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NAFCU
Management Development Institute
Branding, Advertising and Marketing
Todd Werner
Group Vice President, Marketing and Sales
November 5, 2008
1
What is a logo?
Have you seen these images before…
2
15
The Impact of a Brand
16
The Impact of a Brand
17
Branding
18
The traditional view of branding
“It’s what companies say in advertising, logos, and promotion”
a name a logo a tagline
Coca-Cola “The Real Thing”
“Just Do It”
Nike
“The Ultimate
BMW Driving Machine”
19
Branding
A BRAND is a PROMISE.
A brand is a promise. It is the expectations that reside in each
customer’s mind about your products, services, and your Credit
Union. Branding is making an emotional connection with the
member. It is the process of executing and managing the things
that make people feel the way they do about your brand.
Branding is NOT a corporate image package, a product, or
advertising campaign.
People fall in love with brands. They trust them, develop strong
loyalties to them, buy them, and believe in their superiority.
20
Branding
“Brands are belief systems … once you look at a brand as a
belief system: it automatically gains all the advantages that
companies strive for: trust, vibrancy, relevance, a sense of
values, community, leadership, vision, empathy,
commitment, and more.”
- Patrick Hanlon, Primal Branding
“Believing is belonging. When you are able to create
brands that people believe in, you also create
groups of people who feel that they belong … we all
want to belong to something that is larger than
ourselves.”
21
Branding
Branding IQ
1. A brand is a Benefit Chain
2. Strong brands command 9% more of a price premium
3. Branding can add 37% to a firm’s market capitalization
4. Successful brands start at the Executive Suite
5. The customer is most effective vehicle for promoting your brand
6. Branding does not increase the cost of sales
7. The value of the brand is a real number you can put on your balance sheet
8. Communications play 50% in building a brand
Branding Laws
1. The Law of the Word: A brand should strive to own a word in the mind of the customer. Example: It
can be said that Mercedes owns the word "prestige" in the mind of the customer. Example: Kleenex
tissues. Even with "Scotts" brand tissues, most people call them "Kleenex.” FedEx "owns" overnight.
Others include Q-Tips, Band Aide, and Xerox.
2. The Law of Singularity: The most important aspect of a brand is its single-mindedness. Brand is a
singular idea of concept that you can own inside the mind of the prospect.
Branding Imperatives
1. Discover our Brand: Acknowledge that we live in a branded world.
2. Build our Brand: Seize every opportunity to position our company in our client’s mind.
3. Communicate our Brand: Communicate a strong brand idea over and over again. Identify touch
points – places in which a client/customer interfaces with the product or service.
4. Leverage our Brand: Use brand identity to create sensory magnets to attract and retain clients.
22
Branding
“I have learned, based on my experience, that everything is dominated by
the market. So whenever we are struck with any obstacles or difficulties, I
always say to myself: ‘Listen to the market, listen to the voice of the
customer.’ That’s the fundamental essence of marketing. Always, we have
to come back to the basics. Because branding, image, or love marks are
determined by the customer, not us. We really cannot determine anything.
The customer does that. That is essence.”
– Yoshio Ishizaka, EVP Toyota Corporation
23
INTEGRATED
Branding Product Design
Delivery
“Where do we start?” CREATIVE
Personality Attributes
STRATEGIC
THREE KEYS TO BRANDING Vision
1. A good brand is strategically based: Brand Essence. Mission
Values
2. A good brand is creatively distinctive: Brand Meaning.
3. A good brand is seamlessly integrated: Brand Communications.
1. Brand Essence
We must answer the questions:
Who are we, where are we going, and what is the one thing that sets us apart
and makes us unique?
Mission: What do we do? Who do we do it for?
Vision: Where are we going? Why do we want to get there?
Values: What do we hold sacred? Who are we?
Discovery Stage: Questionnaires and interviews with employees and
customers.
24
“A product is something made in a factory; a brand is something
that is bought by the customer. A product can be copied by a
competitor; a brand is unique. A product can be quickly outdated; a
successful brand is timeless.”
– Stephen King, WPP Group, London
25
2. Brand Meaning
We are seeking to make a connection with the member/consumer.
It will have to be relevant; it will have to be emotional; it will have to create an experience.
Creative branding will require: The Story, the Promise, the Graphics.
The Story:
Love marks, Kevin Roberts: “Stories feed Love marks. They are how we explain the world to ourselves and give
value to the things we love. We all know how a great story at the right moment can change our minds or release
that vital ‘oh-now-I-get-it’… Stories have huge value in business because they look in the right direction…at people.
