Sherwin-Williams
Grand Opening Paint-a-Palooza
4/28/2011
Direct Marketing
Christina Nguyen, Jimmy Liao, Michelle Tamez, Kim McCullars and Amanda Trapp
1
Table of Contents
Overview…………………………………………………………………………………………..3
Segmentation, Targeting, and Positioning………………………………………………………...4
Creative, List, and Offer…………………………………………………………………………..8
Media Selection and Use………………………………………………………………………...11
Testing and Metrics……………………………………………………………………………....18
Fulfillment……………………………………………………………………………………..…22
Recommendations………………………………………………………………………………..24
Appendix A…………………………………………………………………...………………….25
Appendix B………………………………………………………………………………………32
Appendix C…………………………………………...………………………………………….35
Budget………………………………………………………...………………………………….36
Sources………………………………………………………...…………………………………38
2
Overview
Sherwin-Williams is a national retailer of leading home and industry paint products, with
an excess of 3.000 retail branches. On June 25, 2011 Sherwin-Williams will open a new store at
11260 North Central Expressway, Suite 100 in Dallas, Texas. With the opening of its new
Dallas location, the goal is to maximize retail customer sales, which represent 15% of SherwinWilliams’ total business, and to maximize foot traffic for this new centralized location’s grand
opening.
Currently, Sherwin-Williams offers its customers an interactive website, with information
on such topics as: products, painting tips, and green painting solutions. Sherwin-Williams
additionally offers a ‘Preferred Customer Program’ that offers loyal customers special sales and
discounts.
This campaign is designed to appeal to ‘do it yourself’ homeowners. With a budget of
$14,000, the most appropriate allocation of this budget will consist of grand opening postcards to
neighborhood homes; a list composed exclusively of homeowners with the greatest sales
potential These postcards will detail the Grand Opening Weekend Event, with a publicized
donation of 5% of all sales to the Dallas branch of Habitat for Humanity. ‘Teaching’ workshops
will be provided, with each attending potential customer receiving an additional 5% off their
purchases. Radio DJ’s will also be utilized to inform the target demographic of the opening
through radio advertisements.
3
Segmentation, Targeting, and Positioning
Sherwin-Williams was founded in 1866 by Henry Sherwin and Edward Williams. They
are the largest producer of paints and coatings in the United States, and one of the leading
producers in the world. During his life, Henry Sherwin was actively involved on several boards,
and also took an active interest in the YMCA. In fact, Henry Sherwin first met Edward Williams
through their mutual interest in the association.
From the beginning Sherwin-Williams has prided itself on the quality of its products;
when the company began it had to contend with professional painters who only trusted paints
they mixed themselves. Sherwin-Williams’ paint guaranteed its quality on the label, with a
money-back guarantee that was enough to tempt painting professionals to test the product. The
paint’s quality stood strong, and Sherwin-Williams’ paint became associated with quality. As
Walter Cottingham, Sherwin-Williams’ Chief Executive Officer from 1909 to 1921, later
stipulated, “such enviable prominence, such unrivaled power…That’s the reward – the strongest
and most valuable of assets – Reputation.”1
In 1941 Sherwin-Williams’ research into alternative paint coatings was accelerated due to
World War II shortages, and the company created a water based paint. This revolution took
painting away from the professionals, and gave every household the opportunity to become ‘doit-yourself’ painters. While Sherwin-Williams conducts 85% of its business with other
businesses, it is this target segment of individuals with the ‘Do It Yourself’ attitude that comprise
the remaining 15% of its sales.
This campaign will reach potential consumers of homeowners with an income reaching at
most $200,000, and a minimum of $25,000. Homeowners are the preferred segment due to their
ability to alter the appearance of their residence, as opposed to apartment dwellers and leasers.
1
http://excellence.sherwin.com/history_timeline.html
4
This income bracket of homeowners will have a great enough disposable income that they will
be able to afford the extra cost of premium Sherwin-Williams paint, as opposed to buying the
house brand of the local hardware store.
While at the top most section of this income bracket may have enough disposable
income to afford to hire outside contractors for painting jobs, stressful economic times, may push
a greater percentage of this group to adopt the ‘Do It Yourself’ attitude that many in this segment
already possess.
Seeking out customers with a desire to complete their own household embellishments
themselves is key to the success of this direct marketing initiative. Regardless of economic
background, if the customer does not have the motivation to use the paint themselves, or a desire
to modify their home, there is no point in allocating a portion of the budget to attract their
interest.
The store in question will open in zip code 75243 in Dallas, Texas. In this area, 85% of
the population falls within the desired income bracket, approximately 50,618 persons (Appendix
A, Figure 1). There are eight zip codes surrounding the highway where the new store will be
opened, and of these zip codes, 75243 has the highest population (Appendix A, Figure 2) and the
greatest number of housing units (Appendix A, Figure 3) of these zip codes as well.
