RAY-BAN MEDIA PLAN 2015-2016 BY: NATALIE EDWARDS SITUATION ANALYSIS
Company Overview: q In 1937, the Ray-Ban brand was founded in Rochester NY by American company Bausch & Lomb q In 1999, sold to the Italian Luxottica Group for $640 million q Company is owned by Sebastian Zurita V. and Luxottica Group
q Produce eyewear for brands such as Oakley, Chanel, Dolce & Gabbanna, and Burberry q Company headquartered in Milan, Italy q Products are sold nationwide COMPANY OVERVIEW q Luxottica’s Annual 2014 Revenue = $9.3 billion q Market Share = 80% hold on the eyewear market
q Monopoly status (27%) q Luxottica owns most sunglass retailers
q Sears / Target Optical, Sunglass Hut, LensCrafters q Estimated 77,000 employees q Produced over 77 million pairs of glasses in 2014 q Ray-Ban = World’s #1 Seller
COMPANY / BRAND BACKGROUND q The first Ray-Ban sunglasses were created for the U.S. Army Air Corps
q The army was looking for an elegant looking sunglass to protect aviators from the sun q In May 1937, Bausch & Lomb patented the “Aviator” sunglass
q First sunglass to incorporate an anti-glare lens and have a lightweight metal frame q Became popular during WWII and quickly became a part of American fashion and popular culture in the 1950s and 1960s
q Worn by celebrities and musicians; product placement in movies PRODUCT INFORMATION
Ray-Ban offers 6 types of signature sunglasses, available in different shapes and colors (polarized and non-polarized): q Aviator q Wayfarer q Clubmaster q Round q Justin q Erica PRODUCT INFORMATION q Where to Buy
q Ray-Ban’s website (ray-ban.com) q Retailers (LensCrafters, Sunglass Hut)
q Optical Centers q Average Price of Product = $100 to $220 INDUSTRY ANALYSIS q Luxottica controls 80% of the eyewear segment
q Includes the following brands: Ray-Ban, Oakley, Top Sunglass Burberry, D&G, and more Frame Makers q Super-Manufacturer Luxottica owns most of Ray- 2012 Ban’s direct competitors
q Saturated market makes it costly to acquire new customers q Luxottica’s Advertising spending 2011-2013 = $141.6 million q Luxottica Competitors (Eyewear Segment):
q Safilo Group, De Rigo, and Marcolin
COMPETITIVE ANALYSIS
Oakley Warby Parker q Subsidiary of Luxottica q Luxottica Start-up q Revenue: $768 million company q Market Share: Luxottica q Revenue: $116 million (27%) q Market Share: N/A
Retailer Knockoffs q Revenue: N/A q Market Share: N/A q Knockoff sunglasses with styles similar to Ray-Ban’s products
COMPETITION q Oakley q Makes and sells performance sunglasses and ski goggles for sports and fashion enthusiasts (expensive) q Oakley is known for its customizable lens technologies, including 3D, and especially for its High-Definition Optics q Warby Parker q Starting at $95, Warby designs glasses in-house and sells directly to customers to avoid retail markups q The company primarily sells eyewear online and through its New York City headquarters q Retailer Knockoffs q Cheaper products available ($5-20), but poorer quality q Wal-Mart, Target, Walgreens, American Eagle, H&M ADVANTAGE
Ray-Ban’s Benefits:
q Recognized as an iconic American brand
q Timeless style and trendsetting qualities
q More affordable than Oakley products
q Better quality / durability than knockoff sunglasses
q Have better product warranty than Warby Parker COMPETITION Knockoffs
Oakley
Warby Parker TARGET AUDIENCE q Demographics
q Age: 18-34 q Gender: Male / Female
q HHI: $35K - $100K
q Education: Some College
q Marital Status: Single / Now Married
q Occupation: Working Class or Professional q Race: Mixed (Caucasian / African American / Hispanic)
q Geography: Anywhere in the U.S. TARGET AUDIENCE q Psychographics q Interests: Listening to music, hanging out at the local bar/ coffee shop, going “thrifting”. q Hobbies: Attending concerts, playing intermural sports, going to the gym, playing an instrument. q Lifestyle: Active, on-the-go, watch less TV and pay more attention to OOH. q Attitudes/Behaviors: Strong emphasis on individuality and self- expression. They do not believe in spending a significant amount of money on a pair of sunglasses, but they do like buying and wearing accessories. q Media Outlets q Heavy Magazine, OOH, Internet and Mobile App users.
MARKETING OBJECTIVES
Marketing Objective: q Improve the trial and repurchase of the product q Despite the expensive price of their sunglasses, we want people to buy and invest in more than just one pair.
