STRATEGIC ACCOUNT PLAN Information Resources Incorporated and News America Marketing

Connor Achim, Danny Jarecki, Alex Larson, Kyle von der Linden MKT 325, Section 001

4/20/16

 

 

TABLE OF CONTENTS

Executive Summary……………………………………………………………………………………... IRi Situation Analysis…………………………………………………………………………………….

Summary of IRi……………………………………………………………………………………. Internal Analysis…………………………………………………………………………………. External Analysis…………………………………………………………………………………

News America Marketing Situation Analysis……………………………………………. Summary of News America Marketing………………………………………...…… Internal Analysis…………………………………………………………………………………. External Analysis………………………………………………………………………………… Purchasing Characteristics………………………………………………………………… Value Chain Sequence……………………………………………………………………...

Positional Assessment…………………………………………………………………………………. Current Relationship………………………………………………………………………….. SWOT Comparison……………………………………………………………………………..

Strategic Account Plan………………………………………………………………………………… Vision Statement………………………………………………………………………………... Value Proposition……………………………………………………………………………….. Goals & Objectives…………………………………………………………………………….. Implementation Schedule…………………………………………………………………..

References……………………………………………………………………………………………………..

2 3-44 3 16 24 45-92 45 53 70 89 90 93-95 93 93 96-103 96 96 99 101 104-105

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EXECUTIVE SUMMARY

The purpose of this Strategic Account Plan is to explore the relationship between

Information Resources Incorporated (IRi) and News America Marketing and to identify

potential areas of growth and development for their relationship. The Strategic Account

Plan will begin with a situation analysis of both IRi and News America Marketing which

will include internal and external analyses of the firms. The plan will then discuss the

current relationship between IRi and News America Marketing in a Positional

Assessment. Finally, the plan will conclude with goals and objectives that specify how IRi

is to strategically grow their account with News America Marketing.

In this scenario, IRi is the supplier firm to News America Marketing and is selling

them marketing research data. Drawing from research, the plan will identify key

opportunities for IRi to help News America Marketing gain a greater competitive

advantage in their marketplace that will support their long-term strategies. Key

opportunities that have been identified include upgrading current point-of-sale (POS)

data capabilities, increasing the use of IRi technologies across the salesforce of News

America Marketing, and adding digital advertising data analytics to the arsenal of News

America Marketing.

Overall, the plan will synthesize the current strategies of both firms and will align

their long-term goals in order to create a mutually beneficial relationship. Through careful

planning and implementation, IRi will be able to use this Strategic Account Plan to grow

their business with News America Marketing as well as help News America Marketing

increase sales with their current customers and achieve new business in the future.

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IRi SITUATION ANALYSIS

IRi SUMMARY

IRi Worldwide is an American company that

delivers growth to client firms through the form of

strategy, analytics, intelligence, technology, and

media. The company was founded in 1979 by two

professors who decided to take advantage of the newest technology to hit the storefront:

bar codes. Through tracking this data, they were able to capture, analyze, and predict

the behavior of shoppers. While that mainly involves data analysis, IRi has grown

immensely from its genesis, and has continued to add value to it’s clients in many forms.

Headquartered in Chicago, IL, IRi has strong roots domestically, and is a major

international player as well, with operations in 58 countries that reach as far as Australia.

Many firms trust in IRi’s reputation and results, so much so that 95% of Consumer

Packaged Goods (CPG), retail, and health and beauty companies in the Fortune 100 work

with IRi.

IRi has three major tools to capture their data, and they each bring more insight to

the consumer’s behavior as a whole. Their access to data, innovative mindset, and

2,500 determined employees really exemplify the motto that IRi has recently attained,

growth delivered. All of IRi’s tools give unprecedented insight to client firms. With their

track record of success and dependability, IRi has brought in the top clients from around

the nation and are truly recognized as a cutting-edge company. In a 2015 American

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Marketing Association chart, IRi ranks 5th on the top 10 marketing research companies in

the world, and the top private marketing research company.

Overall, according to IBISWorld, the NAICS has an optimistic expectation of the

marketing research industry. “The expected revenue growth of 2.5% in 2016 is a more

accurate depiction of recent industry performance.” While IRi is doing well, the industry

is growing at a slower pace. Additionally, “industry revenue began to improve after 2013,

profit grew from 5.9% of revenue in 2011 to an expected 8.1% of revenue in 2016.”

History

The inception of IRi happened in 1977 with John Malec, a market research veteran,

and University of Iowa professor, Gerald Eskin. Their genius idea was sparked by the

works of a company called Adtel, Inc. based out of the Philippines, and the revolutionary

creation of barcodes in the early 1970s.

“Adtel used purchase diaries kept by consumers to compare the effects of

alternate TV ads run by separate cable systems. The main drawback of the Adtel system

was that it took rather long to decipher the data. Malec figured that if scanners could be

used as a tool for collecting the same types of information, that problem would be

solved” (Funding Universe). The problem at the time was their ambitious idea was too

expensive. After several banks rejected their financing requests, the two – along with

the help of the third founder of Adtel – turned towards their would-be prospective clients.

After pitching their idea to major companies like Coca-Cola, Quaker Oats, Kraft, and

Procter & Gamble, they had received $2 million in contracts from 11 companies. With

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their startup fund secured, the two then bought $2 million worth of scanners from Nation

Semiconductor, and IRi was officially formed in 1979.

With their first few years under their belt, IRi had reached revenues of $12 million

by 1982. With an ambitious mindset and a seemingly bright future, IRi went public in

March 1983. With stock prices nearly doubling in the first day, the company had raised

$20 million to help fund their long-term debts and allow them to be more innovative and

expansive.

IRi introduced a cutting-edge product in 1987, InfoScan, the first nation-wide

supermarket tracking service based on Universal Product Code (UPC) scanning. This

gave IRi the upper hand in marketing research and analysis over their upcoming

competitor Nielsen. What kept the two companies alive while delivering a unique, almost

niche, service, was IRis aggressive buying of companies that would help them gain

deeper insight in the US market, and Nielsen’s stronger international presence.

IRi was strong in telling clients what their consumers did and how to classify each

consumer or household, but the Symphony Technology Group, who specialized in

predictive analytics wanted to take IRi to the next level and allow IRi’s clients to know

how to classify and predict trends among its end consumers. IRi was bought out in 2003

and became Symphony IRi under the leadership of Romesh Wadhdwani. Thus IRi’s

Liquid Data platform rolled out to help accomplish that mission.

A few years down the road, Symphony IRi had a major investment from New

Mountain Capital LLC for an undisclosed amount, but shortly thereafter, Symphony IRi

was rebranded as IRi Worldwide. IRi entered the China market in 2015 with the

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acquisition of market research firm Datasea. Also just last year, IRi began a

groundbreaking partnership with MasterCard advisors. This allowed the company to offer

a full view of purchasing habits for consumer segments. It also introduced Shopper

Marketing Cloud, which is the largest set of integrated data in the world, built from the

Liquid Data mentioned earlier.

Locations

IRi has a very strong presence nationally as well as internationally. With their

global headquarters in Chicago, IL, it is a very common place for CPG growth and

startups. They also have domestic offices in Arkansas, California, Connecticut, Georgia,

New York, New Jersey, North Carolina, Ohio, Pennsylvania, and Virginia. This allows for

all of IRi’s major clients to have a major location relatively nearby no matter where they

client is located. For instance, IRi’s top clients are Altria, PepsiCo, and Procter & Gamble

which are located in Virginia, New York, and Ohio respectively. Along with their strong

national presence, IRi has been expanding since the 80s and have locations across the

world in France, Italy, South Africa, Canada, Germany, Netherlands, Sweden, China,

Greece, New Zealand, UK, Spain, and most recently, Australia.

Mission

IRi is founded on the basis of being able to understand an end consumer and

predict their behavior. With their extreme amount of data and insight, they are charged

with continually providing the most accurate and actionable insights to their client’s year

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after year. IRi’s motto that is used very liberally in their workspace and even in their logo

is, “Growth Delivered.” They deliver growth in five key areas that were briefly mentioned

earlier, and they are: market performance and strategy, consumer and shopper

intelligence, in-market execution and analytics, media, and technology. By keeping

those five areas at the front of their mind and business model, they will continue to keep

the client in mind while developing themselves to become the principal provider of data

in the world. All of those areas of constant improvement and dedication to the client and

the client’s customers can be summed up with their motto Growth Delivered.

Products

IRi has a multitude of solutions and products that it offers its clients, but the three

that would make the most impact for News America Marketing are the following. These

data sources have been collected, created, and built over the last 20 to 30 years.

Originally it started with just scan data in grocery stores, but continued to grow and

innovate with new technology and methods.

First, they have household panel data of over 100,000 households where each

participating household has a known income, ethnicity, children or lack thereof,

education level, employment, etc. They are issued scanning devices that, once any item

anywhere is purchased, they scan it. This happens multiple times each day, and the data

is instantaneously updated to a central location where the data is then stored for future

use. With this data, researchers are able to know where, when, what, how much, how

frequently, and which products were purchased. With that information as well as the

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information about family, researchers can analyze the spending habits of a sample that is

very representative of the U.S. population.

Their next product is IRi Liquid Data (ILD) which breaks the barrier that normal data

providers have set. Most data providers are able to provide some sort of comprehensive

overview of the market and/or a product within a market in a static view. The way it is

usually laid out is in the form of a pyramid, with Stock Keeping Units (SKUs), Brands, and

then the corresponding Manufacturer. This view allows some insight to what’s going on,

but it is very hard to rework once a change has been made within that structure, likely

taking weeks or months to restructure. With new brands, manufacturers, and SKUs

coming out every week, month, quarter, the traditional method of data visualization is not

the most helpful. With IRi’s Liquid Data platform, it transcends the static, concrete

hierarchy that traditional data providers use, and breaks every bit of data down into the

most granular, or small, form possible. This in turn allows for a much deeper knowledge

of products, brands, manufacturers, etc.

The data is broken down by features like flavor, color, size, package type, scent,

etc. This very intricate classification system allows you to see trends across markets,

brands, competing products, and much more. ILD also allows a client to find out the

performance not only by brand, but by brand in one store, a cluster of stores, or a store

nationally. Being able to see data at such a granular level also allows the user to see

where new consumers are coming from and leaving to. The data that needs to be pulled

for any client is aggregated, or compiled, on the fly. This allows for very customizable

results that are produced in seconds. ILD is a popular product with amazing potential for

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any company, there are more than, “15,000 users globally, 1 million queries a month are

executed, 95% of which are answer in less than 10 seconds” (YouTube). Very recently,

ILD has been upgraded to an even more sophisticated version called CSIA. As you will

see later, we will recommend this version be used by News America Marketing.

The last big platform that IRi has that this paper will be focusing on is IRi’s

ShopperSights platform. Clients who want to know if they should appeal to the more

active people or those who are heavy into computer use or those who have pets are the

ideal users of SS. ShopperSights (SS) was a very recent invention that looks at data as a

household, much like the panel data does. However, SS is a combination between ILD

and panel data. By taking the knowledge of each household’s income, ethnicity,

education, and hundreds of other factors and combining with the purchasing habits and

insight of ILD, IRi is able to predict, with astounding accuracy, the lifestyle of each

household. Lifestyle is a broad concept and might seem very hard to know without

knowing each individual household.

For example, if Anheuser-Busch InBev wanted to find out how to effectively and

efficiently target the consumers of Michelob Ultra, they would use SS. Through SS,

Anheuser-Busch InBev would find out that the consumers of Michelob Ultra tend to be

60% female, in their 30s, educated with at least a college degree, making more than

$35,000 each year, likely to be married, have children, and are extremely active in

running, hiking, rock climbing, and very rarely watch television. One might think ‘what

the heck does all that have to do with beer?’ By knowing the ideal target and what they

are more likely to do or be involved in, ABI can very efficiently target that consumer.

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With that information, ABI should advertise in marathon events, hiking events,

family-friendly environments, and focus more on print, radio, or event marketing. This

marketing is one of the most effective tools that IRi offers, in fact, “one of our large

manufacturer clients was able to partner with a major retailer to develop programs to

reach target consumers in high opportunity stores, resulting in an estimated $5.3 million

in incremental sales” (IRi Worldwide).

To break it down more fundamentally, here’s a brief overview of IRi’s areas of

expertise:

● Market Performance and Strategy- Features market measurement/point-of-scale

(POS) tracking to in-store performance audits and forecasting. Answers questions

like, “How can you achieve growth in a mature market? “Are you missing key

innovation or category opportunities?”

● Consumer and Shopper Intelligence- Solutions that focus on deep shopper

insights, segment planning, opportunity sizing, and activation strategies to win the

sale and the shopper.

● In-Market Execution and Analytics- For optimizing pricing, promotion or

assortment, or be more productive with a manufacturer, this analytical tool helps

decipher vast amounts of data.

● Media- Answers questions like, “Can you be more efficient with your media

spend? “Did your advertising lead to any sales? These media solutions include

household level to actual purchases for deeper insights, targeting, activation, and

measurement.

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● Technology- Features Liquid DataTM platform, offering insights with the touch of a

button. This is the biggest reason clients leave competitors for IRi.

Key People & Positions

With such an intricate business, several products, hundreds of clients, and global

expansion, there are many people that are essential the the success and growth of IRi.

There are the C level important people, but the presidents that report into them are the

real drivers of growth. I will elucidate each important member in due chorus.

Andrew Appel is the current President and Chief

Executive Officer of IRi. As the former Chief

Executive Officer of Aon Consulting and Senior

Vice President of Revenue Operations at

Accretive Health, Appel is a driven leader with a

portfolio of growth in the companies he has previously been involved with. He continues

to look forward into IRi’s future and be a cunning and determined leader, with his main

goal of expanding IRi globally.

Jane Altobelli is the current Executive Vice President

and Chief People Officer of IRi. Continuing the

company’s efforts in building a high-performance

culture, Altobelli is responsible for global human

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resources efforts, talent and performance management, organizational change efforts,

staffing, benefits and compensation.

