DECA Ad Campaign

Microsoft Zune “Today is Your Day” Campaign

Advertising Campaign Competition Washington State DECA Competition

Robert Kazmi Eric Hanson

April 15, 2007 Snohomish High School Snohomish, WA

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Table of Contents I. Executive Summary

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II. Descriptions Business and Product Agency

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III. Objectives of the Campaign

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IV. Target Markets Primary Secondary

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V. Media or Channels of the Campaign Print Television Radio Social Internet Endorsements Trade Shows/Events

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VI. Campaign Schedule

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VII. Campaign Budget and Exposures Print Television Radio Social Internet Endorsements Trade Shows/Events Agency Billings

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VIII. Budget Breakdown

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IX. Statement of Benefits

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I. Executive Summary On November 14, 2006, the Microsoft Corporation launched one of their newest products and ventures, the Zune. They entered the one sided, one company, one product dominated industry of personal MP3 players. On one side is the Apple iPod and the Imusic empire they have built. This is when Microsoft called in E&R marketing (E&R). E & R has created an advertising campaign that will help Microsoft Zune establish itself into the growing industry of personal MP3 players. There are many problems to overcome to reach that final objective. These problems can be compacted into two major problems. The first is seen in a survey of retailers by Piper Affray that showed 8% of sales people recommend the Zune to the 75% that recommend the iPod. The second problem is that in the second week of sales, the Zune was the fifth most sold personal MP3 player, sharing only 2.1% of the total market share. E & R has come up with an extensive but effective campaign to solve these and other problems. The solution is “Today is Your Day” awareness and loyalty campaign. The first part of the campaign is to compete with the active youth market of the iPod and other players. The second part of the campaign is to get noticed by retailers throughout the nation. The basic objective of this campaign is to create awareness and want to create, want and loyalty of the Microsoft Zune. E & R promise a 75% increase in awareness, to increase brand product loyalty, use efficient advertising techniques, to make the Zune a household name and to be at least the second most sold personal MP3 player by the end of the calendar year. The campaign will last six months from April to September, the spring and summer months, plus a trade show in January. The target market is youth with active lifestyles are mainly focused into high adrenaline sports. The target will primarily be from middle to high-income families and be from California and Florida, because trends are created from this group of people. They will be reached through many different advertising mediums. These channels are magazine ads, television and radio commercials, endorsements and many other creative medias.

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This advertising campaign will be cost-effective by reaching the maximum amount of people with the least amount of capitol. E & R has produced a quote of $11,239,995 for each dollar of the campaign 2.85 people will see or hear something promoting the Microsoft Zune for every dollar spent. Throughout the six months, the endorsers will be at many events and our sales people will be with them at trade shows and action sports events. II. Descriptions A) Description of the Business/Product Microsoft Corporation, is an international computer technology corporation with global annual revenue of $44.28 billion and 71,553 employees in 102 countries as of July 2006. Microsoft Corporation is one of the world’s largest software companies. It develops, manufactures, licenses and supports a wide range of software products for computing devices. Headquartered in Redmond, WA, its bestselling products are the Microsoft Windows operating system and the Microsoft Office Suite office software, each of which has achieved near-ubiquity in the desktop computer market. Microsoft Zune is the Microsoft brand of portable media players, associated software, an online service for acquiring and sharing media. Following its launch, the first Zune device was briefly the #2 selling portable media in the United States. The first Zune device released to the U.S. market was a 30GB model for $249.99 on November 14, 2006. Microsoft’s entry into the media player market debuted with a strong initial showing, but by the end of its first month of sales Zune had revealed itself to be the underdog to Apple’s iPod. Despite being shadowed by iPod’s established limelight the Zune offers several new features that arrive integrated with the device. A key differentiator between Zune and competing players is Zune-to-Zune connection and the Wi-Fi connectivity. B) E & R Marketing (E & R) E & R has been hired to create a promotional campaign for the Microsoft Zune media player to have it be a major competition to the Apple iPod, which controls the market.