You cannot tell a story without characters and emotion and sensory detail. Even the dumbest road-crossing-chicken
jokes have it. And they capture us faster than the most elaborately produced annual report.”
The Promise:
We need to ask two basic questions in order to obtain the promise:
- What is the one thing you want people to take away when they see your credit union name?
- What is the promise you want to make to the member/consumer that will connect you emotionally?
We need to follow two keys to developing a promise statement:
1. Keep it simple
2. Keep it truthful
The Graphics:
Logos, Visuals, Copy.
26
“Brand is really about how the phone is answered, how
customers are greeted. The questions we ask when they
open a service with us, and if they feel we’re genuinely
interested in meeting their needs.”
– Larry Magnesen, Fifth Third Bank
27
3. Brand Communications
Internal:
Seven keys to Internal Branding:
1. CEO must be the brand champion
2. We must make it fun. We must create an experience for our own employees
3. We must communicate clearly and often. Newsletters, meetings, intranet, etc
4. Encourage ownership and give true empowerment
5. Provide actions steps
6. Educate our people
7. Reward brand champions
External:
Design products/services to communicate your brand.
Evaluate delivery channels and touch points for your target market and make sure they are
integrated
1. Electronic Media: Internet, e-mail
2. Mass media: TV, newspaper, radio, billboard
3. Alternative Advertising: Events, sales meetings, tradeshows, symposiums, etc
4. Environmental: CU signage, lobby, office graphics
5. Collateral: CU brochures, sales material
6. Customer Service: Training, tools, support, empowerment
7. Equip employees for customer service
28
The Modern Approach to Branding
“It’s a Managerial Lens for Decisions and Actions”
Finance
Human
Resources
Sales
Business Brand Marketing
Strategy
Operations
Distribution
R&D
29
Branding Summary
In Banking, Brand Matters More Than Ever
• A brand is the manifestation of who we are, what we stand for, and why people
might prefer to do business with us
• A brand takes on the foundational importance of doctrine, and serves as the
organizing principal for operations and culture
• It is a critical business asset, affecting sales velocity in the short-term and
competitive advantage in the long-term
• It extends beyond the Marketing Department into every element of an
organization – it must be owned by everyone
30
Branding Summary
• Start with the customer – ground your decisions in what they value
• Earn the relationship – deliver the experience consistently and repeatedly
• Make brand everyone’s job – we need engaged and well-prepared workforces
• Success requires:
Thoughtful choices
Adaptability in a rapidly changing environment
Management and financial commitment
Patience to understand that improvements will come in increments
31
Advertising
32
Advertising
Advertising is a form of
Communication!
33
Advertising
Advertising Rule #1:
K.I.S.S.
34
Advertising
Advertising Fact:
Consumers see over 3,000 (direct/indirect)
marketing messages each day
Source: The right to remain silent, peppers and Rogers, 2004
35
Advertising
How much is spent on advertising each year…
Rank/Category Total $$ spent across all media
#1 - Automotive
(Ford, GM, Toyota & Local Dealers) $19.6 Billion
#2 - Retail, Department
and Discount Stores $13.938 Billion
(Wal-Mart, Macy’s, Target)
#3 - Movies, media
and advertising $6.828 Billion
(AOL/Time Warner. Walt Disney, Miramax)
#4 - Food, beverages
and confectionery $6.420 Billion
(McDonald’s, Coca-Cola, M&M/Mars)
#5 - Pharmaceutical $7.51 Billion
(Johnson & Johnson, Pfizer, Merck & Co.)
Source - www.AdAge.com
36
Advertising
How much is spent on advertising each year…
How on earth can we compete?
37
Advertising
How on earth can we compete?
• The advertising plan must deliver multiple contacts across all mediums for
members and prospective members to remember it
It must be integrated across all: T.V. Radio, Print, Online, Direct Mail,
Outdoor, Grassroots, On-site, etc.