Susan E. Bennett is the Executive Vice President

and general counsel for IRi, is responsible for all

corporate legal matters. She has extensive global

experience in corporate governance, commercial

transactions, employment, intellectual property,

litigation management, mergers and acquisitions, distribution and risk management.

Piyush Chaudhari is the current President of the

Americas for IRi. He has responsibility for Client

Insights, Client Service and Pre-Sales. He focuses on

bringing IRi’s strategy to life with clients in North

America as well as with select multi-national, global

clients. He ensures collaboration between the client insights and service organizations,

and the company’s Centers’ of Excellence to help clients achieve fundamentally

enhanced performance and growth through new capabilities.

Krishnakumar Davey is the current President of

Strategic Analytics for IRi. Bringing to this role more

than 25 years of experience at leading consulting,

media/advertising, syndicated research and custom

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market research companies, Dr. Davey is focused on generating even further growth for

the CPG and retail consulting practices at IRi.

Mike Samuels is the current Chief Financial Officer for

IRi. As the CFO of IRi, Mike Samuels is responsible for

overall financial management of the company and its

financial reporting and transparency, including

accounting, financial planning and analysis, treasury,

tax, audit, real estate and procurement.

Srishti Gupta is president of IRi’s Media Center of

Excellence (COE) and a member of IRi’s Executive

Leadership Team. The Media COE has a mission to

increase return on media dramatically through

unparalleled insight into the relationship between

media interactions and purchase behaviors. These capabilities empower IRi’s clients to

create scalable, targeted cross-media 1:1 marketing activation campaigns, plan and

allocate resources across media in real time, improve marketing mix effectiveness and

optimize ROI across all marketing activities.

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John McIndoe is the current Senior Vice President of

Marketing for IRi. As senior vice president of marketing,

John McIndoe is responsible for IRi’s marketing efforts,

including corporate branding, communications strategy,

thought leadership, events, media and analyst relations and

marketing communications supporting the company’s

ongoing transformation, innovation and growth initiatives.

Ash Patel is the current Chief Information Officer of IRi.

Ash M. Patel leads IRi’s global technology and oversees

the company’s onshore and offshore teams. He focuses

on generating value from innovative technology

solutions, ensuring client satisfaction with technology

deliverables and strengthening technology alliances.

Michael Rosenthal is the current Executive Vice

President of Global Operations for IRi. As executive

vice president of Global Operations, Michael

Rosenthal is charged with supporting and

accelerating IRi’s operating excellence efforts as well

as bringing to market the company’s next-generation data-integration solutions. He leads

IRi’s efforts to deliver a unique competitive advantage in the consumer packaged goods

(CPG) market with advanced technology that delivers forward-looking insights,

prescriptive analytics, and an open, democratized, real-time set of platforms.

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Robert Tomei is the current President of Consumer & Shopper

Marketing Core Content & Insights for IRi. As president of

Consumer & Shopper Marketing, Robert Tomei oversees

growth, development and management of the company’s

consumer and shopper insights, consumer segmentation, new

product innovation, shopper marketing and activation services

and solutions. He also manages IRi’s product management

function around the company’s core content (point-of-sale, consumer, shopper,

third-party supplied).

What IRi Does

Throughout this initial summary of IRi, it is necessary to keep in mind that IRi looks

to grow its client base through trust, transparency, and results. By delivering growth in as

many areas as possible for its clients, IRi continues to make its mark on the marketing

research world. Since 1979, IRi has looked to improve itself while making sense of the

multitude of data that is out in the world today. With constant innovation, collaboration,

and the onboarding of the smartest minds in marketing research, IRi captures, analyzes,

and predicts almost better than any competitor in order to deliver growth.

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INTERNAL ANALYSIS

Financials Performance

IRi sets very high expectations for growth from year to year. While 6% annually

can seem like a very menacing goal, and it is, especially for a $1 billion company, it has

been achieved several years out of the last decade. IRi sets high standards for growth

for many reasons: to eliminate complacency, encourage innovation, and to attract more

employees and business. However, many companies wouldn’t dream of a 6% growth

year after year after year. At some point, it becomes literally impossible, so why does IRi

still have this ambitious mindset? To go public. It has been briefly mentioned before, but

IRi has been completely privately held for almost a decade after it was purchased by

Symphony Technology Group. This has made acquIRing financial numbers quite the

hassle. However, thanks to Senior Vice President of Consumer & Shopper Marketing,

Christopher von der Linden, there is some evidence of growth in the face of such

tremendous goals. With this 6% goal in mind, and the success it has had in achieving it,

IRi has some great clout within the industry when it goes public.

Pulled from a slideshow from a 2013 presentation, one can see that from 2013, the

global growth from 2012-2013 was 5.8% which is just shy of the global expectation.

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However, there was some decrease from 2013 – 2014. From a 2014 Research

Access article found on the web, they report a global increase of 3.8%, which didn’t hit

the goal set by the company.

There is still room for improvement from a YTD (Year-to-date) standpoint, but

when you think about it, they are pushing their luck if the idea of going public is truly on

their to-do list. As an investor, I would imagine that seeing growth year after year for the

last decade would be a huge selling point. With numbers falling just shy of their goal of

6% year after year growth, it would be in IRi’s best interest to go public sooner rather

than later.

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Market Position

IRi is always viewed as a top competitor in the marketing research world, and has

been for quite some time. From a relatively recent American Marketing Association

study, IRi was voted the top 5 out of 25 companies that operate near the same capacity

as IRi. IRi was preceded by Westat, Ipsos, Kantar, and its biggest competitor, Nielsen. IRi

continues to remain in the middle of its top 10 competitors in the marketing research

world, but is constantly trying to move up and make itself bigger and better than its

competition.

IRi realizes they are not a perfect company, and in many ways, this is what makes

them one of the best. Not blinded by its success, IRi keeps their feet on the ground,

egos in check, but their goals as ambitious and exciting as possible. Lifted from one of

the presentations given in 2013, IRi looks back on their progress as a firm and asks two

major questions that any good business should constantly ask themselves: what do we

do well, and what can we improve on.

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Continually asking themselves these two questions and making it clear that they are

doing well, but can always be doing better is what wins them the admiration and

continued business of all their clients.

Strategic Orientation

The above graph displays in one of several ways how IRi is positioned within the

industry and among its competitors. This particular graph is laid out so that the variety of

the company’s services are on the x-axis. Perpendicular to the Variety of Services, the

graph shows the level of innovation for each company, and where it roughly would fall.

This graph very much accentuates IRi’s best features by showing that IRi is a leader in

number of services offered to a client as well as the ongoing endeavor to constantly

improve the services and products offered. Compared to all of IRi’s competitors, it is

obvious that they lack in either innovation or number of services. Although IRi is lesser

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on the totem pole monetarily, market share, and a few other factors, these two are major

in the industry.

Core Competencies

Support Activities

Human Resources

Technology/ R&D

Procurement

Primary Activities Data Programs Data Collaboration Acquisitions

Referring to the Porter’s Value Chain above, you can see where IRi excels and

where its core competencies lie. It is imperative to understand these core competencies,

because it shows why IRi is attractive to the multitude of clients and potential clients in

the industry. It also shows why News America Marketing shows interest and continues to

renew its contracts for IRi’s services. IRi collects data, interprets and analyzes data, and

reports its data to its clients; however, everyone in this industry does that just the same.

First IRi creates value in the form of its data programs and its services. As

previously stated, IRi has a bevy of solutions, products, patents, and services. IRi has the

ShopperSights platform which allows the predictive analysis of consumers through

cross-indexing, and they also have the IRi Liquid Data platform which gives unlimited,

customizable, granular data insights. Through these unique data programs, IRi is able to

go deeper in depth into it’s end consumer’s minds and see not only where, when, how

much, how frequently the purchase, but also the likelihood of them being active, having

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children, being educated, etc. Because of the vast amount of information that each of

these services create, it sets them apart from all the other competitors in the industry.

Many clients will leave competitors and break contracts just to have one or both of these

services available to them.

Data collaboration is one of the biggest ways IRi creates value for its clients and

their end consumers. It seems simple enough of an idea, that when IRi wants to

understand end consumers more and make its predictions more accurate, then it will

need more data. This is accomplished through two companies partnering up and sharing

their data with one another. This makes both of the parties more successful, and this is

actually a fundamental way that IRi is able to have so many scanners for its ILD platform.

By a store allowing IRi to use its scanner data to track sales, IRi then has the knowledge

that can make that store sell more efficiently. So weekly, monthly, quarterly, or yearly

reports can be generated for each store to let them know how much of which product

was sold and what products are often bought together, thus hopefully leading to more

traffic to that particular store.

Take that concept and apply it to IRi and another data provider. For instance, IRi

has recently partnered with comScore, which collects data on individuals and households

through the use of television and mobile data. By giving IRi access to its database, IRi

can now tell its clients which TV or mobile ads produced the most sales, in which areas

of the country those ads were most effective, what age group they most influenced, etc.

And IRi can tell comScore the same info, which allows them to hone their processes and

make their data that much more valuable to its clients. IRi looks to continue to find the

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right partners where they will be mutually beneficial which makes IRi more valuable to its

clients. In many ways, this is where News America Marketing becomes involved. By

each other relying on the others products and knowledge, they are both able to help

each other accomplish their own goals.

The last primary activity that adds value to the firm is IRi’s acquisitions. Much like

their partnerships and data collaborations, IRi does a phenomenal job at acquIRing

companies that will allows them to take an existing technology and learn more from it

while expanding their footprint. With IRi’s resources and thirst to deliver growth, they

have always looked for the next best opportunity that will make them more

knowledgeable about a consumer. Through acquIRing companies like Datasea, one of

China’s leading analytic services and market research companies which has deep

knowledge and expertise in the retail and CPG industries, IRi has more access to the

Chinese markets which it entered a relatively short time ago. IRi also most recently

acquired Aztec, “a leading provider of market measurement and related services for

consumer packaged goods (CPG), liquor and pharmaceutical manufacturers and retailers

in Australia, Canada, Hong Kong, New Zealand, South Africa, Sweden and the United

Kingdom” (Reuters). These acquisitions are allowing much more knowledge of

consumers globally, which gives IRi much more knowledge, insight, and value, especially

for its global clients.

The support activities that add value to IRi and, more importantly, IRi’s clients are

the human resources, technology, and procurement. With IRi’s extensive expectations of

its hires, phenomenal training program, and transparency with its needs, IRi is able to

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attract and retain the best and brightest minds in the marketing research industry. This

leads to harder working, more driven, enthusiastic, and caring employees. Which, in turn,

leads to better relationships and more relationships with clients.

The technology and research & development that IRi keeps at the front of its

business model adds value through the want and need to innovate, create, improve, and

repeat. Through the technology that it has and the incessant want to better itself, IRi

constantly sets the bar higher with its technology. With technology becoming smaller,

more powerful, and faster every single year, there will always be new, more efficient

ways to deliver growth to a client.

Lastly, through procurement, or the way that companies acquire the resources

they need to operate, IRi continues to add value. Through not only acquIRing

businesses, but allowing business, clients, partners, etc. to work off of each other’s

successes and resources, IRi sets itself ahead of the competition. IRi’s goal isn’t to

dominate the market by buying out every competitor and it isn’t to earn the most

revenue, because it doesn’t. IRi’s goal is to deliver growth, and it does that through

smartly partnering with as many people as possible in order to learn the most about the

industry and end consumers.

Organizational Culture and Structure

In class we had discussed how truly important culture is in an organization. So for

IRi, everything is about bettering their client’s business and delivering growth. The

client’s goals become IRi’s goals. This creates an interesting dynamic especially with

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relationships because client’s rely on IRi for information and data, and IRi would hope to

see their information better a business. Even from the company’s website, one can tell

the culture is described as innovative. It all comes down to meeting client’s needs and

doing whatever it takes to do so. The business marketplace is constantly evolving, and

when the marketplace and client’s businesses evolve, IRi does as well. IRi does a terrific

job with client relationships, because in this industry, it is imperative that firms establish

multi-year contracts. One of IRi’s constant goals is establishing new partnerships, in order

to increase the amount of resources they have. This entails the company having great

communication from management down.

The culture of offices is generally very laid back, but intense at the same time.

Employees dress corporate casual, which creates a comfortable but productive

environment. The structure of the offices themselves encourages high communication

because of the layout of the desk cubicles. It is designed to have the walls low, so every

employee can communicate effectively from the comfort of their own desk. The ability for

employees to bounce ideas off each other, ask questions, and communicate effectively is

what makes IRi a great environment to work in.

EXTERNAL ANALYSIS

Markets and Customers

IRi’s main customer target market is specifically in the CPG or Consumer

Packaged Goods industry. In addition, IRi also provides data to the retail,

over-the-counter healthcare and media companies. The main purpose of this industry

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especially for IRi is providing value in terms of data that the business can in turn use to

develop growth strategies. This market is mainly dominated by a couple of major players

and this includes IRi and their main competitor Nielsen. The industry is in a constant state

of innovation. Innovation in terms of today’s complex technological world, and for big

data companies like IRi, innovation has been their DNA since the start of the company.

As new technology develops, the way that companies can find and interpret data is

changing as fast as ever before. Companies today simply do not have the time or

resources to seek this data internally, so they seek services like IRi to help them out.

Marketing research today has changed drastically in the last decade or so. Market

research then included phone surveys, door-to-door surveys, and many other

non-efficient ways to collect data. Today, the Internet and social media have taken over

the industry, and is the largest product segment. “Research can be broadly divided into

two forms of measurement and interpretation: quantitative research and qualitative

research. In this industry, quantitative market research is used for the collection and

analysis of data to measure consumers' response to a particular product, issue, campaign

or related phenomenon. During the past five years, quantitative research has changed

significantly with the application of new technology and the ability to link various

databases. This has increased the sophistication of techniques used by market research

firms. Qualitative research attempts to explain how and why consumers make decisions

and is expected to account for 19.0% of industry revenue in 2016” (Ibisworld.com). The

following graph shows broadly the markets and segmentation in the market research

industry.

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The 56% of market research by electronic means has been increasing drastically in the

last several years and will continue to increase as new, innovative technology develops.

