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Advertising Plansbook
Olivia Silvestri
Spring 2011
TABLE OF CONTENTS
I. THE INDUSTRY
A. Overview
B. Industry History
C. Current Conditions
D. Industry Leaders
4
4
5
6
II. THE COMPANY
A. Overview
B. History
C. Company Mission
D. SWOT Analysis
1. Strengths
2. Weaknesses
3. Opportunities
4. Threats
7
7
9
10
10
11
12
13
III. THE PRODUCT
A. Stage of Product Life Cycle
B. Product Sales Features
C. Product Positioning
D. Distribution
E. Pricing
F. Sales History
G. Market Share
14
15
15
16
16
17
20
IV. TARGET MARKET
A. Primary Target Market
B. Secondary Target Market
21
21
V. COMPETITION
A. Top Competitors
B. Strengths of Competition
C. Weaknesses of Competition
D. Marketing Activities of Competition
22
23
24
25
VI. COMMUNICATION STRATEGY/HISTORY
A. Advertising
B. Promotion
C. Event Marketing
D. Direct Marketing
E. New Media
28
29
30
30
30
2
VII. MARKETING
A. Positioning Statement
B. Target Market Description
C. Marketing Objectives
31
31
32
VIII. ADVERTISING
A. Advertising Objectives
B. Advertising Strategy
1. Media
a. Media Strategy
i. Media Mix
ii. Media Vehicles
b. Media Schedule
i. Media Flow Chart
2. Creative Strategy/Brief
3. Creative Executions
33
33
34
34
34
35
38
38
38
39
IX. BUDGET
41
X. MEASURES AND EVALUATION
43
3
I. THE INDUSTRY1 2
A. Overview
J. Crew Group Inc. identifies with the following industry SIC
codes: 5699, Miscellaneous Apparel and Accessories; and
5961, Mail Order Houses. Also, it is categorized with the NAICS
code 448150 Clothing Accessories Stores.
Companies within these industries specialize in sports apparel,
uniforms, designer apparel, customized clothing, and women
accessories. Typically many of these retailers rely on catalogs
and the Internet for advertising and customer sales.
B. History
The Mail Order industry dates back to the 1490s just after
Gutenberg invented the printing press. The first known
catalog was established in Venice in 1498 and mail-order
operations have existed in the United States since the colonial
era.
In the 1980s, companies benefited from computer and
software advances, allowing retailers to manage customers
and inventory better. In addition, the development of new
methods of payments such as credit cards, made purchasing
products through the mail safer and efficient. Between the
1980s and 1990s mail-order sales increased tremendously;
however, by the start of the next decade as the economy
suppressed so did sales.
In 2000, the Mail Order Houses industry was redefined as
retailers launched catalogs, catalog sellers opened stores,
and many merchants made Internet sales. Through Internet
sales the industry has exploded in growth. A noted example
1
"Catalog and Mail-Order Houses." Encyclopedia of American Industries. Online Edition. Gale,
2011. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.:Gale Group.
2011. http://galenet.galegroup.com/servlet/BCRC
2
"Women's Accessory and Specialty Stores." Encyclopedia of American Industries. Online Edition.
Gale, 2011. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.:Gale
Group. 2011. http://galenet.galegroup.com/servlet/BCRC
4
was in 1998 when online sales for J. Crew quadrupled
reaching $20 million, a significant increase from previous
years.
The Women’s Apparel and Accessories industry was
dominated by fur retailers and peaked in 1987 reaching sales
of $1.8 billion. However, when the economy took a turn,
many stores dropped their fur departments. The set backs of
this led to changes within the industry and in the early 1990s
accessories became more popular.
It was not until the mid-2000s when sales substantially
increased as women looked more toward purchasing
clothing that would transition from career wear to leisure
wear. While shoppers remained budget conscious, they
became more fashion savvy and began using accessories to
keep their styles current.
Stores categorized in this industry offered a vast selection
within limited product lines and therefore were considered
specialty retailers.
In 2003 as the economy rebounded, the industry saw good
growth rate because women began to splurge on the “little
things” again.
C. Current Conditions
In the three most recent annual reports of the Multichannel
Merchandise 100 (MCM 100), 83 of the top 100 companies
reported year-over-year increase in catalog and Internet
revenue for 2004, 2005, and 2006. That indicates the mail
order house industry has stabilized after a difficult stretch in
the early 2000s.
In 2003, 70 of the top 100 companies reported year-over-year
growth for catalog and Internet sales, while 60 of the top 100
reported such growth in 2002.
Acquisitions helped several companies achieve growth in
2006, according to the 2007 MCM 100 report.
5
The Direct Marketing Association (DMA) also noted positive
growth in the industry through the fourth quarter of 2007. In its
Quarterly Business Review (QBR) for the fourth quarter of 2007,
DMA reported the industry experienced its eighteenth
consecutive quarter of positive growth. Those results
indicated the growth was slowing down, and DMA
forecasted more modest growth in the first quarter of 2008.
With an uncertain U.S. economy because of high-energy
costs and difficulty in the housing and mortgage industries
heading into the late 2000s, the mantra for accessory and
specialty shops was "When the dollars get tight, the tight get
accessories."
Following strong years for accessories sales in 2005 and 2006,
2007 was mostly positive in the industry and the forecast for
2008 was favorable as well.
Growth appeared mostly at the moderate and upper tiers as
consumers in many instances opted to update wardrobes
with accessories rather than replace them. The lower part of
the market suffered somewhat with shoppers having to
bypass some smaller impulse purchases in favor of gasoline.
D. Industry Leaders
The leaders in the Mail Order House industry include:
• Dell Inc.
• Amazon.com
• Office Depot
The leaders in the Women’s Apparel and Accessories industry
include:
• Victoria’s Secret Stores
• Claire’s Stores, Inc.
• Gucci Group N.V.
6
II. THE COMPANY
A. Overview3
J. Crew Group (J. Crew) is an apparel and accessories brand,
which offers an assortment of women's and men's apparel
and accessories. The company sells its products through
stores, catalogs, and websites. Primarily they operate in the
U.S. It is headquartered in New York City, New York and
employs about 3,100 people.
The company recorded revenues of $1,334.7 million in the
financial year ended January 2008 (FY2008), an increase of
15.9% over 2007. The operating profit of the company was
$172.5 million in FY2008, an increase of 37.3% over 2007. The
net profit was $97.1 million in the FY2008, an increase of 35.5%
over 2007.
