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MBA in 2 minutes | Lesson 14 : How management folks design ads

Updated: Jan 8, 2021

We will be solving practical challenges through MBA concepts. No theory only applications !

I am writing this one after a break and honestly I am really excited about it. The topic of interest is how advertisements, if placed smartly, can improve your organisation's branding-something which is taken very seriously by all organisations today. It doesn't matter which department you work for. There are always high likelihood you will end up working with marketing team or atleast asked to have a view point.

Step 1:

This blog is basis case method- Volvo.

Since 1981, Volvo had been selling heavy duty trucks in US. These trucks were low priced and perceived to be low quality fleet trucks. However, in '98 Volvo developed a "premium" line of trucks.

The Goal was to now raise from "low status" image (qualitative) and improve sales (quantitative).

Step 2:

Commonly, the creative heads will start throwing ideas around how to approach the advertisement (one of the marketing channels). However MBA concepts really help you to attack the problem scientifically. It aids in hitting bulls eye with higher probability and convince peers rather easily.

Hence, you must start with objective management questions around marketing mix (backed by data)-

A) Budget setting - 1.3MM + 0.5MM ( one can set this basis % expected sales or sum of individual costs)

B) Who is your target audience - Drivers and truck fleet buyers (research showed that truck buyers cared about drivers’ perceptions). In consumer goods industry we call this targetting the influencer. Here, driver is the influencer !

C) Channel- 70% of all truck drivers watch all or some part of the Super Bowl game

D) Message strategy- Here 3 things to focus on are- highlighting differentiated attributes, rational aspects of product and emotional aspects (fear/humor) The eventual copy was extremely premium (here is the copy of famous '98 ad).

E) Testing Copy- You will also need to field test the copy to gauge reaction in a controlled environment before going big at Super Bowl.

Volvo Trucks eventually sponsored Super Bowl parties at 40 truck stops around the country and a Volvo VN770 parked at each truck stop !

Step 3:

The campaign was huge success. Let's list down how do we define "success".

3 step approach

A) Attention- It was viewed by 1.4 million truck drivers, more than half the target market !

B) Interest Desire- 23% of truck drivers talked about the ad with generation of ~325,000 conversations about the ad.

C) Action- By ’98 end –sales were up 44.5%; market share rose by 2.5% points to 12%. The graph above is what you will typically see as response to your ad. Qualitatively- the Volvo brand was related with a “Hilton” as opposed to “Motel 6” !

There are other technical KPIs for monitoring success of the campaign such as CPM, GRP (Reach*Frequency), Neilson ratings ( interested folks can google them further).

The key takeaway of the blog is to define structured criteria before and after launch of a successful advertisement !

Having detailed out the success of this data backed campaign, now you can talk a) intelligently next time you discuss media campaigns b) take an easy shot if TATA would want to change brand positioning of its trucks in India :)

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If you are new here and wish to know the story how MBA in 2 minutes was started, you can click here.

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