The choice of whether or not to target a younger demographic, with less disposable
income, who are subsequently more likely to make modifications to their home themselves
remains.
The first group to consider targeting consists of general homeowners of the 75243 zip
code with an income less than $200,000, residing in owner occupied homes, Target A (Appendix
A, Figure 4).
5
The second group to consider targeting, Target B, consists of homeowners in the same
zip code with an income that does not exceed $75,000, who have never been married, and have,
at minimum, a high school education, and at most, a four year degree (Appendix A, Figure 4).
Constructing a GE matrix, and attributing the greatest weight to the potential target’s
historical response rate, indicates that Target A is the more prudent investment to target with this
campaign. Other factors that are considered for the construction of this matrix include overall
market size, annual market growth rate, historical profit margin, and the availability of lists.
Each of these factors are equally weighted. The final factor taken into consideration is
Competitive Intensity, which is given the lowest weight in the GE matrix.
Target A
Weight
Overall Market Size
0.15
0.15
0.30
0.15
0.15
0.10
1.00
Market
Annual Market Growth Rate
Attractiveness Historical Response Rate
Historical Profit Margin
Availability of lists
Competitive Intensity
Score
Market
Attractiveness
Target B
Weight
Overall Market Size
Annual Market Growth Rate
Historical Response Rate
Historical Profit Margin
Availability of lists
Competitive Intensity
Score
0.15
0.15
0.30
0.15
0.15
0.10
1.00
Rating (15)
4
3
3
3
4
4
Rating (15)
2
5
1
2
2
2
Value
0.6
0.45
0.9
0.45
0.6
0.4
3.4
Value
0.3
0.75
0.3
0.3
0.3
0.2
2.15
A value scale is attributed to each of these weighted categories of the GE matrix
(Appendix A, Figure 5). For Target A, while no market received a rating of 5 in any of the
weighted categories, collectively the market had a cumulative value of 3.4. Alternatively, Target
6
B received a rating of 5 for its annual market growth rate, but for the category with the greatest
weighted value, historical response rate, Target B had received a rating of 1, and ultimately
received a cumulative value of 2.15. This shows that Target A is a more prudent market to
pursue.
7
Creative, List, and Offer
On the Grand Opening Weekend of June the 25th through the 26th, the new store will hold
a “Paint-A-Palooza” event. In honor of the grand opening, the store will donate 5% of all
purchases made this weekend to Habitat for Humanity. This donation will be widely publicized
through each method of communication with potential consumers, with the exception of Google
ClickAds.
This donation to Habitat for Humanity will promote a sense of goodwill in customers
who make purchases on opening weekend, and may additionally entice others who were
considering home renovations, and subsequently paint purchases, to move up their purchase to
the weekend of June 25th in order to help others.
To further promote the Habitat for Humanity benefit, in front of the store there will be a
10’ by 5’ fabric painted banner with the phrase “Paint for a Cause” emblazoned across. Paint
and paint brushes will be on site to allow anyone who so desires to leave their mark on the
banner and promote their purchase. On site donations will also be accepted on behalf of Habitat
for Humanity. This banner may further encourage walk-in’s who were not specifically targeted
by the direct marketing campaign.
There will be two workshops held on the opening Saturday, the first, which will begin at
ten in the morning, will be titled “Going Green.” This workshop will use recycled paper and
glass bottles to make the perfect Eco Friendly flower vase for any space. This workshop will be
targeted to children ages seven and up, as well as adults, with a duration time of thirty to forty
five minutes. All supplies will be included at the store, which will include water, glue, recycled
magazines, gift wrapping tissue paper, scissors, various recycled glass bottles/containers and
8
transparent sealer. This workshop is designed to attract families, and encourage parents to bring
their children with them to the store.
Each participant will receive a complimentary Purdy Eco Pro Brush, which has recycled
nylon bristles with a beech wood handle, and is designed to work with all paint finishes. Each
participant will also receive a coupon for $10 off of $50 special marked Sherwin-Williams’
GreenSure products and supplies line, which will be valid between June 27th and July 5, 2011.
GreenSure paint is manufactured using sustainable raw materials and less solvent than
typical household paint. The line is also designed to clean easily and resist mold and mildew
growth.2 This coupon will encourage any persons intending to attend the workshop and depart
without making a purchase on opening weekend to return in order to procure the GreenSure
paint.
The second workshop will begin at noon, and is targeted toward adults. Over the course
of one hour, participants will be educated regarding different types of faux finishes, and how to
successfully create them. All supplies will be provided, including paint, various types of
brushes, canvases, and aprons. Participants will be divided into small groups, each group sharing
a canvas with a set of several types of brushes that will be demonstrated during the workshop.
