Reach, Frequency, and Impact

Mock VC Panel has just given a small publishing house $2.1 million to help the publisher continue to grow. The managers/owners decide they need to spend about $500,000 on getting the word out about the company. JoAnn remembers from a marketing class she took in college something about “reach, frequency, and impact” when it comes to choosing your media for a promotional effort. She asks you, a friend, if you remember these words and what they might mean for how she chooses to spend her promotional budget. Respond to JoAnn’s question by explaining what these terms mean, but also help her to understand what trade-offs there might be when considering these media elements.  Which is more important for a given objective?  

Chapter 16.

JoAnn. As  a friend, I’d take about $15,000 of that and see if I could find someone who could do some marketing consulting part time. Someone who has some experience.  I think I have some people on my LinkedIn that could help you. But,  I’m in the middle of taking my final for my marketing class. Why are you even asking me now? You know this is a bad time for me. I swear, it’s like sometimes you’re no friend at all.

But since you asked, here goes. Half a million dollars may sound like a lot, but once you’re writing those big checks, it will go fast. That’s why you have to be conscious of your media selection. As you may have some idea of, different media has different levels of exposure to the audience. They key is finding the most cost-effective for your goals and budgets. Marketers define these three terms as so: “Reach” is the number of households exposed to your message in a certain time frame; “frequency” is the number of times an average household is exposed to your message; finally “impact” is the qualitative value of an exposure through  a given medium.

What was that?

Oh, “Qualitative?” That just means that it can’t be measured like on a ruler. That’s what they call “quantified”. You can count the number of times you have frequence and you reach a household, but this is more subjective. I guess it’s like this. If you’re selling ammo, you advertise in Guns and Ammo, not Better Homes and Gardens.

They’re magazines, you know, they were special interest publications that are sent out at a set schedule to people who have paid for them.

Yeah, like printed blogs.  I forget how young you are sometimes.

Anyways, different media has a different mix of reach, frequency and impact you can get for a given amount of money. I’m sure someone has made up some sort of chart or graph that tries to quantify it per dollar spent. If not, that would be a good graph.  Basically there are trade-offs. You want reach right now because your Press is growing, but you also want frequency so that people don’t forget you. And you have a limited budget. I’d focus on internet, radio, and newspapers because they both have reach and frequency at a lower cost. There is an urge to go big with a television spot, but that limits your frequency.  You’d more or less be one and done, when you want to get the word out you need to hammer your message in as many times as possible because there are so many other small presses and you want them to think of you along the lines of Greywolf Press, or New Directions.

Paintball City

Kenny McKinney wants to get more customers into his new Paintball City store. Kenny is new at owning a business and has to decide how much to spend on his marketing communications efforts (he calls everything advertising because he never had a marketing class, which is fairly common among highly successful entrepreneurs). There are four ways Kenny can use to decide how much to budget for marketing Paintball City: the affordable method; the percentage of sales method; the competitive parity method; or the objective and task method.  Recommend one and explain why it is the best approach.   Chapter 15.

In my experience, the best way to set a marketing budget is to set it blindly, larger than you think you need it to be, and then find your justifications.  

The authors of our textbook throw my vast experience out the door, and instead try to find an objective sort of way to instead set this budget.  Kenny’s got a new business, so he has to use his marketing budget to drive sales.  It is no longer the day when you could throw out your shingle, saying “Ye Olde Paintball City Store” and all the locals would have to come to your shop for their paintball needs because you were the only game in town.

I’m not sure what Kenny’s approach here is, but my inquisitor knows the four basic ways to set the marketing budget. First is the affordable method, where you set it at what you think you can afford. Second is the percentage of sales method, where you take the sales, and then pull out a set percentage of those and there’s your marketing budget. Third is the competitive parity method, where you look at the budget your competitors set and you match that. Finally you have the objective and task method, where you take the goals you have, what you need to do to meet them, and look at the cost of those.

All of these have their weaknesses for Kenny.  For the affordable method, Kenny is just starting out, so he may feel like he doesn’t have any money right now after he clears his set-up and inventory and licensing.  It is also cyclical.  When you feel poor, you don’t want to spend money on anything extraneous, and that reinforces your poverty.  A good marketing plan can fight against that cyclical issue.  The percentage of sales approach has the same weakness.  When your sales drop, math says that the dollar amount of the percentage you’re taking will also drop.  There is a secondary concern where this is a new store and Kenny has no sales. No matter what percentage he took now, the amount of dollars he would be able to take out is ZERO.  The issue with the third possibility, the competitive parity method is that many of his competitors are established businesses. Their markets may be somewhat different. It would also be hard to find that information if the companies were closely held.  And finally, the problem with the objective and task is that Kenny doesn’t know what he’s doing. He doesn’t have much marketing background, so he would be limited on the tasks he knew how to do (and what tasks would be beneficial and when they would be most beneficial).

