Introduction to Advertising

RMIT International University Vietnam

Bachelor of Communication

ASSIGNMENT COVER PAGE

Your submission will not be accepted unless all fields below are completed

Course Code: MKTG1294

Course Name: INTRODUCTION TO ADVERTISING

Location where you study: RMIT Vietnam SGS Campus

Title of Assignment: Advertising strategy and media plan

SKY
File(s) submitted

Student name: Tran Thi Mai Anh

Pham Thanh Khoa

Chau Tran Minh Dat

Le Nguyen Hoang Long

Learning Facilitator in charge:

Assignment due date: 13 September 2010

Date of submission: 13 September 2010

Number of pages including this 19

one:
Word Count: 3,541

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 Introduction to Advertising

Table of Contents
1. INTRODUCTION.......................................................................................................................4

2. COMMUNICATION STRATEGY................................................................................................5

 SWOT Analysis......................................................................................................................5

Key Learning...............................................................................................................................5

Communication Objectives..........................................................................................................6

Proposition...................................................................................................................................7

Values, Personality & Brand Essence...........................................................................................8

3. MEDIA PLAN............................................................................................................................9

Media Objectives.........................................................................................................................9

Advertising on Television.............................................................................................................9

Advertising on Magazines............................................................................................................9

Advertising on Internet..............................................................................................................10

Public Relations..........................................................................................................................11

Sponsorship Marketing Activities..............................................................................................11

Direct Marketing........................................................................................................................13

Membership Card......................................................................................................................14

Media Schedule.........................................................................................................................16

Budget........................................................................................................................................16

4. Big Idea/Creative Concept....................................................................................................17

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Reference.......................................................................................................................................19

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1.INTRODUCTION
IKEA is a well-known household name which sell all kinds of household fittings form; the
smallest t-spoon to huge double beds. IKEA first started in the 1940's in a small farming village
in southern Sweden where it was founded by Ingvar Kamprad when he was 17 years old. After
seventy years operating, IKEA has establish a new concept that base on offering a wide range of
well – design, functional home furnishing products at price so low that as many people as
possible will be able to afford them. This reports will more analysis about communication
strategy and prepare the new media plan for this type of product launching in Vietnam with
budget is $400,000. The IKEA creates the media plan in 6 months and the first store will be
opened on 5 January 2011.

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2.COMMUNICATION STRATEGY
 SWOT Analysis
Strengths
 Broad of global distribution network
 Focus on providing product at low and
affordable cost.
 Strong international brand
 Be a western product with modern
design -> attract more customers from
ASIA
 Increasing use renewable material
 Wide product range
Opportunities
 Less competitor in the Vietnam market
 Increasing demand for greener product
Weaknesses
 Poor customer service (customers assemble
the product by themselves)
 Be a global company therefore IKEA's
global activities may make it difficult to
control standard
Threats
 The regulatory environments across the
globe vary and can affect how IKEA does
business and its product costs, especially the
use of natural resources
 Vietnamese mainly transport by motorbike
-> difficult to loading the product by
themselves

Key Learning
SKY has success to build a global brand but focus on a low price offer in home furnishings to
help people live better life at home. Moreover, SKY has built a unique business model which is
Unlikely with other brands in the world, when people choose the product of SKY, they have
accepted the concept that, they have to assemble the SKY product by themselves. However, In
the Vietnam Market, SKY is facing with the issue that, the major of Vietnamese are using motor
bike, therefore they hard to adjust the concept of SKY in the Vietnam market. Additionally, SKY
in Western countries focus on low price but when come into the Vietnam market they need to

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 Introduction to Advertising
adjust the pricing strategy because Vietnam is still a developing country and Vietnamese income
is also low compare with other Asian countries.

Communication Objectives
 Gain 60 percent brand awareness of target audiences in the first 3 months launching
period.
 Encourage 15 percent number of target audiences come to SKY stores after 6 months
launching campaign.

Category Insight
 The home furnishings industry in Vietnam is mostly covered by domestic companies such
as Loi Phat, Pho Xinh, Nha Dep, Chi Lai, etc and a few from China.
 Domestic brands focus mostly on high-class consumers. Meanwhile, Vietnam is still a
developing country, so there is a large number of consumers belong to lower-class and
middle-class. SKY will be successful if they still apply their low-price strategy in
Vietnamese market.
 Vietnam is very potential market for low-priced products of SKY.
 SKY will bring a new and creative service for Vietnamese consumers when coming to
SKY outlets.