B. History4
J. Crew Group started in 1983 when Arthur Cinader
established a classic apparel catalog J. Crew, a name that
connoted casual, collegiate clothing. First-year sales were
recorded at about $3 million.
The following year Arthur’s daughter Emily became the
company’s chief designer. Although early catalogs included
clothing from a number of manufacturers Emily moved the
company to selling its own brand exclusively.
J. Crew's early unisex styles were shaped by her desire to
wear some of the same clothes she wore while growing up,
such as her brother's chinos. J. Crew catalog sales grew
rapidly during the mid-1980s.
3
“J Crew Group, Inc.” Datamonitor, New York, NY: 28 Dec 2009. Business Source Premier.
http://web.ebscohost.com/bsi/pdf?sid=4a167157-805d-4e1a-8108203438b89efb%40sessionmgr11&vid=15&hid=19
4
“History.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/history.html?companyId=40243000000000
7
In 1989 Emily became president of the J. Crew catalog
division and launched a risky expansion into retail, with its first
store in New York City. Later in 1989 J. Crew unveiled an
ambitious store-opening plan (50 stores in five years).
However, a weakened economy and sharp competition
slowed growth.
In 1993 J. Crew signed an agreement with ITOCHU, permitting
the Japanese retailer to distribute its clothes in that country.
In an effort to recapitalize the struggling company, the Texas
Pacific Group bought its stake in J. Crew in 1997, with an eye
on taking it public when its performance improved. At that
time Arthur retired and Emily succeeded her father as J.
Crew's chair (Emily retired from the board in late 2006).
In 1998 J. Crew attributed a loss of $27 million to disappointing
mail-order sales caused by the USPS strike and a warm fall
and winter. The company dismissed 10% of its workforce to
reduce overhead costs that year.
In 2001 J. Crew announced plans to launch a complete line
of children's wear for boys and girls ages 6 to 12. Then the
company laid off about 30 workers at its headquarters after
recording disappointing sales.
In 2003, former Gap executive, Millard "Micky" Drexler
became Chairman and CEO. Just in time for Fashion Week in
2004, Drexler led J. Crew down the wedding aisle by
introducing an abbreviated collection of wedding ensembles
for men and women. The success of the wedding line
prompted the company to launch a bridal-only catalog "J.
Crew Wedding" in April 2005. Also in 2005 the company
brought its J. Crew factory business to the Internet with the
launch of jcrewfactory.com and began offering jewelry in
May.
In 2006 the company expanded into the children's apparel
market with a new collection called Crewcuts for kids ages
two through 10.
8
In June, J. Crew finally went public with an offering worth $376
million, which at the time was the third largest apparel
retailing public offering in history. In August the company
launched Madewell, a new retail concept, in Dallas.
In 2008 the company opened a small men's shop in
downtown Manhattan where it planned to work on finetuning for its men's apparel business in preparation for the
launch of standalone J. Crew men's stores.
In March 2011, TPG Capital and Leonard Green & partners
took the company private for $43.50 per share in cash. The
stock was de-listed from the New York Stock Exchange on
March 7.
C. Company Mission5
In 2003, Millard “Mickey” Drexler joined J. Crew as Chairman
and CEO, pushing service, quality and innovation to the next
level. By partnering with the finest global fabric mills and
craftsmen—as well as with iconic brands such as Jack
Purcell®, Timex®, Thomas Mason® and Red Wing® (to name
just a few), J. Crew focuses on satisfying its customers’
apparel and accessory needs and providing them with the
best service possible. In addition, the company is committed
to maintaining integrity and sees this as a critical long-term
goal.
5
“About Us.” J. Crew. J. Crew, 2011
http://www.jcrew.com/footer/aboutus.jsp
9
D. SWOT Analysis6
•
•
•
•
•
Strengths
Multiple sales channels
Product portfolio at multiple
price points
Opportunities
Growing direct to consumer
channel
Increasing market presence
Growing U.S. apparel market
•
•
•
Weaknesses
Declining same store sales
Geographic concentration
Overdependence on suppliers
•
•
•
Threats
Intense competition
Low consumer confidence
Affects of the sub prime crisis
1. Strengths
•
Multiple Sales Channels
J. Crew offers its products through multiple sales channels
including retail and factory stores and direct channels.
Stores help in creating brand awareness and customer
loyalty by bringing about a personal touch.
The direct channel comprises the website, jcrew.com and
J. Crew catalog. In addition to offering the similar
merchandise offered by the company at the stores, the
direct sales channels also offer exclusive merchandise not
available at the retail or factory stores.
In FY2008, the company derived 68.5% of its revenues from
stores channel and 28.3% of its revenues from the direct
sales channel.
J. Crew’s catalogs help in driving customers to other sales
channels. Direct sales channels help the company extend
its market reach and penetration without incurring
additional infrastructure set up expense. Physical stores
6
“J Crew Group, Inc.” Datamonitor, New York, NY: 28 Dec 2009. Business Source Premier.
http://web.ebscohost.com/bsi/pdf?sid=4a167157-805d-4e1a-8108203438b89efb%40sessionmgr11&vid=15&hid=19
10
enable customers to personally select their outfits at leisure;
websites and catalogs suit those customers who are
pressed for time. Therefore, multiple sales channels enable
J. Crew to reach out to a wider customer base and to earn
more revenues.
•
Product portfolio at multiple price points
J. Crew offers customer focused merchandise at various
price points. Through J. Crew and Crewcuts, the company
caters to affluent customers. The company caters to price
conscious customers through factory stores and Madewell.
Offering products at varied price points enables J. Crew to
cater to varied needs of customers.
2. Weaknesses
•
Declining same store sales
J. Crew has been recording a decline in same store sales
over the last few years. Same store sales declined
significantly in FY2008. In FY2008, the company recorded
same store sales growth (an annual growth rate) of 5.6%, as
compared with a 13% growth rate in FY2007. The same
store sales declined from an increase of 16.4% in FY2005 to
an increase of 13.4% in FY2006. Declining same store sales
indicates that J. Crew is not able to stock a proper
merchandise mix that appeal to customers.
•
Geographic concentration
J. Crew’s operations are concentrated in the U.S. Though
the company derives revenues from Japan through its
license there, the revenue received by the company in the
form of royalties is meager.
Geographic concentration exposes J. Crew to business risks
associated with that particular region, making the
company vulnerable to adverse economic developments
in that market and also limits its growth prospects.
11
•
Overdependence on suppliers
J. Crew is over dependent on its suppliers. The company
does not own or operate any manufacturing facility and
therefore sources all of its merchandise from third party
suppliers.