So though each have their issues, I think the one that Kenny should chose is the last one.  Instead of making a budget of some set amount and then trying to find marketing tasks to fit that budget, he can work the other way around. He can consult with someone who has the experience of what to do when and knows how much they cost -- and then he can measure them to see how well they do. Though this is more or less zero-based-budgeting (a scare word there) for marketing, as Kenny’s business matures, he can find what works and doesn’t work for his business.  For the time being, the marketing tasks need to be planned, individually budgeted, and measurable.

Co-Branding

Chocolate maker Hershey is looking for growth opportunities, and has considered launching a few new products it has developed and acquired. Hershey has traditionally used blanket family brand names such as Hershey’s Milk Chocolate Bar, or individual names such as Mr. Goodbar, their chocolate with peanuts bar.

Hershey has a new product that is almond and caramel-based, covered with chocolate. The California Almond Growers Association wants to create a tie-in with their products, by calling the new product the Hershey California Almond Express. This is an example of joint-venture co-branding.  Discuss the advantages and disadvantages of this co-branding?  How might each brand (Hershey and California Almonds) benefit from this relationship?    Chapter 10

Hershey is mass-market chocolate, but they have the advantage of being the most well known purveyors of chocolate in the country.  They have a town in Pennsylvania named after them, and an amusement park and factory tours just to celebrate the chocolate.  They are at the top of the heap[ when it comes to the their company, the “Hershey” name being an umbrella that the rest of their bars use.  As far as I know, there are few variations of the basic bar. I can think of almonds, and there was an experiment to add mint or to have a cookies and cream version of the standard bar. I don’t know if these have passed, but as someone who buys at least one candy bar a week from a drugstore display, there are only two versions of the Hershey Bar that I know.  So what Hershey has is a strong and undiluted brand when it comes to candy bars.  There is the original milk chocolate, and there is one with almonds.

Hear that?  It is “With” almonds.  The almonds are a secondary concern, an added benefit of the Hershey bar, something thrown in to mask the milk-chocolate monotony.  They don’t sell the almonds, they filler.  If I were going to look at  this new product, I would celebrate the Almonds. They aren’t second fiddle, they’re the basis of the whole thing.  The caramel is just a glue to hold the bar together and the chocolate is just a covering.  And what is an almond?  It’s not just a nut, but it is a power-packed protein missile, coming to stave off your hunger and to help you build muscle and get some of those healthy nut fats.  The Hershey’s California Almonds Express is no mere candy bar, not by any means.  This is a healthy alternative to regular snacking (which in itself is no problem when taken in moderation) but this is a new day in mid-day hunger relief!

There is a possibility that the public might not be receptive to this message, having seen too many junk foods being peddled to children and the body conscious only to find that they are full of sugar and carbs and all those things that make you fat.  But they aren’t believers, and won’t be until they get their mouths on a Hershey’s California Almond express.  The other possibility is that there may be some resistance to seeing an almond candy bar just a version of existing candy bars.  They’re wrong, this is a whole new market segment.

New Project

The next few posts will be the questions and responses to the final exam I took for a marketing class at an unnamed midwestern university for my MBA. I took this exam a week ago, but I was waiting for my grade to post (A, of course). I think I may be operating in an ethical gray area, since I want to share my writing but not expose the test questions of the professor.  I don't post all my writing, but I liked some of these.  The directions are below.  For the five questions attempted, I took bout 2.5 hours.

MKTG 6100 Marketing Design and Strategy

Final Exam, 250 points

October 15, 2014

Time:  3 hours, 45 minutes

You are required to answer 5 of the following 8 essay questions.  Each essay question is worth a total of 50 points.  Extra credit can be earned by answering more than 5 essay questions, each additional essay written has a total potential value of 30 points; indicate which essays are intended for extra credit.

You can use a laptop computer in class for this exam.  If you are writing by hand, use the space provided for your answer (you are allowed to use the back side of the paper, if necessary).  If more paper is necessary, please ask your instructor for additional paper.  Write legibly!   

Keep track of time.  Do not spend more than 40 minutes on any single essay.   There is no word-count requirement for your essays; write as much or as little as is necessary to develop your ideas and answers.   

