kellyscoffee-imc

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June 2002

This sample Integrated Marketing Communications plan has been made available to users ofIMC Plan Pro, IMC planning software published by Palo Alto Software. Names, locations andnumbers may have been changed, and substantial portions of text from the original plan may

have been omitted to preserve confidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not havepermission to reproduce, publish, distribute or even copy this plan as it exists here.

Requests for reprints, academic use, and other dissemination of this sample plan should beemailed to the marketing department of Palo Alto Software at [email protected]. Forproduct information visit our Website: www.paloalto.com or call: 1-800-229-7526.

Copyright Palo Alto Software, Inc., 2001-2003. All rights reserved.


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Confidentiality Agreement

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Upon request, this document is to be immediately returned to _______________.

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This is a plan. It does not imply an offering of securities.


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1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0 Promotion Opportunity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Communications Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.1.1 Competitive Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.1.2 Target Market Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.2 Market Segmentation Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.0 Corporate Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.1 Corporate Image Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.2 Brand Development Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.3 Brand Positioning Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.4 Distribution Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.5 Business-to-Business Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.6 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4.0 IMC Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.1 IMC Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.2 IMC Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.3 Internet Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5.0 IMC Objective One (Consumer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5.1 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.2 IMC Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

5.2.1 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.2.1. Advertising Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125.2.1. Creative Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125.2.1. Advertising Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

5.2.2 Consumer Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135.3 Media Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145.4 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

6.0 IMC Objective Two (Distribution Channel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

6.1 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156.2 IMC Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.3 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

7.0 IMC Objective Three (Business-to-Business) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

7.1 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167.2 IMC Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

7.2.1 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187.2.1. Advertising Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187.2.1. Creative Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197.2.1. Advertising Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

7 2 2 Personal Selling 19

Table of Contents


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1.0 Executive Summary

Kelly's Coffee is the third largest specialty coffee retailer/wholesaler in the San Francisco-BayArea, with 100 outlets throughout the metro areas. Founded in 1990, Kelly's CoffeeCorporation is a leading specialty coffee roaster, retailer and wholesaler. Kelly's Coffeewholesale channels also includes, offices, food service and restaurants as well as over 200grocery stores. From an initial staff of 10, Kelly's Coffee has grown to employ 1,150 people.Last year, the company grossed $120 million in sales. Over 70% of gross sales weregenerated from the retail stores.

Kelly's Coffee is introducing a feature that will impact how customers purchase coffee. Thecompany is launching a store-value card (pre-paid debit card) that can be used to makepurchases in any of Kelly's 100 stores in the greater San Francisco-Bay Area. This integratedmarketing communications plan is designed for the introduction of Kelly's Coffee new debitcard. The plan includes a promotions opportunity analysis, corporate strategies, IMCobjectives, plus all relevant advertising, promotion, personal selling, and database programs.A media plan and methods for evaluation the success of the IMC plan are also included in theplan.

Specialty coffee retailers in the San Francisco-Bay Area grossed in excess of $400 million insales for 2001. Sales are expected to increase by 15% over the next five years as theeconomy heats up and companies begin new hiring. Location as a marketing strategy has ledto fierce competition between retailers in the high traffic areas. The competition has impactedcustomer loyalty. In current surveys, no more than 35% of respondents reported apreference between the three major chains in the San Francisco-Bay Area: Starbucks,Seattle's Best and Kelly's Coffee.

The goal of the debit card program by Kelly's Coffee is to build customer loyalty in amarketplace where the competitors share more similarities than differences. The introductionof a debit card by Kelly's Coffee is directed at the company's primary target customer, themiddle income urban professionals that works in the commercial districts. Numerous surveysof this group indicate that they will be responsive to a debit card program that has rewardsand incentives.

The success of the card will serve as a vehicle to build stronger relationships with thecustomer base. Overtime the goal is to create a compelling reason for customers to walk pastthe competitors' coffee stores to get to a Kelly's Coffee store. Kelly's Coffee will establish acard reward and incentive system that will assure that the target customer groups see valuein using the cards.

The debit card will also be marketed to the area's businesses and companies. The business-to-business campaign will have two focuses. The first will be to promote the card to businessesas resources they can use within the company to buy coffee and pasty for meetings or, betteryet, as rewards to employees or customers. The second goal of the plan is to create

t hi ith i th t ill th d bit d i th i k ti k

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The overall goals for this integrated marketing communications plan are to:

Establish the debit card with the target customer groups. Create an effective communication and data storage system for the debit card system. Promote businesses and companies' use of the debit card.

