LOWEs: Optimizing the Marketing Communications Mix

Group No:-12 Dhruv Samel (PGP02.50) Saugata Mandal (PGP02.53) Makarand Takale (PGP02.56) Vipul Bali (PGP02.62) Vipin Kumar (PGP02.124)

About Lowes
Lowes is an American chain of retail home improvement and appliance stores that has retail stores in the United States, Canada, and Mexico. Founded in 1946 in North Wilkesboro, North Carolina, the chain now serves more than 14 million customers a week in its 1,781 stores in the United States, Canada and Mexico.
Provide customer valued solutions with best prices, products, and services to make Lowes the first choice of home improvement

Industry Leaders
-The largest home improvement retailer - most aggressive player in industry -Third Largest home improvement retailer - supplier of wood for cabinets, flooring, countertops and construction materials -Nations largest repair network with more then 10000 technician -- provide free in home design consultation with turnkey installation projects

Industry leaders
-Leading Scandinavian Furniture retailer -- provide shoppers a web tool to customize design as per choice, 3D views and price details

-Mainly product based firm -- provide installation services in collaboration with third party contracters

From OIS To NGIS

OIS Original Installed System - Since 1990s
sell customers the product they need installation by third party contracter as per specifications customer knows what they want

NGIS Next generation Installed SystemChange in Strategy in 2008

Based on kitchen remodeling concept, identified as new market and revenue source Go beyond installation by coordinating from initiation to post completion. Provide End to End solution for customers kitchen remodeling

Challenges
How to best engage the potential customers? What marketing strategies and methods to follow What is customer buying Decision process for kitchen remodeling? What should be the expense structure of marketing channels and how maximize ROI What is the best mix of traditional and Digital Media marketing method to educate and convince customer about value NGIS provide?

Customer Experience Mapping

to
understand customer buying cycle from beginning to end.

-Identify the Pain Points and Opportunities for Delight - Identify the best Marketing communication channels

Make Decision about positioning and engagment strategy of Services

Customer Experience Mapping Results

Preliminary Mapping
-Follow Proactive Approach -- get involved with customers in early stages of decision making process. -Guide the customer through the process - Gain the trust by insightful advice and service

- Gain customer Loyalty by customer satisfaction and minimizing complaints

customer Experience Mapping Results

Detailed Mapping
- Need to have strong relationship with other stakeholders i.e family friends, third Party contracters

Insight about Customers Must Have and Nice to have information

Communicating with consumers Online Advertising ,

Offline advertising (Traditional Media) SEO, budget planner, 3D modeling

Awareness

Consideration

Purchase

Consumer Buying process involves above three distinct stages Lavidge and Steiner 1961

Require synergy within media and cross media to effectively communicate with customers

Communicating with consumers Contd..

According to Stammerjohann, 2005, 3 reasons why earlier approach should work
Encoding Variability theory message from several sources -> Encode-> recalling likelihood increases Repetition variation theory- same message from multiple sources and different media improve attitudes Selective attention theory use of variety and repetition -> increased attention -> more elaboration -> improved attitude

Best Mix using Hierarchical Synergy model

Social Media

Banner Ads

Direct Mail Search here is organic (SEO based) as difficult to estimate cost of paid search with given data

Maximizing ROI - Suggestions

Media Channels Traditional TV Print In store Total Digital SEO Website E mails Social Media Total Direct Mail Grand Total 50000 50000 20000 75000 195000 25000 789230 6 6 3 10 25 3 250 100 125 200 75 Cost (in $) 450000 69230 50000 569230 %age contribution to budget CPM values 57 9 6 72 37.5 not available 2 39.5

Digital media has higher CPM but low percentage of budget values Using findings of hierarchical synergy model research paper, we suggest:
Direct mail is as important as Online so its budget allocation should increase to at least 8% Since awareness is not a major issue so budget allocation to traditional media can be decreased to 69%

Initially, ROI might not be the appropriate measure as need is to overcome the threat of Home depot so increase in awareness levels could be a better yardstick

If Virtue and Knowledge are diffused among the People, they will never be enslav'd. This will be their great Security. Samuel Adams

Thank you!