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,

Burberry, D&G, and more

q  Super-Manufacturer Luxottica owns most of Ray-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

Top Sunglass Frame Makers

2012

COMPETITIVE ANALYSIS

Oakley q  Subsidiary of Luxottica q  Revenue: $768 million q  Market Share: Luxottica

(27%)

Warby Parker q  Luxottica Start-up

company q  Revenue: $116 million 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

Oakley

Warby Parker

Knockoffs

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

Media q Television q Magazines

q Digital Media q  Internet/Website q Social Media

Ads

q  Alternative/Ambient Media q  Event

Marketing q  OOH

q  Marketing Services Media 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

q Nationwide Advertising q  More prominent

advertising in major U.S. cities (Chicago, New York, Los Angeles, Miami)

q  OOH ads, special events, and coupon distribution

SEASONALITY

q Continuous Advertising q  Internet and TV

q Seasonally q  Heavy product

advertising during specific times

q  At the start of spring, during the summer, and near Christmas time

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

Allocated Budget = $4 million q  Daytime = 7,000 CPP

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

Daytime = 25% ($1 million)

Primetime = 75% ($3 million)

TELEVISION

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

Day Part Cost Total Points Total Spending

Daytime (12pm-4pm)

$7,000 9 $1,000,000

Primetime (8pm-11pm)

$25,300 11 $3,000,000

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

Insertion # of Insertions

Total Cost

Rolling Stone

1,415 $211,580 5 $1,057,900

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

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.

Event Total Spending

Coachella $1,000,000

Lollapalooza $1,000,000

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

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.

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

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

Type Geographic Area

# of Weeks Total Cost

Digital Billboards

Chicago, NY, Houston

28 $105,000

Permanent Bulletins

LA and Miami 52 $130,000

Public Transportation

Chicago, NY, Miami

24 $120,960

Bus Shelters Chicago, NY, LA

52 $136,500

OUT-OF-HOME

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

TV

Magazines

Event

Internet

OOH

Coupon

$4 million

$1.93 million

$2 million

$1 million

$492,460 $500,000

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