2.0 Promotion Opportunity Analysis

Specialty coffee retailers in the San Francisco-Bay Area grossed in excess of $400 million in

sales for 2001. Sales are expected to increase by 15% over the next five years as theeconomy heats up and companies begin new hiring. The specialty coffee market is crowdedwith large and small competitors who are jockeying for position with consumers. Survey ofcoffee drinkers indicate that though there is a certain amount of customer loyalty, mostcoffee drinkers will go to the most conveniently-located coffee shop.This has been anadvantage for the larger coffee retailers, like Starbucks and Seattle's Best, who have over550 outlets in the San Francisco-Bay Area.

Location as a marketing strategy has led to fierce competition between retailers in the high

traffic areas. In many ways specialty coffee retailers resemble gas station competition with astation on each corner at a major intersection. In the past, the goal was to harvest as manycustomers as you could. Now stores are looking for strategies to attract customers to walkthat extra half-block away from a competitor's store to their store.

Kelly's Coffee is the third largest specialty coffee retailer/wholesaler in the San Francisco-BayArea, with over 100 outlets throughout the metro areas.The company is launching a newservice for its customer: a prepaid debit card that can be used in any Kelly's Coffee store tomake purchases.

2.1 Communications Analysis

The major specialty coffee stores employ a variety of advertising vehicles to improve sales.Newspaper advertisements, outdoor advertisement on buses and at bus shelters, radio, anddirect mailing have all be used by Kelly's competitors. Newspaper advertisements receive70% of advertising budgets. Coffee is an impulse item. During the course of the day, a daily

newspaper will be read by many potential customers in an office while radio and outdooradvertisements are only effective during commute periods. The newspaper offers the bestvehicle to direct an advertising message that will be reinforce every time a potential customerpicks up the newspaper.

The communication market analysis was conducted to examine how coffee shops advertisetheir products to target consumer groups. Kelly's competitors were examined, in particular,

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2.1.1 Competitive Analysis

There are only two major chains in the San Francisco-Bay Area that competes with Kelly'sCoffee, Starbucks and Seattle's Best. Kelly's advantage is that it is based in the area. BothStarbucks and Seattle's Best have their headquarters in Seattle, Washington. Kelly's hasreinforced that distinction by using the image of the Golden Gate Bridge in its logo. Kelly'sCoffee retail stores have twice the floor space of its competitors, providing additional spacefor customer to relax with their coffee and pastry.

Starbucks has over 350 retail stores in the San Francisco-Bay Area. The company is the most

dominant specialty coffee chain in the area, as well as the country, with 5,000 stores. Lastyear, Starbucks grossed $280 million in sales in the San Francisco-Bay Area. The company'smarketing strategy is focused on leveraging the Starbucks brand through products availableat their retail stores and supermarkets. Approximately, 80% of their advertising budget is innewspaper advertisements.

Seattle's Best has 100 retail stores in the San Francisco-Bay Area. Seattle's Best strategy hasbeen to locate their stores in suburban areas. The marketing is focused on local markets incommunity newspapers and direct mail campaigns. Last year, Seattle's Best grossed $100million in sales.

Currently, Kelly's Coffee has 75% of its retail stores in commercial areas in direct competitionwith Starbucks. The remaining 25% are located in suburban areas. Therefore, Starbucks isKelly's strongest competitor. Customer surveys indicate that loyalty is soft for all retailoutlets. Kelly's unique San Francisco-oriented environment gets high customer approval but itisn't sufficient alone to pull customers away from Starbucks.

A debit card program that is tied to incentives, discount, and rewards will be Kelly'smarketing vehicle to increase market share. Kelly's will seek out partnership opportunitieswith the debit card.

2.1.2 Target Market Analysis

The three main target markets for Kelly's Coffee are three income groups that work in thecommercial sector.

Modest Income: This group constitutes 40% of all office workers that purchase items atKelly's Coffee. Their primary criteria for selecting a coffee cafe is location and the speed ofservice. In surveys, this group rated incentives and rewards high (80%) as effectivemarketing tools. Though this group is less likely to purchase the high-end products that areavailable in the store, they are responsible for 34% of all whole bean sales.

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Sex: 60% male, 40% female; Family Income: $35,000-$60,000; Average Purchase: $10.

Upper Income: This urban professional group is 10% of Kelly's Coffee market. This groupshares much of the same observations of the middle income group but there are somedistinctions. This group reported having discounts on the store's high-end products as aattractive incentive to bring in more customers.

Ages: 40-60; Sex: 70% male, 30% female; Family Income: $80,000+; Average Purchase: $15.