Of the total number of suppliers, J. Crew procures 52% of its
merchandise from its top 10 suppliers. Of the total
merchandise procured overseas, J. Crew procured around
86% of its merchandise from Asia. J. Crew purchased 50% of
its total merchandise from a single buying agent in FY2008.
As the company depends entirely on suppliers for its
merchandise it could result in longer lead times and quality
issues. Both the factors could adversely impact the
company and result in low revenues.
3. Opportunities
•
Growing direct to consumer channel
Online shopping has steadily grown in popularity in the U.S.
and was estimated to touch $329 billion in 2010. J. Crew
offers its merchandise through its website jcrew.com. The
company enhanced its website and updates it through the
day to reflect the availability of the products online.
The U.S. retail catalog business is projected to grow
between 2006–2011 and is expected to be the world’s most
lucrative catalog business. The company markets its
products through J. Crew and Crewcuts catalogs.
In FY2008, the company issued special catalogs to cater to
the needs of specific segments of customers. A positive
outlook for the U.S. online and catalog retail market would
boost J. Crew's revenues.
•
Increasing market presence
J. Crew plans to increase its market presence by
expanding its store base. In FY2008, the company opened
23 retail stores and in FY2009 J. Crew proposed to open
between 25–30 retail stores.
12
Increasing market presence would enable the company to
cater to a wider customer base and hence earn more
revenues.
•
Growing U.S. apparel market
J. Crew is engaged in the retailing of men’s, women’s and
children’s apparel in the U.S. The U.S. apparel market is one
of the largest in the world, it accounts for 34.6% of global
sales. The U.S. apparel market is expected to grow by a
CAGR of 2.6% during 2006–2011.
The company offers apparel, wedding and special
occasion apparel, weekend wear, swimwear, loungewear,
outerwear, shoes, bags, belts, hair accessories and jewelry.
The growth in the U.S. apparel market could drive the
revenues of J. Crew.
4. Threats
•
Intense competition
J. Crew faces intense competition in men’s, women’s and
children’s apparel and accessories. The company
competes primarily with specialty retailers, higher-end
department stores, catalog retailers and Internet business
engaged in the retailing of women’s, men’s and children’s
apparel, accessories, shoes and other merchandise.
Intense competition and pricing differential could lead to a
loss of market share and may also put pressure on the
company’s margins.
•
Low consumer confidence
Consumer confidence in the U.S. declined in March 2008
owing to weakening labor market and harder borrowing
standards. The drop in customer confidence has been
caused primarily by concerns over job security in a
tightening job market.
The proportion of consumers expecting their incomes to
increase declined to 14.9% in March 2008 from 18% in
February 2008. This has contributed to a decline in
13
consumer confidence. A decline in consumer confidence
could adversely affect the J. Crew’s revenues.
•
Affects of the sub prime crisis
According to data compiled by the National Retail
Federation, a retail trade association in the U.S., rising home
equity was one of the significant reasons for growth in retail
sales in 2005 and 2006.
Since the onset of sub-prime crisis, housing prices have
dropped. This has caused consumer spending to dwindle
forcing not only sub-prime borrowers, but also other classes
of borrowers to defer discretionary spending to meet rising
debt repayments. As a result, the big retailers in the U.S.
have experienced a fall in sales. If the sub-prime crisis
spreads to other classes of assets, then the impact could
be even bigger on the retail industry.
III. THE PRODUCT
A. Stage of Product Life Cycle
J. Crew is in the growth stage of the product life cycle. The
company continues to increase its market presence through
opening additional stores, including specialty boutiques
specifically for segmented markets, and utilizing multi sale
channels. Catering to more customers on multiple platforms
results in higher revenues.
Since 2010, J. Crew sales increased 9.14%, and as the U.S.
market continues growing through 2011 the company’s
expansion reflects this pattern looking optimistic.7 Remaining
active in this stage is crucial for J. Crew. Capitalizing on
strengths and opportunities such as catalog and online sales
will help the company bring in more revenue and sustain itself
in the growth stage.8
7
“Basic Financial Information.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/financialSummary.html?companyId=402430000000
00
8
“J Crew Group, Inc.” Datamonitor, New York, NY: 28 Dec 2009. Business Source Premier.
14
B. Product Sales Features
The crews depicted in the polished catalogs of the J. Crew
Group are far from motley. The retailer is known for its preppy
fashions, including jeans, khakis, and other items sold to
young professionals through its catalogs, websites, and retail
and factory stores in the U.S.9
The J. Crew Group offers complete assortments of women's,
men's and children's apparel and accessories. The company's
key products include the following: Men's apparel and
accessories, women's apparel and accessories, children's
apparel, footwear, bags, belts, hair accessories, and jewelry.
Currently J. Crew Group offers these products through three
brands J. Crew, Madewell, and Crewcuts.10
C. Product Positioning11
Maintaining positive relationships with customers is key to J.
Crew. The company positions itself inspiring consumers to buy
into the J. Crew lifestyle.
Throughout the years, J. Crew has re-invented its style and so
have its customers. Instead of dropping the retailer, most
customers, especially females, have altered their styles
according to the J. Crew trends.
J. Crew also demonstrates strong positioning tactics through
its catalog and website. For example, the retailer shows how
the clothing can work together in print and then customers
can further explore these options online.
http://web.ebscohost.com/bsi/pdf?sid=4a167157-805d-4e1a-8108203438b89efb%40sessionmgr11&vid=15&hid=19
9
“About Us.” J. Crew. J. Crew, 2011
http://www.jcrew.com/footer/aboutus.jsp
10
“J Crew Group, Inc.” Datamonitor, New York, NY: 28 Dec 2009. Business Source Premier.
http://web.ebscohost.com/bsi/pdf?sid=4a167157-805d-4e1a-8108203438b89efb%40sessionmgr11&vid=15&hid=19
11
“Case Study: J. Crew shows what print catalogs can add to the online shopping experience.”
Meghan Keane. 3 March 2010. E-consultancy.com.
http://econsultancy.com/us/blog/5516-case-study-j-crew-shows-what-print-catalogs-can-add-tothe-online-shopping-experience
15
In addition, real life women who inspire J. Crew style are
featured in catalogs and on jcrew.com. While this may not
directly send customers to product links, it helps convey a
lifestyle that a brand like J. Crew would promote.
D. Distribution12
J. Crew distributes products through its catalogs, website, and
355 retail, factory, and specialty stores in the U.S. It operates
two distribution facilities and one customer call center.