Reach and frequency must be consistent
• A message MUST be seen 6 – 7 times before an individual remembers it
• Don’t change your message on whim; brand advertising builds equity over time and the
clock starts every time you make a change
Deliver the brand promise though your service delivery
• Train and make the front-line and managers aware of the advertising campaigns
Carefully measure your Return on Marketing Investment
38
Campaign
Measurement
39
Correctly Measuring Direct Marketing
• Avoids simple metrics
• Includes precisely measured campaign results
• Forecasts future behavior
• Tracks growth, attrition and charge offs
• Calculates
Return on marketing investment
Profit contribution over the life of accounts acquired –
shareholder lifetime value
40
Avoids Simple Metrics Alone
• Response rate
• Cost of acquired accounts
• Number of acquired accounts
• Balances acquired
41
Response Rate
• Merely the top of the funnel
• Fails to recognize the value contributed from acquired
accounts
• Assumes all accounts yield and average contribution
• Fails to properly support champion/challenger testing
42
Cost of Acquired Accounts
• Fails to provide insights on differential profitability of
acquired accounts
• Seeks to provide a metric for measurement against other
channels – yet falls into the trap of average performance
Failure to examine profitability blinds the marketer to true
performance and leads to poor decision- making
43
Case Study – The Postal Route Targeting Approach to
Deposit Acquisition
• Targeting – drop all HH in postal routes near to branches
• Tailoring – mail the same creative/offer to all
• Premiums – offer cash or the latest premium manufactured
overseas
The grill / emergency road repair kit / toaster / blender /
smoothie maker
• Measurement – often claim credit for all new accounts opened in
tracking period
44
What’s wrong with Postal Route? Everything!
• No targeting – is it likely that all HH near a branch have the same
likelihood of profitable response?
• No tailoring – is it likely that all HH are going to have the same
needs and attitudes and behaviors related to deposits (or any
financial service?)
• Incomplete measurement
Little effort to match responders to mail stimulus
No use of Control (non-mailed) population to measure “walk-
in” population baseline
No tracking of account attrition over time
45
Case Study - Historic Response Rates to
PO Route Deposit Mail Drops 2002 - 2006
First PO
Box Type Drop
Data Source: Actual client statistics
46
Components of Proper DM Measurement
• Match respondents to mail file
• Create a Control that mimics mail file composition
• Scale up Control results to size of mail file
• Track response, accounts opened, balances
• Apply internally agreed pre-tax margins and account life
estimates – subtract Control
• Calculate predicted lifetime value
• Track campaign performance over time – attrition, growth and
charge offs
47
Components of DM Success
• Sophisticated segmentation
• Targeting and response models
• Creative tailored to segments
• Measurement of results on LTV basis
• Champion/challenger testing
• Measurement against control
48
Sophisticated Segmentation
Total U.S.
population with a
deposit account
Self-Directed Conservative Demanding Insecure Debt
Branch Advice Disengaged
Diversifiers Dependents
Bankers Seekers
U.S. incidence: U.S. incidence: U.S. incidence: U.S. incidence: U.S. incidence:
~15% ~25% ~20% ~20% ~20%
49
Targeting and Response Models
Segmentation de-averages the Gains Chart and enables finely tuned targeting
Predicted
response
decile Aggregate
S1 S2 S3 S4 S5 view
1
1.22% 1.03% 1.12% 0.58% 0.27% 0.66%
2
BAU 0.97% 0.67% 0.71% 0.42% 0.20% 0.46%
3 0.47%
mail 4 1.04% 0.66% 0.79% 0.42% 0.19%
file 0.84% 0.48% 0.73% 0.36% 0.18% 0.40%
5 0.35% 0.16% 0.45%
0.79% 0.41% 0.61%
6 0.31% 0.24% 0.11% 0.40%
0.65% 0.51%
7 0.56% 0.27% 0.48% 0.22% 0.36%
0.10%
8 0.51% 0.26% 0.45% 0.24% 0.08% 0.37%
9 0.45% 0.23% 0.40% 0.18% 0.06% 0.37%
10 0.42% 0.20% 0.30% 0.15% 0.04% 0.30%
Total 0.75% 0.38% 0.54% 0.38% 0.19% 0.42%
Mail more Don’t mail
50
Creative Tailored to Segments
51
Measurement of results on LTV basis
• Match account openings to mail file by name and address
• Track response, accounts boarded and balances
• Apply internally agreed net income per dollar of balances acquired and
account life
• Calculate discounted value over expected Life Time Value (LTV)
• Subtract cost of campaign
52
Champion/Challenger Testing
• Tweak offers based on research, competition, customer feedback
• Create appropriate test cells within segments
• Monitor and compare results – at the segment and branch level
• Adopt new champion creative
• Modify response models, mail volumes based on profit generated
per mail piece
• Iterate process
53
Measurement Against Control
• Create hold-out non-stimulated population of appropriate size
• Monitor and scale up results to mail size
• Subtract control performance from campaign results
• Measure control-adjusted profit and LTV
54
Susquehanna Bank case study:
February 2007 customer mailing
Susquehanna Bank Performance to Date - Deposits
February 2007 – present: Gross Performance
Total drops / mail volume: 3 / 1.1 mm
Total accounts opened: ~9,600
Total balances generated: ~$202 mm
Average balance: ~$21,000
Checking accounts generated: ~3,400
Average checking balance: ~$2,500
Note: A fourth mailing is being dropped in October
55
Susquehanna Bank case study:
Customer Response by Segment February 2007 customer mailing
Conservative Branch Bankers have the highest cross-sell rate and deliver
lush deposit balances
5.90%
3.80%
3.40%
Customer
response
rate
…
Self-Directed Conservative Insecure Debt
Diversifier Dependent
Branch Banker
Average deposit
$31,000 $27,000 $15,000
balance:
56
Susquehanna Bank case study:
Response Optimization May and August 2007 prospect
mailings
Prospect response rates improve with each mail cycle as response
models are refined
Response to Checking Lead Offer
0.65%
38% lift
0.47% 0.25% in overall
response
MMDA/CD/Savings
response rate 0.20% 48% lift
in checking
response
Checking only 0.40%
response rate 0.27%
NetGain! “generic” First generation “custom”
targeting models Susquehanna targeting models
57
Net of Control Measurement Susquehanna Bank case
study:
August 2007 mailing
The DM campaign is generating significant incremental deposit accounts
and balances above “walk-in” business.