Looking at the major market segments in the market research industry paints an

interesting picture. “This industry’s markets can be divided into three broad segments:

providers of consumer goods and services wishing to measure and understand their

market; providers of media and advertising wishing to measure and understand their

viewers; and government institutions and political candidates wishing to measure and

understand their constituents” (Ibisworld.com). The following graph illustrates the major

market segmentation within the industry in 2016.

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In analyzing the market segmentation of the market research industry, it is not

surprising to see that IRi only focuses on the major segment percentiles of the pie chart.

This includes media, CPG or consumer goods businesses, and the pharmaceutical and

healthcare businesses. This equates to 58% of the market segmentation, which also may

include additional business from the “other businesses category”. The largest market in

the industry is from businesses that produce or sell consumer items, such as packaged

goods. Once again, it is not surprising that IRi’s primary focus is this market segment.

“Demand for market research from consumer goods and services providers has been

growing in the past five years, fueled by companies’ investments in research and

development. Industry demand from this market is expected to grow at a faster rate

during the next five-year period (Ibisworld.com). The other big segment is media. “Media

research includes measuring and profiling audiences across television, the internet and

mobile platforms. This research includes collecting ratings and viewer data for print and

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electronic media. Clients use media research to better understand their audiences and

maximize the value of their content” (Ibisworld.com). News America fits into this market

segment as they utilize IRi for their advertising production. This answers whom exactly to

target and advertise to, where to place these advertisements, and many more aspects

that News America uses to pinpoint and get the most attention/use.

As we can see from the pie graph, there is still a good percentage of business that

can be penetrated into. IRi may look in the future to penetrate these markets, such as

automotive, finance, banking, insurance, and potential from once again the “other”

category. Perceptibly, the current target market is the three broad segments as

mentioned above, and IRi is exceeding in the penetration of these segments. It will be

interesting to see what other markets it penetrates in the near future.

Industry/Competition Analysis

Competition

There are only a few major players, which hold significant market share that

dominate the market research industry. However, the major players are highly

competitive especially in terms of innovation. The firms within the industry compete

mainly with price and the quality of services. The services again change with innovation,

and the top player is the firm who consistently brings innovation to acquIRing data for

businesses to utilize. Large companies have the upper hand as, “Larger companies,

aside from leveraging their name recognition, have extensive data gathering systems

and infrastructure in place, allowing them to accurately obtain large amounts of

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information at lower costs” (Ibisworld.com). This makes it very difficult for smaller firms

within the industry to compete with the major players; hence the amount of mergers and

acquisitions has been steadily increasing.

As far as market concentration, the industry displays a low level of concentration.

“The Market Research industry exhibits a low level of concentration, with the top four

players expected to account for a combined market share of 28.9% in 2016. The industry

is largely comprised of smaller companies; more than 80.0% of industry enterprises

employ fewer than 20 people. In the five years to 2016, revenue growth facilitated a rise

in the number of firms operating in the industry. Over the next five years, the number of

market research firms is forecast to increase at an annualized rate of 3.8% to 41,373

enterprises” (Ibisworld.com). Looking into the major players, it is noteworthy to mention

Nielsen Holdings NV, one of the largest market research companies in the world. It

currently holds 15.9% market share. The following graph illustrates the major players.

For IRi, it is very difficult to compete with a player like Nielsen, however it has

been on track to compete on a very high level simply due to their innovation. The

success of Nielsen is primarily due to the fact that 85% of the company revenue is

recurring. This means that Nielsen’s clients typically commit to multi-year contracts. In

September of 2013, Nielsen gained a massive acquisition in Arbitron Inc. for an

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astounding $1.3 billion. Nielsen’s financial performance is continuing to improve as their

clients expand across new territories and again increase their budgets for market

research.

Another noteworthy main competitor of IRi in the industry is the Kantar Group,

which currently as the graph shows holds a 6.5% market share. Kantar is a global

advertising and marketing services company headquartered in the United Kingdom. A

familiar pattern is starting to develop in the industry, as Kantar was also a part of an

acquisition back in 2008. The company acquired market research company TNS with its

Research International business. This significantly increased their market share and still

continued to head in the right direction post-acquisition with the average revenue annual

rate was rising at an average annual rate of 3.1% up until 2016. (Ibisworld.com)

There exist many key success factors within this industry that have proven to work

for companies across the board. These include the following: Firms who have the ability

to quickly adopt new technology, Access to skilled and flexible workforce, Provision of

relevant results, Good project management skills, and lastly Development of a symbiotic

relationship with another industry” (Ibisworld.com). The last factor correlates with IRi with

their relationship with the consumer packaged goods industry in which remains their top

priority market. The first factor has definitely been IRi’s biggest one by far as the

innovation it has developed has been rather impressive in the last decade. Working on

these success factors is crucial to remain relevant in this highly competitive industry and

in order to have or maintain a competitive edge.

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Industry

The industry of market research has come a long way in terms of progression

through innovation and technology. There is a considerable amount of demand for data

that companies seek, and this should continue to improve looking ahead into the future.

“During the five years to 2021, revenue for the Market Research industry will grow as

businesses increase marketing budgets due to recovering economic conditions. The

rebounding labor market will lead to a rise in consumer spending, in turn expanding

corporate profit. With recovery underway, revenue is forecast to increase at an average

annual rate of 1.9% to total $22.2 billion over the five years to 2021, as businesses

continue spending more on advertising and research and development” (Ibisworld.com).

This information leads for reason to believe that the partnership between IRi and News

America has without a doubt room for growth in the next five or so years. In order to gain

a competitive edge, businesses will constantly seek to understand their customers and

target markets. As talked about in class, the last decade or so there has been a record

amount of mergers and acquisitions across the board in many different industries. In the

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market research industry, that is no different. For example, Nielsen, the industry’s largest

player and IRi’s main competitor in which we will assess next, gained approval to

purchase Arbitron. Arbitron is one of the industry's largest firms, and a major player in

radio research. This phenomenon will make it very difficult for new companies to enter

the industry. Another factor that would generate demand is media. With new media come

new opportunities. The fastest growing segment within the industry recently has been

mobile advertising. A 2013 report from ZenithOptimedia showed that mobile advertising

has been growing seven times faster than desktop Internet advertising. This is displaying

the constant adaptation that companies incur in this industry as technology continues to

progress. Also, “The continued fragmentation of consumer markets highlights the

importance of market research. During the past five years, social networking and

user-generated content increasingly allowed interest groups to create online

communities, making it easier to target specific demographic groups. Furthermore,

technology that tracks online information will continue to improve, integrating comments

made about brands on Facebook, Twitter and other social media platforms with real-time

sales numbers. Implementing this data in marketing strategies will become crucial in the

coming years and will improve many companies’ ability to manage brand development

and reputation” (Ibisworld.com). Looking at the industry from outside in, it is easy to

notice the potential that market research firms like IRi will have and what is still billions of

dollars of revenue to pursue in the near future.

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Influences of Porter’s Five Forces

Porter’s Five Forces Model was first introduced back in 1979 and started a

strategic revolution in the business environment. The five forces include rivalry among

existing competitors, threat of new entrants, threat of substitutes of service or products,

bargaining power of suppliers, and bargaining power of buyers. “The strongest

competitive force or forces determine the profitability of an industry and become the

most important to strategy formulation” (Porter). Using Porter’s model IRi can get a good

sense of where they stand strategically in the industry and how they match up against

competitors. The chart below illustrates Porter’s Five Forces Model.

The first aspect of Porter’s model is the industry competition. Currently in the

market research industry, competition is at a high level and firms compete on a variety of

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different factors like price and quality of services as mentioned previously. There exist

intense rivalry because only a few major players dominate the industry. (Kantar, IRi, Ipsos,

Nielsen, Westat, etc.) The major players also have significant leverage over other firms

competing just with their name, and can acquire much more data and information at a

much lower costs. The competition has been and will continue to steadily increase as the

major players continue to acquire smaller firms, which in turn increases their market

share.

The next aspect of Porter’s Model is the threat of new entrants and entry barriers.

According to Quickmba.com, “It is not only incumbent rivals that pose a threat to firms in

an industry; the possibility that new firms enter the industry also affects competition. In

theory, any firm should be able to enter and exit a market, and if free entry and exit

exists, the profits should be nominal. In reality, however, industries possess

characteristics that protect the high profit levels of firms in the market and inhibit

additional rivals from entering the market, or ‘barriers to entry’” (Quickmba.com). Barriers

to entry in the market research industry are low but significantly increasing because of

the market share of its’ top players especially through acquisitions. There is not much as

far as qualifications and licenses and even few barriers to entry, but the amount of

resources and multi-year contracts that top firms have makes it substantially hard to

compete against if a firm does so choose to enter the market.

The third aspect of Porter’s model is the threat of substitute products or services.

In the market research industry, and in IRi’s case, the threat is low. This is because of the

amount of resources that companies have developed that makes it very difficult to

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substitute. Clients typically, if they choose to do so externally, have a small range of

companies to choose from to better their business. Price allowing, they will typically pick

the major player’s services because of the strategic results that occur from the

information they are supplied with. Also, because of the constant innovation in the

industry, it would be hard for other substitutes to be relevant at all.

Next, the power of suppliers is the fourth aspect to the model. So who actually

supplies the market research industry in this case? It includes industries such as

commercial leasing, data processing and hosting services, VoIP, and wired

telecommunications carriers. The power of suppliers is low, because the industries

competitors have continually been developing methods of acquIRing vast amounts of

information.

The last force in Porter’s Model and the final aspect is the bargaining power of

buyers. “The power of buyers is the impact that customers have on a producing

industry… In reality few monopsonies exist, but frequently there is some asymmetry

between a producing industry and buyers” (Quickmba.com). In this case, the market

research industry has low buying power. This is mainly because of the fact that clients of

this industry even increase their marketing budgets as the economic conditions improve

to utilize companies like IRi and its resources. Also, clients can negotiate the multi-year

contracts as mentioned however because of the power of competitors, companies like

Nielsen and IRi have more price control than the buyers.

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SWOT Analysis

INTERNAL EXTERNAL

POSITIVE

Strengths  Research & Development

Procurement Wide Product Portfolio

Client Loyalty Acquisitions and Partnerships

 Flexibility

Opportunities Acquisition of Mobile Competitors

 Innovation and R&D Growth and Expansion

Internationally Public Funding

NEGATIVE

Weaknesses International Presence

Mobile Experience Private Company

Not Process-Driven

Threats Saturated Market

Privately Held Nielsen Gaining CPG Knowledge

Strengths

Through the analysis of IRi’s environment and industry that it works in, it can seem

like the company is in danger of getting swallowed by the multitude of competitors.

While that can loom in the background, it is no surprise why clients continue to stick with

and defect to IRi. IRi has many strengths, most of which come from its core values,

innovation, and decades of experience. IRi has a solid R&D department that is constantly

bettering the technology currently available, while making sure to try and utilize and

discover new technological advancements that better their clients. The procurement of

IRi’s data is simply astounding with more than 100,000 households of data and scanners

in thousands of stores internationally. With the astonishing amount of data that is

collected and retained by IRi, this gives them the ability to use it in several different ways.

Their vast array of solutions and platforms is a major strength and asset to the company.

With all the data they pull, the solutions they have, advice they offer, and the overall care

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for the client, IRi’s loyalty is their lifeblood. With the majority of their clients resigning

multi-year, multi-million dollar contracts, this keeps IRi near the top and keeps them from

failing. With knowing their clients needs and really focusing on the end consumer in

every situation, IRi is able to very strategically align their goals and services with that of

their clients. This, of course, being the basis of MKT 325, is a central factor in IRi’s

business model, and is a major part of their continued success. This allows them to

partner with companies that will not only benefit IRi’s clients, but allows for a mutual

benefit between the two companies. It truly is a win-win-win situation between IRi, the

partner, and the end consumers. Lastly, IRi’s flexibility is key. From a recent interview

with Dave Buisson from IRi, “Nielsen and other companies are very process-driven … but

IRi’s flexibility allows for greater autonomy and use of resources for every individual

client’s needs and schedule” (Buisson).

Weaknesses

It would be naïve of any company to believe that they are immortal. Oftentimes,

the ones who allow that thought to corrupt their mindset, they end up filing for

bankruptcy. I wholeheartedly believe that IRi has management that constantly survey the

weaknesses, and the most obvious one is their lack of international presence. It is almost

laughable that a company with more than 35 years of experience and a product that is

essential to every business worldwide has such little international presence. Nielsen

dwarfs IRi with offices in hundreds of countries compared to IRi’s 9. This is not only an

embarrassment, but a massive weakness. However, within the last 5 years, many

Nielsen employees have been poached and brought to IRi to start a global penetration

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strategy according to Buisson. With IRi only testing the waters of mobile and electronic

marketing with comScore, they are leagues behind the curve, and are losing valuable

experience, time, and clients. However, the partnership is a step, and if funding allows,

IRi would be foolish to not make an offer to acquire a company with that expertise.

Speaking of funding, with IRi privately held, there is potentially less in their operating

budget compared to those who are public. IRi is losing market share, clients, and funding

because of Symphony Technology Group. However, with their great financials,

experience, and need to grow, many would bet that IRi goes public within the next 5

years. Lastly, Dave Buisson had mentioned that IRi is not process-driven. While this

breeds flexibility and autonomy, it limits the structure for the future. By not being

process-driven, IRi has a difficult time showing new minds how to operate and what to

do. This can limit client satisfaction if there is no consistency between solutions and

communication.

Opportunities

IRi has several observed strengths, but that doesn’t mean they can remain steady;

they need to encourage innovation, eliminate complacency, and be on constant lookout

for the next opportunity. A few opportunities that IRi has are apparent throughout this

report, but one that is a necessity is the acquisition of companies that are more

mobile-centered. IRi is just beginning to understand that some of their biggest

competitors are ahead of them because they fell short on a growing mobile and

electronic industry. IRi has the opportunity to look into purchasing companies that will

allow them a greater field of view of the market through a mobile and electronic lens.