By educating participants about various painting techniques, it may prompt to consider more
extensive paint jobs at their homes, and build their confidence regarding Do It Yourself home
modifications. This workshop will target adults with that already possess the Do It Yourself
attitude but lack the necessary knowledge and techniques to complete various looks themselves.
Each workshop participant will receive a complimentary paint roller.
An amount of $250 has been allocated to provide for workshop trainers, and $400 to pay
for supplies for the two workshops.
2
http://www.sherwin-williams.com/do_it_yourself/green/greensure/
9
To tie in with radio advertisements, a DJ from Mix 102.9 will be on site from noon to
three. Having the DJ arrive at the same time the second workshop commences will encourage
workshop participants to stay past the conclusion of the tutorial, enabling their purchase value to
grow. Additionally, having a popular radio DJ present at the grand opening will serve to bring in
the radio station/DJ’s fans to the store. The cost of this DJ will be $1,000.
Beginning at eleven am, complimentary drinks, popcorn and snow cones will be
provided. By having the food and drinks arrive at eleven, customers who might have departed
for lunch will be enticed to stay longer, and the food and beverage time will overlap with the
Mix 102.9 DJ as well as the end of the first workshop and the entirety of the second. $105 has
been allocated for both the snow cone and popcorn machines rentals each, and $150 has been
allotted for the procurement of drinks.
Sherwin-Williams will also have five drawings for $20 gift cards to the store, once every
half hour, beginning at eleven am. These drawings will help to bring customers into the store, as
well as to assist in keeping them in the store once they have arrived. They will also encourage
winners to make a purchase on the day of the event.
Every paint purchasing customer will also be eligible to submit their name for a raffle,
the prize being a Sherwin-Williams gift basket, containing:
-
Paint Brushes
Drop Cloths
Bucket
Tape
Kleenguard Basic Coverall
1 Gallon of Classic 99 Paint
$20 Sherwin-Williams Gift Card
10
Two of these baskets will be awarded, and the winners will be notified on Sunday, June
26th by 6 pm. Each of these baskets will have an estimated value of $100.
The list that will be used to target potential consumers with print mail will be purchased
from www.melissadata.com. This list includes residents of the area code 75243, excluding
apartments, and businesses. The average income of each mail carrier route in this zip code falls
within the target income of $25,000 to $200,000. The minimum average home value is $66,854,
and the maximum average home value is $313,479 (Appendix B).
This group is ideal to be targeted since they will likely have enough disposable income to
afford Sherwin-Williams paint, but they will not be so wealthy as to be able to afford hiring an
outside contractor to paint their homes. Additionally, geographically, each name on this list
resides in the same area code where the new store is opening, making their geographic
positioning ideal for a mailing campaign. There are 6,729 addresses on this list, which was
purchased for $63.93.
Each mailer will offer its recipients, who bring in the card, 15% off their purchase made
during the grand opening weekend, and inform potential customers of the Habitat for Humanity
tie-in, where 5% of all purchases made the weekend of June 25th will be donated to the
organization.
Each mailer will have a barcode on it, to track which customers bring the card into the
store, and to enable the new Sherwin-Williams location to begin to build an effective house list
for future offers.
The postcard will also inform recipients of the workshops, DJ, giveaways and food that
will be available to them should they decide to visit the store on its opening weekend.
11
Media Selection and Use
In order to capture the immediate attention of the residents of the geographic area
surrounding the store, postcard mailers will be mailed to residents of the zip code 75243.
These mailers will be sent with first class postage, and will be scheduled to arrive at
residences on Thursday June 23rd. This arrival date will ensure the event is fresh in the mind of
recipients, while simultaneously providing them with enough notice to plan their weekends to
stop by the new store.
The mailers will be printed by Dallas Print, for a cost of $485. Postage will be applied,
and they will be mailed by Tri-Win Mailing Service for a cost of $0.32 for each card, a total of
$2.490.
Each mailer will also include an incentive for recipients to seek out Sherwin-Williams
Dallas on Facebook, as well as a QR code which will direct those with smart devices to the same
website.
“Facebook has changed the way we communicate permanently. In which it used to be
the 6 degrees of separation, there is now a person or less!”3
Sherwin-Williams has an official Facebook page, which provides updates on national
sales, events, remodeling ideas, and provides opportunities for customer feedback. Currently,
8,232 people ‘like’ this page.
The newly created Sherwin-Williams Dallas page currently has more than 40 friends,
with 80 impressions over the course of one week. Creating an account is free; the only
additional cost will be the optional extra side bar advertising (Appendix A, Figures 8-10).
$1,000 has been allocated for Facebook cost per clicks.
3
“Facebook Marketing and advertising connection advertising information and does not do.” E-Marketing.
12
This Facebook page will offer Dallas Sherwin-Williams customers the opportunity for a
more personalized and localized experience. Loyal customer interactions will be simpler, and it
will be easier to provide customers with feedback, solutions, answers and ideas for their home
improvement inquiries.