Product/Service Insight
 SKY trademark represents the leading home furnishings brand in the world with more
than 300 stores in more than 35 countries.
 Provide a wide range of products.
 SKY concepts are based on well-designed, high quality, and especially with low prices.
 The prices are low because they minimize transportation and storage costs.

Moreover, customers also contribute to make prices low. They will select and pick up the
products by themselves, transport them home and then assemble them by themselves. This is a
creative and unique selling service of SKY.

Consumer Insight/Target Audience

 Geographic

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 Density: urban areas, including Northern and Southern of Vietnam.
 Focus on Ho Chi Minh City.
 Demographic
 Family life-cycle: young and married with children.
 Occupation: office workers.
 Income: at least 3 million – 5 million VND.
 Middle-class people.
 Psychographic
 Care about where they live.
 Care about what it feels like at home.
 Appreciate simple design and modern furniture.

Proposition
SKY is the perfect choice for their target customers because they provide:

 Global brand with local price

 High quality and simple designs

Support
SKY group is a global brand with over 300 stores, 123,000 co-workers in 25 countries around
the world. According to 10 Keys to SKY’s Low Prices (n.d), three of ten things help to reduce
the cost of product are:

Waste Reductions
SKY's designers and engineers strive to reduce the amount of material used and wasted in
production.  Additionally, many waste products are then used to make new products, further
reducing overall costs both to the pocketbook as well as to the environment.

Automatic Selling
Despite the showrooms showcasing SKY furniture in real living arrangements (typically located
upstairs), SKY is a warehouse store designed to maximize customer self-sufficiency with
minimal reliance on staff assistance. Cost savings stem from reduced wages, training costs and
lower design, maintenance and outfitting costs associated with the marketplace and warehouse
areas of the stores.

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In-house designs
Virtually all of SKY's products are designed by SKY's staff of in-house designers who are well
versed in creating trend-setting designs while working from a set price point.  In-house design
also means there are no large design commissions to be paid.

Values, Personality & Brand Essence

For a long time, SKY has become a big brand on many countries. Their achievement is seemed to be a
miracle. But the main aspect is not about where they are standing now, more than that is who they are and
what brings them to success. In 2007, the book "The Testament of a Furniture Dealer" written by the
IKEA father, Ingvar Kamprad, has established to unite SKY ideas as well as show their personalities.
These are some personalities that create the SKY today.

1. The product range – their indentity

2. The SKY spirit – a strong and living reality

3. Profits give them resources

4. Reaching good results with small means

5. Simplicity is a virtue

6. Doing it a different way

7. Concentration – important to their success

8. Taking responsibility – a privilege

9. Most things still remain to be done – A glorious future!

Most of people know SKY as the brand of cheap furniture. This aspect is really important in Vietnamese
market due to the fact that Viet Nam is a developing country; most of the population is middle class.
Furthermore, Viet Nam customers often consider a lot when they decide to buy something. The main
reason is they not only want the product with the cheap or affordable price but also acceptable standard.
Knowing this, not only in Viet Nam but also in many other countries, SKY has come up with the new
idea that is never done before. "Low price with a meaning", that is the unique point of SKY. There no
doubt that SKY essence is totally fit in Viet Nam market.

3. MEDIA PLAN

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Media Objectives
 Concentrate heavily on advertising tools (TV, magazine, and internet) and sponsor for
charity events.
 Reach 65 percent of target audience with a frequency of 4.0 within first month launching
the campaign.
 Generate 85 percent reach with 3.0 frequencies per month during launch.

Advertising on Television
SKY plans to advertise in HTVC channel. The reason why SKY chooses HTVC channel is
because this is a home shopping network. With this channel consumers can interact to the
manufacturer because they can call to ask for the information or call to book the product.
According to Chitty, Barker & Shimp (2008), television advertising is particularly desirable
when a company launches a new brand in market before it achieves national distribution.
Therefore it is suitable for SKY to use Television advertising as a major media tool to launch a
new brand in Vietnam. Following is the detail cost when use HTVC channel.