The target market forecast data is provided in the table below. Based on the target marketanalysis, the projected number of customers anticipated by Kelly's Coffee during 2002 will be200,000. Based on annual growth rate of 8.45%, Kelly's Coffee projects a total of 276,662customers during 2006.

Table: Target Market Forecast

Target Market ForecastPotential Customers Growth 2003 2004 2005 2006 2007 CAGRModest Income 8% 80,000 86,760 94,091 102,042 110,665 8.45%Middle Income 8% 100,000 108,450 117,614 127,552 138,330 8.45%Upper Income 8% 20,000 21,690 23,523 25,511 27,667 8.45%Total 8.45% 200,000 216,900 235,228 255,105 276,662 8.45%

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Modest Income

Middle Income

Upper Income

Market Forecast

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2.2 Market Segmentation Strategy

Based on the communication market analysis, Kelly's Coffee will focus primarily on themiddle-income group. The other two groups, modest and high-income groups will besecondary targets.

For the middle-income group the average purchase is $10. Surveys have indicated that thisgroup places a high value on comfortable seating space in the cafe. A majority of respondents(70%) reported that Kelly's Coffee has more tables and comfortable seating than itscompetitors. But most respondents (60%) noted that this wasn't sufficient cause to walk pasta competitor retail store to reach a Kelly's Coffee retail store. They suggested the need forother incentives and reward. Discounted or free coffee drinks received the highest favorableresponse in the survey (90%). This group reported a high acceptance of debit cards (90%).When ask to identify the most favorable aspect of the debit card, 80% of respondentsreported "not having to fumble around for money." Another 75% of respondent reported thatrewards and incentives would make the debit card more attractive to use rather than thebank debit card.

The modest-income customers are Kelly's Coffee's secondary target group. Surveys indicatethat they are divided on the value of a debit card (Yes: 55%No: 45%). Respondents notedthat the cost of coffee was high enough without paying for 10 cups in advance. There was amore favorable response to the debit card if its use would lower the price of the cup of coffee(75%). More importantly, 63% of respondents reported that rewards and incentive wouldimprove the value of the card. Free coffee or free whole beans were noted most often asdesirable rewards.

The final group, high-income customers, are also secondary target customers. Surveysreported that this group was not very interested in a debit card. Over 65% of respondentsreported that they would not be interested in a debit card. The rewards and incentives thatwere satisfactory for the modest and middle income groups were not attractive to the highincome group. Only 40% of respondents reacted positively to the proposed reward of freecoffee or whole beans. There was a decidedly better response (65%) to discounts on high-end products in the store like espresso makers or other specialty coffee items.

Target Markets

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3.0 Corporate Strategies

To succeed, Kelly's Coffee must accomplish the following:

Attract the target customers into using the store's debit card. Create a sufficiently visible reward system that is tied to card use. Tier the rewards to attract the customers from all three target groups. Establish advertising visibility with target customer groups.

The marketing strategy for Kelly's Coffee will be to:

Get the debit card into the hands as many customers as possible. Have a reward system in place to promote activating the card. Make the process as smooth and as error free as possible.

3.1 Corporate Image Strategy

The primary market for Kelly's Coffee is the middle income urban professional. "The Bay'sBest!" will be the focus of Kelly's Coffee corporate image strategy. This is consistent with thebranding and imaging strategy of Kelly's Coffee.

3.2 Brand Development Strategy

The brand name of "Kelly's Coffee" reflects the company's origins in San Francisco in 1992.

Over the years the company has expanded only within the San Francisco-Bay Area. Thegrowth and success of the company has created an image of "Kelly's Coffee" that is distinctlySan Francisco.

Consistent with the brand image strategy, the brand development strategy and the brandpositioning strategy, Kelly's Coffee stores will use the tagline "The Bay's Best!" This taglineconveys the concept that Kelly's Coffee stores are the great places to have coffee.

3.3 Brand Positioning Strategy

The brand positioning strategy of Kelly's Coffee will be that the stores are a reflection of SanFrancisco-Bay Area culture. The appeal will be highly effective and partisan. Allcommunication of Kelly's Coffee will highlight this concept in the tagline "The Bay's Best!" Thedebit card will have famous San Francisco Bay Area landmarks imprinted on the cards

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3.4 Distribution Strategy

The distribution strategy for the debit card is the installation and setup of the systemnecessary to load, read, and process the debit card at each store. This is a process that mustrun smoothly in order to build customer confidence. Evans Electronic Systems has been hiredto implement the installation of the centralized data system as well as the processingequipment at each store. Kelly's Coffee will work closely with Evans Electronic Systems tomaintain as flawless a process as possible. Key to the success of this partnership will be thedevelopment of an effective processing system that is proactive in preventing problemsbefore they occur.