This profile was created based on the profile of a Sherwin-Williams store located in
Clinton, Missouri. Clinton’s Sherwin-Williams page has more than 100 friends, and provides
customers with updates about sales, upcoming store events, and significant news through the
Facebook Wall application. Facebook users have the option of receiving updates on sales,
upcoming store events, and local news.
The Sherwin-Williams Dallas page is based on the page of a store in Galesburg, Illinois.
This page has one check-in, and 147 people currently like this page, which features Facebook’s
Wall, information, friend activity, deals, photos, discussions, reviews, video, links, events and
notes. The page provides users information about sales, upcoming store events, SherwinWilliams’ related topics, and significant local news through the Wall.
Based on the statistics from these two stores, comparable information regarding
anticipated numbers for this Dallas Sherwin-Williams store can be generated. Clinton, Missouri
has a population of less than half that of the targeted Dallas area; with this in consideration, it is
reasonable to anticipate the Sherwin-Williams Dallas page gaining at least 200 friends. The
Galesburg, Illinois Facebook page serves a population 2.71 times larger than that of SherwinWilliams Dallas. Based on this store’s figures, it is likely the Dallas page would receive 55
‘likes;’ however, if the Facebook page were used in lieu of a profile, it is estimated that the
Dallas page will receive closer to 150 ‘likes.’
13
Both of these pages showed the greatest deal of user interaction, and were some of the
top search results from the inquiry “Sherwin Williams” on Facebook.
Having a Facebook page for this store opening further expands the store’s marketing
options, through the use of Groupon.com.
Groupon’s popularity has grown steadily. Since 2008, more than 41,920,000 Groupons
have been sold. 68% of Groupon buyers are aged between e18 and 34. 18% of buyers are
between 35 and 44. With regards to income, typically a Groupon customer earns between
$30,000 and $1,000,000 annually.
A Groupon store is opened through the website, and after the store has twenty five
followers, the store can begin to run coupons. There is no direct cost to Sherwin-Williams;
Groupon sells a store’s coupons to the consumer, which they will subsequently take to the retail
outlet to redeem. Upon redemption, Groupon will send the retailer a check for each coupon
barcode that has been scanned, keeping a percentage of the sale for themselves. The store has
the ability to limit the number of coupons that are sold, set the dates when it is available for
customer use, and determine the parameters of the offer.
Groupon coupons add a sense of emergency to an offer, as a timer appears on the screen
counting down to the expiration of the offer. This would also inform consumers who regularly
check Groupon of the Sherwin-Williams deals which are available in their area, as well as
acquaint them with the new store. Groupon offers can be shown on the Facebook page as well,
expanding the potential consumer exposure of these coupons.
The use of Facebook and Groupon will make it possible to use another form of online
marketing: My Dallas Mommy (Appendix A, Figure 11).
14
My Dallas Mommy is an online blog sponsored by WFAA. The creator, Laura
Thornquist, is a former news anchor who created the blog to promote local coupons and help
show the people of Dallas special deals to help families live more frugally in this down economic
time. My Dallas Mommy is part of a series of MyMommy websites that were started by Kim
Julian in St. Louis, Missouri. These websites give local family matriarchs the opportunity to
share coupons and stories that will relate to, and potentially assist, others living in the DFW area.
Coupons, ads, deals, and freebie offers are posted on this website.
This website would be an ideal way to promote Sherwin-Williams new store; this website
is designed to draw in bargain hunters, and is connected with both Facebook and Twitter. In the
DFW area, this website is ranked 13,614. The site tends to draw in moderately educated users,
mostly female, between the ages of 25 and 45. These users tend to be parents, and tend to have
incomes between $30,000 and $100,000, which falls into the desired range for Sherwin-Williams
customers.4 This website will serve as another direct channel to approach targeted potential
customers.
A Google ClickAd campaign will also be implemented. There will be two ads (Appendix
A, Figure 13) that will run concurrently, the first will have “Paint-a-Palooza” in the blue
hyperlink line, with explanation text informing the searcher of the new store, free food, and live
DJ that will be present at the store’s grand opening.
The second advertisement has “New Sherwin Williams” on the first line of the ad, with
the explicative text relating the grand opening ‘Paint-a-Palooza,’ and mentioning a coupon that
can be found if the ad is clicked on, good for 15% off of purchases. The dates when the coupon
are valid are also mentioned in the Google ClickAd.
4
http://www.alexa.com/siteinfo/mydallasmommy.com
15
The hyperlink on each of these two ads will direct clickers to the Dallas SherwinWilliams Facebook page, where they will be able to print the 15% off coupon. Once on that
page, the clicker will also be exposed to the events that are planned for the grand opening
weekend.