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The biggest company that should be on their short list is their current corporate partner,

comScore. Another opportunity is the incessant technology growth. With better

technology, the more IRi can do. By being very involved in technology improvements,

and capitalizing before competitors can, IRi can be very successful. IRi is very strong

within the U.S., and arguably one of the best domestic data providers. By growing their

footprint abroad, they will not only capture more data from other parts of the world, but

will gain clients. Not only clients who want to know more about their business abroad,

but also those foreign companies who want to understand U.S. consumers better. One

of the last great opportunities that lie before IRi is their ability to go public. IRi has been

privately held for close to a decade, and while it was a great change of leadership then,

by going public with the advancements they have made, they can bring in many more

ideas and much more funding. This stands to benefit every stakeholder within IRi.

Threats

With everything supporting this in the industry analysis, the industry, by it’s nature,

is a threat to IRi. With over 41,000 firms expected to be in the industry in the next 5

years, IRi needs to make substantial moves in order to minimize the threat that other,

developing firms pose to them. By seizing the opportunities listed, IRi can get ahead of

their upcoming competitors and potentially capture more market share. While it is an

internal weakness, being privately held is also a threat. This could potentially limit IRi’s

growth, but also lead more investors, clients, and partnerships towards IRi’s competitors.

IRi needs to understand they are being held back by being privately held, and they need

to open themselves up to the public. Lastly, to continue playing a broken record, Nielsen

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poses a threat. Nielsen has been mentioned more that one would care to read at this

point, but for good reason. Nielsen is the leader in the industry, they have the most

clients (along with most client loyalty), and they are quickly “boxing out” IRi. They are a

leader in mobile and electronic data and are a giant in the international sense. With

Nielsen gaining more knowledge about the CPG realm through recent partnerships, this

could render IRi literally useless. IRi needs to make drastic changes to remain a sizeable

threat to Nielsen.

Quantitative SWOT Assessment

Strengths Research & Development Wide Product Portfolio Client Loyalty Acquisitions & Partnerships Flexibility Procurement

M ● I = R 3 ⚫ 3 = 9 3 ⚫ 3 = 9 3 ⚫ 2 = 6 3 ⚫ 2 = 6 2 ⚫ 3 = 6 2 ⚫ 3 = 6

Opportunities Acquisition of Competitors Growth and Expansion Innovation and R&D Public Funding

M ● I = R 3 ⚫ 3 = 9 3 ⚫ 3 = 9 3 ⚫ 2 = 6 3 ⚫ 2 = 6

Weaknesses International Presence Mobile Experience Privately Traded Company Not Process-Driven

M ● I = R -3 ⚫ 3 = -9 -3 ⚫ 3 = -9 -2 ⚫ 2 = -4 -1 ⚫ 1 = -1

Threats Privately Held Nielsen Gaining CPG Intel Saturated Market

M ● I = R -3 ⚫ 3 = -9 -3 ⚫ 3 = -9 -2 ⚫ 2 = -4

M = Magnitude of element Magnitude scale ranges from +/- 1 to +/- 3

I = Importance of element Importance scale ranges from +/- 1 to +/- 3

R = Rating of element

Strengths

Referring to the chart above, IRi’s highest rated strengths are R&D and the variety

of products they have. Both factors scored a 9 because they are the most valuable

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aspect of IRi’s business. Referring to the Strategic Positioning section, IRi prides

themselves on, and surpasses major competitors in variety of products as well as their

ability to develop new technologies to enhance the outputs to the client. Ranking in the

middle for strengths, IRi’s client loyalty is a major part of its success, hence the 3 in

importance. The ranking of the 2 signifies that while they are doing well, they aren’t

doing the best. Nielsen has a 90%-95% resigning contract rate. IRi still has room to grow

to hit that number. Also ranking in the middle, IRi’s corporate partnerships and

acquisitions. IRi understands that this will help them grow and understand markets they

could never understand on their own. This is vital to their business now and will be more

vital going forward, hence the 3. While they have many partnerships like comScore,

Rentrak, and News America Marketing, they still know they aren’t doing the best they can

be, hence the 2 in magnitude. On the lower end of IRi’s strengths, flexibility and

procurement. These rank near the bottom because, while they do a great job at both,

they aren’t of utmost importance. Flexibility allows IRi to work around each of their

client’s schedules, and procurement allows IRi to sift through mounds of data, but if IRi

wasn’t as flexible it wouldn’t be the end of IRi. Likewise, having 100,000 households is

great, but technically IRi only uses 60% of that data, so more isn’t necessarily always

better.

Weaknesses

As aforementioned, IRi is not blind to their flaws. They understand the gravity of

all their weaknesses, and have plans to handle them accordingly. However, to reiterate,

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International presence is arguably their weakest point. The importance of moving into

more territory to expand their name and client base is a principal concern among top

management. As their biggest flaw and with the importance of international business

today, it scored a -9. If not tied with international presence, mobile experience is a close

second in major flaws of IRi. As more people are implementing more technology in their

day-to-day lives, it becomes an essential aspect of marketing research that IRi lacks.

With the importance of technology in marketing research, and the lack of IRi’s

involvement in it, that scored a -9. Being privately held is holding back from IRi

streamlining their process, limiting funds that could be used internally, and is overall

limiting growth. With it being bothersome but not necessarily essential, and with the

impact it’s having on the company, it is ranked at -4. The last factor that was outline

above has to do with a process to IRi’s methods. This could help IRi replicate more

consistent, concise results, but with no push from outside sources (being private) and no

major impact, it is only a minor inconvenience.

Opportunities

IRi has many opportunities that, if seized, could probably land them among the top

3 in the industry. IRi’s acquisition of mobile competitors ranks highest, and if it could go

higher, it would. IRi understands the need for a mobile aspect of their business. This

ranked 3 on importance and 3 on magnitude, because this opportunity will not be around

long. While they have great relations with comScore, they should be using this as a way

to get exclusivity to their methods and practices in perpetuity. Growth internationally is a

major endeavor that will take many resources and is no child’s game. Putting more

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pressure internationally should be very high up on IRi’s short list of things-to-do. With

expansion in general high on the list, this factor received a 3 on importance and on

magnitude. Innovation and R&D comes in just below expansion because, while very

important and paramount to IRi’s success and values, nobody can make breakthroughs

overnight. Constantly surveying the technology horizon and testing new methods and

techs should be at the front of their mind, however since it can be a slow process, the

magnitude of this falls at a 2. Lastly, public funding is extremely important to IRi. With

the ability to employ 2,500 employees, train them, support their current technology while

investing in better tech, IRi simply needs more funding. Going public is a major deal, but

also shouldn’t be on the backburner. The importance is definitely a 3, but the magnitude

of this is a 2 because they shouldn’t get greedy.

Threats

Not only is IRi being crippled from within by being privately held, but it is allowing

other major competitors to gain more traction and overcome what IRi cannot while being

privately held. Like being in the pits during a NASCAR race, IRi can fix issues and

reorganize themselves, but it is not getting ahead. This is severely detrimental to

domestic and foreign growth, global brand image, and long-term goals. This is very

much a threat, and accordingly scored a -9. Worrying about their chief competitor,

Nielsen is taking advantage of IRi’s lack of mobile knowledge and trying to hit them

where it would hurt, CPG. With Nielsen being a leader in media and mobile tracking, as

well as moving heavily into CPG, IRi could find themselves redundant within a market

where redundancy fails. This threat is real and needs to be addressed. This scored a -9

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as well. Lastly, the entire market that every marketing research firm is in technically

qualifies as a threat. With new businesses springing up frequently, and stagnant

businesses either failing or being acquired, this threatens everyone within the industry.

IRi must keep innovation at the forefront of their plans, and must continue to add value to

clients where others do not. With this constant threat looming over, but with IRi’s

decades of experience and knowledge, this factor scores a -4.

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NEWS AMERICA MARKETING SITUATION ANALYSIS

NEWS AMERICA MARKETING SUMMARY

News America Marketing is a premier

marketing services company in the United

States that prides itself on being able to

reach consumers at every point on the path

to purchase: at home, online, and in the store. Through of broad portfolio of advertising

products, News America Marketing is able to help its customers grow their business

through selling them a consultative marketing solution that will effectively target

consumers. Some of their portfolio products include: Smart Source Magazine™ , Smart

Source In-store Media, Smart Source Media Group Custom Production, and

Programmatic Digital Display Advertising.

News America Marketing competes in the print advertising Industry (US - 54186)

as well as various others including in-store advertising and digital advertising. As of

recently, the print advertising industry has been steadily declining while the in-store

industry has been growing through technological advancements. Of the three industries,

the digital advertising industry has been achieving the most robust growth.

History

News America Marketing is a wholly owned subsidiary of News Corp. News Corp

was formed in 1979 by Rupert Murdoch as a holding company for News Limited. Since its

birth, News Corp has grown to become the largest news and information service

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provider. News Corp has found success by acquIRing companies such as The FOX

Entertainment Group, The Wall Street Journal, Dow Jones & Company, GQ, Vogue, and

many more.

News America Marketing (US - 54186) was founded when News Corporation

purchased the marketing divisions of two Free Standing Insert business competitors:

Quad/Marketing Inc. and Product Movers Inc., in 1988. News America Marketing has

since been a subsidiary of News Corp. In 1997, News America purchased an in-store

marketing company called Actmedia. As a result, the company changed its News

America to “News America Marketing”(America Pink). Since then, News America

Marketing has become arguably the largest source that controls most of the in-store ads

and grocery coupons in the United States.

More recently, News America Marketing has been making larger strides in the

digital realm of advertising. One of the largest factors contributing to their growth in this

segment is due to their merger and acquisition growth strategy. On July 24, 2015 News

America Marketing acquired Checkout 51. Checkout 51 is known as “the data-rich, digital

and mobile coupon company based in Toronto” (News America Marketing). Checkout 51

uses a digital platform so consumers can redeem coupons using their smartphones to

make couponing easier. The technology allows consumers to save money by keeping

their receipts and applying the coupons to their purchases. This is critical to the future for

News America Marketing because it makes the lives of the everyday consumer easier by

simplifying the process of couponing into a digital format. Since it goes along with one of

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the three main product lines, this gives News America Marketing an edge on their

competition.

In order to make everything possible, News America Marketing has formed

strategic alliances with various companies throughout their history. One of the most

significant partnerships they formed is with Information Resources Incorporated (IRi).

Through this partnership they have access to big data related to scanners across retail

grocery and drug stores throughout the entire United States. Another firm News America

Marketing has aligned with is Spectra Marketing. This firm has given them extreme

targeting capabilities in their direct mailer business as the company has an expertise in

gathering household data and information. In the digital realm, News America Marketing

has partnered with OwnerIQ. This company is a digital marketing firm that helps News

America Marketing run Programmatic Digital Display advertising programs. Their

competencies lie in tracking browsing behaviors of online users so that News America

Marketing can optimize their digital ad campaigns and allocate impressions based on the

highest percentage of conversion. Overall, these firms have helped News America

Marketing to deliver quality advertising programs to their key accounts.

Locations

News America Marketing is very widespread across the United States and even

reaches into Canada (referred to as News Canada Marketing). Within the United States

News America Marketing has locations in San Francisco, Los Angeles, Dallas,

Bentonville, Minneapolis, Chicago, Cincinnati, Atlanta, Charlotte, Pittsburgh, Wilton, and

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the global headquarters are in

New York City (refer to map on

right). Within Canada, there are

two offices in Toronto and

Montreal. Even though News

America Marketing is very well

established in the United

States, they are currently pursuing an organic growth strategy through continuously

researching viable markets to expand to domestically and internationally.

Markets and Products

News America Marketing competes in a variety of markets within the realm of

advertising. Their portfolio mainly spans through the markets of print, in-store, and digital

media. In the print and in-store markets, News America Marketing is considered to be a

powerhouse and industry dominator as it controls an estimated 50%-60% of the insert

market and as much as 90% of the in-store business (IBISWorld). More recently, the

company has been making large strides in the digital market through partnerships and

acquisitions. This sector of the business is by and large the fastest growing sector in the

company.

Products that News America Marketing produces in their print sector include

SmartSource Magazine as well as custom production items from SmartSource Media

Group. The magazine is essentially a large coupon book that is inserted into newspapers

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that are paid for through subscriptions of consumers. SmartSource Media Group is a

separate print sector of the business that offers higher customization of print products

that can be delivered in a more targeted manner than SmartSource Magazine. Products

offered through this sector include:

● Customized direct mailers

● Customized Newspaper inserts

● Newspaper bags

The in-store front is arguably the most market-dominant business unit of News

America Marketing. With a network of more than 56,000 stores, News America

Marketing has advertising rights all across the united states. The variety of store types

that News America Marketing advertises in include supermarkets, drug stores, dollar

stores, office supply stores, mass merchandisers and specialty stores. From national

chains such as Walgreens and CVS down to local community grocery stores, News

America Marketing has the capability to reach consumers anywhere. Products that News

America Marketing produces for in-store advertising include:

● Shelftalk Banners

● Tearpad Banners

● Coupon Machines

● Packaging Display advertisements

● Sampling advertisements

● Floortalk stickers

● Cart advertisements

● Ceiling banners

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For an in-store advertising campaign to be successful, News America Marketing often

bundles products into a mix that they think will bring the most ROI to their customers.

In an increasingly digital world, News America Marketing is shifting a lot of their

efforts to developing cutting edge products that will allow advertisers to remain

competitive. Currently News America Marketing offers:

● Digital couponing

● Direct-to-card downloading

● Targeted email blasts

● Digital display advertising

● Programmatic digital display advertising

Key People & Positions

Martin Garofalo currently serves as the Chief Executive Officer and

President of News America Marketing (Bloomberg). He previously

served as Executive Vice President of all of News America

Marketing’s Sales divisions, and prior to that as Executive Vice

President, Shopper Marketing. During Martin’s 27 years at News

America Marketing, he has held numerous positions such as a few National Sales

Manager roles and some Senior Vice President roles. Before joining News America

Marketing in 1987, he spent several years as a marketing manager with NFL Properties.

He started his career in packaged goods as a brand manager for both Procter & Gamble

and Nestlé (News Corp). The role Martin carries with News America Marketing is

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overseeing the overall strategy of the organization. Articulating the total value

proposition that IRi has to offer is essential in correspondence with Martin. If IRi can

demonstrate how their services align with the long-term strategies of News America

Marketing, Martin will be on board and will sign off on further development of the

account.

