Defining a Communication Plan Simulation - Essay Example

The primary goal of the Defining a Communication Plan Simulation was to create a communication plan to launch a furniture store, Olive, in the UnitedStates market. Phase one objective was to choose a group of demographic factors in order to identify the people who will buy Olive’s products. Various reports were available to help the analyst make the decision. One report on its own would not give a person the information needed to make a decision. For example the U.S demographic data reflected that the largest age group is the 55 years and older segment. A person might think that the largest age group should be targeted. The consumer report contradicted this assumption by stating that this age group has shown a steady decline in average spend during the last three years. The European sales report was very helpful towards the selection of the demographic factors. One of the expert advisors in the simulation suggested that the sales patterns in Europe and the US were similar. After making the final selection of factors the simulation taught me that choosing more than two factors would result in insignificant segmentation. Exhibit A illustrates all outcomes from the simulation. The second phase of the simulation was to choose profiles for psychographic segmentation. The optimal psychographic profile for the company was chosen based on the company global position of providing quality and style at affordable prices. The profile which better match sensitivity to these purchase factors was selected. Another element taken into consideration was the size of the group. The statistical sales projection tool in phase II helped validate the decision made. The next step in the simulation was to choose a position statement for the US operation. Two sources were taken into consideration when choosing the attributes to include in the position statement. The global positioning statements of the company and a statistical survey which demonstrated the customer preferences were the primary tools utilize to make the decision. The simulation taught me that a maximum amount of attributes a company should utilized in a positioning statement is three. I also learned that when a company expands to other markets the marketing strategy must be adjusted according to the customer preferences in the region. The next phase of the simulation was to allocate a $32 million dollar advertising budget among different communication tools. The five communication tools to choose from were: advertising, sales promotions, online marketing, sales promotions, direct marketing. The company’s global allocation and the data of advertising budget allocations from the competitors were the primary tools utilized to arrive at a decision. The simulation taught me that advertising provides the highest customer reach of all communication tools. The final phase of the simulation involved choosing a sales promotion scheme, selecting communication tools and allocating a budget for the sales promotion. The advice from the experts helped in the scheme determination. The customer reach was the primary factor in deciding the optimal communication tool. The simulation taught me that excessive price discounting dilutes the image of a brand. Integrated Marketing Communication (IMC) can be defined as a communication strategy which evaluates different disciplines combining them to optimize the impact of communication (Ciadvertising, 2007). Research plays a vital role in the IMC process. Market research provides the data needed to plan an IMC campaign. The Defining a Communication Plan Simulation clearly showed the impact research has in the entire process. Research techniques should be applied both to learn about the behavior of potential and current customers. The client database is a rich source of data that can be utilized to learn a lot about purchase behavior of clients. The role of segmentation within an IMC campaign is to create an effective specific marketing strategy for the target market of the company. Geographic, demographic, psychographic and behavioral variables help marketing analyst in the segmentation process (Wikipedia, 2007). Targeting is the selection of the actual group which a company will market too. The IMC campaign and its implementation strategy are based on the tendencies of this targeted group. Positioning involves selecting the attributes of the company’s product which will be the focus of the IMC campaign. These attributes should reflect the needs and desires of the customer base. The complexity of global markets requires companies to concentrate on specific areas in order to be able to effectively concentrate their communication efforts efficiently. Segmentation and targeting specific audiences help persuade people to buy a companies product. For example a company dedicated to selling sports magazine should not spend an advertising dollar on people that do not watch or play sports. Segmentation and targeting helps eliminate unnecessary communication efforts, thus optimizing the advertising campaign of a company. Two major considerations when creating a positing strategy for an IMC campaign are the customers and the competition. When focusing on the customers, their needs are what must be taken into consideration to persuade them. The attributes which a customer wants must be emphasized in the communication efforts. Another strategy is to create a position statement based on the direct competition a company faces. An example of positioning a product against the competition has been occurring for decades between two giants in the fast food industry, McDonalds and Burger King. There are many other positioning strategies a marketer can use such as positioning by price/quality, positioning by use or application, positioning by product class, positioning by product user and positioning by cultural symbols (The Role of IMC in the Marketing Process). The elements of an IMC plan should speak in one voice in order to create consistency across different communication channels. All the messages the customer receives from a company have an impact on his impression of a company. Communication that contradicts itself can create distortion which may cause a person to loose interest in the message. References Ciadvertising.org (2007). Retrieved May 16, 2007 from http://www.ciadvertising.org The Role of IMC in the Marketing Process. 17-19. Retrieved May 17, 2007 from http://www.google.com Wikipedia.com (2007). Retrieved May 17, 2007 from http//en.wikipedia.org/wiki/Segmentation_(disambiguation) Exhibit A: Results of Defining a Communication Plan Simulation Age Group (years) Annual Household Income Household size 25 to 34 $50000 to $75000 2 35-44 $75000 to $100000 3 4 Psychographic groups selected were Self-Actualizers and Tightrope Walkers. The selection of these two groups created a potential customers total of 6,648,000 Positioning attributes: 1. Affordability 2. Comfort 3. Style Positioning statement: Style and comfort at affordable prices. The graph below shows the allocation of the $32 million marketing budget. The simulation resulted in projected sales revenue of $803.36 millions. The sales promotion strategy chosen was sleep over. The graph below shows the $4.8 million sales promotion budget. Read More