Five Google keywords have been selected to draw in searchers (Appendix A, Figure 12):
-
Sherwin Williams
Buy Paint
Paint Supplies
Sherwin Williams Grand Opening
Sherwin Williams Dallas
Of the above keywords, by far, “Sherwin Williams” has the greatest number of both global and
monthly searches, with 673,000 and 550,000 respectively. It is estimated that this keyword will
generate the greatest number of clicks, at a cost of $0.56 per click, and an estimated daily cost of
$30.18. “Buy Paint” has the second most global and local searches, 74,000 and 40,500
respectively with an estimated cost per click of $0.96. This ad is expected to generate twenty
clicks per day, with an estimated total cost of $20.08. Both “Sherwin Williams Grand Opening”
and “Sherwin Williams Dallas” have very low search records, but the estimated cost per click
for each of these keywords is $0.05, and it is also estimated that these ads will have first position
on the search page in the event that these keywords are entered by the searcher.
A parameter of a maximum of $2 per click has been established, with a daily budget of
$83.33.
In addition to these online forms, a radio campaign will be launched on Mix 102.9, a
Clear Channel station:
Summer is here! Been thinking about sprucing up your home? This Saturday SherwinWilliams at 75 and Royal is having a Grand Opening Paint-a-Palooza! Stop by and see
16
us for food and fun! There are free paint classes, gift drawings, the MIX 102.9 DJ, food,
and more! A portion of each purchase will go to Paint for a Cause Dallas Habitat for
Humanity. That’s this Saturday, Sherwin-Williams Grand opening at 75 and Royal
Paint-A-Palooza! See you there!
These thirty second spots will run beginning running Wednesday, June 22nd through
Saturday June 25th. Two ads will run each day. The cost of each of each radio advertisement
will be $296, for a total cost of $2,368 for the entire radio campaign. These radio advertisements
will broadcast across the entire DFW area, and will showcase the highlights of Paint-a-Palooza,
as well as further promote the Habitat for Humanity benefit. The radio advertisements on this
station will further promote the presence a DJ from this radio station at the grand opening event.
17
Testing and Metrics
As the mailer is the most expensive form of communication, as well as the most time
sensitive, it is vital that the list that will be used shall me tested. Based on the response rate from
a tested batch of mailers, it will be possible to determine whether or not mailing to the entirety of
Target A will be a prudent investment for Sherwin-Williams. If the test does not receive a great
enough response, then that will inform Sherwin-Williams as to whether or not the offer, or
perhaps the target list itself, will need alteration in order to make mailers a profitable endeavor.
First, an appropriate test size must be determined. In order to do this, the marketer must
first determine the level of confidence they desire to have with the results they receive from the
test.
The confidence level is the number of standard deviations from the mean in a normal
distribution. The higher the confidence level, the more indicative the results of the test will be of
the actual response when the entire campaign is mailed. However, as the confidence level rises,
the number of recipients in the same size also rises, making each experiment both more accurate
and more expensive.
When considering Target A, with 6,729 recipients on the list, to conduct a response test
with a confidence level of 95% and a confidence interval of three would have to contain 921
names from the target group.
18
This sample must be randomly selected. There is a high likelihood that the results of this
sample would be indicative of the results when the mailing is sent to the entire target market.
To use this same sample size, and anticipate a 99% confidence level, the confidence level
would increase to 3.51.
It is also important to determine the acquisition cost for each new customer, as well as the
life time value of each of these consumers, be they realistic one time acquisitions, or returning
consumers. The following assumptions are made:
Inputs
Average Spend per Purchase
$ 100.00
Average # of Purchases per Year
2
Direct Marketing Costs per Customer per Year
8.41
Average Gross Margin
50%
Average Customer Retention Rate
65%
Annual Discount Rate
10%
19
Using this data, it is possible to determine the ideal and realistic onetime acquisition
costs.