Target Audience: q Nonusers and Light Users (18-34 years old) q We want to target the people who haven’t shopped with the brand before; the type of people who would rather spend $10 on a cheap pair than invest in a quality pair.
Challenge: q Getting consumers to stray away from buying from our competitors who offer similar, cheaper sunglasses. MEDIA OBJECTIVES q With Ray-Ban’s “Never Hide” campaign, we want to reach 70% of new target audience while maintaining average frequency of 3 (more exposure) q Magazines, Television, and Internet q Increase website and social media traffic / engagement by 25% in the first 6 months of the campaign q Ray-Ban.com and Facebook q Obtain new customers and improve product sales by 20% q Through event sponsorships and direct mail / coupon offers MEDIA MIX q Traditional q Alternative/ Media Ambient Media q Television q Event q Magazines Marketing q OOH q Digital Media q Marketing q Internet/Website Services Media q Social Media Ads q Direct Marketing/ Couponing MEDIA STRATEGIES q Utilize the pulsing method during year-long campaign q Combine flighting and continuous scheduling by using a low advertising level all year round and heavy advertising during peak selling periods. q Heavy advertising for TV and Magazines à beginning of spring, summertime, near Black Friday, and Christmastime q Air commercials before and during sponsored events to gain exposure and bring awareness to the brand q Continuous OOH advertising year round during all seasons with the implementation of guerrilla marketing tactics q Heavy outdoor exposure regardless of the weather q A constant Internet / social media presence will engage consumers and remind people of the brand GEOGRAPHY / SEASONALITY
GEOGRAPHIC CONSIDERATIONS SEASONALITY q Nationwide q Continuous Advertising Advertising q Internet and TV q More prominent advertising in major q Seasonally U.S. cities (Chicago, q Heavy product New York, Los advertising during Angeles, Miami) specific times q OOH ads, q At the start of spring, during the special events, summer, and near and coupon Christmas time distribution MEDIA TACTICS
Overview: q Television q Magazines q Event Marketing q Internet q Out-of-Home q Coupons
BUDGET BREAKDOWN q Television (40%) $4,000,000 q Magazines (20%) $2,000,000 q Event Marketing (20%) $2,000,000 q Internet (10%) $1,000,000 q Out-of-Home (5%) $500,000 q Couponing (5%) $500,000
Total Budget = $10 million TELEVISION Daytime = 25% ($1 million) Allocated Budget = $4 million Primetime = 75% q Daytime = 7,000 CPP ($3 million) q 1,000,000/7,000 = 142 TRPs q Primetime = 25,300 CPP q 3,000,000/25,300 = 118 TRPs
142 + 118 = 260pts
260pts / 20pts = 13 Weeks of TV TELEVISION
Day Part Cost Total Points Total Spending Daytime $7,000 9 $1,000,000 (12pm-4pm) Primetime $25,300 11 $3,000,000 (8pm-11pm)
Channels: MTV, Comedy Central, USA Network, TBS, and E!
Rationale: q Daytime TV will target the consumers who are more likely to be home during the daytime (get home from school / work early) q Primetime TV will target entire audience (18-34), who enjoy watching late night TV and talk shows that relate to their interests and hobbies TOTAL TELEVISION SPENDING = $4,000,000 MAGAZINES q Biweekly magazine q Circulation = 1,415 q Frequency = 24 q 4C Base Rate = $211,580
Purchased 5 inserts = $1,057,900
Rationale: Appeal to the current target audience; advertise in print medium in which they are already interested in. MAGAZINES q Bimonthly magazine q Digital / Web-based q Circulation = 102 q Frequency = 6 q 4C Base Rate = $55,220
Purchased 4 inserts = $220,880
Rationale: Print ad in digital form will appeal to consumers who prefer the internet / mobile. MAGAZINES q Bimonthly magazine q Circulation = 1,066 q Frequency = 12 q 4C Base Rate = $163,465
Purchased 4 inserts = $653,860
Rationale: Appeal primarily to the female audience with ad placement in popular women’s fashion magazine. MAGAZINES
Magazine Circulation Cost per # of Total Cost Insertion Insertions Rolling 1,415 $211,580 5 $1,057,900 Stone Spin 102 $55,220 4 $220,880
Elle 1,066 $163,465 4 $653,860
Rationale: Our target consumers are heavy print / magazine readers, as well as fashion and music enthusiasts. These three specific magazines will be popular among both men and women (18-34) and will cater to their interests. TOTAL MAGAZINE SPENDING = $1,932,640 EVENT MARKETING
Event Sponsorships Feature brand ambassadors, free sunglass giveaways, signage, pop- up stores, and other unique experiences throughout the duration of both music festivals. q Coachella Music Festival q Indio, CA q April 15th – April 24th 2016 q Lollapalooza q Chicago, IL q July 28th – 31st 2016
EVENT MARKETING
Event Total Spending
Coachella $1,000,000
Lollapalooza $1,000,000
Rationale: Sponsoring two of the most popular music festivals in the United States will generate brand awareness and goodwill for Ray-Ban. Sponsorship of these two events will give Ray-Ban the opportunity to reach festival attendees, Ray-Ban loyalists, and potential customers. These events target people who love music and fashion as well.