The company owns a 282,000 square foot facility in Asheville,
North Carolina that houses its distribution operations for its
stores. Merchandise is transported from this distribution center
to stores by independent trucking companies, Federal Express
or UPS, with a transit time of approximately two to five days.
J. Crew also owns a 262,000 square foot facility, and leases a
63,700 square foot facility, both located in Lynchburg,
Virginia. These facilities contain the company’s customer call
center and order fulfillment operations for its direct channel.
J. Crew outsources a portion of its customer calls to a thirdparty service provider. Merchandise sold via direct channel is
sent directly to customers from this distribution center via the
United States Postal Service, UPS or Federal Express.
E. Pricing13
J. Crew offers customers a mix of select designer-quality
products and more casual items at various price points,
consistent with its signature styling strategy of pairing luxury
items with more casual items. J. Crew has introduced limited
edition “collection” items such as hand-beaded skirts, which
12
“SEC Filings-Annual Report.” Hoover’s. Hoover’s, Inc., 2011.
http://hoovers.api.edgaronline.com/EFX_dll/EdgarPro.dll?FetchFilingHTML1?SessionID=oA56HeLPrw
nlyFF&ID=7810534#D10K_HTM_FIN156929_6
13
“SEC Filings-Annual Report.” Hoover’s. Hoover’s, Inc., 2011.
http://hoovers.api.edgaronline.com/EFX_dll/EdgarPro.dll?FetchFilingHTML1?SessionID=oA56HeLPrw
nlyFF&ID=7810534#D10K_HTM_FIN156929_6
16
the company believes elevates the overall perception of its
brand.
J. Crew believes offering a broad range of price points
maintains a more accessible, less intimidating atmosphere.
F. Sales History
Basic Financial Information14
Company Type
Fiscal Year-End
Financial Filings
2011 Sales
1-Year Sales Growth
2011 Net Income
1-Year Net Income Growth
Prescreen Score
Auditor
Company Website
Private
January
SEC
$1.72B
9.14%
$121.50M
(1.50%)
Low Risk
KPMG LLP
www.jcrew.com
Income Statement15
Year
Revenue
Net Income
Jan 2011
Jan 2010
Jan 2009
Jan 2008
Jan 2007
Jan 2006
Jan 2005
Jan 2004
Jan 2003
Jan 2002
$121.50M
$123.36M
$54.12M
$97.07M
$77.78M
$3.79M
($100.31M)
($47.28M)
($40.59M)
($11.01M)
$1,722.23M
$1,578.04M
$1,427.97M
$1,334.72M
$1,152.10M
$953.19M
$804.22M
$688.29M
$766.38M
$777.94M
14
Net Profit
Margin
7.06%
7.82%
3.79%
7.27%
6.75%
0.40%
-----
“Financial Summary.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/financialSummary.html?companyId=402430000000
00
17
16
2011 Year-End Financials17
Debt Ratio
Return on Equity
Cash
Current Ratio
Long-Term Debt
Shares Outstanding
Dividend Yield
Dividend Payout
Market Cap
0.00%
27.40%
$381.36M
2.35
$0.00M
63.91M
0.00%
-$2,774.96M
15
“Income Statement.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/incomeStatements.html?companyId=402430000000
00
16
“Financial Summary.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/financialSummary.html?companyId=402430000000
00
17
“Financial History.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/financialHistory.html?companyId=40243000000000
18
18
Annual Income Statements19
Jan 11
Jan 10
Jan 09
Revenue
$1.72B
$1.58B
$1.43B
Gross Profit
$747.00M
$695.66M
$555.42M
Operating Income
$213.97M
$211.26M
$96.68M
Total Net Income
$121.50M
$123.36M
$54.12M
Diluted EPS
$1.84
$1.91
$0.85
18
“Financial History.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/financialHistory.html?companyId=40243000000000
19
“Financial Summary.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/financialSummary.html?companyId=402430000000
00
19
G. Market Share20
2010 Key Numbers
J. Crew
Lands’ End
The Gap
L.L. Bean
Annual
Sales
Employees
$1,722.23M
--
$14,197.00M
$1,500.00M
12,000
--
135,000
4,600
Market
Cap
$2,500.77M
--
$11,722.00M
--
20
“Competitive Landscape.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/competitiveLandscape.html?companyId=40243000
000000
20
IV. TARGET MARKET21
A. Primary Target Market
J. Crew primarily markets its “classic with a twist” apparel and
accessories to women ages 25-40. Typically, these females
have a household income of more than $125,000 and want
high quality design, fabrics and craftsmanship in addition to
regular fits and detailing.
B. Secondary Target Market
J. Crew’s secondary target market is aimed at children
between the ages of two and 10 through Crewcuts, which
offers high-quality apparel and accessories.
Young children’s style is influenced by what their parents
wear; therefore, customers who love the J. Crew style for
themselves will want it for their kids as well.22
V. COMPETITION23
The specialty retail industry is highly competitive. J. Crew
competes primarily with specialty retailers, department stores,
catalog retailers and Internet businesses that engage in the
sale of women’s, men’s and children’s apparel, accessories,
shoes and similar merchandise.
21
“J Crew Group, Inc.” Datamonitor, New York, NY: 28 Dec 2009. Business Source Premier.
http://web.ebscohost.com/bsi/pdf?sid=4a167157-805d-4e1a-8108203438b89efb%40sessionmgr11&vid=15&hid=19.
22
“J. Crew Shrinks Down To New Market.” David Moin. New York, NY: 2006.
Fairchild Publications, Inc.
http://galenet.galegroup.com/servlet/BCRC?as1=j.+crew&ai2=KE&locID=loyoland_main&srchtp=a
dv&c=5&as2=target&ab1=AND&ste=31&tbst=tsVS&ab2=AND&tab=2&ai3=KE&ai1=KE&aca=nwmg
&docNum=A142579914&bConts=2
23
“SEC Filings-Annual Report.” Hoover’s. Hoover’s, Inc., 2011.http://hoovers.api.edgaronline.com/EFX_dll/EdgarPro.dll?FetchFilingHTML1?SessionID=oA56HeLPrwnlyFF&ID=7810534#D10K_
HTM_FIN156929_6.
21
The company believes the principal bases upon which it
competes are quality, design, customer service and price.
J. Crew believes its primary competitive advantages are
consumer recognition of its brands, as well as its multiple sale
channels that enable its customers to shop in the setting they
prefer.
The company differentiates itself using its signature product
design, ability to offer both designer-quality products at
higher price points and more casual items at lower price
points, focusing on the quality of products, and its customerservice oriented culture.