Analysis
Average Contribution before Mailing Costs per Customer per Year
One-time Acquisition Cost per Customer
Realistic One-time Acquisition Cost per Customer
Average Contribution per Purchase
$ 50.00
$373.78
$150.00
$ 50.00
The difference between the onetime acquisition cost and the realistic onetime acquisition
cost reveal the following:
ONE-TIME ACQUISITION
COST
Year 0
Revenue per Customer
One-time Acquisition
Cost
Year 1
$
100.00
Year 2
$
100.00
Year 3
$
100.00
Year 4
$
100.00
Year 5
$
100.00
Year 6
$
100.00
Year 7
$
100.00
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$(373.7
8)
Mailing Cost
Profit per Customer in
Year
$(373.7
8)
$
91.59
$
91.59
$
91.59
$
91.59
$
91.59
$
91.59
$
91.59
Expected Present Value
in Year
$(373.7
8)
$
83.26
$
49.20
$
29.07
$
17.18
$
10.15
$
6.00
$
3.54
Cumulative Net Present
Value
Cumulative Retention
Rate
Cumulative Discount
Rate
$(373.7
8)
100.00
%
100.00
%
$(290.5
1)
100.00
%
$(241.3
1)
$(212.2
4)
$(195.0
6)
$(184.9
1)
$(178.9
1)
$
(175.36)
90.91%
65.00%
42.25%
27.46%
17.85%
11.60%
7.54%
82.64%
75.13%
68.30%
62.09%
56.45%
51.32%
20
REALISTIC ONE-TIME
ACQUISITION COST
Year 0
Revenue per Customer
One-time Acquisition Cost
Year 1
$
100.00
Year 2
$
100.00
Year 3
$
100.00
Year 4
$
100.00
Year 5
$
100.00
Year 6
$
100.00
Year 7
$
100.00
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$
(8.41)
$(150.0
0)
Mailing Cost
Profit per Customer in Year
$(150.0
0)
$
91.59
$
91.59
$
91.59
$
91.59
$
91.59
$
91.59
$
91.59
Expected Present Value in Year
$(150.0
0)
$
83.26
$
49.20
$
29.07
$
17.18
$
10.15
$
6.00
$
3.54
$(150.0
0)
100.00
%
100.00
%
$
(66.74)
100.00
%
$
(17.54)
82.64%
$
28.72
27.46
%
68.30
%
$
38.87
17.85
%
62.09
%
$
44.87
11.60
%
56.45
%
$
48.41
90.91%
$
11.54
42.25
%
75.13
%
Cumulative Net Present Value
Cumulative Retention Rate
Cumulative Discount Rate
65.00%
7.54%
51.32%
A break even analysis indicates that the total cost for each order is $38.56, and that the
average total selling price is $103.50. These numbers indicate that there is an allowable balance
of $64.94 (Appendix C).
21
Fulfillment
Anticipating a response rate of 2.25% and a conversion rate of 15.5%, there is an
anticipated return on promotion of 13%.
Return on Promotion
Actual orders received tied to mailer
Actual response rate
225
2.25%
Conversion rate
15%
Cost per inquiry
$8.61
Cost per order
$57.41
Number of orders needed to breakeven
Response rate needed breakeven
199
1.99%
Revenue
$23,288
Net profit minus promotion cost
$14,611
Net Profit on promotion
$1,694
Return on Promotion
13%
In the event that the Sherwin-Williams Grand Opening Paint-a-Palooza receives a greater
than anticipated response rate, a response rate of 4%, with a conversion rate of 20%, there would
be a 101% return on promotion.
Return on Promotion
Actual orders received tied to mailer
Actual response rate
400
4.00%
Conversion rate
20%
Cost per inquiry
$6.46
Cost per order
$32.29
Number of orders needed to breakeven
Response rate needed breakeven
199
1.99%
Revenue
$41,400
Net profit minus promotion cost
$25,975
Net Profit on promotion
$13,058
Return on Promotion
101%
22
If, however, the Sherwin-Williams Grand Opening Event shows a response rate less than
anticipated, 1%, with a conversion rate of 10%, the store would experience a significant loss on
promotion, with a -50% return on promotion.
Return on Promotion
Actual orders received tied to mailer
Actual response rate
100
1.00%
Conversion rate
10%
Cost per inquiry
$12.92
Cost per order
$129.17
Number of orders needed to breakeven
Response rate needed breakeven
199
1.99%
Revenue
$10,350
Net profit minus promotion cost
$6,494
Net Profit on promotion
-$6,423
Return on Promotion
-50%
23
Recommendations
More than 100 years ago, the founders of Sherwin-Williams met through their mutual
interest in the YMCA youth organization. It is recommended that Sherwin-Williams pursue a
relationship with Habitat for Humanity, or a similar type charity. This organization carries a
great deal of community support and involvement, and Sherwin-Williams would be able to place
their product at the construction site of any project with which they were involved. This would
promote the company’s name, as well as the brand value.
It is also recommended that Sherwin-Williams create and actively maintain a local
Facebook page, and expand their use of digital marketing through local pages such as My Dallas
Mommy, and coupon sites such as Groupon.
Sherwin-Williams continues to promote their quality product, the same quality that made
the company successful continues to define the company’s marketing position today. This
quality speaks through itself, and through the enthusiasm a Sherwin-Williams’ employees. By
having events such as the Paint-a-Palooza, it is likely that foot traffic will increase, particularly
on the store’s opening weekend. While these persons may not immediately convert to
consumers, they will remember the knowledgeable staff and the quality product after they depart.
This strategy may prove to convince some of these walk-ins to become Sherwin-Williams
customers.
