MK12 - IMC Tutorial Products Fall 2023

Page 1 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. MK323 – Marketing Management Tutorial: IMC (Awareness) Tutorial developed by Jonathan Hibbard, Deborah Utter, Lorri Veidenheimer Revised by Jonathan Hibbard, Lorri Veidenheimer, Deb Utter, Isabella Previte, May 2023 Updated 10/20/23 This tutorial is your roadmap for estimating the percent awareness you will achieve for your target segment for the five years of your forecast. It walks you through the calculations for most of the elements of your integrated marketing communications plan and provide you guidelines to make these estimates realistic. Because of the number of elements and the complexity of making the calculations for each year, each team member should be engaged in double-checking the assumptions, calculations and reviewing these guidelines. Below are important points to know upfront: ● Product teams will create national awareness and launch their products nationally. ● Teams must think creatively to generate awareness and use many communication tools to achieve your goals. Diversification is key with this type of planning both in the real world and for this project. ● One vehicle alone does not create awareness. It is the TOTAL of ALL the impressions from ALL your marketing vehicles which create awareness. ● The method you will use to examine individual elements of your IMC is called a Quick Test, which is described later in this tutorial. We have divided this tutorial into the following sections: Part I - Pull Marketing Part II - Guidelines Part III - Push Marketing Part IV – Example IMC Plan Part I: Pull Marketing — Marketing that DIRECTLY targets end customers, so they are aware of your product/service and seek it out to purchase We divide Pull marketing Paid, Owned and Earned Media: Paid Media – Awareness is generated from money you pay for advertising and other vehicles Owned Media – Awareness is generated and nurtured by your company’s own properties including social media and website properties Earned Media – Awareness is amplified by user enthusiasm from paid or owned media

Page 2 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. Paid Media -- Online Advertising for Products AWARENESS Teams can use Meta’s Instagram and Facebook Ads Manager to roughly simulate the audience who would view your online advertisements. Ads Manager allows you to select target audiences, set a budget, set advertising objectives, and create advertisements that could be shown to your target audience (NOTE: f or the Creative Workshop, you will generate your own ads). To demonstrate, throughout this tutorial, we will use the example of a woman’s hair accessory product, which targets females, ages 25-54, who consider themselves stylish. This target market is 12,000,000 women, based on the segmentation tree. Note : You will need to review the TA Video Tutorial, “IMC Meta Ads Manager” to set up a business Facebook account so you can access Ads Manager tool to develop your awareness-building ad campaign.  TA (Isabella Privite) Video Tutorial on IMC Meta Ads Manager: https://youtu.be/WGEbVSGgdmY  Meta site: https://business.facebook.com/overview/  For this tutorial, we will assume that the annual online ad budget is $60,000. When we filter to reach our target for the women’s hair care accessory, we might get information in the screenshots below: Total annual impressions: Using the example of a girls’ hair accessory product, identify an audience to reach with your ad using the Meta filters age, demographic and geographic information, and one interest — note that adding interests will increase the number of impressions, and make your audience too large. Conservatively, Meta estimates that this company will get approximately 58,000 impressions/day. Since you are creating an annual plan, multiply that by 365 days. 58,000 x 365 = 21,170,000 Total annual impressions Targeted Impressions: Because Meta’s filters will never match your segmentation tree exactly, we need to make an adjustment for the imprecise number of impressions. Many of the people seeing your ad will not be interested in your product/service. Adjust your annual impressions by 50% for a better fit between your target segment and that which Meta can provide.

Page 4 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. To calculate the 15% of total pull you can do the following since we don’t know the total budget until we ADD IN the online budget we make the calculation as follows: If budget without online is $100k, then $100,000/ (1- .15) = $117,647. Then take 15% of that = $17,647 to get your online spending budget. Thus, for Year 1, $17,647 can be spent for online advertising Paid Media -- Influencer Marketing Finding Influencers Influencers should be in your target segment or have a target segment that is similar to that of your target segment. For instance, for the women’s hair accessory product, you should find influencers who target women aged 25-54 who consider themselves stylish. You should plan to find at least 1 influencer in each influencer category who is a good fit for your product (i.e.. 1 Nano, 1 Micro, 1 Mid-tier, 1 Macro). The easiest way to find relevant influencers is to search for brands in your product space and review their sponsored posts ( i.e., who do they feature/repost on their page?) Find the “Tagged” posts for that brand profile (sometimes influencers will post products and tag the brand for exposure, even if they are not working with that brand). Other avenues include Instagram hashtag searches, similar profile searches, and Google. How to calculate Awareness from Influencers Spend your influencer budget in $10,000 increments Year Spending Limit * Identify Influencers, size of following Awareness YR 1 $10,000 Team to complete this information 0-1% YR 2 $20,000 1-2% YR 3 $30,000 2-3% YR 4 $40,000 3-4% YR 5 $50,000 4-5% For your IMC plan, you can only use Mid-tier and Macro influencers beginning in the 3 nd year. Before then, you can use a mix of Nano and Micro. Influencer Type Follower Count Minimum # of posts in campaign Nano 1,000-10,000 5 Micro 10,000 – 50,000 5 Mid-Tier 50,000 – 150,000 5 Macro 150,000 - 500,000 5 Paid Media – Guerilla Marketing (GM) Ideas – Products and Services Teams We want each team to develop at least one GM idea (sometimes called out-of-the-box idea) that happens in places where your target could be found in the physical space. When done well, GM inspires photos, videos, comments and can go viral. We want teams to develop and research creative GM ideas. If you need some inspiration regarding guerilla marketing ideas, you can begin here .