In addition, J. Crew believes its success substantially depends
on the company’s ability to originate and define product and
fashion trends as well as to timely anticipate, gauge and
react to changing consumer demands.
Some of J. Crew’s competitors are larger and may have
greater financial, marketing and other resources; therefore,
there can be no assurance that J. Crew will be able to
compete successfully with them in the future.
A. Top Competitors
J. Crew’s top competitors include:
•
The Gap24
The Gap’s 2010 annual sales were $14,197 million, a 2.26%
increase from 2009. The Gap currently operates 3,100 stores
worldwide and owns other major retailers Banana Republic
and Old Navy. All Gap clothing is private-label merchandise
made exclusively for the company.
24
“The Gap, Inc. Overview.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/overview.html?companyId=11469000000000
22
•
L.L. Bean25
L.L. Bean’s 2010 annual sales were $1,500 million. Mailing over
200 million catalogs per year, L.L. Bean specializes in outdoor
apparel and gear. The company operates 15 retail stores and
15 outlet stores throughout the Northeast, Illinois, and China.
•
Lands’ End26
Lands’ End’s is a private company that has not released any
financial data. The firm markets casual apparel for men,
women, and children through its flagship and specialty
catalogs, website, and Sears department stores. It operates
more than 290 in-store Lands’ End Shops at Sears locations
plus freestanding retail stores in the U.S., U.K., Germany, and
Japan.
B. Strengths of Competition
•
The Gap27
Compared to other retailers Gap has reported and
maintained strong margins. Positioning Old Navy as a value
priced family apparel retailer enables Gap to capture
increased revenues; and its value focused outlet stores (Gap
Outlet and Banana Republic Outlet) cater to the price
conscious customer base. In addition, Gap’s global presence
allows for a large and diversified revenue stream.
•
L.L. Bean28
L.L. Bean’s large and varied product base offers costumers a
seamless shopping experience and enables the company to
25
“L.L. Bean, Inc. Overview.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/overview.html?companyId=40271000000000
26
“Lands’ End, Inc. Overview.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/overview.html?companyId=10883000000000
27
“Gap Inc.” Datamonitor, San Francisco, CA: 11 Jan 2011. Business Source Premier.
http://web.ebscohost.com/bsi/pdf?hid=21&sid=92f7a185-9f90-4cd4-9b29f52818103b5c%40sessionmgr12&vid=5
28
“L.L. Bean, Inc.” Datamonitor, Freeport, ME: 23 Dec 2010. Business Source Premier
http://web.ebscohost.com/bsi/pdf?hid=21&sid=92f7a185-9f90-4cd4-9b29f52818103b5c%40sessionmgr12&vid=12
23
address specific customer needs and preferences, which
increases average customer spending. Plus with multiple
selling formats, the company can reach out to a larger
audience enhancing sales.
•
Lands’ End29
The company distributes its wide variety of products through
multiple sales channels, with catalogs being its primary
marketing tool and source of revenue. Existing in the global
market allows Lands’ End more opportunity for growth and
increase sales in multiple markets.
C. Weaknesses of Competition
•
The Gap30
Low productivity per store square footage has been recorded
since 2005, as this continues it will negatively impact
profitability. Also, a long-term risk involves the rise in increased
markdowns compared to inventory growth outpacing sales
growth.
•
L.L. Bean31
L.L. Bean’s excessive dependence on the U.S. limits its market,
creating a disadvantage compared to retailers with global
profiles.
In 2009, the company issued notices for a series of product
recalls. Not only do recalls involve costs for the company, but
also they indicate that the company’s quality control systems
are lax. This negatively effects reputation and brand image.
29
“Lands’ End, Inc. Overview.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/overview.html?companyId=10883000000000
30
“Gap Inc.” Datamonitor, San Francisco, CA: 11 Jan 2011. Business Source Premier.
http://web.ebscohost.com/bsi/pdf?hid=21&sid=92f7a185-9f90-4cd4-9b29f52818103b5c%40sessionmgr12&vid=5
31
“L.L. Bean, Inc.” Datamonitor, Freeport, ME: 23 Dec 2010. Business Source Premier
http://web.ebscohost.com/bsi/pdf?hid=21&sid=92f7a185-9f90-4cd4-9b29f52818103b5c%40sessionmgr12&vid=12
24
•
Lands’ End32
Immediate parent company Sears, Roebuck struggles with
finding a long-term strategy for Lands’ End. This can
negatively impact the company in the future by diminishing
its brand identity.
In addition, with 293 Lands’ End shops at Sears stores
compared to 14 freestanding stores, over dependence on
Sears stores can substantially hurt the company.
D. Marketing Activities of Competition
•
The Gap
In 2009, Gap said it would focus on growing its core brands,
as well as its online and international businesses. As part of its
growth strategy, the company said it would shift marketing
initiatives for the Gap brand to a mix of traditional and
nontraditional media. Its top priorities were driving traffic and
improving productivity.
In addition, Gap outlined its top marketing concerns for its
Old Navy and Banana Republic brands. The company
focused on improving product assortments and executing on
a new store design for Old Navy. It hired agency Crispin
Porter + Bogusky, Miami, to handle the creative elements
appealing to young moms—a key target audience for Old
Navy.
Similarly, the marketing activities for Banana Republic were to
drive business while continuing to market the brand to an
affluent, mid-thirties, city style, professional demographic.
The Gap expressed growth opportunity online through its ecommerce sites that serve as a marketing venue for its stores.
According to the company, its online division grew from $595
32
“Lands’ End, Inc. Overview.” Hoover’s. Hoover’s, Inc., 2011.
http://subscriber.hoovers.com/H/company360/overview.html?companyId=10883000000000
25
million in net sales in 2005 to $903 million in 2007, and was
expected to rise in coming years. 33
Recently in 2011, the Gap continues international expansion
through launching online shopping in eight additional
European countries.
Old Navy they kicked off spring with a new marketing
campaign that combines music, fun, and fashion to better
engage with its fashion focused customers through
enhanced in-store, online and mobile device experiences.
Banana Republic celebrates its new spring campaign with
“Journey In Style” print ads and the first ever film trailer. This
campaign was inspired by the brand’s heritage of discovery
and hopes to engage customers through a variety of media.
Also in 2011 to support its global business, the Gap shifted to
advertising agency Ogilvy & Mather Worldwide.34
•
L.L. Bean
In the past L.L. Bean has strived off its marketing philosophy of
getting out into the field a much as possible and doing the
same things customers are doing. By using its own products,
the company has a better idea of how they are performing
and this practice helps them closer identify with customer
experiences and needs.35
Recently L.L. Bean announced a new marketing strategy that
will waive shipping fees with no minimum order. This
permanent, no strings-attached policy was announced this
March to cater directly to the company’s customers.