Channel Program Time Duration Unit cost Amount Total cost

of ads
HTVC Shopping Prime time (8 6 months $500/slot/minute 200 $100,000
online PM to 10 PM)

Advertising on Magazines
According to Quester et all 2007 when the Advertisement is strategically placed in the right
magazine, it can improve the business many times over. Therefore SKY chooses advertising in
magazine instead of newspaper. Moreover, SKY advertise in magazine because there are many
advantages which magazine advertising has such as selective, long life or ability to present
detailed information. SKY decides to advertise their product in Nha Dep, Tiep Thi & Gia Dinh
and The Gioi Phu Nu magazine. The reason why SKY chooses those magazines to advertise is
because they are popular magazine in Vietnam talk about the interior design with hundreds of
thousand prints per year. We plan to advertise each of them every two weeks during 6 months.
Moreover we estimate that the cost for this tool will be ($800+$700+$900) x 4 magazines x 12
weeks (every two week during 6 months) = $28,800.

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Advertising on Internet
SKY has used about 5% of total budget for internet advertising. Because the budget is limited,
therefore SKY cannot advertise in any aspect of the internet. As the result in order to use
effectively that amount of money, SKY focuses on advertising in online newspaper.

Online newspaper:

The advertisement of SKY will be appeared in the shopping category of two popular online
newspaper websites in Vietnam, http://www.vnexpress.net/ and http://www.dantri.com.vn/.
Following is the detail of online advertising

Place of putting advertisement: Shopping category

Timing: December 2010 to May 2011

Time change new advertisement: every month

Costing: $15000/month for vnexpress.net and $1200/month for dantri.com.vn (adapt from
http://www.fptad.com/)

Total cost:

 VnExpress: $1500 x 6 months = $9,000

 Dantri: $1200 x 6 months= $7,200

Public Relations
According to Wells and other authors (2008), public relations is intended to generate goodwill
for an organization and has the objective of creating trust and maintaining the integrity of the
organization. Due to these advantages of PR, besides using mix of advertising tools we also use

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PR activities to build a trust in SKY’s target audiences. First of all, because SKY is a completely
new brand in Vietnam market, press release is very necessary in this case to official introduce
SKY. Secondly, we decide to create a new SKY website in Vietnamese version to provide more
information for Vietnamese customers. Next, organizing charity events or social activities are
also main parts of PR activities. Moreover, SKY wants to care about the development of
Vietnamese people as well as education in Vietnam, providing free facilities for schools in Cu
Chi and Can Gio province. Because the life standards in these two places are still poor, SKY
wants to give more chances for people here, especially homeless children, to come to school.

Sponsorship Marketing Activities

To promote for the advertising campaign, attract the attention of public in the special way, SKY
wants to be one of the sponsors for game shows Sieu Thi May Man (LuckySupermarket) and
reality show Ngoi Nha Mo Uoc (The Dreamed House).

Game show Lucky supermarket is the product of HTV7 channel .The audiences of this show
only focus on South Vietnam. Tran (2010) provides information that even this show limited the
audiences by each domain but it still be one of the game show has highest rate audience at the
moment. Second, the number of people waits to attend on this game show rise by thousands of
people. The fascination of this show could be due to the attention of Vietnam celebrities in role
of player and the value prize. The main target audience of this show is housewife, parents,
student anyone who likes shopping. So become one of the sponsors for this show, SKY can
develop their image and reputation in their main market, Ho Chi Minh City and neighboring
provinces and generate the attention on the target audiences of this show. Finally, the cost for
sponsor is very reasonable, about 10,000,000 VND per game. As HTV’s policies for sponsors,
the SKY’s information on HTV’s magazine will be published free if SKY sponsor for more than
2 game of Sieu Thi May Man.

The reality show the dreamed home is the product of the cooperation between HTV channel and
Pomina steel company. The main goal of this show is help poor people who do not have the
ability to build the house. With the norm of The dreamed home, the good leaves protect the
worn-out leaves, they want to bring to poor people their own house by using money from
benefactors and material form Pomina steel company. The cost for every house usually fluctuate
from 20,000,000 to 25, 000, 0000 VND. To become a vice sponsor for The dreamed home, SKY

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will sponsor the facility for these houses with the cost for facility will be 5 million VND. So the
cost to sponsor for 6 months will be maximum 120,000,000 VND.

