devise an innovative marketing

Paper instructions:

You are the KFC Account Manager at the Planet Sales Promotions Team and KFC has just handed you your toughest assignment. The growing Australian obesity problem is forcing many food manufacturers, supermarkets and fast-food companies to reconsider their product ranges and how they market their products. Six months ago KFC released the Healthier You range of chicken burgers and wraps—the primary targets were teenagers and families with children 3-12 years old.

Nutrition Australia’s website has the following information.

The average amount of kilojoules required daily is represented in the following table:
Age    Male    Female 12-15 years    10 900 kj    9 550 kj
16-18 years    12 900 kj    10 200 kj
19-50 years    11 550 kj    9 300 kj
51-70 years    10 450 kj    8 800 kj
Adults over 70 years    9 450 kj    8 300 kj
Source: NHMRC, Canberra . These figures represent average requirements for the Australian population. Actual energy needs for individuals will vary considerably depending on activity levels, body composition, state of health, age, weight and height.

http://www.nutritionaustralia.org/national/resource/balancing-energy-and-out#.U3lQxCidGSo

The kilojoules in KFC’s burgers and wraps range from 2,648 to 3,503—these are meals with regular chips and a can of soft drink. Having larger chips adds noticeably to the kilojoules.

Sales have been disappointing to say the least. The launch consisted of a $15m national TV launch campaign which was followed by intensive radio advertising ($1.5m) on highly targeted music and talk-back stations. Social media was used sparingly. Sales are only 25% of budget—sales reached $7.5m for the six months. Annual forecasts sales were as follows.

Year 1    $60m
Year 2    $100m
Year 3    $200m
Year 4    $350m

The key message in the TV and radio campaigns was that the KFC Healthier You range ‘tastes just like a traditional KFC meal but only healthier.’

KFC now doubts the wisdom of the decision to introduce at this time the healthier food options. However, KFC recognises that if it does not address this issue then the Federal and State Governments may introduce new regulations on fast-food nutrition requirements and fast-food marketing practices. Consequently, KFC wishes to re-launch the Healthier You product range.

KFC has given you the following information:

1.    there will be no more TV or radio support for the next 6 months
2.    the objective is to gain sales of $30m through a new marketing promotions campaign

KFC’s marketing manager has allocated $3m for you to work with. Your ability to retain this prestigious account will depend heavily upon turning around the sales situation.

Devise an ‘innovative’ marketing promotions campaign for KFC for the coming six months.

Background—Male Cosmetics on the Rise
The usage of male cosmetics has grown considerably over the last two decades. 89% of men polled in the United States and Europe believed good grooming was important for their professional success, and 70% of them shopped for their own skincare products, as opposed to only 48% in 2008. Cosmetics companies have even begun to penetrate the over-40 market, which is not as saturated as the women’s and young men’s markets. L’Oreal has particularly focused on expanding its men’s skincare segment in Asia.
There are two key reasons why the male demographic is receiving so much attention from cosmetics companies: first and foremost, it is still not as saturated as the female market. More importantly, men have proven to be more loyal to specific products and brands than women are, who are more likely to switch to whatever the next trend is. Therefore cosmetics companies are trying to appeal to the male market in order to secure long-term loyal customers. With some exceptions (Maybelline, Lancôme, Shu Uemura and Kérastase) L’Oreal’s brands cater to both men and women. L’Oreal also spans different income levels, from affordable lines (Matrix) to luxury products (Yves Saint Laurent).
Source: http://www.wikinvest.com/stock/L%27oreal_%28LRLCY%29#Male_Cosmetics_on_the_Rise
The in-house magazine for the Fitness First chain of health clubs reported the following in its May/June 2011 edition, p. 20. “When it comes to guys and grooming products, the average Aussie guy is spending $20.20 per month, valuing the Australian men’s grooming market at $1.99bn annually. This is forecast to grow—currently younger Aussie men (25 to 34 years) spend $25.60 per month on grooming products. But despite this, Australia still has a long way to go before the metrosexual man becomes truly mainstream. Currently under half of Aussie guys (44%) are moisturising, just 17% exfoliate and under one in ten use any kind of facial treatment.”
The Scenario
L’Oreal employs the services of an external sales promotions firm to complement internal marketing expertise. You are the L’Oreal Account Manager at the New Millennium Sales Promotions Team and L’Oreal has just handed you your toughest assignment. It released a range of male cosmetics (called PEAK Performers) six months ago targeted at 18-24 year olds but the sales have been disappointing to say the least. Despite a $1m national TV launch campaign which was followed by intensive radio advertising ($0.5m) on highly targeted music and sport stations, sales are only 25% of budget—sales reached $125,000 for the six months.
Forecasts sales were as follows.
Year 1    $1m
Year 2    $3m
Year 3    $6m
Year 4    $10m

The product range consists of exfoliation, cleansing and moisturising products. The products (in 100g packs) can be bought individually or in a combined package and the prices were:

•    Exfoliation    $25
•    Cleanser    $22
•    Moisturiser    $18
•    All three    $58

The bulk of the $125,000 sales were for the moisturiser.

The TV campaign focused on skin protection (by regularly using all three products) featuring local male models that appeared to fit the target market. The product range was available at the major department stores (Myer and David Jones) and at major pharmacy chains.

L’Oreal has given you the following information:

1.    there will be no more TV or radio support for the next 6 months;

2.    the objective is to gain sales of $0.75m through the sales promotions campaigns you develop;

3.    L’Oreal’s marketing manager has allocated $250,000 for you to work with; and

4.    your ability to retain this prestigious account will depend heavily upon turning around the sales situation.

Required

Devise an “innovative” marketing promotions campaign, incorporating (but not limited to) elements such as push and pull strategies, for L’Oreal for the coming six months.

25 marks

They are not to write what could be included in a plan but to write the ACTUAL PLAN—this has to be stressed during the exam preparation session in the lecture. Failure to do so will result in a fail mark for the question.

The question gives them some latitude to show their creativity but some key points should be evident in any answer. I expect them to show the following table (in some appropriate format).

Goals    How Measured    Objectives (next 6 months)
Growth    Sales ($)    $0.75m
Awareness    Unaided recall of brand name by target market    20%
Trial    % of target market trial product    10%
Repeat Purchase    % of trial purchasers repeat     50%
Efficiency    Maximum spent on sales promotions    $250,000

Whatever they devise should take into account the target audience – 18-24 year old males – they could (should) expand on this by making reasonable guesses, eg these are likely to be technology oriented (Internet, mobile phones, etc), they could be innovators or early adopters, that is they want to be seen/known for using the latest products. These additional elements may influence which marketing communications techniques are selected. In addition, they need to consider whether males have girlfriends, mothers, sisters who would buy these goods for them – what does this mean for the campaign?

At the consumer level where we’re chasing trial and repeat purchase but need to “spread the word” amongst the target audience. We could run a ‘design’ competition where members of the target audience could submit a new packaging design that will be used for a limited run—winner receives a voucher for $1,000 of product for self or friends, could use a POS display that says that upon purchase they get a number that can be used on a special PEAK Performer website – they can earn points for purchases and for customers who they referred and then go into a draw for a holiday, etc. The aim is to get the target market using the product, recruiting others (viral marketing) and being rewarded. There’s a considerable amount of freedom here but it has to make sense!

Could consider some form of trade promotion—students cannot just state this—they need to provide details.

Research – whilst the budget is small, some may consider it wise to spend some money upfront to evaluate whether the campaign could work. Most (hopefully) will mention that some research will be necessary at the end of the campaign to assess its successes/failures.