Internet research firm comScore Inc. says the industry is
moving towards this direction. In 2009, 30 to 35 percent of
33
“Gap Outlines Marketing Goals for 2009.” BrandWeek. 16 Oct 2008.
http://www.brandweek.com/bw/content_display/news-and-features/retailrestaurants/e3i2fb2f531735004810b2e7d0e33c99c82
34
“Gap Inc. Announces Major Changes at Gap Brand.” Gap Inc., 2 Feb 2011.
http://www.gapinc.com/content/gapinc/html/media/pressrelease/2011/med_pr_gapbrandannc
02022011.html
35
“Company Information.” L.L. Bean. L.L. Bean, 2011
http://www.llbean.com/customerService/aboutLLBean/background.html#PRODUCTS
26
online holiday purchases involved free shipping, and this past
holiday season the numbers increased to 40 and 45 percent.
36
To announce this move to the public, L.L. Bean will be
wrapping 10 Massachusetts Bay Transportation Authority
(MBTA) buses to resemble mail-order packages and offering
free rides to everyone who gets on those buses for the
specific week, Monday through Saturday.
The company is paying MBTA $216,000, which is roughly
double what the 10 buses would collect in fares in a normal
week. In addition, during the free-ride promotion, the fare box
inside will also be covered to resemble an L.L. Bean parcel.37
•
Lands’ End
Lands’ End’s marketing is led by chief marketing officer Susan
Sachatello. Sachatello is at the center of Lands' End brand
marketing and creative services for catalog, online, and instore initiatives. Her team encompasses divisions including
multi-channel marketing, marketing operations, consumer
insights, creative development, and public relations.
Sachatello continues to advance Lands' End's understanding
of customer connections to the brand by leveraging
customer analytics to deliver compelling creative and
marketing programs that better meet customer needs and
build stronger customer relationships.38
Recently on landsend.com, the company offered great
values and daily spring “breaks” on warm weather items,
such as polo shirts, shorts, and beach towels.
After doing research, the company found out that families
were participating in “stay-cations” rather than going on
extravagant vacations. “Stay-cations” allow families to take a
break from their normal routine and spend time together
36
“L.L. Bean embraces year-round free shipping.” David Sharp. 24 Mar 2011. Business Week
http://www.businessweek.com/ap/financialnews/D9M5JDP01.htm
37
“L.L. Bean, MBTA wrap up free ride deal.” Eric Moskowitz. 25 Mar 2011. Boston Globe.
http://www.boston.com/business/articles/2011/03/25/ll_bean_mbta_wrap_up_free_ride_deal/
38
“Corporate Information.” Lands’ End. Lands’ End, 2011.
http://www.landsend.com/newsroom/corp_info/exec_bio/susans_sachatello/index.html
27
without breaking the bank. Promoting and marketing these
“breaks” catered to customer needs.39
VI. COMMUNICATION STRATEGY/HISTORY
A. Advertising
The J. Crew catalog is the primary branding and advertising
vehicle for the J. Crew brand. The catalog reinforces the J.
Crew mission and brand image, while driving sales in all
channels. J. Crew distinguishes itself from other catalog
retailers by utilizing high quality photography and art
direction.
Additionally, in fiscal 2010, the company continued to
expand its marketing strategy to include online, print and
outdoor advertising.
Deferred catalog costs, included in prepaid expenses and
other current assets, as of January 29, 2011 and January 30,
2010 were $7,584 and $5,403 respectively.
Catalog costs, which are reflected in selling, general and
administrative expenses, for the fiscal years 2010, 2009 and
2008, were $41,859, $42,111 and $51,746 respectively.
All other advertising costs, which are expensed as incurred,
for the fiscal years 2010, 2009 and 2008 were $18,802, $14,700
and $8,763, respectively.40
39
“Lands' End is the Spring Break.” Lands’ End. Lands’ End, 4 Mar 2011.
Destination.”http://www.landsend.com/newsroom/press_releases/index.html
40
“SEC Filings-Annual Report.” Hoover’s. Hoover’s, Inc., 2011.
http://hoovers.api.edgaronline.com/EFX_dll/EdgarPro.dll?FetchFilingHTML1?SessionID=oA56HeLPrw
nlyFF&ID=7810534#D10K_HTM_FIN156929_6
28
•
Print
J. Crew clothing has been featured in magazines such as
Real Simple Magazine41, InStyle Magazine42, Martha Stewart
Magazine43, and New Yorker Magazine.44
•
Celebrities
J. Crew received attention throughout the 2009 Presidential
campaign as a favorite of the first family. Outfitting the
Obama girls in custom coats for the inauguration staged a
major marketing coup. However, the retailer's website
crashed when the news became public that Tuesday
morning; and it wasn't until Thursday that the site featured
actual sketches of the coats and messages from the
designers on its home page.45
In 2010, J. Crew created advertisements called The
Romantics’ featuring Katie Holmes, Josh Duhamel, Adam
Brody, Malin Akerman, Rebecca Lawrence, and Jeremy
Strong.46
B. Promotion
J. Crew’s private-label credit card offers customers exclusive
benefits such as $25 reward card for every $500 spent,
exclusive access to seasonal looks, card member-only private
sales, and personalized service.
In fiscal 2010, sales on J. Crew credit cards made up
approximately 17% of its total net sales. J. Crew believes that
41
42
43
44
http://jcrewaholics.com/in-the-news/j-crew-featured-in-real-simple-magazine/
http://news.instyle.com/category/j-crew/
http://www.marthastewart.com/article/j-crew-fall-fashion-picks
“The Merchant.” Nick Paumgarten. 20 Sept 2010. The New Yorker.
http://www.newyorker.com/reporting/2010/09/20/100920fa_fact_paumgarten
45
“Inauguration Scorecard.” Andrew Hampp. 26 Jan 2009. Crain Communications, Inc.
http://galenet.galegroup.com/servlet/BCRC?as1=j+crew&ai2=KE&locID=loyoland_main&srchtp=a
dv&c=2&as2=advertising&ab1=AND&ste=31&tbst=tsVS&ab2=AND&tab=2&ai3=KE&ai1=KE&aca=n
wmg&docNum=A192868173&bConts=2
46
“J. Crew’s ‘The Romantics’ Photo Shoot.” Jennifer Paull. 18 Aug 2010. Stylelist.
http://www.stylelist.com/2010/08/18/j-crew-the-romantics-katie-holmes-josh-duhamel/
29
its credit card program encourages frequent store and
website visits and catalog sales and promotes multiple-item
purchases, thereby cultivating customer loyalty to the J. Crew
brand and increasing sales.