Chris Blanco currently serves as the Chief Financial Officer and

Executive Vice President of News America Marketing. Prior to his

appointment to Chief Financial Officer, Blanco held the title of Vice

President, Controller for eight years. He joined News America

Marketing in 1999, serving in many capacities in the organization's

Finance department where he has been responsible for the

company's accounting, financial reporting, accounts payable, and payroll departments

(PR Newswire). Chris will be the person that approves further spending with IRi.

Increased spending will require providing justifications and evidence for ROI to the

company.

Katy Dickson currently serves as the Chief Marketing Officer of

News America Marketing (News America Marketing). Katy is an

experienced marketing executive, who has a vast knowledge of

marketing and CPGs to the News America Marketing. Katy

served as Vice President of Marketing for a number of General

Mills brands and has led three consecutive teams in receiving General Mills Champion’s

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Award (News America Marketing). Katy will be in charge of overseeing the

implementation of added products and services into the sales strategy of News America

Marketing. The conversations had with Katy will need to be very interactive and many

questions will need to be asked to assess the needs of the company’s sales strategy.

Katy will help to determine the level of customization IRi will need to provide in their

product offering.

Emmanuel Miran currently serves as the Chief Technology Officer

for News America Marketing (Bloomberg). Emmanuel is a seasoned

technology and digital executive with global experience in the CPG

industry. He spent a majority of the past 17 years at L'Oreal, starting

in their United States division in 1997 on the technology side of the

business. He took on a series of expanded roles that included

e-commerce and digital marketing before being News America Marketing the Global

Executive Director of IT for BioMerieux in 2012. He returned to L'Oreal in 2013, as the

Global Head of Digital Commerce Technology for the L'Oreal Group, where the was

responsible for the launch of ten brands online across all three L'Oreal zones (Americas,

Europe and Asia) (PR Newswire). Emmanuel will be in charge of managing the integration

of added products and services into the infrastructure and internal technologies of News

America Marketing. The conversations had with Emmanuel will need to be very

interactive and many questions will need to be asked to assess the specific needs of the

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company’s technology. Emmanuel will also help to determine the level of customization

IRi will need to provide in their product offering.

INTERNAL ANALYSIS

Financial Performance

The direct mail advertising industry is currently a $12 billion industry. After the

recession, an increase in corporate profit margins led to a rise in advertising spending.

As a result, IBISWorld predicted that revenue for the Direct Mail Advertising industry

would increase over the five years leading up to 2016. During the next five years leading

up to 2021, industry revenue is expected to become stagnant and/or decline (IBISWorld).

From 2014 to 2015, News America Marketing experienced tremendous growth

primarily because of their digital markets expanding. We can see from the graph above

that they have seen a 16% increase in revenue from 2014 to 2015. There is also a 22%

increase in "Other" revenue recorded which is made up of their newer markets. In the

past year, News America has seen a 7% decrease in revenues, mainly due to a decline in

print sales. In fact the revenue of prints sales for News America Marketing declined to

only $87 million in 2015 for FSI products and direct mailers. These losses were partially

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offset by a growth in digital advertising as well as in-store advertising. There was a partial

offset of an increase in $50 million in revenue, primarily due to the increase in in-store

advertising sales (News Corp Annual Report).

Source:Morningstar.com

Looking at the five year sales and profits of News America Marketing shows there

has been a steady decline from 2011 to 2015. In 2011, News Corp. had a revenue of 9,095

and in 2015 they recorded 8,633. Going along with that, their operating expenses have

increased from 3,078 to 3,286. The good news for News Corp. is that they're gross profit

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has risen a great deal just from 2014-2015 alone, but still isn't up to what the gross profit

was in 2011. This should be a wakeup call for News Corp. because as we saw with News

America Marketing from 2014-2015, their operating expenses were increasing as well

because they had to make up for lost business. I think this may have something to do

with how News Corp. has acquired so many companies that they can't give their full

attention to all of them. For example, in 2011 News Corp. reported that MySpace.com had

been suffering a great deal under News Corp. "News Corp. reported third-quarter net

income of $639 million (MySpace.com), a 24% drop from $839 million a year earlier.

Revenues fell 5% to $8.3 billion, from $8.7 billion a year earlier," (LATimes.com). What we

can understand from this, is that News Corp. needs to be more particular with the

companies that they involve themselves with, because if one of these giants goes down,

they could bring the whole company with it.

Even though there has been a slight decline in print advertising sales, News

America Marketing will still rely on the FSI as their main revenue driver and will continue

to push it as one of their most successful products. Leveraging growth in both the digital

and in-store markets will ultimately help News America Marketing to continue to increase

profitability in years to come. There may come a time when print advertising, such as the

FSI, will become obsolete so News America Marketing will need to continue growing in

other aspects of their business such as digital advertising.

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Corporate Structure

News America Marketing is a relatively tall organization with a centralized

structure. This structure is necessary because the company employs more than 1,000

people and needs a strong hierarchy to effectively manage its efforts. As any corporation

does, there is an executive team consisting of a CEO, CFO, COO, CMO, and CTO. The

executive team manages the overall strategy of the company and focuses on “the big

picture”. This allows the company to maintain a focus on where they are headed while

simultaneously perfecting their current operations.

Below this team are Executive Vice Presidents (EVPs) that oversee the

performance of the Individual Strategic Business Units (SBUs). Within News America

Marketing, there are five distinct SBUs within the organization that serve a specific role to

the overall strategy of the company. These SBUs include Core, SmartSource Media

Group (SSMG), Digital, Shopper Marketing, and Partnerships. Outside of these SBUs are

sectors that cover the basic functions of the company including accounting and finance,

sales support, and field support.

Directly reporting to EVPs are Division heads (Head of Eastern, Central, and

Western Divisions) that oversee the efforts of sales staff in their respective geographic

region for all of the SBUs. Having this team not only allows the division heads to be

liaisons in communicating big-picture information, but it also allows them to oversee the

day-to-day progress of their sales teams.

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The sales force of News America Marketing is organized primarily by geography

(i.e. Western, Central, Eastern), secondarily by function (Core, SSMG, etc.), and lastly by

advertiser product category (i.e. beauty, pet food, hygiene, etc.) Sales teams are

overseen by a Group Sales Manager (GSM) who serves as the “team lead.” Group Sales

Managers typically handle the largest accounts and oversee the daily sales activities of

the entire team. Directly below the GSMs are numerous Account Directors with specific

product category assignments. The Account Directors (ADs) work closely with their

Account Associates and Account Coordinators who aid in account development to the

AD’s set number of clients through lower-level sales activities. The organization of the

typical sales team allows for a dynamic of checks and balances which promotes

efficiency and thoroughness.

Mission

News America Marketing's mission believes in making it easier for people to

access information. In Mark Cuban's book, "How to Win At The Sport of Business," Mark

Cuban talks about the path of least resistance. The path of least resistance states that

people are attracted to find the easiest method possible to acquire something. In

business, companies will thrive if they give their customers the simplest path to acquire

the product in their industry. Cuban believes that consumers are more concerned with

how simple is it to acquire more than the actual brand behind the product. News America

Marketing is taking a similar approach by saying that they understand the path of least

resistance and that they are appealing the most to their customers than their

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competitors. Their mission statement says, "We're removing the boundaries for how and

where people access and enjoy high-quality content."

Organizational Culture

At News America Marketing, culture is extremely important and heavily influences

the way business is done. News America Marketing firmly believes in developing its most

valuable investment: its people. Additionally, they promote an “open door policy” that

applies to everyone in the company, including the CEO. This type of culture creates a

cohesive environment that fosters teamwork to achieve results.

The number one way News America Marketing develops its employees is through

the Sales Development Program. Through this program, the company teaches the skills

employees need to be successful salespeople and gives them the tools they need to

continue their growth. During the development program, salespeople will experience

both guided learning as well as hands-on experience.

Account Coordinators are responsible for performing various account

development duties to supplement their guided learning. After 15 months in this role,

salespeople become Account Associates (AAs). As AAs, employees are given additional

responsibilities and are challenged with generating new accounts. This not only builds

on what they know but helps them put it into practice before getting their own accounts.

After another 15 months, salespeople are then evaluated to determine if they are ready

for the role of Account Director. At this point, salespeople can become more autonomous

in their role and get to call the shots on how they handle accounts.

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All along the way, salespeople are receiving more compensation and higher

bonuses. This method of training not only incentivises growth and performance but it

increases a sense of accomplishment among salespeople and makes them feel more

valued as an employee. In the long run, this reduces employee turnover which proves to

be a very cost-effective strategy for the entire organization.

In addition to developing the company’s human capital, News America Marketing

promotes an “open door policy” that creates open lines of communication between all

employees within the company. Entry level salespeople are not only allowed but are

encouraged to approach executives to have conversations with them. This culture is so

strongly embedded within the organization Martin Garofalo (CEO) has been known to

approach the lowest level of the company (the interns) without hesitation. This practice

builds unity within the company and helps to increase collaboration among all levels of

the organization.

Product Mix

News America Marketing boasts an expansive product portfolio that allows them

to target consumers at all points on the path to purchase: at home, online, and in-store.

Many of their product offerings stem from assets of the company while others are

facilitated through outside partnerships. Their product mix includes:

● Free-Standing Inserts

● Custom Production

● SmartSource Digital

● In-Store Advertising and Merchandising

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Free-Standing Inserts are multiple-page marketing booklets containing coupons,

rebates and other consumer offers, which are distributed to consumers through insertion

primarily into local Sunday publications. News America Marketing is one of the two

largest publishers of free-standing inserts in the United States Advertisers, primarily

packaged goods companies, pay News America Marketing to produce free-standing

inserts where their offers are featured, often on an exclusive basis within their product

category. News America Marketing contracts with and pays publishers as well as printers,

among others, to produce and/or distribute free-standing inserts in their papers.

Currently, News America Marketing has contracts with more than 2,000 publications

across the United States News America Marketing’s free-standing insert products, which

are distributed under the SmartSource Magazine brand, have a circulation of more than

73 million based on internal sources and are distributed 43 times a year. SmartSource

Magazine is an asset owned by News America Marketing. Campaigns that run through

SmartSource Magazine allow advertisers to reach a mass audience with repeated

impressions. This product offers the lowest cost per impression. The cost per thousand

(CPM) is roughly $5.00.

Custom Production embodies more targeted advertising tactics can easily be

delivered through Custom Production which is handled by SmartSource Media Group.

SSMG can deliver unique campaigns to highly targeted audiences through products such

as customized direct mailers, newspaper inserts, newspaper bags, and door hangers. To

distribute these products to specified groups of consumers, News America Marketing

has partnered with Spectra Marketing to gather geographic, demographic, and even

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purchasing behavior data. Campaigns that run through custom production will ultimately

achieve the highest conversion rate.

SmartSource Digital includes all of News America Marketing’s digital offerings in

the United States and Canada. It encompasses printable couponing, load-to-card

couponing, targeted email blasts and programmatic digital display advertising.

Campaigns utilizing printable couponing and load-to-card are facilitated by News

America Marketing while targeted email campaigns and programmatic digital display ads

are facilitated by partner company OwnerIQ and over 300 partner websites. Targeted

email blasts are distributed through email lists built by OwnerIQ that can be organized by

geography, demography, and purchasing behavior. Programmatic digital display

campaigns are programs that automatically optimize over time to target consumers that

show higher conversion tendencies. Going through digital products allows advertisers to

achieve higher quality impressions than any other product in News America Marketing’s

portfolio.

In-Store Advertising and Merchandising is News America Marketing’s strongsuit.

They are a leading provider of in-store marketing products and services, primarily to

consumer packaged goods manufacturers. News America Marketing’s marketing

products include: at-shelf advertising such as coupon, information and

sample-dispensing machines, as well as floor and shopping cart advertising. Currently

News America Marketing’s in-store programs are found in more than 56,000

supermarkets, drug stores, dollar stores, office supply stores, mass merchandisers and

specialty stores across North America. News America Marketing also provides in-store

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merchandising services, including production and installation of in-store programs

through a field team made of part-time employees (NAM Annual Report).

Strategic Orientation

While their competitor chooses to compete as a low-cost supplier, News America

Marketing chooses to employ a differentiation strategy. By providing the highest quality

products along with a high level of service, News America Marketing targets customers

that are not low-cost shoppers but are high-value shoppers. This means that News

America Marketing’s main goal is to communicate their value proposition through

demonstrating the ROI to their customers. News America Marketing is able to do this

through conducting research and partnering with marketing research firms to provide

concrete evidence of value to their customers.

One research practice News America Marketing utilizes is conducting Matched

Panel Tests that track the effectiveness of in-store programs. These tests observe two

stores that are similar in nature. One store has an in-store program running for a specific

product while the other doesn’t, and the test tracks the difference in sales. Almost all of

the time, there is a significant difference in sales and News America Marketing is able to

use this evidence as a reason why their customers should buy their products.

In partnering with IRi, News America Marketing can do a similar test by observing

point-of-sale data. When a company runs a program in the FSI, salespeople can pull

real-time numbers that show sales lift data for the product the advertiser is promoting in a

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certain time frame and geographic region. When advertisers see proof of ROI, they

choose to continue giving News America Marketing their business.

Even though News America Marketing differentiates itself through providing

higher quality products and services than its competition, the company will become

stagnant if they do not continue to expand the business. Growth strategies that News

America Marketing uses include market penetration, market development, product

development, and diversification. Below is a chart that demonstrates strategies News

America Marketing employs in each of these categories:

Markets/Products →

↓ Current Products New Products

Current Customers

● Increase circulation for FSI ● Increase programs for In-store ● Increase scope of digital

campaigns

MARKET PENETRATION

● Increase Digital capabilities ● Increase In-store capabilities ● Increase complexity of

targeting tactics

PRODUCT DEVELOPMENT

New Customers

● Generate new business in current industries

● Enter new industries (i.e. adult beverage industry)

MARKET DEVELOPMENT

● Research and develop new sales territories

● AcquIRing digital companies (i.e. Checkout 51)

DIVERSIFICATION

Market Penetration

News America Marketing constantly strives to grow their current business by

leveraging the partnerships they’ve built. This would entail up-selling their current

purchasers to spend more on their current products. Examples of this would be

increasing circulation for a particular FSI program, Increasing the number of stores a

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customer includes their campaign in, and increasing the scope of a digital campaign by

purchasing a higher number of impressions. Achieving market penetration requires the

salespeople of News America Marketing to consistently create and communicate added

value to their customers.