24
Appendix A
75243 Income Distribution
<$10000
$10000-$14999
$15000-$24999
$25000-$34999
$35000-$49999
$50000-$74999
$75000-$99999
$100000-$149999
$150000-$199999
$200000+
Figure 1
Population
60000
50000
40000
30000
Population
20000
10000
0
75243
75230
75231
78251
75225
Figure 2
25
75251
75205
75206
Housing Units
30000
25000
20000
15000
Housing Units
10000
5000
0
75243
75230
75231
78251
75225
75251
75205
75206
Figure 3
Zip
75243
Market
Size
Target
A
High School +,
Never
Married or
Married,
Owner
Occupied
Homes, $25k
- $200k
6749
3.53%
3.11%
24.80%
more
accessible
low
4
3
4
3
4
4
3925
5.12%
0.47%
11.91%
less accessible
high
2
5
1
2
2
2
Score
Target
B
Score
High School 4 Year
Degree,
Never
Married,
Owner
Occupied
Home, $0k $75k
Growth
Rate
Response
Rate
Profit
Margin
Availability of
Lists
Competitive
Intensity
Figure 4
26
Scale Key
Overall
Market Size
Annual
Market
Growth Rate
Historical
Response
Rate
Historical
Profit Margin
Availability of
lists
Competitive
Intensity
Rating Value
1
Rating Value
2
Rating Value
3
Rating Value
4
Rating Value
5
(1-2000)
(2001-4000)
(4001-6000)
(6001-8000)
(8001-10000)
(0%-1%)
(>1%-2%)
(>3%-4%)
(>4%-5%)
>5%
(0-1%)
(>1-2%)
(>2-3%)
(>3-4%)
>4%
(0-10%)
(>10%-20%)
(>20%-30%)
(>30%-40%)
>40%
least accessible
less accessible
accessible
more accessible
most accessible
very high
high
medium
low
very low
Figure 5
27
Figure 6
Figure 7
28
Figure 8
Figure 9
29
Figure 10
Figure 11
Figure 12
30
Figure 13
31
Appendix B
ZIP
Count Records With Name Prizm Code Selected Excluded Options
75243 6,729
0
Exclude Apartments Of City Deliveries
Exclude Business Address Of City Deliveries
Exclude Business Address Of P.O Boxes
Exclude Apartments Of Rural Routes
Exclude Business Address Of Rural Routes
No
List Cost: $63.93
ZIP
Carrier Route Total Avg. Income % Home with children Avg. Home value
75243
C001
207
39000
28
166045
75243
C002
154
37000
24
270645
75243
C007
315
33000
27
207363
75243
C008
32
35000
23
188533
75243
C009
284
31000
22
74653
75243
C011
18
39000
28
169125
75243
C013
62
32000
28
105687
75243
C016
418
57000
23
194446
75243
C018
1
35000
46
188533
75243
C019
47
32000
24
177796
75243
C020
268
46000
18
108741
75243
C022
399
43000
23
195210
75243
C023
168
41000
39
190945
75243
C027
341
114000
43
313479
75243
C030
55
28000
11
139294
75243
C032
493
62000
35
161364
75243
C035
48
42000
17
229496
75243
C043
110
30000
20
66854
75243
C044
350
106000
42
272640
75243
C046
24
32000
21
261389
75243
C047
292
33000
17
71909
75243
C052
198
67000
36
305980
75243
C055
335
134000
45
299381
75243
C056
175
33000
34
104185
75243
C057
183
49000
25
226902
32
75243
C058
401
46000
39
122029
75243
C059
224
49000
29
237054
75243
C062
315
73000
35
279292
75243
C067
255
59000
41
123171
75243
C068
438
55000
17
150811
75243
C069
119
36000
30
118251
Sub Total:
31
6729
Total:
31
6729
Melissa Data
www.melissadata.com
1-800-MELISSA.
Fax: 949-589-5211
ZIP Code Record Count Report
Run Time: 4/14/2011 12:15:38 PM
ZIP
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
RTE
C001
C002
C007
C008
C009
C011
C013
C016
C018
C019
C020
C022
C023
C027
C030
C032
C035
C043
C044
CITY
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
ST
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
NO
APTS
757
809
676
1321
147
1252
636
0
626
1598
381
305
447
0
1087
43
660
212
15
W/S
AMT
0
0
0
0
0
0
0
418
0
0
0
0
0
341
0
493
0
0
350
H/D
AMT
207
154
315
0
284
0
0
0
0
0
268
399
168
0
0
0
0
0
0
C/R
AMT
0
0
0
32
0
18
62
0
1
47
0
0
0
0
55
0
48
110
0
33
RESI.
