Lowe’s companies case study

Group 12Vipul Bali

Vipin KumarMakarand TakaleSougata Mandal

Dhruv Samel

Issues – Simpson faced

• NGIS required different approach to communicating with consumers – How?

• Plan best mix of traditional and digital and marketing communications channels

• Maximize ROI on marketing Investments

Communicating with consumers

Awareness Consideration Purchase

Consumer Buying process involves above three distinct stages Lavidge and Steiner 1961

Offline advertising (Traditional Media)

Online Advertising , SEO, budget planner, 3D modeling

Require synergy within media and cross media to effectively communicate with customers

Communicating with consumers – Contd..

• According to Stammerjohann, 2005, 3 reasons why earlier approach should work– Encoding Variability theory – message from several

sources -> Encode-> recalling likelihood increases– Repetition variation theory- same message from

multiple sources and different media improve attitudes

– Selective attention theory – use of variety and repetition -> increased attention -> more elaboration -> improved attitude

Best Mix – using Hierarchical Synergy model

Direct Mail

Banner Ads

Social Media

Search here is organic (SEO based) as difficult to estimate cost of paid search with given data

Maximizing ROI - Suggestions• Digital media has higher CPM but

low percentage of budget values• Using findings of hierarchical

synergy model research paper, we suggest:– Direct mail is as important as Online

so its budget allocation should increase to at least 8%

– Since awareness is not a major issue so budget allocation to traditional media can be decreased to 69%

• Initially, ROI might not be the appropriate measure as need is to overcome the threat of Home depot so increase in awareness levels could be a better yardstick

Media Channels

Traditional Cost (in $)%age contribution to

budget CPM values

TV 450000 57 37.5

Print 69230 9 not available

In store 50000 6 2

Total 569230 72 39.5

Digital

SEO 50000 6 100

Website 50000 6 125

E mails 20000 3 200

Social Media 75000 10 75

Total 195000 25

Direct Mail 25000 3 250

Grand Total 789230