3.5 Business-to-Business Strategy

The business-to-business strategy for Kelly's Coffee is twofold. First, establish the debit cardwith the area's businesses and companies. The cards can be loaded up to $600. This can be aconvenient resource for paying for large orders that are associated with a meeting. Debitcards can also be used as a reward for employees.

The second focus is developing partnerships with companies that want to use the debit cardas part of a marketing strategy. The card could be bundled with a company's introduction ofa new car, consumer product, or service.

3.6 Evaluation

Evaluation of the branding, image, and positioning will be a continual process. From the verystart of the promotion, surveys will be conducted with customers in the stores. These surveysare designed to measure the effectiveness of the campaign to raise the brand nameawareness and consumer knowledge about the debit card. The positioning strategy will bemeasured if customers are responding to Kelly's brand strategy.

The table below highlights the evaluation program that will be used. Time frames and costsare estimated. The success of Kelly's Coffee debit card will be greatly affected by the speed inwhich the company can use the information from the evaluations. The total cost for the

evaluation is estimated at $290,000.

Table: Evaluation Programs

Evaluation Programs PlanStartDate

End Date Cost Manager Department

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Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Brand Awareness

Image Awareness

Positioning Analysis

Advertising Recall

Retail Traffic Analysis

Other

Evaluation Programs

4.0 IMC Management

Kelly's Coffee is launching an aggressive advertising campaign to introduce its debit card.Customer promotions will be used heavily to bring the target customer groups into the

stores. Advertising will be coordinated with the promotions to increase customer traffic. Thepositioning strategy of Kelly's Coffee, as "The Bay's Best," will be the focus of all thecompany's communication.

Kelly's Coffee has budgeted $850,000 for the IMC program for next year.

4.1 IMC Objectives

The IMC objectives for Kelly's Coffee is to firmly establish the company's brand positioningand development strategies with the targeted customer groups. Based on the communicationopportunity analysis, the following three IMC Objectives will be the focus of this IMC plan:

Establish the debit card with the target customer groups. Create an effective communication and data storage system for the debit card system

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4.2 IMC Budget

Kelly's Coffee communication budget for year one of operation will be $850,000. The basicbreakdown of this budget will be:

IMC Objective 1: $650,000 IMC Objective 2: $50,000 IMC Objective 3: $150,000

Kelly's Coffee will spend approximately 75% ($650,000) of the budget to achieve IMCObjective 1 to promote the debit card. The advertising and promotion will be directed towardthe target customer groups. The goal will be to create sufficient interest to generate traffic.

The goal of the IMC Objective 2 to is assure that the debit card's data processing and storagesystem functions effectively. The budget of $50,000 will be used to strengthen thecommunication links between Evans Electronic Systems and Kelly's Coffee. Budget will alsofund the collection of system data in order to improve the implementation of the debit card.

IMC Objective 3 will focus on the promotion of Kelly's Coffee debit card to businesses andcompanies. Of the assigned budget, $100,000 will be used to create direct mail marketingmaterial that will promote the debit card. The remaining $50,000 will be used to developpromotional partnerships with companies using the debit card as part of a product marketingcampaign.

Table: IMC Budget

IMC Budget 2004 2005 2006 2007 2008Consumer $650,000 $381,750 $374,575 $360,617 $359,555Distribution Channel $50,000 $60,000 $70,000 $50,000 $45,000

Business-to-Business $130,000 $148,000 $166,000 $151,000 $143,000Total Budget $830,000 $589,750 $610,575 $561,617 $547,555

$30 000

$40,000

$50,000

$60,000

$70,000

$80,000

Total IMC Budget

Monthly IMC Budget

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4.3 Internet Website

The website plays a significant role in Kelly's Coffee debit card program. Customers will beable to load money onto the card via the website. The website will also list locations of thestores, list of coffee and tea products as well as preparation equipment.

The website will provide information about the Kelly's Coffee, its history, and the history ofcoffee shops in San Francisco. The goal of this focus is to promote the brand positioning ofKelly's Coffee being the areas own local chain as opposed to its competitors.

5.0 IMC Objective One (Consumer)

The IMC Objective 1 is creating maximum visibility for the new debit card. The campaign willbe launched with a customer promotion program that will be integrated with all advertising.Kelly's Coffee employees will hand out 15,000 cards during the morning commute and lunchhour in the commercial centers in the San Francisco-Bay Area. Advertising will alertconsumers to the prizes that have been loaded onto selected cards. Potential card users will

be asked to come into a Kelly's Coffee store to find out if there is a prize on his or her card.