Customers Prospects
3.25% 2.25%
Response
rate – all
deposit 1.00%
products 0.50% 0.35%
0.15%
Mailed Unmailed Net Mailed Unmailed Net
population control impact population control impact
population population
Incremental balances generated: $60mm $15mm
Return on marketing investment: 1,500% 150%
58
Susquehanna Bank case study:
February and May 2007 mailings
Checking Account and Household Retention
Households acquired using NetGain! have opened more net new accounts.
To date, households acquired in the February and May 2007 mailings have
demonstrated:
• No decline in number of active checking accounts
• 5% lift in total active accounts
• 12% lift in total household deposit balances
59
Marketing
60
Marketing
• What is Marketing?
• Research
• Segmentation
• Marketing Mix and the four P’s
• Marketing Plan Outline
61
Marketing
Marketing is an organizational function and a set of processes for
creating, communicating and delivering value to customers and
for managing customer relationships in ways that benefit the
organization and its stakeholders.
- AMA
62
Marketing
Helps to accomplish the following:
• 1% increase in customer satisfaction leads to a 3% increase in market cap
• 2% increase in customer/member loyalty leads to a 10% cost reduction
• 5% increase in customer retention increases customer lifetime value by 25%
• 50% of customers will pay 20 – 25% more for a brand they are loyal to
• Getting a new customer/member costs 7 to10 times more than keeping an
existing customer/member
63
RESEARCH
64
Why do research?
Research can provide an organization…
1. A generation of ideas for marketing action including the identification
of marketing problems and opportunities
2. The evaluation of marketing actions
3. The comparison of performance vs. objectives
4. The development of an understanding of marketing phenomena and
processes
Research is not a substitute for managers making decisions, but it is a
valuable tool for making more informed and better decisions.
65
What Does Research Do?
Research is the link between consumer or business needs and marketers’
services.
Research provides guidance for marketing planning, problem solving and the
ability to monitor a company’s progress in meeting strategic objectives—
Planning—what kinds of people buy/are likely to buy our products and
services? Are markets for our products increasing or decreasing? Are
there new promising markets for our products and services? Are the
channels of distribution for our products and services changing?
Problem Solving— What are the components of the products we should be
offering? What price should we be charging? Where and by whom should
we be selling our products? How much should we spend to advertise and
promote our products?
Monitoring—What is our market share? Are customers satisfied with our
products? How are we perceived by our target audience?
66
Types of Research
Qualitative – In-depth interviews that are used for exploratory purposes,
generating ideas, screening down ideas, better defining ideas or concepts
Focus Groups
In depth Interviews
Online
Teleconference
Quantitative –research that is projectable to the general market of interest
Online Survey
Telephone Interviews
Mall/ Central Location Test
Mail
Combination of Qualitative/Quantitative
67
Segmentation
68
Segmentation
• What is it?
The division of a market into different homogeneous groups of
consumers
• Allows marketers to tailor the marketing mix to specific target markets;
rather than offering the same marketing mix to vastly different
customers
• Market segments need to be:
Measurable
Accessible by communication and distribution channels
Different in its response to a marketing mix
Durable (not changing too quickly)
Substantial enough to be profitable
69
Consumer Market Segmentation
• The four primary bases on which to segment a consumer market
1. Geographic segmentation is based on regional variables such as
region, climate, population density and population growth rate
2. Demographic segmentation is based on variables such as age,
gender, ethnicity, education occupation, income and family status
3. Psychographic segmentation is based on variables such as values,
attitudes and lifestyle
4. Behavioral segmentation is based on variables such as usage rate
and patterns, price sensitivity, brand loyalty, and benefits sought
• Segmentation is built upon market research, market trends, and managerial
judgment; they are summarized by profiles, often given descriptive names.