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III. Objectives of the Campaign 1) Increase the awareness by 75% in 6 months 2) Establish a brand loyalty 3) Ensure efficient advertising to influence as many as possible 4) Adopt a way to create product recognition 5) Use current sales in Microsoft, like Xbox, to boost sales 6) Have Microsoft Zune be at least 2nd in MP3 player market share

IV. Identification of the Target Markets Primary Market The target market for this campaign will primarily be boys with an interest in action sports and plugged in with the alternative life, rather than a traditional cookiecutter life. The demographics stat with the first age group is 10-15 year olds (pre-teens), these boys have a higher family buying power but low individual buying power. The second age group is 16-20 year olds (teens), these boys have a medium family buying power and individual buying power. The last age group is 21-25 year olds (young adults), these adults have low family buying power but high individual buying power. The income and status group that is targeted will be medium to high-income classes. These boys have grown up with computers, Internet, Saturday morning cartoons, MP3, digital animation, and a dislike for the green movement. More importantly, they have seen and paid attention to the increase of awareness and commercialization of the action sports world. The target market is located on the west and east coasts, from California and Florida being the primary locations. The boys will primarily live in the urban and suburban environment. The primary occupation of this group is students, from middle school through the universities. The young adults will be in college entry positions in firms of study primarily in communication and business. The psychographics of the primary market are specialized in this new alternative world of action sports, even though their world is becoming more and more commercialized. The target group sees the world by plugging into hot media that their friends talk about, to learn about news, sports, equipment, trick and tips. Unfortunately, they are tuned to look for the cool or what they have heard about before and pass over

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brands that word of mouth has show is inferior. This means they will see ads and will generate word of mouth and that become peer pressure, but peer pressure make them to pay more attention to some ads, and not others. This is circle of perception, word of mouth and peer pressure will have to be overcome to effectively deliver our message to the groups. One solution that will be addressed is having an equal mix of face-to-face marketing and face-to-TV/media marketing. Lots of personal experience to lots of consumers will generate lots of word of mouth. The motivation and self-concept of these boys is a big part of how they operate and why they do what they do. To answer this, they are motivated at being part of a close-knit community. They want to be part of a small, segmented, personal and specialized environment. Accessing this motivation and self concept, the campaign will need to become a vessel for this community. This means they need to have a sense of community and a part of sharing knowledge with each other. The Zune will need to be incrowd, in-style and in-with standing out. The plan will connect with the concept that you are what you buy. The attributes of this group are that they do not want to be stuck in a rut, ever. They and the rest of their community will always provide a way out of any rut. The reference group, or group of people that the target group will imitate, are the athletes and celebrities in the commercialized world of action sports. The main goal of the campaign will establish a sense of heuristics among the target market. This is a mental rule of thumb that leads to speedy decisions and simplifies the buying process. The target market will have brand loyalty to the Zune and have a simple choice to buy Zune products and accessories.

Secondary Market The secondary market is the groups of consumers that will be affected by the advertising campaign but not primarily affected by the ads. The first of these groups is the families, parents and sisters of the target market. The target boys and the campaign will convince the parents the Zune is a good investment. The second group is the tourists and residents in the areas that events and trade shows we will be attending. These people are in the areas where the action sports are headquartered and therefore seen as a daily

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part of life, whether it is skateboarding, surfing, drifting, snowboarding or any other action sport in the neighborhood. The next group is the sporting community at large. This is a less defined group, and ranges from the average joggers and gym go-ers to professional athletes and the fans. This means baseball, basketball, tennis, NASCAR, football and all other sporting events. For example, the group that would see and be effected by Tiger Woods warming up with a Zune is a segment of this sporting world. Another group is the Microsoft users at large. These people are PC buyers and users, Xbox players and other Microsoft product users. This group will follow the brand loyalty and heuristics already inside them, and pick the Zune because it comes from Microsoft. The final group of secondary market is the electronic savvy people. These are people who appreciate the features and will find use for them (do not need to find them, they will find you, but keep track of what they are saying about the Zune to each other, will not be difficult with blogs and social network monitoring of chat rooms and message boards).

V. List of Advertising Media (Channels)

A) Print Magazine Ads Skateboarder Magazine Skateboarder Magazine was picked because of its known audience. Teenagers of active lifestyles read this magazine to stay up with the newest developments in the skateboarding industry and sport. Surfer Magazine Surfer Magazine was picked because of the people influenced by the magazine. Teenagers and young adults both read this magazine to stay on top of the surfing world, new tricks and technologies. Sport Compact Magazine Sport Compact Magazine was picked because of the vast audience the magazine. Adults and teens alike read this subscription to keep up with the latest in the industry of sport compact racing. This is an old magazine and well established, therefore it is a good investment for the campaign.

