competitive spend analysis sov

COMPETITIVE SPENDING ANALYSIS

Competitive Spending Analysis and SOV

Magazine Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total Canon 7095.0 1011.2 212.1 4914.2 51.2 763.9 0.0 14047.6 Mita 1829.2 716.3 506.6 3222.7 134.0 405.1 778.8 7592.7 Ricoh 1164.2 1471.9 0.0 1265.7 226.4 1345.9 0.0 5474.1 Sharp 2862.5 311.0 37.0 3525.7 1189.8 859.0 0.0 8785.0 Xerox 37.2 635.6 2.4 547.2 0.7 0.0 0.0 1223.1 TOTAL 12988.1 4146.0 758.1 13475.5 1602.1 3373.9 778.8 37122.5

EXHIBIT I: COPIER CATEGORY EXPENDITURES $(000)

Magazines Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Canon Inc 7095.0 1011.2 212.1 4914.2 51.2 763.9 Compaq 374.1 545.9 Harris Corp 1116.2 124.0 11.6 357.0 Konica Corp 2558.8 129.8 11.1 30.3 878.2 Matsushita 172.1 4.6 Minolta 3902.2 3.3 43.2 Mita Co 1829.2 716.3 506.6 3222.7 134.0 405.1 778.8 Pitney Bowes 1128.9 0.8 411.1 595.1 Ricoh Co 1164.2 1471.9 1265.7 226.4 1345.9 Sharp Corp 2862.5 311.0 37.0 3525.7 1189.8 859.0 Toshiba Corp 24.6 Xerox Corp 37.2 635.6 2.4 547.2 0.7

1. Five copiers, Canon, Mita, Ricoh, Sharp, and Xerox, are targeted to the same market. Using Exhibit I, fill in media expenditure data and complete this table for the five brands listed.

Competitive Spending Analysis and SOV Magazine Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total

Canon 7095.0 1011.2 212.1 4914.2 51.2 763.9 0.0 14047.6 Mita 1829.2 716.3 506.6 3222.7 134.0 405.1 778.8 7592.7 Ricoh 1164.2 1471.9 0.0 1265.7 226.4 1345.9 0.0 5474.1 Sharp 2862.5 311.0 37.0 3525.7 1189.8 859.0 0.0 8785.0 Xerox 37.2 635.6 2.4 547.2 0.7 0.0 0.0 1223.1 TOTAL 12988.1 4146.0 758.1 13475.5 1602.1 3373.9 778.8 37122.5

2. Which of the five copier brands is the biggest media spender - i.e., which had the highest total advertising expenditures across all media? Name the brand and give the total amount below.

Canon was the biggest spender, with a little more than 14 million in spending ($14,047,600). Don't forget the (000) – correct answers are expressed by adding (000) or thousands.



3. Which brand spent the most ad dollars in cable TV? Name the brand and the total amount.

Ricoh spent the most in cable TV, at $1,345,900



4. Which brand spent the most ad dollars in Network TV? Name the brand and the total amount.

Canon is the heavy hitter in Network TV with nearly $5MM ($4,914,200)



5. Using the figures you copied into the "Big Five" Table, calculate Media Mix (as percentages) for each copier brand. Enter proportions into the table below, rounded to one decimal place.

Media Mix for each brand is calculated by dividing the expenditures for each medium used by the total dollars for the brand.

Example Using Ricoh Natl Newspapers:

$1471.9 (000) / 5474.1 (000) * 100 = 26.9 (26.88)

(Brand Medium Spending / Brand Total Spending) x 100 = Media Mix Percentage

Evaluating Competitive Spending Magazine Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total


Media Mix Magazines Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total

Canon 50.5 7.2 1.5 35.0 0.4 5.4 0.0 100.0 Mita 24.1 9.4 6.7 42.4 1.8 5.3 10.3 100.0 Ricoh 21.3 26.9 0.0 23.1 4.1 24.6 0.0 100.0 Sharp 32.6 3.5 0.4 40.1 13.5 9.8 0.0 100.0 Xerox 3.0 52.0 0.2 44.7 0.1 0.0 0.0 100.0

5. Using the figures you copied into the "Big Five" Table, calculate Media Mix (as percentages) for each copier brand. Enter proportions into the table below, rounded to one decimal place.

Completed table:

Percentages, rounded to one decimal place.

Media Mix• Definition: The way media dollars are allocated• Compares spending by media type to the total budget.• What percentage of your budget is spent on “X Media”?

• What’s your Media Mix?

• Expressed in percentages



6. Again, using the figures in the "Big Five" Table, calculate Share of Voice for each copier brand. Enter SOV data into the table below. Round percentages to the nearest tenth.

Share of Voice (SOV) is calculated by dividing the expenditures for each brand by the total for the category.