From this attractiveness can be evaluated and target segments selected.
70
Illustrative Segmentation Approach
OBJECTIVES
Acquire
Cross Sell
Retain
71
The key to member acquisition and growth…
Advanced Segmentation
d
Beyond demographic rte r
o o
ep avi
Attitudes/Beliefs
R h
al/ /Be
tu e
Beyond “lifestyle” Ac sag
U
Simultaneous clustering of
needs, attitudes and behaviors
Needs
72
73
Lending Tree Video
74
Needs, Attitudes and Behaviors
Demographics
Behaviors
Lifestyle
They inform and do not drive selection
75
1. Survey based insights
Category - specific questions
Factors consumers use to determine product /
brand selection
Required product features - needs
Beliefs and attitudes about providers
Actual/reported product use
Channel orientation
Alternate provider receptivity
Scalar responses that enable sophisticated
statistical analysis and clustering
76
2. Advanced statistical analysis
• Screen out non-informing questions
• Apply advanced clustering
• Test and refine
al/
tu rted Population
Beliefs Ac po e
g
Re Usa grp1 grp2 grp3
FP1 FP2 FP3 FP4 FP5
Improved
Required segmentation
features structures
77
3. Typing algorithms enable segment scoring
Append external data from third parties
to customer and prospect files
Develop segment-typing algorithms to
yield 30% to 50% typing accuracy – a
100% to 250+% boost over random
78
Cracked the code for household-level marketing…
WHY
79
Deposits are the “profit stars” of
retail banking income…and paying dividends
Other
Other
13% 10%
Core deposit
Core deposit 90%
87%
Small Biz
Consumer
Note: Core deposits includes checking, savings, MMDA, and CDs; all other for consumer includes loans (8%) and securities,
trust, and insurance (5%)Source: FMCG analysis of; U.S. government data and benchmarks 2000
80
Intentionally incomplete
The Deposits category is comprised of five Financial PersonalitiesSM. Allows financial
institutions to prioritize targets based on alignment with their value proposition and strategic
focus to provide a critical marketing advantage.
Total U.S. population with
a deposit account
Self-Directed Conservative Demanding Insecure Debt
Diversifiers Branch Bankers Advice Seekers Dependents Disengaged
Average total deposit Average total deposit Average total deposit Average total deposit Average total deposit
balance1/index: $45K/147 balance1/index: $51K/166 balance1/index: $34K/109 balance1/index: $8K/25 balance1/index : $23K/73
U.S. incidence: ~15% U.S. incidence: ~25% U.S. incidence: ~20% U.S. incidence: ~20% U.S. incidence: ~20%
Dimensions
Values access via both
Engagement Strongly favors remote Strongly favors face-to-
remote and “brick & mortar”
preference channels face interactions
channels
no strong marketing “hot buttons”
Neutral across most dimensions;
Suspicious of banks; don’t
Loyalty and trust Tends to be loyal and Most loyal and trusting of
know whom to trust for
trusting of bank bank
financial planning
Decision-making Most likely to seek advice
style and advice Averse to advice from bank
from bank
Somewhat rate sensitive Looks for competitive rates Fee-sensitive; least rate-
Price sensitivity
but less likely to shop and fees sensitive
around
Confidence and Very confident and Not very confident or
knowledge knowledgeable knowledgeable
Discipline and Disciplined in approach to finances Financially undisciplined
control
…
…
…
…
…
1 Self reported total balances in checking, savings, CDs, and money market accounts
81
Deposit Financial Personality® Segmentation
Framework
Total U.S. population with a deposit account
Conservative Demanding Insecure
Self-Directed
Branch Advice Debt Disengaged
Diversifiers
Bankers Seekers Dependents
1 Self reported total balances in checking, savings, CDs, and money market accounts
82
Total U.S. population with a deposit account
Conservative Demanding Insecure
Self-Directed
Branch Advice Debt Disengaged
Diversifiers
Bankers Seekers Dependents
Self-Directed Diversifier
Avg. balance2/index:
$46K/147
Incidence: ~15%
83
Self-Directed Diversifier
• Favors remote channels
• Not loyal to one FI
• Adverse to advise from
a FI
• Uses bank primarily as a
utility for Transactions
84
Total U.S. population with a deposit account
Conservative Demanding Insecure
Self-Directed
Branch Advice Debt Disengaged
Diversifiers
Bankers Seekers Dependents
Conservative Branch Banker
Avg. balance2/index:
$51K/166
Incidence: ~25%
85
Conservative Branch Banker
• Strongly prefers face-
to-face interaction
• Does not seek advice
from FI