5.1 Budget

The budget for accomplishing Objective 1 will be $650,000. Twenty-five percent of theadvertising budget will pay the development costs of the advertising. All advertisements andsupporting communications will be developed by the creative staff of Kelly's Coffee. Of the

remaining $487,500 allocated for accomplishment of Objective 1, 40% will be spent onadvertising. Advertising will be the most effective for alerting the target customer groups ofthe rewards during the card giveaway. Card distribution and consumer promotions will use$270,000. The remaining funds ($22,500) will be spent on sustaining customer promotionsthroughout the year.

Table: IMC Budget by Consumer

IMC Budget by

ConsumerBudget 2004 2005 2006 2007 2008Advertising $357,500 $321,750 $289,575 $260,617 $234,555Card Distribution $270,000 $30,000 $40,000 $50,000 $60,000Sustaining ConsumerPromotions

$22,500 $30,000 $45,000 $50,000 $65,000

Other $0 $0 $0 $0 $0Total $650,000 $381,750 $374,575 $360,617 $359,555

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$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Advertising

Card Distribution

Sustaining Consumer Promotions

Other

IMC Budget by Consumer Monthly

5.2 IMC Methodologies

Kelly's Coffee is launching an aggressive card giveaway program that will be integrated withadvertising on the new debit card. The company will focus on promoting its brand image of

being San Francisco-Bay Area based. The tagline "The Bay's Best" will be used in all companycommunications. Customer promotions will be the center piece of the marketing campaign.Prizes will be loaded onto selected cards. Potential customers will to come in and activate thecard in order to find out if they have won anything.

5.2.1 Advertising

The primary goals of the advertising program are to build product awareness with the targetcustomer base. The advertising budget is $357,500.

The creative staff at Kelly's Coffee will create 9 full-page newspaper advertisements and 26half-page advertisements. The advertisements will focus on the San Francisco-Bay Area rootsof Kelly's Coffee and the ease and joy of using a debit card to buy coffee.

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5.2.1.1 Advertising Budget

The advertising budget is $357,500.

Table: Advertising Budget by Consumer

Advertising Budget by ConsumerBudget 2004 2005 2006 2007 2008Newspaper Ads $195,000 $175,500 $157,950 $142,155 $127,939Ad Development $162,500 $146,250 $131,625 $118,462 $106,616Other $0 $0 $0 $0 $0Total $357,500 $321,750 $289,575 $260,617 $234,555

Average $119,167 $107,250 $96,525 $86,872 $78,185

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Newspaper Ads

Ad Development

Other

Advertising Budget by Consumer Monthly

5.2.1.2 Creative Brief

In developing the initial advertisement for Kelly's Coffee, the following creative brief will beused.

Objective: To convince potential customers to activate their Kelly's Coffee debit cards.

Target Audience Profile: The target customer group is middle income urban

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5.2.1.3 Advertising Design

In creating the advertisements for Kelly's Coffee, the following means-end chain wasdeveloped.

Attribute: Kelly's Coffee is improving customer loyalty by adding value and benefitsto shopping at Kelly's Coffee stores.Benefit: More customers will use their debit cards at Kelly's Coffee rather than cashat a competitors' store.Personal value: Customers feel they are being rewarded by shopping at Kelly'sCoffee.Leverage point: Kelly's Coffee uses an image of the Golden Gate Bridge in thebackground. In the foreground, there is coffee cup with a green four-leaf clover in themiddle of the cup. The name "Kelly's" runs, at a 45% angle, through the four-leafclover. The image is tied to the headline "The Bay's Best!"Executional framework: The dramatization of a customer searching his pockets forthe money to buy a cup of coffee.

Advertising Design: The print advertisement will utilize an effective, cognativestrategy. The advertisement will take place at the counter of a Kelly's Coffee store. Ayoung man is searching his pocket for cash to buy a cup of coffee. The man is visibly

nervous. The cashier waits patiently. Behind the young man, a couple also wait to beserved. The man is holding a pound of coffee. The woman is holding a espressomaker. Both are holding Kelly's Coffee debit cards. The headline of the advertisementwill read "Why waste time searching your pockets, when Kelly's Coffee will reward youfor using the card." The tagline of the advertisement will read "The Bay's Best!"

