case 02 lipton

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CASE STUDY 2. LIPTON: Marketing

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Marketing

Unilever and Advertising

At UnileverWorld one of the leading global advertisers we pay great attention to the quality and

effectiveness of our external communications. It is important to adapt media support to the seasonality

of our product categories and to media acquisition costs, which vary depending on the time of year.

Choosing optimal marketing campaign

You work for the Marketing Department and are in charge of the Lipton brand. Lipton is one of the best

known tea brands worldwide. It has very large market shares. Liptons offer consists of various teas,

starting from the classic Yellow Label Tea, through Green teas and Earl Grey, to fruit pyramid teas.

Tea sales are seasonal. The lowest sales are during the summer, start to rise in autumn and reach

peak sales in the Christmas and Easter periods. Forecasted basic sales for next year (excludingpromotions and media campaigns) are shown in the table below:

Assume that each month consists of 4 weeks (which means a year consists of 48 weeks) and weekly

sales within a particular month are the same (i.e. they are 25% of the monthly sales of the particular

month).

Your task

Your task is to prepare a plan to support Lipton teas on television for the coming year. The television

campaign should consist of three parts, called flights. Post-evaluation of Liptons campaigns from 3previous years shows that 1 flight must last exactly 6 weeks and there should be a break between of at

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

forecastedsales value

(in uni)

2900 3000 2900 3800 1800 1500 1000 1100 2200 2800 3100 4700


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least 6 weeks. One campaign flight will generate 25% additional sales. Assume that sales increases are

visible immediately after the implementation of the television support.

This year Lipton has considerably increased its market share thanks to the introduction of some

innovations and is the indisputable market leader. Innovations were strongly supported on television.

The last campaign flight is ending in the third week of December. With your team you have decided

that Liptons task for next year is to maintain market share built in the current year.

Your media agency has established a classification for TV campaign force based on the ambitions for

market share for the tea category:

1) The Minimum Campaign it should reach 140 GRP per week to be most effective. It aims tosustain current market share.

2) The Medium Campaign it should reach 180 GRP per week to be most effective. It aims togrow current market share.

3) The Intensive Campaign it should reach 240 GRP per week to be most effective. It aimsto aggressively grow current market share. This type of campaign is applied only whenintroducing new products into the market.

GRP (Gross Rating Point) is a measure of media campaign intensity during a specified time period.

GRPs are calculated by multiplying the reach of the campaign by the average frequency.

Reach of the campaign is a percentage of individuals or households within a specific target audience

that sees the advertisement. For instance a reach of 80 means that the advertisement will be seen by

80% of a particular target group.

Frequency is the number of times the same advertisement is shown to the same individual during a

particular time frame (e.g. one week).

Example: a campaign reaches 80% of a target group twice a week.

GRP = 80 x 2 = 160 GRP per week

Note you will not have to calculate GRP for this case.

The cost of a television campaign depends on the GRP and CPP forecast. CPP (cost per point) is the

cost of buying advertising space in a particular media vehicle in order to reach 1% of the target group.

In other words CPP is the price of one GRP.

Your media agency recommends GRP level should be the same in each week of a campaign. You havereceived the following television CPP forecast for next year:

Month Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

CPP in uni 650 750 1050 1100 1200 1050 600 550 1100 1200 1250 950

1) From the options a) to d) listed below, decide in which weeks you will start 3 flights of the TVcampaign. Assume that efficiency of media costs should be the only driver for your decision. You

should, therefore, air your flights in such a way that the cost of generating incremental sales is the

lowest. Remember. however, all the conditions mentioned above.

HINT: using a calculation sheet will makes it easier to resolve the task.

a) week 1, 13, 43

b) week 1, 11, 45


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c) week 6, 31, 43

d) week 6, 12, 45

2) Indicate in which week it would be the least cost-effective to start a flight:a) week 19

b) week 18 or 20

c) week 21

d) in all the above weeks cost-effectiveness is equally low

3) What is the cost of a flight starting in the last week of Aprila) 1017k uni

b) 1083k uni

c) 973k uni

d) we have not enough data to calculate the cost of the flight

Mark your answers for consecutive questions in a sequence of 3 letters (for instance ABC). The first

letter should correspond to the answer to the first question, and so on.

Score:

3 correct answers 5 points

2 correct answers - 3 points

Less then two correct answers 0 points

case 02 lipton

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