Sample Direct Marketing Project

Executive Summary and Recommendations

The IOC and City of London have decided to auction off each piece of the Opening
Ceremony in order to defray the costs of the London Olympics. Our firm, R&R Marketers
Extraordinaire, lobbied for the privilege to execute this on behalf of the City of London and the
IOC. The City of London ultimately decided to provide two contracts. The larger pieces, such as
the Voldemort creature and the Bell, will be sold through professional auction by Sothebys. The
smaller pieces, which include everything from Mary Poppins umbrellas to the sod from the pre-
industrial era, will be sold direct to consumers by R&R. Our total inventory, 1M pieces, has too
many unique items to detail.
Due to our financial agreement with the City of London and IOC, our margins per unit
will not support specific marketing efforts for each piece or even groups of pieces. We therefore
must create a marketing program that will broadly appeal to those who would have an interest in
purchasing a piece of the Olympics. Given these circumstances, we recommend:
Target Olympics Enthusiasts
Leverage direct mailing and online advertisements to reach the target consumer

Situation Analysis
In addition to the situational information provided above, it is worth noting that in exchange for
the high margins we pay the IOC and City of London, we have an exclusive contract for items from the
opening ceremony that Sothebys is not auctioning. While other companies are certainly selling
memorabilia associated with the London Olympic Games, none are selling authentic parts of the
Olympics. We therefore feel that we have a strong competitive position.
The consumer purchase process for these items is traditional. Consumers can place an order
though the phone or website or direct mailing form and the item will be shipped to them. There is no
auctioning process R&R will run the program like an online store.
R&R recognizes that not all of the 6B viewers of the London Olympics Opening ceremony will
be interested or have the financial means to purchase a unique piece of Olympic history. Moreover, we
are fortunate that our sister company, M&P Marketers had a similar agreement with the IOC and City of
Beijing and kept records of their actions and overall conversion rates. Using this information as well as
our insight into consumers usage of technology, we have aligned to the following objectives:

Business and Marketing Objectives
Our business objectives are to sell our entire 1M piece inventory. Before shipping and
taxes, items sell from $10 (sod) to $120,000 (full Mary Poppins uniform). We expect
each purchaser to purchase an average of 1.3 items at an average of $80. We therefore,
must achieve 770,000 purchasers.
Our marketing objectives are to efficiently achieve those 770,000 purchasers. Based on
our colleagues similar work in the Beijing Olympics, 80% of those who call or visit our
website will purchase. Therefore, our marketing objective is to get 960,000 consumers to
visit our website or call our hotline.
Our target market are Olympics Enthusiasts those who signed up to watch the Olympics
on their computers, those who set up an Olympics themed party on Facebook or other
social networking site, and those who are following the Olympics on Twitter or similar
sites worldwide. Of the 6B estimated viewers of the opening ceremony, we estimate that
10%, or 600M, are Olympics enthusiasts.
Our Beijing colleagues, who used a similar approach to defining their marketing target,
found that 30% of this target audience, once aware of the ability to purchase a piece of
the Opening ceremony, would call or visit their website. While we are confident that
advances in technology and our (obviously) superior marketing ability will enable us to
increase this number, we will conservatively estimate the same. Therefore, in order to get
the 960K consumers to visit or call our website, we need to reach 3.2M of our target
consumers.
We will concentrate on the US market, which we know best and over-indexes on
exposure to the Olympics, disposable income, and means by which we can effectively
market to them. There are 115M US households. If 10% (11M) are Olympic Enthusiasts,
and 30% of them will visit website, send in a direct mailing form, or call our hotline once
they are aware, we can get to the 3.2M target consumers we need in the US alone.

Communication Mix
Media Choices
We will use two types of communication to meet our objectives: Direct mailing and
targeted Facebook ads. These means of communicating are selected because of their relative
inexpensiveness per contact and our ability to leverage digital databases to focus our mailing and
ads to those consumers who are highly likely to fall within our target consumer. For direct
marketing, we can purchase the contact information of those who signed up to watch the
Olympics on their computers and specifically target them. For Facebook, we can target
consumers who hosted or attended a party with Olympics in the title.

Messaging
Our message is that we are the exclusive purveyor of items that were part of the XXX
Olympiad Opening Ceremony in London, and for a limited time offer the following for your
exclusive collection: [show items]. A phone number, order card, and pre-stamped return envelop
will be provided with direct mailing. For the Facebook ads, we will advertise the same, and
clicking on the link will direct them to our webpage, which will also have an online ordering
section and a phone number. Costs are outlined in the budget below.

Timing and Expenditures
Due to the secrecy surrounding the opening ceremony, we will not know the inventory
until after the opening ceremony and we will not be permitted to advertise until a couple days
after the ceremony. After this period of silence has ended, we will send mailings with photos of
the top 20 items to 3.2M households. The ads will be simply yet persuasive: Seize your chance
to own a piece of Olympic history! We will also place 500,000 targeted Facebook ads.
Summary Budget
Item Value
Number of consumers reached 3,200,000.00
30% consumer who will engage (call or access website) 960,000.00
80% of engaged consumers who will buy 768,000.00
Average number of purchases per engaged consumer 1.30
Total number of purchases 998,400.00
Average purchase value $80
Total Revenue $61,440,000

Number of direct mailings 3,000,000
Cost of Direct Mailing ($0.40 each) $ 1,200,000
Cost of Facebook ads (500,000 @ 60 dollars each) $ 30,000,000
Cost of marketing materials development and website maintenance and phone calls $ 500,000
Total cost of marketing materials $ 31,700,000

Before COGS Profit $29,740,000
Before COGS profits per consumer $38.72


Evaluation Plans
Ultimately, R&R will evaluate the success of failure of this marketing plan by whether
the business objectives were met. If the vast majority of the 1M items are not sold, the business
was not successful. However, R&R marketing is not responsible for the business decisions, only
the effectiveness of the marketing. To measure this effectiveness, we will do the following:

Marketing Question Evaluation Plan
Were enough target consumers* reached? Direct mailing: since we can control direct
mailing, we can assume that the majority of
consumers who we mail to will receive the
direct mailing.
Facebook: We will measure the number of
clicks on each ad.
In total, we should reach about 3.2M of our
target consumers.

*To note, since our target consumer is
defined primary by an attitude (Olympics
enthusiast), it will be difficult to determine
whether the consumers who engage are the
target consumers we were aiming for.
However, we will assume that if our
marketing is efficient and effective, we are
indeed reaching our targeted consumer.
Did enough target consumers engage? Consumers who write back via direct
mailing, click though to the website via
Facebook ads, visit our website themselves
(unique viewers will be tracked), or call our
hotline (caller names will be asked for) must
total 960K.
Were the costs per reaching those consumers low
enough to ensure before COGS profits at ~$30M?
Cost per reaching the 960K engaged
consumers must not exceed $32M.

We will track all of these metrics on a weekly basis to ensure we are on track to meet our
objectives. Corrective action will be taken if we are off by 10% or more of a specific goal after 2
consecutive weeks.