TOTAL EVENT SPENDING = $2,000,000 INTERNET
Rationale: q It is necessary for the brand to have an online presence because that is what the consumers expect q Must have a web presence to be relevant in the minds of the consumers q The website will guide the consumer, hopefully leading them to purchase the product or to pay attention to other mediums involving the brand
Benefits: q Interactive internet and social media ads are guaranteed to reach the target audience because they spend a majority of their time on the internet / mobile apps q Less expensive to implement compared to other mediums INTERNET q Ray-Ban’s Official Website q 15 million Impressions x $10 / 1000 = $150,000 q Pandora Advertising q Desktop and Mobile Video / Audio Ads ($25 per CPM) q 20 million impressions x $25 / 1000 = $500,000 q Facebook Banner Ads q 20 million Impressions x $10 / 1000 = $200,000 q Instagram Sponsored Ads q 15 million Impressions x $10 / 1000 = $150,000 INTERNET
Form Impressions Cost
Official Website 15 million $150,000
Pandora Ads 20 million $500,000
Facebook Ads 20 million $200,000
Instagram Ads 15 million $150,000
Rationale: Interactive ads will reach the target consumers who spend a majority of their time online and on mobile apps. The target spends a majority of their time on Internet radio and social media websites. TOTAL INTERNET SPENDING = $1,000,000 OUT-OF-HOME
Digital Billboards q $5,000 per 4 weeks à 28 weeks = $35,000 x 3 = $105,000 q Chicago, New York, and Houston
Permanent Bulletins (Signage on Buildings) q $5,000 per 4 weeks à 52 weeks = $65,000 x 2 = $130,000 q Los Angeles and Miami
Public Transportation (Fully Wrapped CTA Buses) q $6,720 per 4 weeks à 24 weeks = $40,320 x 3 = $120,960 q Chicago, New York, and Miami
Urban Bus Shelters (Ads) q $3,500 per 4 weeks à 52 weeks = $45,500 x 3 = $136,500 q Chicago, New York, and Los Angeles
OUT-OF-HOME
Type Geographic # of Weeks Total Cost Area Digital Chicago, NY, 28 $105,000 Billboards Houston Permanent LA and Miami 52 $130,000 Bulletins Public Chicago, NY, 24 $120,960 Transportation Miami Bus Shelters Chicago, NY, 52 $136,500 LA
Rationale: Every year, Americans take about 10.5 billion trips on public transportation. OOH ads stationed on billboards and on public transportation vehicles in urban areas will gain the most exposure out of all mediums. Target audience spends most of their time on-the-go. TOTAL OOH SPENDING =
$492,460 DIRECT MAIL / COUPONS q Distributed in main U.S. cities
q Chicago, New York, Los Angeles, Houston, and Miami q 250,000 pieces at $0.50 apiece = $500,000 q Distributed 4 times per year q Coupon Offer = BOGO
Rationale: Coupon incentive will drive both users and nonusers to purchase the product; fulfill the goal of consumers buying more than one pair. TOTAL COUPON SPENDING = $500,000 MEDIA PLAN SCHEDULE
January February March April May June July August September October November December Total Net Media 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 TRPs Ins. Cost NATIONAL
TELEVISION
Daytime/Primetime 20 20 20 20 20 20 20 20 20 20 20 20 20 260.. $4,000,000
MAGAZINES
Rolling Stone (biweekly) 5.. $1,057,900
Elle Magazine (monthly) 4.. $653,860
Spin Magazine (bimonthly) 4.. $220,880
EVENT
Coachella Music Festival $1,000,000
Lollapalooza $1,000,000
INTERNET
Ray-Ban Website $1,000,000
Pandora, Facebook, Instagram
OUTDOOR
Digital Billboards $492,460
Permanent Bulletins
Public Transportation
Urban Bus Shelters
COUPONS
250,000 pieces ($0.50 each) $500,000
National $9.92 million
BUDGET SUMMARY q Television (40%) $4,000,000 q Magazines (20%) $1,932,640 q Event Marketing (20%) $2,000,000 q Internet (10%) $1,000,000 q Out-of-Home (5%) $492,460 q Couponing (5%) $500,000
Total Spent = $9.92 million BUDGET BREAKDOWN
$500,000 $492,460
TV $1 million Magazines $4 million Event
$2 million Internet
OOH $1.93 million Coupon
WORKS CITED
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