Frequently catalogs contain coupons offering discount
promos.
C. Event Marketing
Occasionally, J. Crew holds in store events welcoming
specific groups of customers to interact and shop with special
discounts. At these events the store provides refreshments
and light snacks.
D. Direct Marketing
Through direct marketing J. Crew uses mailing and e-mailing
lists to target customers. At the time of purchase customers
can provide their e-mail addresses to receive coupons and
other sales promotions and announcements.
E. New Media
J. Crew has adopted a Facebook fan page as well as a
Twitter account, @JCrew_Insider. Through these social
platforms, the company establishes online interaction with its
customers. For example, J. Crew tweets provide links directed
to jcrew.com.
In addition, at jcrew.com customers can look at behind the
scenes on photo shoots and view fashion documentaries
produced by the company. The latest film series is called
“Made in Italy” and gives customers a look into the Italian
mills where some of J. Crew’s fabrics are woven.
J. Crew also uses online banners as an advertising tool.
30
VII. MARKETING
A. Positioning Statement
Utilizing the company’s products and styles, J. Crew positions
itself by inspiring consumers to take part in its trends.
Engaging consumers to feel as if they are part of the J. Crew
lifestyle not only establishes positive relationships, but also
creates long-term and deep connections with the brand.
Strong tactics such as demonstrating how J. Crew apparel
and accessories can work together both in catalogs and
online, enables and motivates customers to easily make
purchases.
Combining J. Crew’s “classic with a twist” style with helpful
shopping tools builds customer satisfaction—a core goal of
the company.
B. Target Market Description
1. Primary Target Market
a. Demographic Profile
• Women
• Ages 25-40
• Household income of $125,000 or more
• Educated
• Career/Business savvy
b. Psychographic Profile
• Women who appreciate fashion
• Want high quality design, fabrics, and
craftsmanship
• Women who incorporate the latest accessories
and trends into their style
• Value brand equity
• Women who are willing to pay for brand name
products
31
2. Secondary Target Market
a. Demographic Profile
• Children
• Ages 2-10
b. Psychographic Profile
• Children who’s style is influenced by their
parents
• Parents value brand equity
• Parents who are willing to pay the price for
brand name children’s apparel
C. Marketing Objectives
Through the marketing mix comprised of product, price,
placement, and promotion, J. Crew strives to remain in the
growth stage. By increasing market presence and satisfying
existing customers the company will continue to expand.
1. Product
To focus on satisfying its customers’ apparel and accessory
needs and providing them with the best quality, service,
and innovation.
2. Price
To increase sales and profits through varied price points,
while also remaining competitive within the market.
3. Placement
To continue offering products through multi sales channels,
expanding its store base, and capitalizing on the growth of
online shopping.
4. Promotion
To create awareness and generate brand loyalty and
equity aimed towards the target market as well as
potential customers.
32
VIII. ADVERTISING
A. Advertising Objectives
1. Express J. Crew’s core values, trendsetting attitude, and
dedication to satisfying customers
2. Build strong brand equity and demonstrate J. Crew’s ability
to be a high-quality women’s apparel and accessory
brand
3. Establish credibility throughout the ads and the overall
media strategy
4. Create informative, fun, catchy ads that always lead to a
call of action
5. Differentiate J. Crew from its top competitors by enhancing
the brand image
6. Generate awareness and buzz about new styles and
products
7. Reassure J. Crew customers that they are a top priority
B. Advertising Strategy
This 12-week advertising campaign will promote J. Crew’s
Summer 2011 collection and be implemented in the New York
demographic market area through June, July, and August.
Using New York as the sole test market for this campaign is
appropriate for several reasons. First, the company is
headquartered in New York City, so its roots stem from the city
and it has a strong sense and familiarity with the area. Second,
it is a large DMA, ensuring widespread reach and frequency.
In addition, New York City and the surrounding areas in the
DMA are the exact environment of the primary target market;
therefore, the campaigns message will hit its audience.
33
I. Media
a. Media Strategy
i. Media Mix
Remaining true to J. Crew’s advertising nature,
this campaign will focus on direct mail, digital,
and introduce out-of-home. While print media is
a popular and effective advertising approach,
J. Crew prefers to spend company expenditures
elsewhere that better suit company needs.
•
Direct Mail
Already implementing strong direct mail tactics,
the campaign will continue to carry out these
methods. Using catalogs and discount coupons,
J. Crew not only builds off its foundation, but also
targets consumers by directly satisfying their
needs.
•
Digital
As digital media becomes increasingly more
popular, J. Crew’s online presence is crucial. With
a simple click, customers will have quick and
easy access to the J. Crew website. Using SEO
tactics, banner ads will be generated to
specifically hit women within the company’s
target market.
•
Out-of –Home
A large portion of the advertising budget will be
used for billboards. Billboards are both an
effective efficient medium to advertise to J.
Crew’s target market. The benefits of using
billboards are that they generate frequency and
cannot be turned off or thrown out; therefore,
the message will reach the audience.
34
ii. Media Vehicles
•
Direct Mail
Catalogs along with promotional and discount
coupon inserts will work together to motivate
customers to make purchases. Mailing these
directly to customers is the most effective way to
pull in revenue from consumers who still rely
heavily on catalog shopping and have not yet
made the switch to online shopping. Direct mail
also demonstrates J. Crew’s deep roots in the
mail order house industry and its commitment to
customer satisfaction. Providing customers
discount opportunities, special holiday sales, and
other promotional efforts at the time they receive
the catalog creates an opportunity for
consumers to be proactive and initiate a
purchase.
•
Digital
Online ads and banners will be placed on
Google, Facebook, MarthaStewart.com and
CNN.com. By distributing ads on a search
engine, social networking site, home and lifestyle
site, and a news site, J. Crew will be able to
measure where the most traffic of its target
market generates throughout the campaign. This
information will allow the company to capitalize
and make changes for future campaigns.
Google47
Google began with the idea of search and that
is where the heart of Google continues to
remain. Its mission is to organize the world’s most
information and make it universally accessible
and useful.
Google generates the majority of its revenue by
offering advertisers measurable, cost-effective
47
“About Google.” Google. Google Inc, 2011. http://www.google.com/corporate/
35
and highly relevant advertising. The company’s
goal is for Google ads to be both as useful for
people as they are for the advertisers.
