June 2002

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 Table of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0 Promotion Opportunity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.1 Communications Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1.1 Competitive Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1.2 Opportunity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1.3 Target Market Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1.4 Customer Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Market Segmentation Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.0 Corporate Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.1 Corporate Image Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Brand Development Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Brand Positioning Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Distribution Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Business-to-Business Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.0 IMC Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4.1 IMC Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 IMC Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Agency Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5.0 IMC Objective One (Consumer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5.1 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 IMC Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2.1 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2.2 Personal Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2.3 Database Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3 Media Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

6.0 IMC Objective Two (Distribution Channel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

6.1 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 IMC Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2.1 Personal Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2.2 Database Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

7.0 IMC Objective Three (Business-to-Business) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

7.1 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 IMC Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.2.1 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.2.1. Advertising Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2.2 Business-to-Business Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.2.3 Personal Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.2.4 Database Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.3 Media Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.4 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

8.0 Samples . . . . ..................................................... 21

8.1 Sample Logo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2 Sample Consumer Advertisement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.3 Sample Business-to-Business Advertisement . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.4 Sample Storyboard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.5 Sample Web Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
 Craft Zone

1.0 Executive Summary

Craft Zone offers more than 50,000 products, everything from ink pads, faux fur, and doll
parts to wreath molds and knitting products. Plus, the books showing how to use it all. The
company is expanding another 300,000 to 400,000 cubic feet of space to meet demand. Last
year, Craft Zone achieved $16 million in annual sales. Though smaller than the full-line craft
distributors it competes with, the company is growing rapidly.

The Hobby Industry Association estimates that the industry will exceed $25.7 billion in sales
for 2002, up from $23 billion in 2000. The group's 2001 Nationwide Craft & Hobby Consumer
Usage and Purchases Study also found that Americans' enthusiasm for crafts is rising—76%
of households polled reported participating in crafts, versus 70% in 2000. Most importantly,
craft product sales have ballooned on the West Coast. The Hobby Industry Association
estimates that industry sales on the West Coast exceeded $7 billion for 2002.

Craft Zone's three main competitors are all east of the Rockies—Notions Marketing in Grand
Rapids, MI., Herr's in Danville, IL, and Sbar's Inc. based in Moorestown, NJ. These three
companies have a total of 23 sales representatives in the West. This year Craft Zone has
hired an additional 22 sales representatives in markets across the West Coast region.

Craft Zone's main target is the 5,500 small independent craft stores on the West Coast. The
secondary target customers is the 200 large store chains on the West Coast.

Craft Zone's competitors have focused their resources on the larger store chains. This
createes a unique opportunity to win market share with small independent stores.

Through the communication market analysis, several significant findings were revealed.

• Small independent craft stores are unhappy with the long delivery time of orders
(frequently waiting more that 30 days before delivery).
• Small independent craft stores like visits from sales people who assist them with
understanding industry trends and identifying areas of need.
• Small independent craft stores don't want to maintain excess inventory.

Craft Zone is launching an aggressive campaign to increase sales to small independent craft
stores. This will necessitate a new marketing plan that will utilize a media mix to assist Craft
Zone's sales staff.

2.0 Promotion Opportunity Analysis

Craft Zone has grown dramatically over the past three years. Last year, Craft Zone achieved
$16 million in annual sales. Though smaller than its competitors, Craft Zone has a advantage
that they can't easily duplicate. Craft Zone's three main competitors are all east of the
Rockies—Notions Marketing in Grand Rapids, MI., Herr's in Danville IL, and Sbar's Inc. based
in Moorestown, NJ.

This is significant because craft product sales have ballooned on the West Coast. The Hobby
Industry Association estimates that industry sales on the West Coast exceeded $7 billion for
2002. This represents a 20% increase of sales the previous year. The Hobby Industry
Association also noted the%age break down of sales based on the size of the retail operation.
The association reported that 60% of sales occurred in large retail chain stores while 40% of
sales occurred in small independent stores.

The growth of sales in the small independent stores offers an opportunity to Craft Zone. The

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 Craft Zone
breakdown of last year's sales per the top craft wholesalers is:

• Notions Marketing: 60%—Large Retailers/40%—Small Independent Stores.

• Herr's: 70%—Large Retailers/30%—Small Independent Stores.
• Sbar's Inc: 55%—Large Retailers/45%—Small Independent Stores.

In contrast, Craft Zone's sales were primarily the small independent store (80%). Only 20%
of sales were with large retailers.

This year Craft Zone has hired an additional 22 sales representatives in markets across the
West. These new sales people will focus on the 5,500 small independent stores on the West
Coast.

The goal of the IMC program is assemble an effective media mix to reach our target
customers and increase sales by 10% each year.