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Import Tuner Magazine Import Tuner Magazine was picked to be part of the campaign due to the magazine’s appeal to young people. Young adults and teens read the magazine because the racing society is well represented through the magazine. In-Store Displays Ads Displays The in-store displays are there to attract attention of the consumers of electronics stores (like Best Buy), Extreme Sports stores and trendy clothing stores. The target market of our campaign will see these displays at least once when shopping. The displays are important because they put the Zune into the consumers’ normal routines. These displays will not cost anything to put into the stores; the only costs will be to produce the displays. This will happen because we will give the title of “Authorized Dealer” or “Authorized Associate,” and they will be better able to sell or publicize our product and the associates gain greater profits. Other Microsoft Products Associated Products With the great amount of Microsoft products being sold worldwide, one of the best ways of promoting the Zune is to put advertisements into products sold. This is a simple process and it will help build awareness and loyalty toward the Microsoft Zune. B) Television Production There will be three (3) television commercials produced, one with each of the professional athletes that will endorse the Zune. These commercials will be 45 seconds long. We can then cut them down to 45, 30 and 15 second commercials. They will correctly target the audience of young athletes with interest in highoctane sports. Showing The three (3) commercials will be twice a week for the 24-week duration of the campaign. These commercials will be shown on the FOX network during the

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television shows “OC and That 70s Show.” Both these shows are watched by are target market and others so the commercials are well spent on theses shows. They will also be shown twice a day during the ESPN Summer X games in August. C) Radio Production There will be the basic same dialogue as the television as the television commercial, so the cost will be reduced and it will be able to reach our target market and more specifically our secondary markets. Showing The commercials will be heard as a part of ESPN radio, both on local network in California and Florida, as well as ESPN Satellite Radio. D) Voice/ Social Email Alerts/ Use Endorsements The campaign will use e-mail and Myspace databases collected form our associates and dealers and we will contact them and try to spread awareness and loyalty towards the Zune. E) Internet Advertisements The campaign will use Microsoft web sites regularly accessed by the mass public, like the MSN.com and MSNBC.com. We will use Microsoft sites because this option is the most cost-effective and fits together with the objective to connect the Zune to other Microsoft products. This is the most cost-effective because Microsoft will not charge ad space for the Zune on its own websites. F) Endorsements Action Sports Endorsements are the most vital part of the campaign. The action sports world is the world we are targeting with the campaign, and we have chosen the biggest names in the business to be involved. These athletes will be a part of print, voice, social, tv, radio, internet and events components of the campaign. Each of the endorsers will be required to a minimum of five events during the duration of the campaign.

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Skateboarding The campaign will use Rob Dyrdek, professional skateboarder by DC Shoes. He also has a new reality show on MTV network, so the Zune will be well publicized by this professional athlete. Surfing The campaign will use Kelly Slater, professional surfer of many years and future years. He has also been shown in movies and is well traveled around the world, so he is a good investment for the Zune campaign. Drifting The campaign will use Rhys Millen, professional automotive racer of the new automotive race series, D1 drifting. He has been shown in movies and is well publicized throughout our target markets. G) Trade Shows/ Events During the events, we will be using two major components to reach the attendees and raise awareness of the Zune. The first component is the equipment and props that will create the atmosphere we need. We have set in the budget $100,000 for the props, stage and equipment that will be re-used for all the events. An outside company will create and ship these items during the campaign. The second part will be the sales people. These will be Microsoft paid employees trained specially for trade shows and events. They will exhibit the Zune to our target and secondary markets and work with the endorsers to create awareness and influence future buying decisions. Consumer Electronics Show On January 8-11, in Las Vegas, the Consumer Electronics Show (CES) will be used as the first step of our campaign. The show is targeted at the distributors of consumer electronics throughout the world. Our campaign will visit this show to help with the distributor awareness and loyalty to the Microsoft Zune. Extreme/ Action Sports Events There will be 13 events during the time of the campaign that will be visit by our target market and will make them more aware of the Microsoft Zune. The

