Communication Week 3 VIRTUAL Do Not Come To Classroom (07/09/12 – 07/12/12). This Week’s Agenda. Review for your Brand or Cause W3A2: IMC Step One – Identify customers/prospects Write about your customers/prospects on the Discussion Board Discussion Board

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This Week’s Agenda

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  1. Integrated Marketing CommunicationWeek 3 VIRTUAL Do Not Come To Classroom(07/09/12 – 07/12/12)

  2. This Week’s Agenda • Review for your Brand or Cause • W3A2: IMC Step One – Identify customers/prospects • Write about your customers/prospects on the Discussion Board • Discussion Board • W3A3: IMC Step Two – Estimating the value of customers and prospects • Using either Don’s Complicated Method or Joe’s Simplified Valuation Chart, write about your customer/prospect evaluation on the Discussion Board • W3DQ3: Participate in Discussion Question #3

  3. Great Integration #3: Major League Baseball • A life is not important, except for the impact it has on other lives. • Jackie Robinson

  4. Branch Rickey, Dodger GM • Envisioned 2 beneficiaries of integration: • An Evolutionary Benefit to Society • Bringing the races together on one playing field • A Financial Benefit to the Dodgers & MLB • Marketing to a new audience of Dodger fans • Bringing new fans into ballparks around the league

  5. 2. Valuation of Customers A Process of Behavioral Analysis Customer Migration $ Customer Retention $ Lapsed Customer $ Emerging Customer $ Prospect $ Customer Growth $ Marketing Organization

  6. Consumer Value in Practice: Tourism Case Study: Surf City USA

  7. Share of Purchases (%) Total Customers Annual Demand per Customer Units/ Revenue/ Gross Margin Brand X Our Brand Consumers X X X Brand Y Penetration Buying Rate Share Margin Determining Customer Financial Value Contribution to Brand $ C-BV = P x BR x SOP x M

  8. 1. Customer Identification From Behavioral Data 5. Budgeting, Allocation, Evaluation & Recycling 2. Valuation of Customers/ Prospects IMC 4. Estimating Return- on-Customer-Investment 3. Creating & Delivering Messages & Incentives The 5-Step Integrated Marketing Communication Process

  9. What is an IMC Strategy?…and how do I get one? • An IMC Strategy is aligned with business objectives: • It includes specific, achievable and measurable IMC Objectives • It forecasts Return On Customer Investment (ROCI) • It requires sacrifice – the essence of strategy is sacrifice! • Without sacrifice there is no strategy. • Without strategy an organization becomes weak.

  10. What is an IMC Strategy?…and how do I get one? • I’ve decided to prepare my own Oral Presentation. • My “cause” is the United States of America • My IMC objective is to increase tourist visits to the U.S.A. • So, here’s my “IMC Strategy for the U.S.A!”

  11. Situation Analysis • I’ve decided to try to build U.S. tourism…particularly by attracting nearby older customers and prospecting for younger, international, inbound visitors… • Based on specific population statistics and travel trends: • About 46% of the total Asia Pacific population, or 1.8 billion are young people under 25 years of age • They are consuming designer clothes, technology and travel (spurred by the rise of low fare airlines)

  12. Situation Analysis • But, I can’t really afford to speak to, or reach all of the people I’d like to… • And I certainly can’t manage to offer every possible type of vacation everywhere in the U.S.A. • So, strategically, I must sacrifice…which requires focus… • Therefore, I’ve decided to select California as the destination…specifically a “Sun and Sand” vacation spot…known around the world…….

  13. The Ultimate California Beach Experience

  14. The “Coastal Market,” particularly California Beach Cities, has become the name for a new national and international destination. • PKC Consulting, California Lodging Forecast

  15. Fast Growing CA Beach Communities: • Huntington Beach – Surf City USA • Del Mar • Pelican Hill • Rancho Malibu • Rolling Hills

  16. California beach towns exude • “Vacation Attitude!” • Huntington Beach – Surf City USA • Home of World Surfing Championships • Experience the laidback lifestyle • World famous pier • Miles of beautiful sandy beaches • Youthful personality • Warm weather and waves year round

  17. Partners • Explore America Tours • http://www.explore-america.com • Adventure Tours for International Students • Destination Partner – Surf City U.S.A. • Huntington Beach, California • Other Partners: • Golf • Disneyland • Surf Lessons • Kayaking

  18. Hotel Capacity • Hilton Waterfront Beach Resort • Hyatt Regency Huntington Beach Resort & Spa • Hotel Huntington Beach • New Hotel Capacity Recently Added • The Shorebreak, a Joie d’ Vivre Boutique Hotel • 5,000+ Hotel Rooms • New Downtown Shopping & Entertainment

