LOWE’s: Optimizing the Marketing Communications Mix

Group No:-12Dhruv Samel (PGP02.50)

Saugata Mandal (PGP02.53)Makarand Takale (PGP02.56)

Vipul Bali (PGP02.62)Vipin Kumar (PGP02.124)

About Lowe’s • Lowe’s is an American chain of retail home improvement and appliance

stores that has retail stores in the United States, Canada, and Mexico.• Founded in 1946 in North Wilkesboro, North Carolina, the chain now

serves more than 14 million customers a week in its 1,781 stores in the United States, Canada and Mexico.

Provide customer valued solutions with best prices, products, and services to make Lowe’s the first choice of home

improvement

Industry Leaders- The largest home improvement retailer

- most aggressive player in industry

- Third Largest home improvement retailer

- supplier of wood for cabinets, flooring, countertops and

construction materials

-Nations largest repair network with more then 10000 technician

- - provide free in home design consultation with turnkey

installation projects

Industry leaders- Leading Scandinavian Furniture retailer

- - provide shoppers a web tool to customize design as per choice, 3D views

and price details

- Mainly product based firm - - provide installation services in

collaboration with third party contracters

From OIS To NGIS

• OIS – Original Installed System - Since 1990’s sell customers the product they need installation by third party contracter as per specifications customer knows what they want

• NGIS – Next generation Installed System- Change in Strategy in 2008

Based on kitchen remodeling concept, identified as new market and revenue source

Go beyond installation by coordinating from initiation to post completion.

Provide End to End solution for customers kitchen remodeling

Challenges

How to best engage the potential customers?

What marketing strategies and methods

to followWhat is customer buying

Decision process for kitchen remodeling?

What should be the expense structure of marketing channels

and how maximize ROI

What is the best mix of traditional and Digital Media marketing method to educate and convince customer about

value NGIS provide?

Customer Experience Mapping to understand customer buying

cycle from beginning to end.

- Identify the ‘Pain Points’ and ‘Opportunities for Delight’

- Identify the best Marketing communication channels

Make Decision about positioning and engagment strategy of Services

Customer Experience Mapping Results• Preliminary Mapping

- Follow Proactive Approach- - get involved with customers in early

stages of decision making process.

-Guide the customer through the process

- Gain the trust by insightful advice and service

- Gain customer Loyalty by customer satisfaction and minimizing

complaints

customer Experience Mapping Results

• Detailed Mapping- Need to have strong relationship with other stakeholders i.e family

friends, third Party contracters

Insight about Customers Must Have and Nice to have information

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 - SuggestionsMedia 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

• 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

Thank you!

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