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campaign will visit six skateboard competitions, five surfing competitions and two drifting competitions. VI) Advertising Schedule Jan Print Television Radio Voice Web Endorsement Events

X X

April X X X X X X X

May X X X X X X X

June X X X X X X X

July X X X X X X X

August X X X X X X X

Sept X X X X X X X

VII) Advertising Budget & Exposure A1) Print Budget:

$579,344, 5.154% 15.7 exposures per $1

Magazine Ads: $254,344 Skateboarder Magazine; 1 page 4-color; $8,255 for 4 issues/ 6 months - $33,020 Surfer Magazine; 1 page 4-color; $13,781 for 4 issues/ 6 months - $55,124 Sport Compact Magazine; 1 page 4-color; $16,540 for 6 issues/ 6 months $99,240 Import Tuner Magazine; 1 page 4-color; $11,160 for 6 issues/ 6 months - $66,960 In-Store Displays: $75,000 Electronics Stores (Best Buy); $25,000 Extreme/ Action Sports Store; $25,000 Trendy Clothing Store; $25,000 Ads in all other Microsoft Products: $250,000 Print ads in Xbox 360, Microsoft Office and other products; $0.05 each Printing costs and Labor costs added to each product A2) Print Exposure: 9,100,000 exposures Magazine Ads: 500,000 exposures In-Store Displays: 3,600,000 exposures Electronics Stores; 100 stores with 100 customers each daily Extreme/ Action Sports Stores; 100 stores with 50 customers each daily

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Trendy Clothing Stores; 100 stores with 50 customers each daily Ads in all other Microsoft Products; 5 million products over 6 months B1) Television Budget

$ 5,750,000, 51.156% 2.78 exposures per $1

Production: $750,000 Three (3) commercials, with endorsers and postproduction $250,000 each Showing: $5,000,000 Major Networks (FOX and ESPN) Fox - $4,000,000 ESPN - $1,000,000 B2) Television Exposure: 16,000,000 exposures FOX: OC and That 70s Show; 12 million people reached ESPN: During sporting events watched by target market; 4 million people reached C1) Radio Budget

$155,000, 1.379% 8.06 exposures per $1

Production: $15,000 Production of Six (6) commercials, with endorsers and postproduction Showing $140,000 Local Spots on major stations used by target market: $90,000 Satellite Spots: $50,000 C2) Radio Exposure: 1,250,000 exposures Local Spots: 1,000,000 exposures Satellite Spots: 250,000 exposures D1) Voice/ Social/ WOM Budget:

$25,000, 0.222% 30 exposures per $1

Email/ Myspace production and maintenance fee: $25,000 for 6 months D2) Voice/ Social/ WOM Exposure: 750,000 exposures Email/ Myspace: 2.5 million exposures E1) Internet Budget

$15,000, 0.133% 300 exposures per $1

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Production Fee: $15,000 for 6 months MSN.com, MSNBC.com E2) Internet Exposure: 4.5 million exposures F1) Endorsement Budget

$3,000,000, 26.69%

3 payments to 3 professional athletes: $1,000,000 each F2) Endorsement Exposure Seen through all the media (TV, Print, etc) G1) Trade Shows/ Events Budget:

$220,000, 1.95% 2.09 exposures per $1

Booth for all events: $100,000 Entry Costs: $85,000 CES: $10,000 Sports: $75,000 or $5,000 each Sales People: $35,000 G2) Trade Shows/ Events Exposure: 460,000 exposures CES: 200,000 exposures Sports: 20,000 each or 260,000 exposures E & R Billings

$1,495,651, 13.3%

(15% of total budget (1,455,651)+ production fees (25,000 + 15,000) To enact this campaign, E&R marketing will charge the Microsoft Corp. the average advertising billing of 15 percent on top of the media spending. E&R will also add all production costs associated with the creation of the advertisements.

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VIII) Budget Breakdown Total Budget:

$11,239,995

Monthly (7 months):

$1,605,713.57

Weekly (25 weeks):

$449,599.80

Daily (175 days):

$64,228.54

Est. views seen:

32,060,000 views

Cost per consumer view per $1.00 spent:

2.85 views per $1

IX) Statement of Benefit E&R Advertising stands by the Today is Your Day campaign, and will guarantee its success to reach and meet the objectives set by our advertising campaign.

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