Placing ads on the most popular search engine,
will definitely drive people to the J. Crew website.
Facebook48
Everyday Facebook provides millions of people
to keep up with friends, upload an unlimited
number of photos, share links and videos, and
learn more about the people they meet.
As the number one social networking site that is
increasingly expanding, J. Crew will benefit from
ads placed on Facebook that can specifically
target the company’s main consumers.
MarthaStewart.com49
MarthaStewart.com engages 37 million creative
consumers every month, providing them with
inspiration and how-to for a life that is both
beautiful and practical. Sharing tools and
content to address consumer’s needs,
MarthaStewart.com emphasizes lifestyle solutions
and allows users to personalize their experiences
along the way.
Promoting J. Crew through MarthaStewart.com is
an ideal location to capture women within the
target market who are looking for new fresh
ideas to better their lifestyle.
48
49
“Info.” Facebook. Facebook, 2011. http://www.facebook.com/facebook?sk=info
“Digital.” MarthaStewart.com. Martha Stewart Living Omnimedia, Inc, 2011.
http://mslomediakit.com/index.php?/digital/marthastewart.com/
36
CNN.com50
CNN.com is among the world's leaders in online
news and information delivery. CNN.com
features the latest multimedia technologies, from
live video streaming to audio packages to
searchable archives of news features and
background information. The site is updated
continuously throughout the day.
With frequent updates, CNN.com is a well liked
and reliable news source. According to J. Crew’s
primary target market the business savvy
consumer or women who just wants to “be in the
know” will get her news online. Placing ads on
CNN.com can lead these consumers to
J.Crew.com during or after they catch up on
news and events.
•
Out-of-Home
Billboards provide the opportunity to reach fastpaced consumers within New York City. While on
their way to and from work, both target market
consumers and potential customers will be
exposed to the J. Crew billboard. During a 12 week campaign, a billboard would create
millions of impressions.
While these individuals may not take action
immediately, because they are on the go, J.
Crew will resonate in the back of their minds and
at an appropriate time they will take action
whether it is visiting a store or the online website.
50
“About Us.” CNN.com., Cable News Network, 2010. http://www.cnn.com/about/
37
b. Media Schedule
i. Media Flow Chart
II. Creative Strategy/Brief
Advertising will convince the target market that J. Crew
apparel and accessories will satisfy their clothing needs
through fashionable styles, trends, and quality. By remaining
loyal to customers and demonstrating customer satisfaction, J.
Crew will continue to inspire new stylistic approaches and
encourage customers to try new current looks.
Advertising aims to create awareness, interest, and desire,
leading consumers to take action. The tone of this campaigns
advertising efforts will be fun and fashionable, influencing
consumers to take the next step.
J. Crew’s character will be visible through its overall consistent
brand image, which is recognized through the clothing and
accessories, models, and the company name.
38
III. Creative Executions
Online Ad 1
Online Ad 2
Online Ad 3
39
Online Ad 3
Billboard
40
IX. BUDGET
$675,000
MEDIA VEHICLE
DESCRIPTION
FREQUENCY
RATES
TOTAL
Catalogs51
&
Coupons/Promos
June, July, &
August
Mailings/ 1 Issue
per month
June, July, &
August
Facebook
Color Banner Ad
MarthStewart.com
Color Banner Ad
CNN.com
Color Banner Ad
Billboard:
Clear Channel
Outdoor53
New York, NY
8 panels
Weekly GRP 25
Rate per face:
$26,986
June, July, &
August
6 weeks total
(First 2 weeks of
June, July, &
August)
6 weeks
(First 2 weeks of
June, July, &
August)
June, July, &
August
Total Catalog
& Mailing Costs
per month:
$4,166
Cost per click:
$1.25
(Est. 30 clicks
per day)
N/A
$12,500
Google 52
Color catalog
with
coupon/promo
insert
Color Banner Ad
N/A
Est.
$3,150
Est.
$3,150
Est.
$1,500
N/A
Est.
$1,500
4-Week Cost:
$215,888
$647,664
With the total budget being set at $675,000, the majority of the
campaign expenses will be spent on the billboard. As a result of
running the campaign in the New York DMA, the costs become
higher. However, despite this expense, a billboard in New York
City will be very effective towards the campaigns objectives
and reaching the target market.
Since the online advertising rates were not available, based on
the Google Ad cost per click rate, money in the budget will be
set aside to cover the total costs at the end of the campaign.
The estimated total for online advertising equals $9,300.
51
“SEC Filings-Annual Report.” Hoover’s. Hoover’s, Inc., 2011.
http://hoovers.api.edgaronline.com/EFX_dll/EdgarPro.dll?FetchFilingHTML1?SessionID=oA56HeLPrw
nlyFF&ID=7810534#D10K_HTM_FIN156929_6
52
Google. http://www.google.com/ads/displaynetwork/control-your-costs/pricing.html
53
Clear Channel Outdoor. http://www.clearchanneloutdoor.com/assets/downloads/mediaplanning-guide/2010-11-eyeson-rates.pdf
41
All together the budget allows room, roughly $5,536, to cover
extra online advertising costs or catalog/mailing costs.
42
X. MEASURES AND EVALUATION
Measures will be noted throughout the campaign to evaluate
the effectiveness of the strategy. Predominantly the online ads
will be measured by how many cost per clicks (CPCs). In
addition, the amount of traffic that these online ads are driving
to the J. Crew website will be tracked. This is beneficial
information that can be capitalized on or corrected for future
campaigns.
Catalog sales will be evaluated based on previous numbers. As
a staple brand in the mail order house industry, J. Crew catalog
sales should remain on target.
The billboard cannot be evaluated based on actual numbers;
however, total sales and revenues within the New York DMA can
be measured. If sales increase significantly throughout the 12week campaign than the billboard will prove to be a strong
media tactic for J. Crew to utilize again in the future.
Another method to measure the campaigns success, will be to
provide target consumers with an online survey. The survey can
conduct questions that will provide J. Crew with valuable
information such as:
• What customers want
• What they prefer
• How they go about satisfying their shopping
needs
• Their favorite method of shopping (online, instore, catalog)
• How they become aware of new styles and
products (online advertising, billboards, etc.)
• How they become aware of discounts and
sales (catalogs, emails, etc.)
Not only will this campaign be beneficial for J. Crew if the
measures show an increase in sales, but also because the
company’s mission and the overall advertising objectives will
have been positively demonstrated.
43