ZIP
TOTAL TOTAL
945
963
998
1340
370
1241
620
422
531
1645
633
708
509
347
1131
543
592
239
361
DATE OF
AIS UPDATE
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
POSS
970
967
1002
1377
446
1281
733
422
713
1647
656
710
626
347
1148
543
733
441
380
PCNT
21.3%
15.9%
31.4%
2.3%
63.7%
1.4%
8.5%
99.1%
0.1%
2.9%
40.9%
56.2%
26.8%
98.3%
4.8%
90.8%
6.5%
24.9%
92.1%
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
75243
C046
C047
C052
C055
C056
C057
C058
C059
C062
C067
C068
C069
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
DALLAS
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
1134
207
607
0
861
743
431
645
0
45
0
368
16013
0
0
0
335
0
0
0
0
315
0
438
0
2690
0
292
198
0
175
183
401
224
0
255
0
0
3523
24
0
0
0
0
0
0
0
0
0
0
119
516
1110
412
788
339
1039
923
822
871
321
256
443
380
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
2011-04-15
1181
513
816
339
1043
941
840
876
323
413
447
502
2.0%
56.9%
24.3%
98.8%
16.8%
19.4%
47.7%
25.6%
97.5%
61.7%
98.0%
23.7%
6729
This List is for one-time rental use only. Altering the data may effect your postage rates. The List may not be
copied, duplicated, transfered, disclosed or retained after the permitted one-time rental use. The List may
not be used for building or integrating into any other databases.
34
Appendix C
Breakeven analysis
Subtotals
Average order
Purchase or mfg cost
Cost premium
Total
28
0
Order processing
O/E purchasing, order downloads, etc.
Packing materials
Pick, pack, seal, affix, label
Cost shipping completed package
Total
1.1
0.4
0.8
6.8
Totals
$28.00
$9.10
Billing and collections
Credit card processing charges (.03)
Returns (app. .25% return)
Bad debts (cost product+shipping) based 3%
Total
0.84
0.123
0.15
Misc costs
Misc
Total
0.35
$1.11
$0.35
Cost per order
$38.56
Selling price
average shipping and handling collected
Total selling price
Less cost per order
100.00
3.50
$103.50
$38.56
ALLOWABLE
35
$64.94
Budget
Starting Budget
$ 14,000
Direct Mailers:
List
$
64
$
750
$
485
Total Prospects of 6,729
www.melissadata.com
Design
Sherwin Williams Graphic Designers
Print
10,000 - 5 1/2 X 8 1/2
Poscards (full color graphics on both sides)
Dallas Print - Nick Burtner
2639 Elm St. Ste. 203
Dallas, Tx 75226
www.dallasprint.com
Postage
6,729 prospects @ $0.37 per postcard
Tri - Win Mailing Services
14335 Inwood Rd. Ste. 102
Dallas, Tx 75244
$ 2,490
www.tri-win.com
Total Cost for Mailers
Radio Advertisement
$ 3,789
$ 2,368
$296 per 30 second commercial
2 commercials per day for 4 days (Wed - Sat)
KDMX 102.9 FM
14001 Dallas Pkwy Ste. 300
Dallas, TX 75240
Radio Remote
$ 1,000
DJ from KDMX for day of event
Google Adwords
$ 2,500
Total budget for cost per clicks
Facebook Advertisement
Total budget for cost per clicks
36
$ 1,000
Workshops:
Trainers
Supplies
Total Cost for workshops
Giveaways
$
$
$
250
400
650
$
350
$
$
$
105
150
105
$
360
$
200
$
$
200
200
Gift cards and various gifts for opening day
5 - $20 Sherwin Williams gift cards
2 - Sherwin Williams gift baskets
(paint brushes, drop clothes, buckets, etc.)
2 gallons of paint
Food
Cost for popcorn machine rental and supplies
Cost for drinks
Cost for snow cone machine rental and supplies
www.bouncenmore.com
Total Cost for workshops
Grand Opening Banner
6x20' vinyl banner
www.gettysburgflag.com
"Paint For A Cause" Banner
10’x5’ fabric banner
paint and supplies
www.gettysburgflag.com
Total Cost for "Paint For A Cause" Banner
37
$
400
Sources
“Facebook Marketing and advertising connection advertising information and does not do.” EMarketing.
http://2010.census.gov/2010census/data/
http://advertisingdirectmail.yuiin.com/what-is-a-good-response-rate-for-direct-mail-marketing/
http://e-marketing.myblogzone.info/2011/04/facebook-marketing-and-advertising-connectionadvertising-information-and-does-not-do/
http://excellence.sherwin.com/history_timeline.html
http://www.alexa.com/siteinfo/mydallasmommy.com
http://www.alexa.com/siteinfo/mydallasmommy.com
http://www.artsandcraftstv.com/?z=easy-recycled-crafts-flower-base
http://www.groupon.com/pages/stores-faq
http://www.grouponworks.com/why-groupon/demographics
http://www.melissadata.com
http://www.sherwin-williams.com/do_it_yourself/green/greensure/
http://www.zipskinny.com
http://www.zipwho.com
38