• Disciplined in
approach to finances
• Values broader FI
relationship
86
Total U.S. population with a deposit account
Conservative Demanding Insecure
Self-Directed
Branch Advice Debt Disengaged
Diversifiers
Bankers Seekers Dependents
Insecure Debt Dependent
Avg. balance2/index:
$8K/25
Incidence: ~20%
87
Insecure Debt Dependent
• Suspicious of FI’s; don’t
know who to trust
• Unlikely to maintain
higher minimum
balances to avoid fees or
get higher rates
• Fee sensitive; less rate
sensitive
• Financially undisciplined
88
Case study: Credit Union - FL
Case Study – 2007 Campaign
Segment based targeting/tailoring is being employed at a Florida Credit
Union
Generating superior returns on marketing investment (ROMI) for Prospects
and Customers
Performance Metric Aggregate
Account Response Rate .84%
Cost per acct. acquired $120
Total Balances $7,430,000
Average Balance $8,808
ROMI 185%
89
Q3 2007 Mail Drop
Bank: Northeastern Bank
Product alignment:
Premium checking product sent to Self Directed Diversifiers and
Conservative Branch Bankers
Free checking product sent to remaining 3 Financial Personality
segments
High Yield money market account sent to Self Directed
Diversifiers
CD offer sent to Conservative Branch Bankers
Campaign Tactics:
Visible Senior Management support
Employee Training – program and sales
Checking and High Yield product segmentation
Calling campaign with Financial Personality segment talking
points
Results:
90
Case Study • 1.24% Campaign Response Rate
• Over $89.0M in deposits
• Positive year one cash flow
• Average deposit of $23,600
$27,900
$33,700 1409%
1261% $23,700
$25,700
1169%
Campaign 1094% $12,300
ROMI 768%
1118%
Self- Conservative Demanding Insecure Disengaged
Directed Branch Advice Debt
Diversifiers Bankers Seekers Dependents
91
NE Bank case study:
Checking Account and Household Retention February and May 2007
mailings
Households acquired using NAB’s have opened more net new
accounts.
To date, households acquired in the February and May 2007
mailings have demonstrated:
• No decline in number of active checking accounts
• 5% lift in total active accounts
• 12% lift in total household deposit balances
92
Summary of segmentation ‘best practices’
• Survey based insights on consumer needs, attitudes and behaviors –
by individual product
• Tools that use external data to quickly and cheaply type consumers
into segments (the targeting)
• Tailored messages to most attractive segments
• Constant testing of champion creative and offers
• Broad channel deployment – DM, phone, Internet
• Use of LTV (profits) and ROMI as measures of success
• Segmentations are available now!
Show me you understand me!
93
Segment - Women
• By 2010, women are Nearly 2/3rds of Women manage
expected to control their money entirely on their own
$1.0 trillion, or 60% of
the country’s wealth –
Business week and Gallup
• Women purchase or
influence the
purchase of 85% of all
consumer goods –
including stocks,
computers,
automobiles and
health insurance –
Marketresearch.com
AARP 2007
94
Marketing Mix and
the 4 P’s
95
Marketing
• The major
marketing Place Product
management
decisions can be
classified into one
of these four Target
categories Market
• These variables
are controlled by
the marketing Price Promotion
manger to best
satisfy members in
the target market
96
Marketing Place Product
• Product is the physical product or service offered to the member. Target
Market
Product decisions include aspects such as function, appearance,
packaging, service, etc.
Price Promotion
• Pricing decisions should take into account profit margins and
probable pricing response from competitors. Price not only includes
list price but, also discounts, like relationship pricing
• Place decisions are those associated with channels distribution the
serve as a means for getting the product to the target customers.
The distribution system performs transactional, logistical and
facilitating functions. Distribution decisions include market coverage,
channel member selection, logistics and levels of service
• Promotion decisions are those related to communicating and selling
to potential members. Since these cost can be large in proportion to
the product price, a break-even analysis should be conducted when
making promotion decisions. It is useful to know the value of the
customer in order to determine whether additional members are
worth the cost of acquiring them. Promotion decisions involve
advertising, public relations, media types, etc.