Beside sponsor for these 2 shows, SKY will have a short TVC on HTV7. The TVC will appear
before and after on the game show Lucky Supermarket and before, between and after game show
The Dreamed Home. The amount of time for every TVC is 5 seconds.

With the general characteristic of these shows is:

 Broadcast time is in the golden time (from 8pm to 10pm)

 Most of their target audience is office workers, family.
 These things can satisfy the criterion of SKY that is attract the attention of many people
and not wasted coverage.

Table of cost for sponsoring

Channel Show’s name Time Duration Sponsor cost Total cost
(game/week)

HTV7 Lucky supermarket Golden time 6 months 10,000,000 VND 240,000,000

( 8:15 to 9 p:m
every Sunday)
HTV7 The dreamed home Golden time 6 months 5,000,000 VND 120,000,000
( 8 p:m to 8:20
p:m every
Saturday)
Total cost to sponsor for 2 shows = 600,000,000
($31,000)

Table of cost for TVC

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Channel Show’s name Position Time Duration Cost/month Total cost
limit
HTV7 Lucky supermarket Before and 5” 6 months 10,000 $60,000
after
HTV7 The dreamed home Before, 5” 6 months 12,000 $72,000
between and
after
Total cost for 2 shows = $132,000

Direct Marketing
Just like any other home furnishings companies, SKY also has catalogues. They have online
catalogue and printed catalogue. But that is not all. Their catalogue is not simply a normal
catalogue. Not only it represents the product, it also shows people their ideas about furniture and
the way they decorate interior. As a result of this big difference, the SKY catalogue has become
the first of the top ten secrets which lead them to success. Each year, they establish a new edition
catalogue. The amount also reach the massive which is 118 million catalogues printed under 23
different languages.

From this point of view, catalogue is an important part of SKY launch. With these strengths,
hopefully the catalogue could bring people to SKY more and more due to the fact that it make
customers more excited with its idea.

In launching day, a thousand of catalogues would be sent to customers who come first. Also
SKY will help customers use the online catalogue. Then, they will explain the ideas from the
catalogue so that people can understand deeper. After all, SKY will give them some advices
about a perfect interior space.

After launching day, many small pieces of catalogue would be printed on magazines and
advertising pages of newspaper. Also catalogues will be sent to customers home that left their
contact address in the launching day if they have demand.

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All catalogue cannot give for free because the fact that they are expensive. Each catalogue is
about 200 to 300 color page, which can cost approximately $ 30. That's why we will spend
around 1,000 x 30 = $ 30,000 on printed catalogue on launching day. Furthermore, the cost for
printed piece of catalogue on newspaper and magazine
would be $ 700 per week. So the total budget for the
catalogue would be $46,800 [$30,000 + ($700 x 24 weeks)].

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Membership Card

In Viet Nam, customers tend to care a lot about free and other advance benefits. So that besides
building a good market, SKY also sets up a long term relationship with the customer by establish
Membership Card (MC). Customers that have MC would receive more advance benefits that the
other cannot have. There are 2 kinds of MC: SKY friends Loyalty Payment Card and SKY
friends Credit Card. They will be sent to customer on the lunching day and every new
customers come to SKY agree to become SKY's member. These are some benefits of MC

IKEA friends Loyalty Payment Card

- 50% discount on coffee/tea and food when come to SKY restaurant.

- Each 100.000 VND payment equal to 2 points, then customer can use these save points to
pick up thousands products.
- 10% off on sewing service.
- Within 30 days, customer can return and change the product.

IKEA friends Credit Card

- Free coffee/tea and food when come to SKY restaurant.

- 10% off on some products.

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- Free home service.
- Each 100.000 VND payment equal to 4 points, then customer can use these save points to
pick up special products.
- Customers can pay many times within 1 years for products above 5 million VND
- Customers can be invited to SKY party every 4 months.

