Lowes companies case study

Group 12 Vipul Bali Vipin Kumar Makarand Takale Sougata Mandal Dhruv Samel

Issues Simpson faced

NGIS required different approach to communicating with consumers How? Plan best mix of traditional and digital and marketing communications channels

Maximize ROI on marketing Investments

Communicating with consumers

Offline advertising (Traditional Media) Online Advertising , 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