97
Marketing Audit Place Product
• The initial step to define what is necessary to succeed and Target
Market
identifes gaps in the in the marketing process
Price Promotion
• Provides insight to competitive landscape and products
• Assists in identifying areas of opportunity
• How does it work:
Usually conducted by an independent firm, it analyzes the CU’s
objectives, strategies and execution of those strategies
A road map is provided back outlining areas to improve marketing
performance internally and externally
• Mystery shop the competition and review branch layout,
customer flow, marketing materials, staff/customer interaction
Identify areas of weakness and strength
98
Marketing Plan
99
Marketing Plan Outline
I. Executive Summary
I. A high-level summary of the marketing plan
II. The Challenge
I. Brief description of product to be marketed and associated goals, such as sales figures and
strategic goals.
III. Situational Analysis
I. Company Analysis
I. Goals
II. Focus
III. Culture
IV. Strengths
V. Weaknesses
VI. Market Share
II. Customer Analysis
I. Number
II. Type
III. Value Drivers
IV. Decision process
V. Concentration of customer base for particular products
100
Marketing Plan Outline
III. Situational Analysis
III. Competitor Analysis
I. Market position
II. Strengths
III. Weaknesses
IV. Market share
IV. Collaborators
I. Subsidiaries, joint ventures, and distributors, etc.
V. Climate
I. Macro-environmental PEST analysis:
I. Political and legal environment
II. Economic environment
III. Social and cultural environment
IV. Technological environment
VI. SWOT Analysis
I. A SWOT analysis of the business environment can be performed by organizing the
environmental factors as follows:
I. The CU’s internal attributes can be classed as strengths and weaknesses
II. The external environment presents opportunities and threats
101
Marketing Plan Outline
IV. Market Segmentation
I. Present a description of the market segmentation as follows:
• Segment 1
I. Description
II. Percent of sales
III. What they want
IV. How they use the product
V. Support requirements
VI. How to reach them
VII. Price sensitivity
• Segment 2
– Same as above
V. Alternative Marketing Strategies
List and discuss the alternatives that were considered before arriving at the recommended
strategy . Alternatives might include discontinuing a product, re-branding, etc
102
Marketing Plan Outline
VI. Selected Marketing Strategy
I. Discuss why the strategy was selected, then the marketing mix decisions (4 P’s) of
product, price, place (distribution) and promotion
• Product – the product decisions should consider the product’s advantages and how they will be
leveraged. Product decisions should include:
I. Brand name
II. Quality
III. Scope of product line
IV. Packaging
• Price – Discuss price strategy, expected volume, and decisions for the following pricing:
I. List price
II. Discounts (relationship pricing)
III. Bundling
IV. Payment terms and financing options
• Distribution (Place)
I. Channels – in-branch, direct, etc.
II. Motivating the channel/front-line
III. Criteria for success
IV. Branch locations (stand alone or on-site)
V. Logistics (full service or basic service)
Promotion
I. Advertising – how much and which media (Mass, Print, DM, Outdoor, Web, etc.)
II. Public relations
III. Promotional Programs
IV. Budget; determine break-even point for any additional spending
V. Projected results of the promotional programs
103
Marketing Plan Outline
VII. Short and Long term Projections for Revenue and Expense
I. The selected strategy’s immediate effects, expected long-term results, and
any special actions required to achieve them. This section may include
forecasts of revenues and expenses as well as the result of break-even
analysis. Consider all the marketing expenses from advertising to
incentives.
VIII. Conclusion
I. Summarize all the above
IX. Appendix
I. Exhibits
I. Calculations of market size, share of market, commissions, profit margins (spreads),
break-even analyses, etc.
104
Marketing Resources
• The Market Planning Guide: Creating a Plan to Successfully Market
Your Business, Products, or Service (Paperback) by David H. Bangs
• First Manhattan Consulting Group – white papers
• www.fmcg.com
• Marketing by the Dashboard
Light: How to Get More Insight, Foresight, and Accountability from Your
Marketing Investments by Pat LaPointe
105
Appendix
106
Why Most Marketing Communications Efforts Perform Poorly
Do You Have World-Class Marketing Communications that are Likely to
Generate a Positive ROI?
Targeted Do your marketing communications focus on a well defined target customer Yes? No?
that was selected based on profit related criteria?
Well Positioned: Are your marketing communications implemented to support the Yes? No?
most motivating positioning strategy available for the brand?
Integrated Are your marketing communications conceived and implemented as a part Yes? No?
of a harder-working integrated campaign?
Growth Focused: Are your marketing communications specifically designed for either
customer acquisition, customer retention, or customer development (increasing share of
Yes? No?
requirements)?
ROI Driven: Are your marketing communications utilizing implementation methods Yes? No?
proven to increase marketing ROI?
Measured: Are your marketing communications performance measurement systems Yes? No?
designed to indicate causality and corrective action?
