The Situation Analysis

Where we are

Why we’re there

What should we do now?

The Situation Analysis

• Why do we start here?– Have to understand:

• Where your brand is• Why you are there• Where your competition is• Why they are there• What your possibilities are

• How to get there

The Situation AnalysisI. Product Category Analysis

A. Product Category History (basic product history including recent category innovations, trends, etc.)

B. Category Structure (list of sub-segments within your category e.g.: car segments, domestically produced goods vs. international goods, price segments. Divide the category the same way either the consumer or your client does.

C. Historical Category Sales: 3-5 year charts showing sub-segments and category sales development with trends listed.

D. Regionality of Category / Sub-segments Sales: Sales by region indexed to population. Category Development Index / Brand Development Index Analysis.

E. Seasonality of Category / Sub-segments Sales: Monthly/quarterly sales over past 3 years showing seasonal variations.

F. Pricing History of the Category / Sub-segments: segments, sales within segments, trends within segments.

G. Distribution History of the Category / Sub-segmentsH. Category Promotional Spending

1) Advertising Spending2) Sales Promotion Spending3) Public Relations Activities4) Personal Selling

The Situation Analysis

II. Competitor AnalysisA. COMPANY / BRAND B. Product

1) Product Construction: ingredients, quality, etc.2) Packaging Analysis

C. Sales1) Sales Volume2) Share of Market3) Regionality / Seasonality

D. Pricing StrategyE. Distribution Strategy

1) All Commodity Volume Distribution, CDI, BDI

The Situation Analysis

F. Research Knowledge Summary (e.g.: brand awareness, advertising awareness, consumer’s views of the product, etc.)

G) Promotion1) Advertising

a) Presumed Creative Strategy1) current advertising2) evaluation / implications

b) Presumed Media Strategy1) media spending2) media plan: key elements, presumed strategies3) SOV/SOM Analysis4) evaluation / implications

The Situation Analysis

2) Sales Promotiona) Presumed Strategyb) promotional plansc) evaluation / implications

3) Public Relationsa) Presumed Strategyb) PR plansc) evaluation / implications

4) Personal Sellinga) Presumed Strategyb) Plansc) evaluation / implications

The Situation Analysis

H. SWOT Analysis Summary1) Strengths

2) Weaknesses

3) Opportunities

4) Threats

I) Implications / Next Steps

“If you don’t know where you are going…

you can never get there.”

BRAND VISION

How to write a visionThere are five basic parts;

1) Where are we today? (Background/current state of events)

2) Where do we want to be X years from now (vision/objective)

3) How are we going to get there? (Strategies)

4) What will be the result of us having reached our goal? (End benefit)

5) Steps to be taken in the next 6 months to move toward the vision. (Road map)

Part 1) Where are we today?

This section includes a critical look at the following:

a) Situation Analysis.

b) Our evaluation of the quality of our work.

c) Brand vitality / new business / new brand assignments.

d) Quality of people.

e) Revenue / profitability growth / decline and reasons.

Part 2) Where do we want to be in X years?

This singular objective states how we and our client will measure our success.

Part 3) how are we going to get there?

This section tells how we will focus our assets and energies to move from where we are to where we want to be.

a) Evaluation.b) Quality of our Work.c) Personnel Quality, group “culture,” training.d) Areas of Leadership.e) Technology.

4) Results of Success

- What will this success mean for our client and for the agency. This should address the following:a) Sales b) Fulfillment of our company vision / mission.c) New brand assignments, new product assignments d) Annualized revenue growth.e) Ongoing account profitability.

5) Next Steps: 6 months

- You don’t eat an elephant all at once. Once you’ve defined very clearly where you want to go, and how you are going to get there, what specific next steps are you going to take for your region to begin along the path?

Let’s try it.

1) Where are we today?

2) Where do we want to be X years from now?

3) How are we going to get there?

4) What will be the result of us having reached our goal?

5) Steps to be taken in the next 6 months to move toward the vision.

Media: The Contact Points

Choosing the right

medium

for your message.

Media: The Contact Points

• Why is Media Important?– Your advertising can’t be successful if it’s not seen by

the right people at the right time.

– In a world with fewer and fewer real product differences, advertising is MORE important.

Media: The Contact Points

• The Key to Success:

– 100% Media Neutrality

– You figure out where are the best times and places to reach your customer and that’s where you advertise.

Day in the life: Dunkin Donuts

What do you do in the morning?

Staying functionally neutral means understanding the difference

between Attitudes & Behaviors

– The difference between what people think (attitudes) and what people do (behaviors)

• “Actions speak louder than words.”

• Example:

Media Neutrality

• Why is Media Neutrality a radical thought?

– Clients like doing what has been done before (“proven successful”)

– Clients like for their children to see their ads on TV

– Agency people like making TV commercials more than packaging redesigns.

– Cannes doesn’t give awards for matchbook covers or point of purchase displays.

