Presentation on theme: "Marketing Report for Imaginary Wilderness Apparel Presented by kSquared Consulting Slideshow runs automatically. Can override with forward and back buttons."— Presentation transcript:
Marketing Report for Imaginary Wilderness Apparel Presented by kSquared Consulting Slideshow runs automatically. Can override with forward and back buttons at bottom. Running Time: 3 min 30 sec
2 The Mission Put more customers’ feet in IWA’s premium hiking boot … The Rock Warrior
3 Who is the Customer? IWA customers were segmented based on: (1) Primary concern: Function or Fashion (2) Relative importance of product durability Source: October 2009 customer survey
4 Profiling the Customer We divided IWA customers into four target groups.
5 Finding the Right Fit We targeted the Hardcore Hiker. This segment ranks durability higher than average in terms of importance, and is more concerned with function than fashion. Which customer is right for Rock Warrior boots?
6 Campaign History The Hardcore Hiker segment has out-responded every other segment in past campaigns. That’s good. But if we use a more targeted message, can we do even better? But if we use a more targeted message, can we do even better? Let’s find out.
7 The Contest In this corner, the Champion: In this corner, the Challenger: Ad B, message more targeted to the Hardcore Hiker segment. Shows the Rock Warrior in action, battling the elements. Ad A, from the May 2009 campaign
8 Rules of Engagement Test mailing to the Hardcore Hiker segment 6,000 randomly selected customers 5,000 received Treatment A (The Champion). 1,000 received Treatment B (The Challenger). How did the bout go, you ask?
9 The Results Champion (Ad A) – 3.5% response rate Challenger (Ad B) – 4.7% response rate At first glance it looks like we have a new champion. But what say the judges?
10 Tale of the Tape Based on the sample results, how certain are we that Ad B will do better than Ad A across the entire Hardcore Hiker segment? We need to determine if the difference in response rates is statistically significant, or if it might just be the result of chance. We need to determine if the difference in response rates is statistically significant, or if it might just be the result of chance.
11 The Decision We can say with 95% confidence* that the difference in response rates is statistically significant. In other words, the Challenger is for real. That means we have a new champion! * Using one-tail difference of proportions test
12 Recommendation Based on the test results, kSquared Consulting recommends a rollout of Ad B to the remainder of the Hardcore Hiker segment. That’s 80,000 customers. Expected response rate lift is: 4.7% minus 3.5% = 1.2 percentage points
13 $ Impact If the results are consistent with the test mailing, this will mean: 1.2% x 80,000 = 960 additional responders. The gross margin for a pair of Rock Warriors is $45. So that’s a lift of 960 x $45 = Just over $43,000!