5.2.2 Consumer Promotions

The budget for consumer promotions is $270,000. Kelly's Coffee will have 800 employeesdistributing the 15,000 new debit cards to morning commuters and lunch time crowds over athree week period. The cost of the card distribution will be $50,000. Initial consumerpromotions is budgeted at $120,000. The consumer promotion will be hidden on selectedcards. Five hundred of the cards will have a $100 credit already added. Five thousand cardswill have a $10 credit already loaded. Four thousand cards will have $5 credit already added.Over 60% recipients of the new debit card will be rewarded when they come into the store toactivate the card.

Kelly's Coffee is casting a wide net to pull in as many potential customers into its stores. Thegoal is to prime the customers to use the new debit cards and then encourage them to reloadcash onto the card with additional rewards. The remaining $100,000 is budgeted to rewardcustomers when they load cash onto the card. When $12 is added, the customer will receivea free coffee drink. When $50 is added to the card, the customer will receive a free pound of

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5.3 Media Plan

Kelly's Coffee will begin the advertising campaign with a saturation strategy throughout theSan Francisco-Bay Area. The company has selected the area's newspapers as the vehicle forprint advertising. The following newspapers will carry Kelly's Coffee advertisements:

Oakland Tribune; San Francisco Chronicle/Examiner; San Jose Mercury News.

During the first three week of the card's introduction, advertisements will appear in the

Monday, Tuesday, and Thursday editions of the selected newspapers. These advertisementswill all be full-page. After that point, half-page advertisements will be scheduled to appear onTuesday each week in July and August. Starting in September, the half-page advertisementswill become bi-weekly and focus on sales and specials.

This media plan will produce 9 full-page advertisements and 26 half-page advertisements.The total cost is $357,500.

5.4 Evaluation

Evaluation of the branding, image, and positioning will be a continual process. From the verystart of the promotion, surveys will be conducted with customers in the stores. These surveysare designed to measure the effectiveness of the campaign to raise the brand nameawareness and consumer knowledge about the debit card. The positioning strategy will bemeasured if customers are responding to Kelly's brand strategy.

Each week for the first three weeks, a survey will be conducted with 500 customers. After theinitial introduction, in-store surveys will be conducted every three months to assess customersatisfaction with Kelly's Coffee and its debit card.

In addition to the in-store surveys, Kelly's Coffee will conduct phone surveys three times ayear to assess the consumer opinion the company's brand identity and positioning. Thesesurveys will also be used to evaluate the effectiveness of newspaper advertisements.

6.0 IMC Objective Two (Distribution Channel)

The primary relationship with the distribution process is with Evans Electronic Systems. Forthe debit card system to work effectively, a customer must be able to access his or heraccount at any Kelly's Coffee store. Evans Electronic Systems will install and setup the

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6.1 Budget

The budget for IMC Objective 2 is $50,000. The focus of this budget is the smooth operationof the data system that will store and manage the Kelly's Coffee debit card program. The$50,000 will primarily be used to establish a database of system operations with EvanElectronic Systems and Kelly's Coffee. As part of the monitoring program, the database willrecord complaints, problems issues, and system breakdowns. The system will be underongoing internal monitoring process. Most of the budget will be spent of three independentthird party reviews of system operations over a 12 month period. The purpose of the reviewis to provide additional resources in assessing the performance of the system. It is estimatedthat as the system grows, new problems will emerge that will need to be addressed quickly.These reports will quickly identify problem areas and provide solution roadmaps. The reportswill be reviewed by both Evan Electronic Systems and Kelly's Coffee.

Table: IMC Budget by Distribution Channel

IMC Budget by Distribution Channel

Budget 2004 2005 2006 2007 2008Advertising $0 $0 $0 $0 $0Trade Promotions $0 $0 $0 $0 $0Personal Selling $0 $0 $0 $0 $0Database Programs $50,000 $60,000 $70,000 $50,000 $45,000Other $0 $0 $0 $0 $0Total $50,000 $60,000 $70,000 $50,000 $45,000Average $10,000 $12,000 $14,000 $10,000 $9,000

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Advertising

Trade Promotions

Personal SellingDatabase Programs

Other

IMC Budget by Distribution Channel Monthly

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The IMC methodology that is key to this objective is the creation of a database that willprovide the information needed to address problem areas before it impact the customer.Customer confidence in the debit card must be earned. Surveys reported that 40% ofrespondents had concerns about the security and accuracy of the potential system. This is asignificant amount. If the system become problematic, customer will refuse to use the cards.The positioning and image strategy of Kelly's Coffee will not be sustainable if customersbecome unhappy with the performance of the debit card system.