Books I Never Finished

 I was thinking of this earlier. My econ professor started talking about Milton Friedman's "Capitalism and Freedom". She made a quick check of the students to make sure that they had at least a nodding agreement with Friedman, and went on with her story. I didn't add, "Of course I know what you're talking about. I have that book on my side table. It has a book mark about 100 pages in, and as long as it stays on the side table, I can consider myself still Reading it -- capital letter intentional."

I even started a part one of when I was reading that book, to the point of holding myself accountable for reading the rest of it. I was with him, up until the point in chapter 2 when he made the argument that it was easy to hold views against the dominate economic system in the US during the time the USSR existed until he was writing, I wanted to yell, what about the Palmer raids, and the red scare and the red baiting and the HUAC? But he's dead, and the book is unfinished. (Though there were parts I remember agreeing with, tough I forget just what now. I'm also remembering pro-choice on schooling, so I think I disagree with him, and his writing is so arrogant and sure of himself that it is had to read in  a scholarly manner. If I ever finish, I'll review it here.

But that made me think of all the books I wanted to read. I've paid money for them and anticipated reading them, and started reading them -- then stopped for whatever reason. I will list them here.

This list will be incomplete as it will miss those library books I returned and others missing from my shelf.


1)  Marcuse -  One Dimensional Man
2) Schumpeter - Capitalism, Socialism and Democracy
3) Kindleberger - Manias, Panics and Crashes
4) Klein - The Shock Doctrine
5) Smith - The Wealth of Nations
6) Minsky - Stabilizing an Unstable Economy
7) Marx - Capital, Vol One
8) Hobsbawm - The Age of Capital
9) Fanon - The Wretched of the Earth
10) Hill - The world Turned Upside Down
11) Piketty - Capital
12) Prins - All the Presidents' Bankers
13) Friedman - Capitalism and Freedom....?

A Framework for Marketing Management: Kotler & Keller. Needs examples.

Overall, I didn’t like this text. It is a couple of years old for the fifth edition, so it is a bit dated with regards to blogs and social media.

The problem isn’t really the content though. The “framework” part of the title is spot-on. The problem is that the framework  is all there is. It comes across as a firehose of jargon, and as someone who had never taken a marketing class, it was a little much. (As an aside, is it just me, or is a bunch of marketing just social science poorly understood and badly applied?) The big thing for me is that there were too few examples, so the terms and ideas just became an unceasing flow of one thing after another. No context for the terms made for harder understanding of the concepts.

 http://www.amazon.com/Framework-Marketing-Management-Philip-Kotler/dp/0132539306/ref=sr_1_1?s=books&ie=UTF8&qid=1413326262&sr=1-1&keywords=framework+for+marketing+management

MKT 6100 Final - A presentation on Gobi Cashmere Company with John Edgar Mihelic & Uguumur Tsogtbaatar

Executive Summary: Gobi Cashmere Marketing Plan

Presented by

John Edgar Mihelic & Uguumur Tsogtbaatar

Slideshow Available At This Link

• ·         The objective is the open a store as a Chicago-based wedge in bringing Gobi to the US market. There are twenty outlets worldwide, including one already in the DC area, but for now the company’s main base of sales is in European market. The DC sales have been disappointing.

• ·         Gobi has some potential advantages because the wool from the goats Gobi owns produces is the best in the world. That means the wool is thin and long and traps air more efficiently than any other legal natural fiber. It is smooth and silky.

• ·         The Brand mantra is: Warm Elegance from the Home of Cashmere. We want to sell both the quality of the cashmere and the country of Mongolia itself.

• ·         The vertical integration of the company allows strict quality control of the product throughout the process, from goat to coat.

• ·         “Cashmere” itself denotes quality, which is key to Gobi’s selling point. However, there is a wide range of competing products. At the low end you can find “Cashmere” labeled wool goods at mass marketers such as Target for less than $100. At the higher end, you can find brand named goods in the five figures.

• ·         Our positioning is to be an affordable luxury. Gobi is priced competitively with local department store’s cashmere, but is of higher quality. The quality can be compared to those much more expensive goods. 

• ·         Gobi is a relatively unknown brand in the US, so we have to establish it in multiple ways. First is a more guerilla strategy, where we will get samples of the product in front of influential fashion bloggers we have identified in the area. The second way we will establish the brand is to utilize more traditional media channels such as print, radio, and television.

• ·         We will start marketing in the summer to try to generate buzz about the brand by utilizing our bloggers and social media presence. As the weather gets cooler, we will advertise with more traditional channels such as print and radio. The idea is to create the buzz about Gobi and then present it in ways that are more traditional so that we saturate potentialities right as the store opens. The store opening should coincide with the first thoughts of cool weather, and the need for potential customers to experience warm elegance from the home of cashmere.