Page 5 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. Guerilla Marketing Reach and Costs Assume you will replicate this event in 10 cities across the country and in three locations per city. You need to hire local people to help you run the event. For each city, budget $3,0 00, (for travel, hotel and hiring two local workers) plus the actual cost of your GM event. Guerilla Marketing Awareness To determine the awareness from guerilla marketing, you need to classify your target markets by size using the following table: TARGET MARKET CLASSIFICATIONS Size A Size B Size C Under 1 million people or households 1-10 million people or households 10-20 million people or households Once you have determined your size category you can use the chart below to determine the awareness generated by your spending. The chart will tell you how much awareness you generate for every $1,000 you spend for events: AWARENESS RELATED TO GUERILLA MARKETING Size A Size B Size C .20% awareness per thousand dollars .08% awareness per thousand dollars .06% awareness per thousand dollars Using the category chart above, you see with 12 million in the target market that the hair accessory company is in Category C. Reading the awareness chart, you see that you get .06% awareness points for every thousand dollars that you spend. So, for this GM event, that costs $750 each time you do it, your awareness would be: City budget = $3,000 x 10 cities = $30,000 Individual Event budget = $750 x 10 cities x 3 events per city = $22,500 Total spend for event = $52,000 $52,500 x .06% ÷ 1,000 = 3.2% awareness points Core teams may NOT use street teams as their expenses are too high and they are unusual for such a small manufacturer. A street team is a term used in marketing to describe a group of people who 'hit the streets' promoting an event or a product. Paid Media -- Outdoor/Transit — Product Teams Outdoor advertising can work quite well for Core teams as a cost-efficient means of building awareness. Outdoor includes all types of transit (subway, bus, bus stops), billboards, and street stencils. As with events, you need to make sure you get enough coverage of your target market. Product teams need to select at least ten major cities and at least four locations within each city that run at least two times per year . The costs of outdoor can be found through large outdoor media companies such as Clear Channel or though the library databases and Google searches. Similar to events, it can be very difficult to calculate awareness so

Page 7 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. Assume it will cost $15,000 to get a professional website set up in Year 1. Starting in Year 2 it will cost $2,000 per year in upkeep and maintenance. Assume your website generates 0% awareness per year. Other owned properties are your Facebook, Instagram, TikTok accounts, etc. The awareness from your social media efforts is included in the awareness you generated from “Paid – Online”, above. EARNED MEDIA — Products and Services Teams Earned Media - Word of Mouth (WOM) Word of mouth awareness is the result of consumers talking, posting or sharing information, photos, and videos about your product as well as online reviews. For product teams, we base the calculations on the previous year’s unit sales. The percent of the people who will create word of mouth depends on the nature of your product. A very public product (e.g. hair accessory) is one that the target market usually sees and discusses. A very private product (e.g., underwear organizer) is rarely seen or discussed by the target market and may generate 0% word of mouth. To calculate WOM, determine the previous yea r’s SALES (trial households – do not include repeats) and multiply by the WOM factors in the chart: WOM Factors Type of Product/Service Public product/service Semi-public product/service Semi-private product Private product Example Hair Accessory, Consumer Services that want walk-ins Credit card holder Services on 2 nd floor locations Serving bowl Services by appt only Picture hanger Counselor/Therapist # Users who generate buzz 75% 50% 25% 10% # of Aware people per user 4 3 2 1 NOTE: Product teams will not have any WOM in Year 1 . Services teams can have WOM in Year 1 Example of WOM awareness calculation We will continue to use the hair accessory example, which is considered a public product from a WOM perspective. If they had 50,000 trial households/year in Year 1, then they can assume that 75% of the year 1 buyers generate enough impressions to make 4 potential buyers aware. Therefore, the WOM impressions for Year 2 would be:

Page 8 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. 50,000 x .75 x 4 aware customers = 150,000 aware potential customers Thus, in a target market of 12 million this would create 1.25% awareness in Year 2. Earned Media - Public Relations Many small firms count on getting “mentions,” coverage, or a write -up about their product. For small companies these are likely to occur in online as well as print magazines, local newspapers and blogs. To get attention, companies typically send press releases or press kits, including samples of their product (if possible) to those who might mention them. Each team can expect to identify 8-10 blogs or websites that would be read by your target segments and cover products, or services related to your product category. For your plan, provide information on the names of the websites and blogs. You can assume that spending on PR is $5,000 per year (you do not need break the spend – we are providing this number for you to use). Awareness from PR efforts can be expected to be 1% for your target market in each year of your plan and you can add this to your awareness calculations. Note: PR differs from Influencer marketing. With PR, the firm is hoping to be mentioned; influencer marketing is typically a “pay fo r play,” or contractual transaction. Earned Media – Carryover Carryover is the result of customers being able to recall your advertising from one year to the next. It is reasonable to assume that only a very small amount of awareness created in Year 1 can carry over into Year 2. You should not expect this carryover to be more than 1% in year 2, and 2% in years 3, 4, 5. This means that if your awareness is 9% in Year 1 and you do not decrease spending in Year 2 you can expect Awareness to be 9% + 1% = 10%. Part II: Guidelines Awareness Reminders, Quick Test Result Guidelines and Rules of Thumb Once you have built your IMC pull plan and schedule, use the Quick Test Results Guide, to assess if you are over the maximum allowable awareness for any vehicle. If so, adjust your reported awareness down to the maximum level and put a footnote in your IMC chart. The maximum levels may typically be an issue for teams with smaller target segments and those with larger target segment.

Page 10 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. logic of how you get from exposures (or impressions) to awareness. Does this mean you will need to use assumptions? Yes! But, do your best to make them educated assumptions based on data you have collected (primary and secondary). Make sure your assumptions make sense, are conservative, and that you have made all necessary adjustments. Other Key Assumptions/Guidance ● Make sure you have coverage across the U.S. Most, if not all Core product projects will be introduced across the US. Make sure you are creating enough impressions across the country to generate national awareness, not just a few cities across the US. ● You cannot hire or use outside agencies for your Core projects – no market research, PR, advertising, media, promotion, Street Teams or packaging consultants. ● You will want to include a cost of producing your advertising/promotions in your budget. As a rule of thumb, you can apply 5% production costs of your total IMC budget to pay the production of these ads. ● In no case, should a team plan on spending more on your marketing than your firm’s sales revenue for any given year. Remember, it is more important HOW you maximize your IMC dollars to produce results. ● The MK faculty expects that teams to explore ALL of the options noted in this tutorial to the fullest. Show your analysis and any assumptions at the IMC Workshop (as back up slides) this analysis. Place your IMC analysis in the Appendix to your Final Plan. In your plan, you will want to highlight the logic of why you selected the vehicles you did based on your analysis of all options. You will also want to briefly provide an overview all of the options you examined with your faculty at the IMC Workshop. We are interested in the trade-offs you make this allows you to justify which elements made the most sense for your business to generate the most awareness in an effective and efficient manner. ● Decimal points: For most of your estimates, round to two decimal points. Exceptions are large dollar amounts on the Bases model, such as Revenue and total IMC spending.

Page 11 © Boston University. It is a violation of BU’s Academic Conduct Code to post this material anywhere. Part III: PUSH MARKETING --pushing your product into the stores Push Marketing are strategies that help your retailers gain awareness and interest in your product as well as tactics that provide support in helping your retailers sell your product to end consumers. Teams should plan to spend 10-15% of their marketing budget on push. Usually 15% in Years 1 - 3. Then, depending on how much you are spending overall, push spending may drop starting in Year 4 and on to about 5%-10% of your total budget. The tactics most aimed at generating awareness among retailers are trade shows, trade magazines/website advertising, direct marketing and personal selling. Each of these will be briefly described below. Trade Shows are attended by members of your industry including retailers. These are not to be confused with consumer expos although sometimes a show will be a mix of the two. Product teams should plan to attend at least 2-3 trade shows each year (including year 0). Trade shows costs can be calculated as follows: 1. The exhibitor cost, which can usually be found on the trade shows website, usually runs about $20 per square feet. So, if you get a 10 x 10 booth, it would be 100 square feet which would cost $2,000. Many trade shows have pricing information on their websites that may also be used as an estimated cost for your team. 2. The cost of your trade show booth (see example on the right) and other items you will set up within your booth costs about $7,000 to purchase; this is a one-time fee and will be part of your Year 0 expenses. 3. Other costs including travel and lodging, electricity and cleaning at the show, shipping and promotion. You can roughly DOUBLE your exhibit fee to estimate these costs so for the 10X10 booth mentioned above the other costs would be another $4,000. If you attend 3 trade shows in Year 0, the cost would be 3 x ($2,000 + $4,000) + $7,000 = $25,000 In your plan, you should describe your goals for exhibiting at a trade show, and what is going on in the booth, e.g., signage, brochures, demos, giveaways, etc. You should provide a customized diagram for your booth. Trade Magazines/Websites are read by retail buyers in most industries. Their advertising is sold in a similar manner to magazine advertising and online banner ads. You should identify the leading magazine/website for your buyers and plan on advertising through this media. Because trade media targets buyers and those in the channel there are not awareness and CPM numbers associated with these vehicles. If you purchase print magazine advertising, you should purchase at least 4 insertions. See next page for a SAMPLE IMC Schedule