2.1 Communications Analysis

The marketing communication analysis focused on how the top craft wholesalers market
brand identity to craft retailer outlets.

Craft Wholesalers employ a limited range of advertising strategies to sell brand identity to
craft retail outlets. The strongest vehicle for brand identification is direct mail and print ads in
trade magazines. Notions Marketing, Herr's, and Sbar's Inc. have strong direct mail
operations with craft retailer outlets.

In addition, the wholesalers will offer value-added services to improve sales. Herr's
distributes a inventory software program that small independent craft shops can use to
manage their inventory. Of course, the Herr's catalog is bundled with the software to
facilitate sales.

Through the communication market analysis, several significant findings were revealed.

• Small independent craft stores are unhappy with the long delivery time of orders
(frequently waiting more that 30 days before delivery).
• Small independent craft stores like visits from sales people who assist them with
understanding industry trends and identifying areas of need.
• Small independent craft stores don't want to maintain excess inventory.

2.1.1 Competitive Analysis

Craft Zone's three main competitors are Notions Marketing, Herr's, and Sbar's Inc.

Notions Marketing provides service to over 4,000 independent customers and chain accounts
across the U.S. and beyond. The company has 15 sales representatives (six in the West
Coast states). Last year's sales exceeded $28 million. The company has 1,000,000 cubic feet
of warehouse space. The focus of their West Coast operation is servicing 20 large chain
accounts and 600 small independent accounts in the 10 major metropolitan areas.

Herr's offers offers more than 50,000 items from over 600 manufacturers. Their three
warehouses have a combined space of 2,450,000 ccubic feet. The company has 10 sales
representatives on the West Coast. Last year's sales were $65 million. The bulk of Herr's
operation is in the Mid-West and the South. On the West Coast, Herr's maintains 20 large

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 Craft Zone
chain accounts and 1,000 small independent accounts.

Sbar's Inc. has over 2,000,000 cubic feet of warehouse space. The company has 30 sales
representatives but only seven on the West Coast. Sbar's sales network is strongest on the
East Coast. Last year's sales exceeded $80 million. On the West Coast, Sbar's maintains 15
large chain accounts and 1,200 small independent accounts.

Table: Competitive Analysis

Competitive Analysis
#1 #2 #3
Competitor Notions Herr's Sbar's

Product and/or Service Notions Herr's Sbar's

Quality 3 4 4
Selection 5 3 4
Price 3 4 5
Other 0 0 0

Location and Physical Appearance Notions Herr's Sbar's

Traffic 0 0 0
Appearance 0 0 0
Visibility 0 0 0
Convenience Factors 0 0 0
Other 0 0 0

Added Value Factors Notions Herr's Sbar's

Pre and Post Sales Service 4 4 3
Experience 3 5 4
Expertise 4 3 4
Reputation 3 3 4
Image 4 4 4
Stability 4 4 4
Strategic Alliances 0 0 0
Other 0 0 0

Other Marketing Activities Notions Herr's Sbar's

Established Sales Channels 4 5 4
Advertising 3 4 4
Post-purchase Support 3 3 2
Incentives 3 4 4
Loyalty Components 2 3 3
Other 0 0 0
Total 48 53 53

2.1.2 Opportunity Analysis

The Hobby Industry Association estimates that the industry will exceed $25.7 billion in sales
for 2002, up from $23 billion in 2000. The group's 2001 Nationwide Craft & Hobby Consumer
Usage and Purchases Study also found that Americans' enthusiasm for crafts is rising—76%
of households polled reported participating in crafts, versus 70% in 2000.

Craft Zone's competition has only 23' sales representatives on the West Coast. Most of these
representatives work on the larger accounts. Typically, the small independent store gets
fewer visits from the sales force and more brochures and catalogs. Small independent stores
have indicated the following in industry surveys:

• 70% want more contact with the companies' sales force.

• 80% want assistance in planning for the future craft market.
• 65% value usable quantity over discounts that create excess inventory.
• 80% want better communication with distributors on product selection.

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 Craft Zone

2.1.3 Target Market Analysis

Craft Zone's main target is the 5,500 small independent craft stores on the West Coast. The
secondary target customers are the 200 large store chains on the West Coast.

The West Coast exceeded $7 billion in craft sales for 2001. This represents a 20% increase of
sales over the previous year. The Hobby Industry Association noted the percentage break
down of sales based on the size of the retail operation. The association reported that 60% of
sales occurred in large retail chain stores while 40% of sales occurred in small independent
stores.

Craft Zone's competitors have focused catalog resources on the larger store chains. This
creates a unique opportunity to win market share with small independent stores.