Media: The Contact Points

• Where is the best place to advertise the following?– Cottage cheese?– Delivery pizza in a college town– iPod– FUBU– New Arctic Monkeys CD– Socks– BMW X-3– Honeymoon vacations– Athlete’s foot products– Life Insurance– New IKEA location

Media: Definitions that sound ickier than they really are

• Stuff you actually need to know to sound smart:– Medium: singular– Media: plural

• Define:– Media Objectives, Strategies, Tactics.– Reach– Frequency– GRP– TRP– CPM– CPP– SMRB & MRI– Day parts: early morning, daytime, early fringe, news, late fringe,

prime, late night – strengths and weaknesses of different media– “Alternative Media” and “New Media” just mean we didn’t think of it before.

Media: The Contact Points

• The eternal debate: – Which is more

important: efficiency or effectiveness?

Media: The Contact Points

• Efficiency– A GRP is a GRP is a GRP

• Get as many as you can afford; it doesn’t matter where they are.

• Media is a total commodity and should be bought like one.

• Just focus on impressions; more than year ago for less money.

Media: The Contact Points

• Effectiveness– The Fishing Channel vs. Desperate

Housewives• Same impact?

– Target your message to media your target cares about.

– Which media do they use (National Enquirer) vs. which do they trust (NY Times)?

Media: The Contact Points

• The answer?– Obviously both are

important. – Start with your target

and you’ll get the right answer.

Media: The Contact Points

• What we really need is credible understanding of what a GRP is worth by medium.– DDB’s Consumer Aperture: what is the ideal

time, place, circumstance where your target should see your ad?

– Every agency has their own version.

Medium Strengths & Weaknesses: Television

• Strengths– High quality sight and

sound

– Visual demonstration

– Creating an image

– Generate excitement

– Image transfer from show (e.g. Academy Awards, Super Bowl)

– Small to large audiences

• Weaknesses– Fleeting message

– Channel clutter

– Commercial clutter

– TIVO & remotes

– :15 commercials increasing clutter

– Expensive production (up to $5MM)

Medium Strengths & Weaknesses: Magazines

• Strengths– Specialized audiences– Certain magazines are

purchased because of the ads

– Life style and consumer passions

– Editorial prestige– Superior color

reproduction– Ability to explain in detail– Shelf-life and pass along

readership

• Weaknesses– Passive medium– Have to buy a lot of them

to get a very broad impact.

– Clutter (e.g. Vogue, In Style fall fashion issues)

Medium Strengths & Weaknesses: Radio

• Strengths– Very specialized

audiences (Howard Stern vs. Rush Limbaugh vs. Radio Disney)

– Sense of immediacy– Really good radio

advertising is very memorable

• Weaknesses– Local, not national– Splintered audience– Easy to change

channels– Lack of real audience

data– Hardly anyone can

write really good radio advertising.

– Background medium

Medium Strengths & Weaknesses: Newspaper

• Strengths– Credible– Local– Most widely used

advertising medium in the US

– Excellent to announce news: e.g. sales

– Short closing dates

• Weaknesses– Declining literacy rates

in the US– TV and Internet have

sapped their hold on immediacy of news

– Lack of standardization still an issue for national advertisers.

Medium Strengths & Weaknesses: Outdoor and Transit

• Strengths– Excellent reminder

vehicles.– Size of the message– Transit: captive

audience

• Weaknesses– <3 seconds.– Communications

limitations– Increasing clutter and

bad postings

Medium Strengths & Weaknesses: Direct Mail

• Strengths– Targeted– Room to say

everything you want and need to.

– 100% focus on your advertising vehicle

– Testable

• Weaknesses– What do you do with

“junk mail?”

Medium Strengths & Weaknesses: Internet

• Strengths– Can do “anything”– Basically not regulated– Deliver tremendous

detail and get a purchase

– Growing impact– Traceable &

relationship building

• Weaknesses– Clutter, clutter, clutter– Majority of computers

still too slow– Forget about most

people 50+– Have to go seeking

information for the most part

Medium Strengths & Weaknesses: Advertising Specialties

• Strengths– Very targeted– Tremendous creative

possibilities– Excellent for local

companies– There when you need

them

• Weaknesses– Unlikely to get

significant national impact.

Media: The Contact Points

• Professor Russell’s #1 Media Gripe:– Media strategy and planning are powerful

competitive tools rarely used these days.• Clients overly concerned about efficiency.• Media not at the table when decisions are made.

– No longer part of the advertising agency.

• Creative elements dictated by Creative Department, Account Planning, Account Management, Clients & the janitor.

• Almost never does the media group even have input. HUGE mistake.

Media: The Contact Points

• Who is at fault?– Media Companies separating from their agencies.– Clients focusing on efficiency, efficiency, efficiency.– Creatives & Clients more interested in producing TV

commercials for their egos than for the brand.

• How do you solve this?– Get media back at the table!

» E.g. LB Warsaw IKEA example.– Re-train clients to view media as creative.– Re-train creatives to share ownership of ideas.– Reward Creatives for media successes.