Market Development

Since News America Marketing is such a powerhouse in their industry, they have

built a reputable brand. Additionally, News America Marketing possesses supplier power

because advertisers do not have many options to choose from. This means that News

America Marketing has the liberty to be selective about who they choose to sell to.

Instead of trying to win any and every account, News America Marketing spends its time

trying to win larger accounts because they have more resources and higher spending

potential.

Salespeople at News America Marketing are always on the lookout for prospects

in current industries they sell to. This process involves researching and qualifying

companies to be potentially profitable relationships. Getting their foot in the door is not

difficult, the challenge is demonstrating the value that News America Marketing has to

offer.

Beyond selling to new customers in current industries, News America Marketing

explores new industries that are relatively “untapped”. If they see the industry as viable

opportunity, they will figure out a way to tap into that industry. A prime example is the

adult beverage industry. Very recently, News America Marketing realized the spending

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potential in this industry and has begun to develop a plan to begin expanding into this

industry.

Product Development

In the advertising realm, it is important to constantly have fresh and innovative

ideas. In Key Account Management (KAM) it is very important to continually deliver

increased value to the customer. For News America Marketing this means increasing

their capabilities with their advertising products to deliver more efficient and more

targeted marketing solutions. More specifically, News America Marketing has been

making great efforts to increase their digital advertising capabilities and in-store

advertising capabilities. By continually investing resources in developing new products,

News America Marketing will be able to deliver added value to their customers for

long-term relationships.

Diversification

Arguably the most lucrative form of growth is diversification. Developing new

products to enter new markets can be hard to manage, but can bring immense

opportunities for growth. Essentially, with great risk comes great reward. One major

stride News America Marketing has made in diversifying is acquIRing the receipt

recognition company Checkout 51 this past summer. This acquisition has not only given

News America Marketing a whole new set of customers, but it has given the company a

tool to further develop the digital and in-store products in their current portfolio. With this

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new technology, News America Marketing has strengthened its current and future

position in their current and new markets.

Core Competencies

Through best practices and company infrastructure, News America Marketing has

developed a set of core competencies that have led to competitive advantages. The

company’s best practice includes not only having high quality products and services but

also communicating the value of those products to customers. Structural characteristics

that provide strategic value include effective organization of salespeople and teams as

well as efficient internal order processing systems. Below is a “value constellation” that

illustrates the core competencies of News America Marketing:

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The best practice News America Marketing uses is quantify their total value

proposition and demonstrating it to their customers. In this day and age, selling has

become less about personal relationships and has become more about efficiency.

Anthony Iannarino argues in his article Your Price Is Too High!, “Regardless of the words

your prospect uses to bring up a discussion of price, what she’s really saying is she

doesn’t perceive enough value to pay the price you’ve quoted.” Iannarino also argues

that a customer isn’t paying for your product or service but is rather paying for the

outcome of your product or service. Essentially, a Key Account Manager must

demonstrate that their product or service is worth the premium price that the customer

will pay for it because it will bring about a positive outcome. In order to do so, the Key

Account Manager must create benchmarks to quantify the value and outcome of their

product and service.

News America Marketing organizes their FSI product into market segments based

on geography and they can calculate the exact amount of impressions a campaign will

achieve based on the newspaper publications they produce inserts for. By providing this

information to their customers, they communicate exactly how many impressions their

advertising program will obtain before they even run it. The number of impressions is an

important metric to customers because the more impressions their programs generate,

the higher the potential they will have to increase sales. After a program is run, News

America Marketing follows up by providing a data analysis that demonstrates the ROI of a

FSI campaign using LiquidData provided by IRi.

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News America Marketing practices a similar tactic for their in-store advertising

products. In order to gain a competitive advantage in this field, News America Marketing

has conducted several studies to observe that their process for installing in-store

advertising is superior to any of their competitors. They have found that the average

in-store advertising program (non-News America Marketing) is only installed into 70% of

the stores they are supposed to be in. Currently, News America Marketing gives a

guarantee that their in-store advertising programs will be installed in no less than 90% of

the stores they are supposed to be in. Additionally, News America Marketing

communicates the value of their in-store programs by showing the results of matched

panel tests that display past success of in-store advertising campaigns.

For digital campaigns, News America Marketing is able to provide real-time data

analysis that tracks the success of the online campaigns. The metrics that indicate a

successful campaign include impression allocation, click-thru rates, and conversion rates.

These numbers show advertisers how their campaigns are performing and allows them

to make adjustments to get a higher ROI.

Overall, the data used by News America Marketing helps to paint a picture and

illustrate just how valuable their products are in order for customers to grow their

business. When companies see the past success of other advertisers it’s hard for them to

say no, and when they see evidence of their own success it’s impossible to not come

back. This practice has helped News America Marketing to achieve more business and

develop better products/services continually deliver added value to its customers.

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Following is a perceptual map that illustrates the difference between News America

Marketing and its competitors from a product and service standpoint:

The first structural competency that News America Marketing possesses is the

organization of their sales force. Since sales teams are assigned to specific functions,

their goals are clearly defined. This gives individual teams a strong sense of direction and

allows them to specialize in their given role. This creates operational efficiency and

eliminates ambiguity.

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The other structural competency is the Internal Processing System that is run

through the company’s intranet. The processing system is very effective because it not

only streamlines the ordering process, but it also encourages competition among sales

teams. Since there is advertising exclusivity in product categories for both FSI and

in-store programs, sales teams want to deliver the open categories to their clients before

their coworkers do. The Internal Processing System allows salespeople to view the

availability for certain categories as well as who has taken other categories. This

capability motivates sales teams to fill the categories quickly and allows them to apply

soft pressure on their clients to commit quickly.

EXTERNAL ANALYSIS

Markets and Customers

The markets in which News America Marketing competes are fairly saturated and

are oligopolistic as there are only a few major players. These markets include newspaper

inserts, direct mailers, in-store advertising, and digital advertising. Within the newspaper

insert and direct mailer markets, News America Marketing has approximately a 60%

market share. Within the in-store market, News America Marketing has an approximately

90% market share (IBISWorld). News America Marketing currently does not have a

significant market share in digital advertising, however, it is the fastest growing segment

of the business.

News America Marketing’s customers can be broken down into two categories:

manufacturers and retailers. The manufacturer category consists of companies that

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produce goods often times found in supermarkets, drug stores, dollar stores, office

supply stores, mass merchandisers and specialty stores. The different categories of

products that are often featured in News America Marketing advertising programs

include beauty, hygiene, food, hardware, office supplies, pet food, and many more.

Examples of larger customers in the manufacturer customer category include Henkel

Corporation, Procter & Gamble, Staples, and Purina. In the retailer customer category,

News America works to gain more advertising rights and help retailers advertise their

clients products. In this situation, it is a win for both News America Marketing and

retailers because they gain higher revenue in sales due to in-store advertising programs.

In addition, News America helps retailers advertise their own products such as Walmart’s

“Great Value” or “Equate” brands.

Competition

The only other major player that competes with News America Marketing is

Valassis Communications. Valassis offers similar products such as newspaper inserts,

direct mailers, in-store advertising, and digital advertising (Valassis). In the newspaper

insert and direct mailer markets Valassis owns an approximate 18% market share

(IBISWorld). The Red Plum Magazine brand is a direct brand competitor to SmartSource

Magazine as it provides the exact same function with less distribution. In the in-store

advertising market Valassis has a less than 10% market share (IBISWorld). Since there are

already extremely large players in the digital advertising market (Google, Facebook, etc.),

Valassis is the most comparable competitor based on product offerings and target

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customers. Valassis has been a recent threat to News America Marketing because they

compete by using a low-cost strategy. Although this strategy has allowed Valassis to

steal a small market share for the time being, it is not an effective long-term strategy and

will not be sustainable in the future.

One minor player that competes with News America Marketing in the in-store

advertising market is Insignia Systems. Insignia specializes in POS couponing that

delivers targeted coupons to consumers when they check out in the store (Insignia

Systems). Since Insignia has embraced a niche strategy, they have a very small market

share in the in-store market. Their share of that market is roughly less than 5%

(IBISWorld).

Levels of Competition

To break down the competitive landscape, one must analyze each of the products

provided by News America Marketing and consider the different types of competitors

they face. News America Marketing really only has three types of competitors: Brand

Competitors, Product Competitors, and Generic Competitors. Below is a chart that lays

out the competition based on type of competitor:

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Product Category Brand Competitors Product Competitors Generic Competitors

Newspaper inserts

Valassis (Red Plum) Newspaper ads Magazine ads Billboard ads Direct mailers

Digital advertising In-store advertising Television advertising Radio advertising

Direct mailers

Valassis Newspaper ads Magazine ads Billboard ads Newspaper inserts

Digital advertising In-store advertising Television advertising Radio advertising

In-store advertising

Valassis Insignia

POS Couponing Packaging offers Agency merchandiser Rollback prices

Print advertising Digital advertising Television advertising Radio advertising

Digital advertising

Valassis Social Media ads Youtube ads Store apps Text message offers

Print advertising In-store advertising Television advertising Radio advertising

Brand competitors include the other major players that offer products that are the

same or fairly similar to News America Marketing. For newspaper inserts, direct mailers,

in-store advertising, and digital advertising, Valassis is the most common brand

competitor. This is due to the fact that they offer products that mirror News America

Marketing’s portfolio and offer similar features and benefits. The only other player

included is Insignia for in-store advertising.

Product competitors are similar products that satisfy the same basic need but

operate in a slightly different way. For print advertising the main product competitors are

newspaper inserts, newspaper ads, magazine ads, billboard ads, and direct mailers. For

in-store advertising, the main product competitors are POS couponing, packaging offers,

agency merchandiser, and rollback prices. For digital advertising, the main product

competitors are social media ads, Youtube ads, store apps, and text message offers.

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Generic competitors are different products that satisfy the same basic need but

operate in a very different way. Since this is the most broad category of competitors,

many of them overlap. For the basic need of advertising the main generic competitors

are Print advertising, in-store advertising, digital advertising, television advertising, and

radio advertising.

Industry

In the advertising industry, there have been paradigm shifts that directly affect the

strategy of News America Marketing as well as its competitors. The most present shift

that is occurring in the advertising industry is the shift to digital marketing. Societal

changes and advances in technology have made it easier than ever before for

consumers to gather information from the internet. This has caused marketers to focus a

lot of their attention on targeting consumers through the internet. In the next year, digital

advertising is expected to grow to 17.2% of the $508 billion global advertising industry

(NY Times). In fact, it is expected that digital

advertising spend will soon surpass television

advertising spend (NY Times). News America

Marketing has adapted to these changing trends

and has focused much of their attention to

growing in the digital advertising market. The

rapid growth in the digital advertising market has

adversely affected the print advertising market

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and has caused some to speculate as to whether or not it will cause the demise of print

advertising (refer to graph above).

After seeing the diagram of products and services segmentation of the print

advertisement distribution industry, it's interesting to note that 28% of the industry comes

from other ad services than the popular methods listed. "Other services such as printing,

creative and graphic design services are likely to remain comprising a small percentage

of industry revenue due to advertising's shift to the online space. While sample delivery

distribution and door-to-door distribution are likely to continue growing, telephone book

distribution is expected to decline as a proportion of industry revenue, as more people

use the internet to find contact information," (IBISWorld.com). I think this proves that the

market is continually moving to a more guerilla market as well as a digital based market

industry. I think it almost ironic that most of the revenue comes from other services such

as digital revenue and door-to-door revenue. It's ironic because they are both ends of the

spectrum meaning that one deals with face to face communication while the other is

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purely online. It's no surprise that phonebook advertisement is the lowest percent strictly

because not many people use phone books when almost everyone has a smartphone

nowadays.

After seeing the Major Market Segmentation diagram of the print advertisement

distribution industry, there are many interesting things to note about the industry. "The

industry tends to generate significant revenue from the retail sector, particularly from

supermarkets and the do-it-yourself (DIY) sector (i.e. hardware stores/warehouses), that

seek to promote weekly specials through catalogs to households within a defined

geographic area for each store. Other retailers are also important at certain times of the

year including major holiday periods, public holidays and with seasonal stock clearance

sales. In 2015, IBISWorld estimates the segment to account for 27.5% of industry

revenue, the largest market for the industry. However, over the past five years, retail

markets have declined as a percentage of industry revenue due to fast growing

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competition from e-commerce," (IBISWorld.com). It's not surprising that retailers are the

top percent for the major markets specifically because they are constantly pumping out

offers for deals on their products weekly in any media they can. I do think it is interesting

though to see that IBISWorld says the market has been declining as a result of growing

e-commerce. I think it will be very interesting to see where the next five years take us

and I can probably bet that ecommerce will overtake print advertisement as the top spot.

I was a little shocked to see restaurants as the top three in the market, but IBISWorld

says, "many restaurants deliver door hangers containing coupons to higher-density

residential neighborhoods. The segment has been growing in the past five years, and in

2015." This makes sense because it shows a personal factor that the restaurants are

going out of their way to bring in new business.

News America Marketing has felt the steady decrease in print advertising in

recent years. Even though the company relies on the FSI as their main revenue driver,

they took a 7% hit in overall revenue in 2015 including a decrease to only $87 million in

FSI revenue (NAM Annual Report). Even still, News America Marketing will continue to

rely on the FSI as their main source of revenue and will further explore their potential in

the digital advertising realm.

The coupon industry is starting to pivot in the way that businesses advertise.