The target market forecast data provided in the table below. Based on the target market
analysis, the projected number of potential customers anticipated by Craft Zone during 2002
will be 5,700. Based on annual growth rate of 7%, Craft Zone projects a total of 7,454
potential customers during 2006.

Table: Target Market Forecast

Target Market Forecast

Potential Customers Growth 2002 2003 2004 2005 2006 CAGR
Large Retail Chains 5% 200 210 221 232 244 5.10%
Small Independent
7% 5,500 5,885 6,297 6,738 7,210 7.00%
Stores
Other 0% 0 0 0 0 0 0.00%
Total 6.94% 5,700 6,095 6,518 6,970 7,454 6.94%

Market Forecast

$8,000

$7,000

$6,000

$5,000
Large Retail Chains
$4,000 Small Independent Stores
$3,000 Other

$2,000

$1,000

$0
2002 2003 2004 2005 2006

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 Craft Zone

2.1.4 Customer Analysis

Craft Zone's survey indicated the following information concerning the target customer
groups:

Small Independent Stores: These stores focus on a particular craft fields. The stores order,
on average, $20,000 to $30,000 in products a month from distributors. Generally, the stores
have limited storage capability and order products as needed. This is the root cause for the
group's complaint concerning the lag time between orders and deliveries with major craft
distributors.

Large Chain Stores: These stores focus on a wide range of craft fields. The stores order, on
average, $80,000 to $100,000 in products a month from distributors. In addition, due to
store size and warehousing space many chain store operations will purchase bulk product
directly from the manufacturer.

Target Market Growth

8%

6%

4%

2%

0%

2.2 Market Segmentation Strategy

Craft Zone's survey indicated the following issues that will be critical to the target customer
groups:

Small Independent Stores: These stores want a consistent face-to-face relationship with a
sales person. Service is the main way distributors distinguish themselves from the
competition, which includes other distributors as well as product manufacturers who sell
directly to retailers at a discount. A major complaint from this group is that the major
distributors use brochures and sales flyers consistently rather than salespeople. Another issue
is that small stores have speciality requests that seem to get less attention than the larger
orders.

Large Chain Stores: These stores focus on quantity and the offered discount. The large
single product orders are made directly with the product manufacturers. This represents

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 Craft Zone
about 50% of sales to the chain stores. The remaining products are purchased from
distributors. The chains evaluate product selection, delivery speed, and post-sales services in
determining which distributing company will receive product orders.

Addressing these issues in the advertising campaign will be critical to its success.

The attractiveness of each market segment in terms of customer characteristics is shown in

the Market Analysis table. The classification ranking runs from 5 (very attractive) to 1 (not
attractive).

Table: Market Analysis

Market Segments Cost Delivery Pre-sales Post-Sales Selection

Large Retail Chains 5 5 5 3 4
Small Independent Stores 4 3 4 5 5
Other - - - - -

Target Markets

Large Retail Chains

Small Independent Stores
Other

3.0 Corporate Strategies

To succeed, Craft Zone must accomplish the following:

• Have the dominant sales force in the West Coast market.
• Create a customer-oriented pre-sale and post-sale strategy.
• Establish advertising visibility that is important to target customer groups.

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 Craft Zone

3.1 Corporate Image Strategy

The primary target customers are the small independent craft stores. "Get in the Zone!" will
be the focus of Craft Zone's corporate image strategy.

3.2 Brand Development Strategy

The position strategy of Craft Zone will be a sales force that provides exceptional service.

Craft Zone will have unsurpassed customer service. All communication of Craft Zone will
highlight this concept in the tagline "Get in the Zone!"

The Hobby Industry Association noted that small independent craft stores reported
salesperson contact as their #1 concern with distributors. By focusing on unsurpassed
customer service, Craft Zone can frame a message that will resonate with the target
customer groups.

3.3 Brand Positioning Strategy

The position strategy of Craft Zone will be that the company provides the best customer sales
support. All communication of Craft Zone will highlight this concept in the tagline "Get in the
Zone!"

By focusing on human connection with the target customer group, Craft Zone can create a
pre-sales atmosphere that will resonate with small independent craft stores. This an
important feature since surveys have indicated that sales support is an important concern of
the smaller stores. Craft Zone must be the best solution in responding to customer demands
for personal contact.

3.4 Distribution Strategy

With the increase in sales support, there will be greater pressure on the distribution system
to meet demand. Competitive wholesale pricing will be dependent on the strength of the
company's relationship with manufacturers. Consequently, it is important to develop a
relationship with each manufacturer to ensure the best price and efficient delivery. Sufficient
inventory must be kept at the warehouse so that the customers have sufficient choices.