6.3 Evaluation

The third party independent review of debit card system operations will be the core of theevaluation process. A report will be produced every four months on the integrity of thesystem. These reports will be combined with other survey data that is linked to systemoperations. The goal is to establish a proactive approach to system problems that willfacilitate the discovery of bottlenecks and breakdowns before they occur.

7.0 IMC Objective Three (Business-to-Business)

There are two elements to the business-to-business objective of Kelly's Coffee. The first isselling the debit card to businesses and companies. The card is a convenient resource forpaying for large orders that are associated with meetings. In addition, the debit cards canalso be used as part of a rewards program for employees. The second objective is developing

partnerships with companies that want to use the debit card as part of a marketing strategy.The card could be bundled with a company's introduction of a new car, consumer product, orservice.

7.1 Budget

The budget for IMC Objective 3 is $150,000. Two thirds of the budget ($80,000) will be used

to create and distribute a brochure selling the debit cards to businesses. The remaining$50,000 will be used to follow up on businesses targeted in the direct mail campaign. Inaddition, Kelly's Coffee will pursue promotional partnerships with companies that can use thedebit card as part of their marketing campaign. The budget for the database program is$20,000.

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Table: IMC Budget by Business-to-Business

IMC Budget by Business-to-BusinessBudget 2004 2005 2006 2007 2008Advertising $80,000 $90,000 $100,000 $95,000 $90,000Business-to-Business Promotions $0 $0 $0 $0 $0Personal Selling $30,000 $35,000 $40,000 $32,000 $30,000Sponsorships $0 $0 $0 $0 $0Database Programs $20,000 $23,000 $26,000 $24,000 $23,000Other $0 $0 $0 $0 $0Total $130,000 $148,000 $166,000 $151,000 $143,000Average $21,667 $24,667 $27,667 $25,167 $23,833

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Advertising

Business-to-Business Promotions

Personal Selling

Sponsorships

Database Programs

IMC Budget by Business-to-Business Monthly


The IMC methodologies for Objective 3 are advertising, personal selling, and the development

of a database program. Advertising for the business debit card will utilize the advertising forthe customer card to achieve visibility with businesses. Kelly's Coffee will use a direct mailcampaign to send brochures to businesses. The brochures will include 3 debit cards.Businesses will be able to load money onto the card at a Kelly's Coffee store or at the Kelly'sCoffee website. The direct mail campaign will be followed up by contact by Kelly's sales staff.The goal will be to establish a long-term relationship that will result in the businesses using

d d b ll ' ff d b d

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7.2.1 Advertising

The primary goals of the advertising program are to build product awareness with the targetbusinesses and companies. The advertising budget is $80,000.

The creative staff at Kelly's Coffee will create sales brochures. The advertisements will focuson Kelly's Coffee debit card and how essential they are to businesses.

7.2.1.1 Advertising Budget

The advertising budget is $80,000.

Table: Advertising Budget by Business-to-Business

Advertising Budget by Business-to-BusinessBudget 2004 2005 2006 2007 2008Brochure/Direct Mail $80,000 $90,000 $100,000 $95,000 $90,000Name me $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0Total $80,000 $90,000 $100,000 $95,000 $90,000Average $26,667 $30,000 $33,333 $31,667 $30,000

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Brochure/Direct Mail

Name me

Other

Advertising Budget by Business-to-Business Monthly

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7.2.1.2 Creative Brief

In developing the initial advertisement for Kelly's Coffee, the following creative brief will beused.

Objective: To convince potential customers to activate their Kelly's Coffee debit cards.

Target Audience Profile: The target customer group is middle income urbanprofessional in high-density commercial sections of the San Francisco-Bay Area.

Message Theme: The primary message theme will be that Kelly's Coffee debit cardoffers ease and rewards that can't be matched at any other specialty coffee store.

The Support: The debit card removes the need for cash and there are rewards forusing the card.

The Constraints: The tagline "The Bay's Best!" is to be used in all communications.

7.2.1.3 Advertising Design

In creating the advertisements for Kelly's Coffee, the following means-end chain wasdeveloped.

Attribute: Kelly's Coffee is improving customer loyalty by adding value and benefitsto shopping at Kelly's Coffee stores.Benefit: More customers will use their debit cards at Kelly's Coffee rather than cashat a competitors' store.Personal value: Customers feel they are being rewarded by shopping at Kelly'sCoffee.Leverage point: Kelly's Coffee uses an image of the Golden Gate Bridge in thebackground. In the foreground, there is coffee cup with a green four-leaf clover in themiddle of the cup. The name "Kelly's" runs at a 45% angle, through the four-leafclover. The image is tied to the headline "The Bay's Best!"Executional framework: The dramatization of a customer searching his pockets forthe money to buy a cup of coffee.