Media Schedule
In Vietnam, people will increase purchasing the furniture at the end of the year to prepare for the
New Year Eve and Luna Tet because Vietnamese believe that shopping at the end of the year
will bring much luck to them. Understanding the culture of Vietnamese, SKY applies pulsing
advertising schedule to capture those customers.

In detail, SKY push up advertising weight in three months from December 2010 (New Year Eve)
to February 2011(Luna Tet).

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Moreover, there is higher frequency of advertising on weekend because people tend to shopping
more at weekend

Budget

Items Budget

Television $100,000 + $132,000 = $232,000

Magazines $28,800

Internet $16,200

Sponsorship Marketing $31,000

Direct Marketing $46,800

Total Budget
$354,800

4.Big Idea/Creative Concept

Because this is the first time SKY comes to Vietnam, a big and creative idea plays an important
role in the big success of SKY advertising campaign. During 6 months launching the campaign,
the message “Show your home some love” will be added in advertisements in all advertising
channels, including TV, magazines and internet. We also create an ad with home furnishings

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which are arranged in LOVE shape and message is showed in the left bottom of the
advertisement.

This ad will appear at the end of home shopping network program on HTVC, one color page in
Nha Dep, Tiep Thi & Gia Dinh, and The Gioi Phu Nu magazines, on shopping category of
VnExpress and DanTri website.

Home Shopping Network – HTVC

VnExpress
website

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DanTri website

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Reference
1) Chitty, W, Barker, N & Shimp T 2008, Integrated marketing communication, 2nd edition, Cengage
learning, Australia.

2) Quester, P., Neal, C., Pettigrew, S., Grimmer, M., Davis, T. & Hawkins, D. I. 2007, Consumer
Behavior: Implications for marketing strategy, 5th edition, McGraw-Hill, Australia. 

3) IKEANFANS 2009, homepage, martindesign, USA, viewed 23 August 2010,

<http://www.ikeafans.com/ikea/ikea-why-ikea/10-keys-to-ikeas-low-prices.html>

4) Hà Đình Nguyên 2006, ‘Chương trình truyền hình Ngôi nhà mơ ước: Những "cô tiên, ông bụt"’,
vietbao, 4 January, viewed 5 September 2010, <http://vietbao.vn/Van-hoa/Chuong-trinh-
truyen-hinh-Ngoi-nha-mo-uoc-Nhung-co-tien-ong-but-thoi-nay/45180343/181/>

5) htv.com.vn 2004, chương trình phát sóng, homepage, Ðài Truyền Hình Thành phố Hồ
Chí Minh, Ho Chi Minh City, viewed 5 September 2010,
<http://www.htv.com.vn/chuongtrinh/default.asp?channel_id=7&date=29-8-2010#lps>

6) MyVietbrand (NVSP) 2009, ‘Bảng giá quảng cáo: Đài truyền hình HTV’,
thegioimarketing, viewed 11 September 2010, <http://www.thegioimarketing.net/web/?
frame=quotation_view&fullscreen=on&id=18>

7) Tran, N.T 2010, ‘GAMESHOW “SIÊU THỊ MAY MẮN” Phát sóng 20h30 Chủ nhật
hàng tuần trên HTV7 (109)’,
<http://www.vatgia.com/raovat/3657/1915412/gameshow-sieu-thi-may-man-phat-
song-20h30-chu-nhat-hang-tuan-tren-htv7.html>

8) Business Word Portal 2004, “10 secrets to succeed of IKEA”, viewed 9 Sept. 2010,
<http://www.bwportal.com.vn/?cid=4,4&txtid=633 >

9) AusBusiness Review 2010, IKEA Catalogue Online, viewed 9 Sept. 2010,

<http://www.ausbusiness.net/review/ikea-com-au-ikea-catalogue-online/ >

10) IKEA Friends 2010, Member Benefits, viewed 9 Sept. 2010,

<http://www.ikea.com.my/friends/pages/membership.asp >

11) A Little IKEA Dictionary 2007, The Testament of a Furniture Dealer, viewed 9 Sept. 2010, <
https://www.emu.dk/erhverv/merkantil_caseeksamen/doc/ikea/english_testament_2007.pdf

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12) Wells et al 2008, Advertising: Principle and Practice, Australian Edn, Pearson Education
Australia, p.467

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