LOWE’S COMPANIES INC: optimizing the marketing communication mix

Title

2 3 41 CASE SYNOPSIS 5This case is a classic example of how to design Integrated marketing

communication for Lowe’s, the second largest home improvement retailer in the world which had launched a new initiative Next-generation-Installed sales in early 2009.

With this decision, Lowe’s was making a concerted effort to move beyond its traditional Do-it-yourself customer base and capture the attention of the do-it for-me customer.

Lowe’s chief competitors were the market leader Home Depot, Sears, Menards, and IKEA along with an assortment of smaller independent service contractors.

It illustrates how consumer insights lead to customer experience mapping which then forms the basis of an integrated marketing communications program.

2 CASE BACKGROUND1 3 4 5

The company was founded in 1946 in North Carolina with the strategy that centered on offering customers low price products and services every day.

The company focused on traditional marketing media in the past, but it has moved towards providing customers with a complete kitchen remodeling solution beyond just installation, the company changed its focus from traditional marketing to digital marketing media.

The company provides its customers free in-home consultations as well as will work with the customers during the design, purchase and installation processes that was missing in its traditional approach.

It is now considering to optimize and design a relevant marketing mix for its NIGS initiative.

3 KEY ISSUEs1 2 4 5 What did the customer decision process for a kitchen remodeling project

look like? What were the customer pain points involved in its journey to kitchen

remodeling? How can the IMC mix can be designed to have a balanced tandem of digital

and traditional medias to deliver a effective message to the customer? Which channel to be used at different stages of buying cycle of the

customer? What criteria should be used to select the best digital marketing tactics

among the options available? Determining the cost involved in using each media along with its reach

among the customers?

4 Inferences1 32 5

STRENGTHSSecond largest home retailer in the worldOffer products at low pricesTrusted position of the company

OPPORTUNITIESDevoted customer baseNIGS initiativeImprovement of the customer pain points by drawing customer journey map

WEAKNESSESLimited interaction with the customer during purchase processPresently no after sale service is providedLimited involvement of the customer at the end & beginning of buying cycle

ThreatsHighly fragmented home renovation industryCompetitors like Home Depot, Ikea, Sears, Menards2008 economic recession

SWOT

4 Inferences1 32 5

TARGET GROUP• Do-it-for-me customers• Women who preferred third party involvement but

with they being asked at every decision making point.• Low to mid income range customers

DECISION MAKING• INFLUENCERS-family, friends, other professionals• Important communication stages of buying

cycle(Exhibit 8)1.Incubation stage(35% importance) 2. Post completion stage(25% importance

4 Inferences1 32 5

PRODUCT

• Kitchen remodeling solution (along with services)

PRICE

• Mid range-$20,000

PLACE

• Charlotte, North Carolina

PROMOTION

• Traditional(TV & print media, in-store marketing, consumer promotion),Digital media(social media tools, website,online customer service)

Marketing Mix

Media Mix for NGIS Communication Plan Cost of Acquired Media

Television $450000Magazine $69230Direct Mailing $250In store marketing $10000Traditional Media Costs (a) $529480Display Advertising( CPM)( for 500,000 unique visitor

$125000

SEO ( for 500,000 unique visitor) $50000

Digital Marketing Costs (b) $175000Interactive webtools $ 50000Promotional E-Mails $ 20000Social Media NO COSTS Online Customer Service tools (c) $70000

Total cost (a)+(b)+ (c) $77480

4 Inferences1 32 5

Avertising Tool

Advertising Tool Advantages Challenges

Television Has worked well and driven traffic for sales Very costly and message might not be effective at the incubation stage of decision process

Print Ads Could show the ‘Before-After’ phases effectively and is extremely selective

Falling circulation numbers and high costs, difficult to communicate value

Consumer Promotion Generate interest and enhance awareness , if promoted to appropriate demographics

Short term basis and could harm th brand on long term

In store Marketing Effective way to make customers aware of remodeling activity

Unclear as to where exactly in the store to place the materials

4 Inferences1 32 5

Advertising Tool Advantage Challenge SEO Could decide how much to pay,

selecting right keywords would ensure the target audience.

Selecting the landing page –whether it should be the remodeling page or homepage, rely on 3rd party agencies to manage SEO and SEM.

Display advertising Present reasons as to what the consumers should chose Lowe and could be targeted to the user’s interest.

Display advertising was considered annoying because they wasted bandwidth and distracted from web page.

Social Media tools More trusted market initiator, influencing customer perceptions and preferences.

Frustrated customer’s could use site for negative reviews and discouraging other buyers, also lack of control.

Customer Design Tools Allow customers to chose from different options and present both estimated cost and timeline, cut the incubation time .

Not Sure whether to have & maintain such a tool in –house, buy of the shelf or contract out the service.

Customer Service Tools Provide timely and relevant data like Ask a consultant, Track your order.

High monetary investment, personnel training required to provide such services.

4 Inferences1 32 5

Exhibit 7 is Inferred on the basis Sales Funnel and the level of involvement of the consumer. For creating • Stage-Incubation/Visioning. Stress on creating Awareness about

the NGIS , TV would be the best media with the broadest reach(50).( Traffic)

• Stage-Active Shopping- For creating an Interest among the buyers a combination of TV and digital media can be used(35). (Lead)

• Stage- Design& development- For creating a Desire among customers Digital destination , paid media and organic searches can be used.(Lead Nurturing)

• Stage-Purchase, Installation and Post completion. This is the stage where the customers will take an Action .According to the inference Social media could be leveraged upon for purchase , followed by digital direct post advertising. ( Sales)

4 Inferences1 32 5

5 Recommendations1 2 43

The company should use the various medias as follows-1.Awareness period: traditional media as its effectiveness is

highest at this stage(Exhibit &7)2.Interest creation: digital media as people trust other people’s

reviews before buying and like to see various remodeled kitchens

3.Desire generation and action: paid search, direct selling mediums (salesperson)

4.Post sales: digital media for building customer relationship

THANK YOU!Anjali Mehta Traya Roy

Chowdhury