If you have one or several no’s, it may be appropriate to take a closer look at
your marketing communications practices
107
Key Steps in a World-Class Marketing Communications
Implementation Process
Analytic Process for All Marketing Communications Efforts
s n
n es tio
a re era l
w sid ria
at
pe
A n T
Co
Re
What Am I
What Do I What is Trying to do to How Do I How Do I
Need To My My Target Successfully Measure
Know? Goal? Customer? Implement? Performance?
Identifying Establish Focusing Action Individual
relevant quantifiable marketing planning and action and
facts for the and activity on project overall
planned measurable acquisition, management campaign
activity and goals and retention, or for better marketing
converting budgets for customer performance performance
them into each marketing development measures
insights action (higher % of
requirements)
108
The Goal of an Integrated Marketing Campaign is to Move
Target Customers and Prospects Up the Adoption Process
Make it easier To reinforce Provide an
for the incentive get a
your prospect reasons for larger share of
Stimulate
target to try repeat your customer’s
Make suspects prospects
your purchasing of requirements with
aware of your curiosity for
Marketing product the the product
product (brand) your
Goals (brand) product
product (brand) (brand)
(brand)
Unaware Aware Consider Try Repeat Loyal
Customer Acquisition Management Customer Retention Management
Example of an Integrated Campaign Architecture to Move Target Customers up the Adoption Process
A) Advertising
B) PR
C) Direct Marketing
D) Promotions
E) Events, Sponsorships
F) OnlineMarketing
G) Channel Marketing
109
Here are Some Definitions to Help Identify and Segment your
Customers and Prospects
Unaware Aware Consider Try Repeat Loyal
What Prospects Prospects Prospects Customers Customers Customers
that have that have that are that have that use that
Are never only heard willing to had at your exclusively
They? heard of of your give your least one product, use your
your brand brand brand a try experience but not product
with your exclusively
brand
Potential “I have “I have
“I have “I had a “Every car
Quotes never Ford that owned two
from a heard of owned a Fords in this family
“Huh?” Ford, but my folks will every
Ford, but gave me my lifetime
have never would like and would buy will be
had one” years a Ford”
Customer to learn back” consider
(Prospect) more” another”
110
What World-Class Looks Like for Each Key Marketing
Communications Activity
Target What
Strategic What do I What is Step in How do I How do I
Marketing need to My Adoption Implement Measure
Services Tool Set know? Goal? Process? Successfully? Performance?
Positioning Goals to Choose between Message Customer effects,
Insights & inform, acquisition, development, market effects,
A) Advertising Message persuade, or retention or copy strategy, and financial effects
Management Guidelines remind loyalty media targeting
Positioning Insights - Brand, Product, Explicit role of Press, event, Ad equivalency, # of
positive messages,
B) PR what messages Investor Relations, PR within an editorial, and target impressions,
communicate best and Public Affairs integrated media
Management through PR? Goals marketing mix targeting
positioning
communication
C) Direct Customer database Acquisition rates, Focus individual List Maintenance & RFM, lifetime
Marketing variables linked to response rates, ROI, offers on acquisition, Segmentation, offer customer value, trial
purchase likelihood target customer retention, or loyalty Development & rates, response rates,
Management penetration (dialogue marketing) Fulfillment Management conversion rates
Target & positioning Response rates, Programs focused Redemption forecasting, Response Rates,
D) Promotions insights and redemption rates, on trial and repeat / offer design, ROI, % sold on
Management promotions success positioning improving share of merchandising and deal, competitive
stories communication requirements integration promotion rates
E) Event, Trade Show, Target habits, # of impressions, impact Focus efforts on Integrating with channels, # of trials, # of
interests, motivations of the medium, in sync awareness, negotiating contracts, impressions, ad
Affinity, Sponsorship and openness to w/ brand strategy, consideration, trial or valuing merchandising equivalency, Direct
forecasted ROI
Management your brand loyalty opportunities and total ROI
Target internet # of impressions, # Focus on awareness Optimizing banners, Hit count, information
F) Internet habits, interests, of hits, # of actions or consideration, or trailers, links, alliances, requests, qualified
Marketing information needs, generated, revenue trial, or repeat, or and response leads, customer calls,
artificial intelligence generated loyalty mechanisms and sales generated
Channel needs, % of sales time, Focus on specific Channel contracts, Channel marking ROI,
G) Channel channel additional support awareness, trial or channel implementation intangibles, extra
Marketing environmental goals, customer repeat activities guidelines, channel consideration, # of
analysis, acquisition and executed through the performance leads, # of new sales
development goals channel requirements
111