"Companies are increasingly moving away from traditional media advertising in

newspapers, magazines and radio. Many industry clients consider mass media

advertising to be a high-cost method of communication with fewer returns than direct

advertising. These concerns have led clients to demand more targeted, cost-effective

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and direct methods of reaching their customers. Consequently, the Print Advertising

Distribution industry has prospered by offering such direct promotional tools, new

technologies and door-to-door delivery of flyers and samples," (IBIS World). What we are

seeing now is that companies are seeing less and less value in print advertising. I think a

major factor that caused this doubt is their low budgets from 2007-2009. When the

recession caused businesses to lower their marketing budgets, it also made executives

think deeply about what was working for them and what isn't. After companies started

raising their marketing budgets in 2012-Present, they've been constantly trying to find

newer methods of advertising that would be cheap and most effective.

These guerrilla marketing strategies have been becoming more and more popular

in today's society. Instead of putting ads in the paper, companies are looking for even

better ways to reach consumers without consumers even having to look for their

advertisements. Some of these strategies include apps for smart phones, digital

platforms, and face-to-face interactions with consumers. These simple and innovative

strategies are becoming so popular, that they are actually putting traditional methods to

shame. "Businesses allocated more money to industry operators. Traditional media, such

as newspaper ads and television airtime, were particularly affected by the desire to find

higher yielding advertising options. Over the five years to 2015, total US advertising

expenditure is estimated to grow at an average annual rate of 3.4%. With companies

increasingly looking to reach their consumers directly, industry operators benefited most

from increasing advertising expenditure," (IBISWorld). It is interesting to see that

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companies are constantly looking for newer innovative ways to reach consumers and

that the advertising budgets are constantly increasing for years to come.

Influence of Porter’s 5 Forces

To better understand the industry in which News America Marketing resides, one

must understand the competitive forces that are involved. In 1985 it was Michael Porter

who introduced us to a model that briefly illustrates the relevant forces within a market.

Below is a model that illustrates the forces in News America Marketing’s markets:

Current Competition

The most obvious force in this model would include the current competition, being

Valassis and Insignia. This force is the strongest force on News America Marketing and

helps the company determine how they will compete and continue to differentiate from

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their competitors. Overall, this force has the most influence on how News America

Marketing operates and will continue to operate in the future.

Bargaining Power of Suppliers

The bargaining power suppliers have over News America Marketing is fairly

strong because there are few suppliers of what News America Marketing buys. The two

most needed resources at News America Marketing are printing capabilities and

data.News America Marketing owns SmartSource and does not need to shop around to

satisfy this need, however, they do have to strategically source their data. In this market,

there are few providers such as IRi and Nielsen. In this situation, News America

Marketing does not have many options to source their data and thus possesses less

bargaining power.

Bargaining Power of Buyers

Firms looking to advertise in the newspaper insert and in-store markets do not

have much bargaining power either. Since News America Marketing owns 60% of the

insert market and 90% of the in-store market, their clients have little to no options. Firms

like Henkel, Neutrogena, and Starbucks almost have to go with News America Marketing

to go this route in advertising which means they, as buyers, have little bargaining power.

In this sense, News America Marketing has strong bargaining power as the supplier.

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Threat of New Entrants

Since the market is fairly saturated with only one or two big players involved, there

is a very low threat to new entrants in the insert and in-store markets. If a firm were to

attempt entering the market, they would likely run out of business due to the massive

market shares possessed by News America Marketing and Valassis. At this point in time,

neither firm should be worried about new competition arising in the insert and in-store

markets.

Threat of Substitutes

The threat of substitutes is always a concern for any firm. In News America

Marketing’s situation, their main concerns should be on the products offered by their

competitors Valassis and Insignia as well as generic substitutes. Generic substitutes

would include alternative forms advertising such as print, digital, television, and radio

advertising. While News America Marketing is involved with both print and digital

advertising, there are still many other forms within each type.

Macro-Environment

Outside of the advertising industry, there are forces in the macro-environment that

influence the direction of the industry as a whole. Overall, these forces change how

consumers and businesses behave at large. Forces that are affecting the direction of the

industry include political and regulatory influences, economic factors, and technological

advancement.

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One major political force is the restriction of highly regulated industries. An

industry that has high regulation and affects the way business is done is the adult

beverage industry. Regulations in the adult beverage industry affect the inbound and

outbound logistics of suppliers and buyers as well as the way the products are

advertised and sold. In the advertising industry, the adult beverage category is tough to

break into especially for companies like News America Marketing. With laws in place that

restrict advertising to minors, it is very difficult for News America Marketing to find a

strategy that they can implement.

Another major political force is lawsuits. In this day and age, companies are more

apt to file lawsuits against their competitors just to stay ahead. In the advertising realm

this could mean a company files a lawsuit against a competitor for defamation or making

false claims. In News America Marketing’s case, they’ve seen multiple lawsuits in their

past due to monopolistic practices. Currently they invest a lot of money in legal fees for

antitrust training in order to prevent such lawsuits from resurfacing. In fact, in 2015 News

Corp reported $20 million in increased expenses for News America Marketing due to

legal fees (News Corp Annual Report).

A major economic force that comes into play in the macro-environment is the

increasing tendency for companies to drift towards commoditization. With the rise of

competition and commoditization in the marketplace, it has become increasingly difficult

for firms to support a sustainable competitive advantage. Lisa Napolitano argues in her

article Customer-Supplier Partnering: A Strategy Whose Time Has Come that companies

are trying to become leaner in attempt to cut operational costs. She says that “single

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sourcing allows companies to leverage the volume of their purchases for enhanced

services and cost-cutting opportunities” (pg 3). As companies grow larger as the process

of consolidation occurs, there are not only more needs and problems that arise but also

more complex needs and problems. As companies deepen in complexity, the need to

measure operations and use numbers increases exponentially. Customers struggle to

see the value of products because they are blinded by the motive to reduce costs (Thull

3,4). This phenomenon demands that companies like News America Marketing

consistently create and communicate their total value proposition through quantifiable

metrics in order to remain competitive.

The final force that stems from the macro-environment is technological

advancements. In the past 10 years, the world has seen significant advances in science

and technology. As this force applies itself to the advertising industry, it has advanced

many of the capabilities of current advertising products and has created new

technologies the world has never seen before. In digital advertising, there are more

capabilities to create unique content with social media, videos, and interactive

campaigns. With the rise in visual recognition technology and GPS recognition

technology, the in-store experience is rapidly evolving from an advertising standpoint.

Furthermore, targeting tactics in general are becoming increasingly sophisticated.

Technology continually has the ability to collect more and more data which ultimately

leads to more specific kinds of targeting for advertisers.

Though these forces apply to almost any industry, they have a large impact on the

advertising industry. They will continue to shape how the advertising industry continues

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to progress and evolve throughout time. Someday the industry may become so

advanced that these forces may even become forces that limit the growth of the industry.

SWOT Analysis

INTERNAL EXTERNAL

POSITIVE

Strengths Corporate structure

Product/service quality Market share

Opportunities Growing digital industry

Growing in-store experience Growth strategies

NEGATIVE

Weaknesses High prices

Declining print sales Legal expenses

Threats Competitor’s prices Dying print industry Potential lawsuits

Strengths

Strengths include internal advantages a company has that allows them to

compete more effectively in their market. For News America Marketing this includes their

corporate structure, product and service quality, and their vast market share. As

discussed earlier, the corporate structure at News America Marketing has a very tall and

centralized structure so that large force of employees is managed effectively. News

America Marketing also possesses a portfolio of products that work. This makes the

process of selling the products much easier and retaining business even easier. Both of

these strengths have helped News America Marketing to achieve their third strength:

market share. In the insert market News America Marketing possesses a 60% market

share and in the in-store market News America Marketing has a 90% market share

(IBISWorld).

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Weaknesses

Weaknesses include internal weak points that a company possesses. These are

factors that may cause a company to compete less effectively in their market. The

weaknesses of News America Marketing are high prices, declining print sales, and legal

expenses. News America Marketing’s competitors have been able to steal some

business because they offer lower prices. Even though News America Marketing offers

higher value products and services, the fact that their prices have caused them to lose

some business makes it a weak point. The decline in print sales in the company also put

a dent in their annual revenue as it decreased to only $87 million in 2015 (News Corp

Annual Report). Another factor that hindered the profitability of News America Marketing

in 2015 was legal fees. News America Marketing has faced a variety of lawsuits in the

past and has begun to invest money in antitrust training to prevent future lawsuits from

happening. In 2015, News America Marketing spent $20 million on legal fees alone

(News Corp Annual Report).

Opportunities

Opportunities consist of external possibilities that could help a company grow.

News America Marketing’s current opportunities include growing in the digital market,

expanding in-store capabilities, and various growth strategies. WIth the advance of

technology, News America Marketing has shifted much of their attention to digital

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advertising and it has quickly become one of the fastest growing segments of the

business. Technological advancements have also provided huge opportunities for News

America Marketing to develop more intricate in-store products that increase the

consumer experience and could revolutionize merchandising.

Threats

Threats are generally considered to be external risks that could potentially cause

harm to the company. Factors that pose a threat to News America Marketing’s business

are competitors’ low prices, the steady decline of the print industry, and potential

lawsuits. Obviously, the lower prices offered by News America Marketing’s competitors

have been giving the company trouble due to lost business. With the decline of the print

industry, the value of print advertising has been dropping as well. This could mean that a

large chunk of News America Marketing’s products could become obsolete in the near

future. Though News America Marketing has made it through various lawsuits in the past,

there is always the threat of them facing another one in the future. Luckily, they are

prepared to prevent any such thing from happening.

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Quantitative SWOT Assessment

Strengths Corporate structure Product/service quality Market share

M ● I = R 3 ⚫ 3 = 9 3 ⚫ 3 = 9 3 ⚫ 3 = 9

Opportunities Growing digital industry Growing in-store experience Growth strategies

M ● I = R 3 ⚫ 3 = 9 2 ⚫ 3 = 6 2 ⚫ 3 = 6

Weaknesses Legal expenses Declining print sales High prices

M ● I = R -3 ⚫ 3 = -9 -2 ⚫ 3 = -6 -2 ⚫ 2 = -4

Threats Dying print industry Competitor’s prices Potential lawsuits

M ● I = R -2 ⚫ 3 = -6 -2 ⚫ 2 = -4 -1 ⚫ 3 = -3

M = Magnitude of element Magnitude scale ranges from +/- 1 to +/- 3

I = Importance of element Importance scale ranges from +/- 1 to +/- 3

R = Rating of element

Strengths

Both the corporate structure and product/service quality are distinct competencies

that give News America Marketing a competitive advantage over their competitors.

Ultimately, these competencies are factors that have led to the massive success of the

company as a whole. Without these factors, News America Marketing would not be as

successful as they are, thus they have a rating of 9. In addition, the market share that has

been achieved by News America Marketing has brought it to the level of market

dominance. Seeing that the ultimate goal of almost any organization is to become a

dominator of their market, this rating also receives a 9.

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Weaknesses

To counter the strength of market share News America Marketing possesses, they

have encountered various lawsuits claiming monopolistic practices. These lawsuits have

costed News America Marketing millions of dollars for not only settlements but for

antitrust training to prevent future lawsuits from happening. Legal expenses warrants a

rating of -9. In addition, the decline in print sales has put a dent in the revenues for News

America Marketing. Since print advertising is still the main revenue driver for the

company, this weakness only gets a -6. Finally, high prices have caused News America

Marketing to lose some business to competitors, but it has not yet adversely affected

their market share. This weakness gets a rating of -4.

Opportunities

The growth opportunities for the company such as in-store and digital are large

and could bring in massive amounts of revenue in the future. Since Digital is the fastest

growing market, it receives a rating of 9. Since in-store is much slower in development

than digital, it only receives a rating of 6.

Threats

With the dying print industry, News America will need to adjust in the future. For

the time being, they can still rely heavily on their sales in this category. For this reason,

this threat receives a rating of -6. Since competitor’s prices have not yet managed to

steal much of the business away from News America Marketing, this threat only receives

a rating of -4. Finally, the threat for potential lawsuits is a risk that News America

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Marketing is actively mitigating through antitrust training. This gives this threat a mere

rating of -3.

PURCHASING CHARACTERISTICS

The purchasing characteristics of News America Marketing are very strategic in

nature. They do not always look for the lowest cost, but rather look to strategically source

where they acquire resources such as quantitative and qualitative information. These

resources help them because it gives them the capability to provide ROI data as well as

more effectively target the right consumers in their advertising campaigns.

A prime example of this practice is their partnership with IRi. Even though IRi was

not the cheapest option as a supplier of data, they offer one of the largest scopes of data

collection as well as a service to help companies interpret the data so that they can use it

to their advantage. Another great example of strategic sourcing is their partnership with

Spectra. In this relationship, News America Marketing pays for a service to obtain

qualitative information whenever they need it. Some of the qualitative information the

company needs includes demographics, psychographics, geographics, and purchasing

behavior. This allows them to create campaigns that are much more targeted and

customized to meet their customers’ advertising needs.

Overall, purchasing decisions are highly centralized because they are made by

upper management. Making a purchase such as IRi data or Spectra information would

involve a meeting with the CEO, CFO, CMO, and the CTO. After discussing the strategic

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value, the team would then decide to buy (or not to buy) and make the resource available

to the entire organization.

VALUE CHAIN SEQUENCE

Marketing and Sales

Inbound Logistics

Operations Outbound Logistics

Service

Prospecting, Researching, Collecting data, Competitive Tracking, Pricing, Consultation, Proposals, Sales

Receiving orders, Processing orders, Payment collection

Order requests, Production

Distribution, Tracking

Installation, Data collection, Consultation

The value chain of News America Marketing consists of Marketing and Sales,

Inbound Logistics, Operations, Outbound Logistics and Service. Marketing and Sales

starts the process of the value chain for News America Marketing by either prospecting

for new business or taking care of existing clients. Within this part of the process,

salespeople perform due diligence by researching the company they are selling to,

collecting data, and engaging in competitive tracking to see what their customers’ direct

competitors are doing with News America Marketing. This research helps the

salespeople to have a deep understanding of the company they are targeting as well as

their long-term goals. With the proper information and knowledge in their arsenal, the

salespeople can then engage in meetings to provide marketing consultation. In these

meetings, News America Marketing salespeople can quantify and communicate the

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value they bring to the table by using the data they’ve collected from their resources.