Example Using Ricoh Natl Newspapers:

$1471.9 (000) / 4146.0 (000) * 100 = 35.5

(Brand medium expenditure / Category medium expenditure) x 100



SHARE OF VOICE (SOV) Magazines Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total


6. Again, using the figures in the "Big Five" Table, calculate Share of Voice for each copier brand. Enter SOV data into the table below. Round percentages to the nearest tenth.

Completed table:

Percentages, rounded to one decimal. Media columns total 100%

SOV (Share of Voice)• Definition: Brand’s percentage of total advertising dollars

spent within a category.• Used in competitive analysis• SOV can be applied to total expenditures or to a particular

media

Competitive Spending Analysis and SOVMedia Mix

Magazines Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total Canon 50.5 7.2 1.5 35.0 0.4 5.4 0.0 100.0 Mita 24.1 9.4 6.7 42.4 1.8 5.3 10.3 100.0 Ricoh 21.3 26.9 0.0 23.1 4.1 24.6 0.0 100.0 Sharp 32.6 3.5 0.4 40.1 13.5 9.8 0.0 100.0 Xerox 3.0 52.0 0.2 44.7 0.1 0.0 0.0 100.0

7. The Media Mix table reveals percent of total budget that each brand allocates to each medium. In contrast, the Share of Voice table reveals which brand's "voice" dominates each medium, and which brand has less voice in each medium. Be sure to consult the correct table for questions below.

A) Xerox invested over 95 percent of total budget into two media. Relative to Xerox's media mix, name the two media and their respective percent of total budget.

National Newspaper (52.0%) and Network TV (44.7%)



7. The Media Mix table reveals percent of total budget that each brand allocates to each medium. In contrast, the Share of Voice table reveals which brand's "voice" dominates each medium, and which brand has less voice in each medium. Be sure to consult the correct table for questions below.

A) Xerox invested over 95 percent of total budget into two media. Relative to Xerox's media mix, name the two media and their respective percent of total budget.

National Newspaper (52.0%) and Network TV (44.7%)Clues:

• One brand

• “media mix”

Competitive Spending Analysis and SOVSHARE OF VOICE (SOV)

Magazines Natl Nwsp Outdoor Net TV Spot TV Cable TV Net Radio Total Canon 54.6 24.4 28.0 36.5 3.3 22.6 0.0 37.8 Mita 14.1 17.3 66.8 23.9 8.4 12.0 100.0 20.5 Ricoh 9.0 35.5 0.0 9.4 14.1 39.9 0.0 14.7 Sharp 22.0 7.5 4.9 26.2 74.3 25.5 0.0 23.7 Xerox 0.3 15.3 0.3 4.1 0.0 0.0 0.0 3.3 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

7. (Cont)

B) What's significant about Xerox's SOV in these 2 media? Prove this with hard data.

Xerox appears anemic in Net TV (4.1% SOV) and Natl Newsp (15.3% SOV)—being the “low spender” or nearly the lowest spender in both.



7. (Cont.)

C) Based on this SOV scenario, what's Xerox's best move? As media director, other than raising the budget, what advice would you give Xerox to help fix their problem?

Xerox's voice is little more than a whisper in these two media. They may gain some voice by changing timing strategy – e.g. - run ads in months/weeks when others are on hiatus. Switching to media where there is less "noise" may have even more success.



8. Which brand has the highest share of voice in Network TV? Lowest share in Network TV? Give the specific shares for each:

Canon is highest with 36.5%Xerox is lowest with 4.1%



9. Which brand has the highest share of voice in Magazines? The lowest in Magazines? Give the specific share for each:

Canon is highest with 54.6%Xerox is lowest with 0.3%



10. Assume you are marketing director representing a totally new brand in the copy machine category, with a $6 million budget.

A) Do you see any opportunities here to use unexploited media? Why or why not use them?

(Answers provided here are not all inclusive)Media least explored by the copier brands are Network Radio, Outdoor, and Spot TV. Network radio was completely ignored except for Mita. Spending in the other two media, Outdoor and Spot TV, is relatively light compared with other categories. There are clear opportunities for competitors to gain SOV in these media or even to dominate SOV. The question arises whether your creative message can be effective in these media – it's of little value to be the dominant voice if nobody's listening.

Competitive Spending Analysis and SOV 10. Assume you are marketing director representing a totally new brand in the copy machine category, with a $6 million budget.

B) Plan your own media strategy. Where would you spend the most, and why?

MagazinesPrint offers an excellent media opportunity; most business executives who make purchase decisions subscribe to B2B (Business to Business) trade pubs. Purchase of a copy machine is a high involvement decision, and business magazines make a perfect fit for copy-heavy ads – ads that allow executives to study the details before making a purchase.

NewspapersNewspapers are well read by business/managerial people. It's also an excellent medium to announce news about your product or service plan.

RadioIf well crafted and highly creative, radio is a very strong medium and is often used as a supplement to print. It can inexpensively help maintain top-of-mind awareness of your brand and also serve as an effective reminder to take action.