  19. High-End Travel – Industry Growth Trend • California Tourism industry data – fastest growing income segment is $75,000+ (up 41 percent) • Represents more than 37.6 percent of overall travel revenue • Affluent, older households: • Take more trips • Spend more and fly more • Are a growing segment • Boomers and multi-income households Randall Travel Marketing research

  20. Under 25 Asian Pacific • About 46% of the total Asia Pacific population, or 1.8 billion young people • Affluence: consuming designer clothes, technology and travel (spurred by the rise of low fare airlines) • A previous young, emerging market (the Boomers) helped create a worldwide travel business after WWII • This audience is “addressable” i.e. online and international digital media • Anecdotal evidence shows these consumers admire the “surf lifestyle”

  21. Total Customers: 790,000 (we can reach) • Drive Markets (Shoulder Seasons) • LA – 500,000 • Phoenix –150,000 • Las Vegas – 90,000 • Fly Markets • Midwest and Eastern U.S. 50,000 • Off and Shoulder Seasons (Fall & Winter) • Total Prospects: 150,000 (we can reach) • International • Asia Pacific upscale youth market

  22. Customer Valuation: • Drive Markets • LA – 4,000 PAX • Phoenix – 3,500 PAX • Las Vegas – 2,500 PAX • Fly Markets • Midwest and Eastern U.S. – 1,500 PAX Total Customers: 11,500 Penetration: 0.0145 (1.4%)

  23. Prospect Valuation • International • Asia Pacific youth market • 2,500 PAX Total Prospects: 2,500 Penetration: 0.0166 (1.6%)

  24. Product Development • 5 Day/4 Night Drive Package • Hotel Shorebreak (4 nights) • $209 deluxe per night, incl. Breakfast = $836 • $50 x 2 (massages) = $100 • $50 x 2 (surfing museum; car show) = $100 • Misc. = $164 • Total = $1,200 ($600 PER PAX) • Margin = $120 ($60 PER PAX)

  25. Product Development • 5 Day/4 Night Domestic Fly Package • Domestic Air = $500 PER PAX x 2 = $1,000 • Airport Transfer = $35 PER PAX x 2 = $70 • Hotel Shorebreak (4 nights) • $209 deluxe per night, incl. Breakfast = $836 • $50 x 2 (massages) = $100 • $50 x 2 (surf museum; car show) = $100 • Misc. = $94 • Total = $2,200 ($1,100 PER PAX) • Margin = $2200 ($110 PER PAX)

  26. Product Development • 9 Day/8 Night International Fly Package • R/T Intl. Air = $941 PER PAX x 2 = $1,882 • Airport Transfer = $35 PER PAX x 2 = $70 • Hotel Shorebreak (5 nights) • $209 deluxe per night, incl. Breakfast = $1,045 • $50 x 2 (surfing lessons) = $100 • $50 x 2 (parasail or kayak) = $100 • Misc. = $103 • R/T Ferry to Catalina = $45 x 2 = $90 • Hotel Zane Grey (Catalina (3 nights) • $189 deluxe per night, incl. Breakfast = $567 • Total = $3,957 ($1,978.50 PER PAX) • Margin = $395 ($197.50 PER PAX)

  27. Share of Purchases (%) Total Customers Annual Demand per Customer Units/ Revenue/ Gross Margin Brand X Our Brand Consumers X X X Brand Y Penetration Buying Rate Share Margin Determining Customer Financial Value Contribution to Brand Remember this chart? $ C-BV = P x BR x SOP x M

  28. Surf City USA Customer Financial ValueJoe Hartnett Simple Chart

  29. Creating Customer & Marketplace Value When the Marketer Loses Control of Message

  30. The Customer in Control • Value is in the eye of the beholder – what value does the consumer see in the product or service? • Networked, interactive and dialogue-driven marketplace behavior is now the norm – how do we now structure IMC to participate? • Enhanced value – e.g. personalize mass-produced products – • Lee Jeans (customer measurements lead to custom jeans) • Dell (customer orders specific components needed/desired) • Personalized mobile phone rings

  31. Eight Guiding Principles of IMC • Become a customer-centric organization • Use outside-in planning – a marketing organization • Focus on the total customer experience, not just on marketing • Align consumer goals with corporate objectives – customer #1 • Set customer behavior objectives – Retention, Migration, Conversion • Treat customers as assets – Lifetime value • Streamline functional activities – Around messages + incentives • Converge marcom activities – and achieve integration!

  32. The “Five Rs” of IMC • Relevance • Receptivity • Response • Recognition • Relationship

  33. Three Key Questions • Who are the Brand’s best customers, and why? • Who are the Brand’s best prospects, and why? • What information does the marketer need to be more relevant to customers and prospects?

  34. Thank you! See you next week, 07/19/12 Guest Speaker!

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