Directly following these meetings can follow proposals and achieved business.

Once has been awarded to News America Marketing, salespeople begin to

process orders and collect payments through their internal processing system. This

requires the sales people to input any specifications for an advertising campaign.

Specifications can include circulation, time frame, product category(ies), and markets in

which the ad will run. After the order has been placed, there is a minimal waiting period

where salespeople must wait for the order to be processed and moved to production.

When an order has been processed and approved to move to production, all of

the necessary information is then sent to the layout teams that ensure the creative fits

the specification of the advertising product. The specifications on these products can

include verbiage, dimensions, and barcode placement. When the layout is complete, it is

then sent to the publisher (in this case SmartSource for inserts and in-store campaigns).

After printing has been completed, it is then up to the publisher to distribute the

products to all of the newspaper publications and/field teams across the United States.

This process includes inventory tracking to make sure packages arrive on time in the

proper location. Once this process is complete, the inserts run in newspapers and field

teams install programs into stores.

The service part of the value chain begins when programs have began to run. At

this point, News America Marketing begins to track the success of the campaign through

collecting quantitative data provided by IRi which includes sales lift numbers. News

America Marketing then provides this feedback to their customers to both show the

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success of their campaign to reinforce the value and to give recommendations to

improve the success of the campaign. This type of consultation helps advertisers to

maximize their ROI while deepening their relationship with News America Marketing.

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POSITIONAL ASSESSMENT

CURRENT RELATIONSHIP

At this time, News America is a key account for IRi. IRi has supplied News America

Marketing with access to POS data through their ILD program. This has helped News

America to communicate and quantify their total valuable proposition to their customers.

This practice requires the capability to pull and create customized reports that show

metrics News America Marketing’s customers are most interested. To help with this, IRi

offers highly trained experts that advise and consult salespeople from News America

Marketing when they have questions. In this way, IRi truly acts as a partner to help News

America Marketing achieve their long-term goals.

SWOT COMPARISON

IRI SWOT Analysis

INTERNAL EXTERNAL

POSITIVE

Strengths  Research & Development

Procurement Wide Product Portfolio

Client Loyalty Acquisitions and Partnerships

 Flexibility

Opportunities Acquisition of Mobile Competitors

 Innovation and R&D Growth and Expansion

Internationally Public Funding

NEGATIVE

Weaknesses International Presence

Mobile Experience Private Company

Not Process-Driven

Threats Saturated Market

Privately Held Nielsen Gaining CPG Knowledge

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News America SWOT Analysis

INTERNAL EXTERNAL

POSITIVE

Strengths Corporate structure

Product/service quality Market share

Opportunities Growing digital industry

Growing in-store experience Growth strategies

NEGATIVE

Weaknesses High prices

Declining print sales Legal expenses

Threats Competitor’s prices Dying print industry Potential lawsuits

After analyzing both IRI’s and News America’s strengths, weaknesses,

opportunities, and threats, it was interesting to see several different connections. Both

companies are looking to grow and expand their products and services to new markets.

Both companies also face their own respective threats within their industries. By teaming

up, the hope is to concentrate on both firm’s strengths and enhance the relationship.

Looking at the opportunities that exist for the two firms, it is evident that

technology plays a huge factor. The growing digital industry is a huge opportunity for

News America and it has began the switch to digital. For IRI it is imperative to adapt to

clients needs as they change over time. Looking at a similar strength, client loyalty

correlates with product quality and service. By providing this consistent quality of

products and services, both firms excel at creating and maintaining client loyalty. This is

especially important for IRI as major players sign multi-year contracts with their clients.

Building client loyalty will continue to generate recurring business and help both firms

out tremendously when focusing on this strength. Another connection uncovered was

the threat of each firm's competition. News America faces a threat with competitions

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prices, while IRI battles the top dog in Nielsen and their ability to gain knowledge within

the biggest share of the market with CPG products. Both industries are very different but

similar in regards to battling the competition. What both firms need to focus on is a way

to limit or eliminate the threats within the industries by strategically planning. For News

America, it is monitoring prices and making sure they are competing at a high level. For

IRI, it is keeping up with gaining knowledge against top players like Nielsen. Overall, the

two companies can develop a rewarding relationship by focusing on each other's

strengths, while jumping on new opportunities.

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STRATEGIC ACCOUNT PLAN

VISION STATEMENT

Our vision is to remain the preferred supplier of marketing research data to News

America Marketing. We aim to do so by developing our current relationship with them

through upgrades to new products that foster innovation and growth to the account. We

will achieve this through providing an unmatched quality of data collection, consultation

of data analysis, and cutting-edge customization capabilities through programs like as

CSIA and Lift supplemented by a workforce of technical experts that are trained to teach

salespeople how to properly use these programs to their advantage. Ultimately, this will

help News America Marketing to achieve a greater competitive advantage in their

marketplace through being able to provide evidence of business growth to their

customers due to their print, in-store, and digital advertising programs. This will allow

News America Marketing to increase the spending of their current customers as well as

achieve new business in the future.

VALUE PROPOSITION

News America Marketing has been realizing that the print industry is a dying

segment in their business model, and have been making strides to compensate. They

are looking to start ramping up the distribution of coupons through mobile and media

outlets/channels as opposed to the traditional print advertising that has been popular for

the last several decades. To do this, they will need to invest heavily into marketing their

products online as well as being able to understand their audience’s reaction to their

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new method. IRI has the opportunity to fulfil News America Marketing needs by giving

them the ability to glean deeper, more meaningful insights from point of sale data by

upgrading to a more refined and advanced platform that IRI uses. By investing in an

upgrade to CSIA, a more refined version of IRI’s Liquid Data platform set to release soon,

they will be able to gather more granular data and pull more meaningful insights from

that data.

With News America Marketing looking to expand their media presence and

understanding of media research, News America Marketing should invest in more

passcodes than they previously used with the ILD system. With more passcodes, it

allows more employees to gather insights much quicker than before, not to mention

they’ll have access to a better system than ILD. Overall, the company will see a higher

return on their investment.

IRi Lift is a brand new product that rolled out on March 28th of this year. It has the

ability to calculate impressions, lift, ad spend, and many other metrics that were

previously unavailable to media researchers. With News America Marketing’s increased

focus on media and how marketing campaigns are doing during the campaign, as

opposed to after, investing in Lift allows them to understand their campaign

effectiveness, reach, and dollars spent from ads. With the platform giving to-the-moment

updates on all previously mentioned metrics, this allows News America Marketing to

make adjustments to their advertising campaigns that minimize their dollars spent on

advertisements, while maximizing exposure and effectiveness. While this capability is

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offered on a smaller scale by their partner OwnerIQ, Lift will put this power in the hands

of all digital sales representatives.

Lastly, News America Marketing is lacking on in-depth knowledge on household

data. IRI has the opportunity to meet a goal that News America Marketing might not

know they are necessarily lacking at. IRI can provide incredibly accurate reports from

100,000 households giving insight to how households operate and spend. Coupled with

all the previous products that News America Marketing has invested in, they can get a full

field of view as to how their target market reacts to an advertisement, when they spend,

how much they spend, and ultimately calculate the effectiveness of a News America

Marketing campaign through the use of this tool and others.

FAB Table

NEED FEATURE ADVANTAGE BENEFIT

Increased data analytics capabilities for print and

in-store programs Deeper insights than ILD

Access to deeper analytics that lead to

more informed decisions

Quantify/communicate value proposition more

effectively

Increased data analytics capabilities for digital advertising programs

Real-time data analytics through lift

Account directors are able to track and adjust programs mid-campaign

Provide higher ROi for customers

Streamlined data analytics capabilities

Programs available in one platform

Simple, organized, and timely

Increased efficiency and productivity of salespeople

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Benefit Stack

GOALS & OBJECTIVES

Goal #1: To develop the account with News America Marketing by upgrading them from

ILD to CSIA for enhanced data collection capabilities.

● Objective #1: Upgrade from News America’s Current subscription of ILD to CSIA at

their next contract renewal.

● Objective #2: Administer advanced training to all potential users within first 6

months of implementation.

Goal #2: To further penetrate the account with News America Marketing by increasing

the number of passcodes purchased.

● Objective #1: Increase the rate of passcodes purchased by News America

Marketing by at least 15% at their next contract renewal.

● Objective #2: Increase News America Marketing’s sales by 5% by the end of fiscal

2020.

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Goal #3: To develop the account with News America Marketing by selling them Panel

Data Services to gain access to household panel data from across the United States. In

doing this, we will take over the services that are currently being provided by Spectra.

● Objective #1: Sell News America Marketing Panel Data Services at their next

contract renewal.

● Objective #2: Administer advanced training to all potential users within first 6

months of implementation.

● Objective #3: Increase News America Marketing’s sales of Direct Mail and Custom

Production campaigns by 5% by the end of fiscal 2020.

Goal #4: To develop the account with News America Marketing by selling them Lift to

gain access to real-time data analysis for digital advertising programs. In doing this, IRI

will supplement the services provided by OwnerIQ and will allow News America to

further increase the effectiveness of their digital advertising programs.

● Objective #1: Sell News America Marketing Lift at their next contract renewal.

● Objective #2: Administer advanced training to all potential users within first 12

months of implementation.

● Objective #3: Increase News America Marketing’s sales of digital advertising

campaigns by 5% by the end of fiscal 2020.

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IMPLEMENTATION SCHEDULE

Goal #1: To develop the account with News America Marketing by upgrading them from

ILD to CSIA for enhanced data collection capabilities.

GOAL #1

Objective Action People Start End

#1

Upgrade from News America’s Current subscription of ILD to CSIA at their next contract renewal.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Next contract renewal

Expiration of new contract

#2

Administer advanced training to all potential users within first 6 months of implementation.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

New contract renewal

6 months after contract renewal

Goal #2: To further penetrate the account with News America Marketing by increasing

the number of passcodes purchased.

GOAL #2

Objective Action People Start End

#1

Increase the rate of passcodes purchased by News America Marketing by at least 15% at their next contract renewal

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Next contract renewal

Expiration of new contract

#2

Increase News America Marketing’s sales by 5% by the end of fiscal 2020.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Summer 2016 End of fiscal 2020

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Goal #3: To develop the account with News America Marketing by selling them Panel

Data Services to gain access to household panel data from across the United States. In

doing this, we will take over the services that are currently being provided by Spectra.

GOAL #3

Objective Action People Start End

#1

Sell News America Marketing Panel Data Services at their next contract renewal.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Next contract renewal

Expiration of new contract

#2

Administer advanced training to all potential users within first 6 months of implementation.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

New contract renewal

6 months after contract renewal

#3

Increase News America Marketing’s sales of Direct Mail and Custom Production campaigns by 5% by the end of fiscal 2020.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Summer 2016 End of fiscal 2020

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Goal #4: To develop the account with News America Marketing by selling them Lift to

gain access to real-time data analysis for digital advertising programs. In doing this, IRI

will supplement the services provided by OwnerIQ and will allow News America to

further increase the effectiveness of their digital advertising programs.

GOAL #4

Objective Action People Start End

#1

Sell News America Marketing Lift at their next contract renewal.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Next contract renewal

Expiration of new contract

#2

Administer advanced training to all potential users within first 12 months of implementation.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

New contract renewal

12 months after contract renewal

#3

Increase News America Marketing’s sales of digital advertising campaigns by 5% by the end of fiscal 2020.

Martin Garofalo Chris Blanco Katy Dickson Emmanuel Miran

Summer 2016 End of fiscal 2020.

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REFERENCES

About Us. InsigniaSystems.com. Web. 17 Mar 2016. About Us. IRiWorldwide.com. Web. 9 Mar 2016. American Marketing Association. Hono Top 50. 2012. Web. 15 Mar 2016. Biggest Advertisers Are Sending Their Dollars to Digital. NewYorkTimes.com. Web. 18

Mar 2016.  Buisson, Dave. Interview. 10 Mar 2016. Company Overview of Information Resources, Inc. Bloomberg.com. Web. 15 Mar 2016. Company Overview of News America Marketing Properties LLC. Bloomberg.com. Web.

12 Mar 2016.

Cuban, Mark. How to Win At The Sport of Business. Print. 2011. Digital Ad Spending Expected to Soon Surpass TV. NewYorkTimes.com. Web. 18

Mar 2016. Iannarino, Anthony. Your Price is Too High! Print. IBISWorld.com. Web. 5 Mar 2016. Information Resources Inc. Reuters. Web. 15 Mar 2016. Information Resources, Inc. History. FundingUniverse.com. Web. 11 Mar 2016. IRI Liquid Data. Youtube. 22 Jul 2015. Web. 15 Mar 2016. IRI Worldwide.com. Web. 15 Mar 2016. Locations. NewsAmerica.com. Web. 7 Mar 2016. Mindtools.com. Web. 12 Mar 2016. Napolitano. Lisa. Customer-Supplier Partnering: A Strategy Whose Time Has Come. Print.

1997. News America Marketing: History. AmericaPink.com. Web. 14 Feb 2016.

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News America Purchases Checkout 51. NewsAmerica.com. Web. 19 Feb 2016. News Corp Annual Report 10-K. Investors.NewsCorp.com. Web. 13 Mar 2016. News Corp. Income Statement (2011-2015). Morningstar.com. Web. 9 Mar 2016. News Corp. profit tumbles 24% as MySpace continues to struggle. LATimes.com. Web. 15

Mar 2016. Our Leadership. NewsCorp.com. Web. 13 Mar 2016. PRNewsWire.com. Web. 10 Mar 2016. Thull, Jeff. Mastering the Complex Sale: How to Compete and Win When the Stakes Are

HIgh! John Wiley & Sons, Inc. Print. 2003.  Top 50 Market Research Firms. Research Access. 2014. Web. 13 Mar 2016.  Valassis.com. Web. 14 Mar 2016. von der Linden, Chris. Interview. 10 Mar 2016. “What is Checkout 51" The Couponing Couple. Web. 18 Mar 2016.

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