Advertising Design: The print advertisement will utilize an effective, conativestrategy. The advertisement will take place at the counter of a Kelly's Coffee store. Acouple are purchasing coffee drinks and pastry at the counter. Both are holding Kelly'sCoffee debit cards. The headline of the Coffee will read "Your Ad/Our Coffee-A Great

Combination!" The tagline of the advertisement will read "The Bay's Best!"

7.2.2 Personal Selling

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7.2.3 Database Programs

The business-to-business database program will be used for the direct mail campaign. Allcommunication with the selected companies will be add to the database. In addition, all cardtransactions tied to a company will be add to the database. The goal is to establish trackrecord of card use that will part of future marketing presentation to businesses andcompanies. This tracking data will also be made available to companies using the cards inmajor marketing campaigns.

7.3 Media Plan

The media plan for Kelly's Coffee is a direct mail campaign of brochures to targetedbusinesses and companies.

7.4 Evaluation

The creation of the database is the primary evaluation tool for the business-to-businessobjective. The database will store all contact data with a business as well as the use level ofcards distributed by the business or company. The goal is to have a strong track record ofsuccess that will sell the debit card to more businesses and companies. Kelly's Coffee will alsoconduct a survey of businesses, twice a year, that have used the debit card in order toestablish the success of the program. The company's brand image, positioning, and thequality of products will also be evaluated.

8.0 Samples

8.1 Sample Logo

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8.2 Sample Consumer Advertisement

8.3 Sample Web Page

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Appendix Table: IMC Budget

IMC Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Consumer $56,875 $56,875 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625Distribution Channel $4,166 $4,166 $4,166 $4,166 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167Business-to-Business $10,832 $10,832 $10,832 $10,832 $10,834 $10,834 $10,834 $10,834 $10,834 $10,834 $10,834 $10,834Total Budget $71,873 $71,873 $68,623 $68,623 $68,626 $68,626 $68,626 $68,626 $68,626 $68,626 $68,626 $68,626

Appendix

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Appendix Table: IMC Budget by Consumer

IMC Budget by Consumer

Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Advertising $32,500 $32,500 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250Card Distribution $22,500 $22,500 $22,500 $22,500 $22,500 $22,500 $22,500 $22,500 $22,500 $22,500 $22,500 $22,500Sustaining ConsumerPromotions

$1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $56,875 $56,875 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625 $53,625Average $14,219 $14,219 $13,406 $13,406 $13,406 $13,406 $13,406 $13,406 $13,406 $13,406 $13,406 $13,406

Appendix

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Appendix Table: Advertising Budget by Consumer

Advertising Budget by Consumer

Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Newspaper Ads $16,250 $16,250 $16,250 $16,250 $16,250 $16,250 $16,250 $16,250 $16,250 $16,250 $16,250 $16,250Ad Development $16,250 $16,250 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $32,500 $32,500 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250 $29,250Average $10,833 $10,833 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750 $9,750

Appendix

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Appendix Table: IMC Budget by Distribution Channel

IMC Budget by Distribution Channel

Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Advertising $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Trade Promotions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Personal Selling $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Database Programs $4,166 $4,166 $4,166 $4,166 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $4,166 $4,166 $4,166 $4,166 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167Average $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833

Appendix

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Appendix Table: IMC Budget by Business-to-Business

IMC Budget by Business-to-Business

Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Advertising $6,666 $6,666 $6,666 $6,666 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667Business-to-Business Promotions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Personal Selling $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500Sponsorships $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Database Programs $1,666 $1,666 $1,666 $1,666 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $10,832 $10,832 $10,832 $10,832 $10,834 $10,834 $10,834 $10,834 $10,834 $10,834 $10,834 $10,834Average $1,805 $1,805 $1,805 $1,805 $1,806 $1,806 $1,806 $1,806 $1,806 $1,806 $1,806 $1,806

Appendix

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Appendix Table: Advertising Budget by Business-to-Business

Advertising Budget by Business-to-Business

Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Brochure/Direct Mail $6,666 $6,666 $6,666 $6,666 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667Name me $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total $6,666 $6,666 $6,666 $6,666 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667Average $2,222 $2,222 $2,222 $2,222 $2,222 $2,222 $2,222 $2,222 $2,222 $2,222 $2,222 $2,222

Appendix

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kellyscoffee-imc

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