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 Craft Zone

3.5 Business-to-Business Strategy

The business-to-business strategy for Craft Zone is to develop new, and strengthen existing,
relationships with small independent craft stores in the Western region. The company has
hired 22 additional sales people to accomplish this goal. The competition has a combined
total of 23 sales representatives in the West Coast states. This give Craft Zone a considerable
advantage in serving the customer base in an attentive manner over time.

3.6 Evaluation

Evaluation of the branding, image, and positioning will be an on-going process. Five months
after beginning operation, a survey will be conducted. The survey is designed to measure
such things as the brand name awareness, the image of the company, and consumer
knowledge about Craft Zone. The positioning strategy will be measured to see how customers
position Craft Zone. The analysis is designed to see if the position is consistent with the one
intended by the overall IMC plan. This survey will be repeated twice a year to develop
longitudinal data for long-term analysis of the overall corporate IMC program.

The table and the chart below highlight the evaluation program that will be used. Time
frames and costs are estimated. The success of Craft Zone will be greatly affected by timely
evaluations and the use of this garnered insight to modify the communication plan. The total
cost for the evaluation is estimated at $94,000.

Table: Evaluation Programs

Evaluation Programs Plan

Start Date End Date Cost Manager Department
Brand Awareness 11/1/2002 3/1/2003 $40,000 ABC Department
Image Awareness 11/1/2002 3/1/2003 $20,000 ABC Department
Positioning Analysis 4/1/2003 5/1/2003 $20,000 ABC Department
Advertising Recall 11/1/2002 3/1/2003 $14,000 ABC Department
Totals $94,000

Evaluation Programs

Brand Awareness

Image Awareness

Positioning Analysis

Advertising Recall

Nov Dec Jan Feb Mar Apr May

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 Craft Zone

4.0 IMC Management

Craft Zone is launching an aggressive campaign to increase sales to small independent craft
stores. This will necessitate a new marketing plan that will utilize a media mix to assist Craft
Zone's sales staff. Advertising will be used to develop brand image that is essential to
attracting Craft Zone's target customer groups. Craft Zone's positioning strategy is the center
of all the company's communication efforts.

Craft Zone has budgeted $634,000 for the IMC program for next year.

4.1 IMC Objectives

The IMC objectives for Craft Zone are to firmly establish the company's brand positioning and
development strategies with the targeted customer groups. Based on the communication
opportunity analysis, the following three IMC Objectives will be the focus of this IMC plan:
1. Increase target customer groups' awareness of Craft Zone.
2. Strengthen relationships with manufacturers.
3. Create a more effective sales force.

4.2 IMC Budget

Craft Zone's communication budget for this operation will be $634,000. The basic breakdown
of this budget will be:
• IMC Objective 1: $210,000
• IMC Objective 2: $100,000
• IMC Objective 3: $230,000
• Evaluation Programs: $94,000

Craft Zone will spend approximately $210,000 to achieve IMC Objective 1 to promote Craft
Zone in trade magazines. The advertising and promotion will be directed toward the target
customer groups. The goal will be to create sufficient interest with the target customer
groups.

The goal of the IMC Objective 2 is to assure that the communication and delivery process
with manufacturers is free of any obstacles that might impact on-time deliveries to stores.
The budget of $100,000 will be used to strengthen the communication links between the
Craft Zone and craft goods manufacturers.

IMC Objective 3 will be the centerpiece of the advertising campaign. It will focus on the
development of Craft Zone's relationships with small independent craft stores. The budget of
$130,000 will be used to create speciality catalogs for seasonal purchases. Salespeople will
hand deliver this material to customers.

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 Craft Zone

Table: IMC Budget

IMC Budget 2003 2004 2005 2006 2007

Consumer $210,000 $235,200 $263,424 $295,035 $330,440
Distribution Channel $100,000 $105,000 $110,250 $115,763 $121,551
Business-to-Business $230,000 $264,500 $304,175 $349,802 $402,272
Total Budget $540,000 $604,700 $677,849 $760,600 $854,263

Monthly IMC Budget

$70,000

$60,000

$50,000

$40,000

Total IMC Budget

$30,000

$20,000

$10,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

4.3 Agency Selection

Craft Zone will create print advertisements and catalogs for this IMC plan in-house instead of
using an outside ad agency.

5.0 IMC Objective One (Consumer)

The objective for the consumer segment of the market is to establish the brand identity of
Craft Zone as a distributor that will go the extra mile for customers. This objective will be
accomplished by integrating all advertising and promotional material to create brand
awareness and preference for Craft Zone. Heavy emphasis will be placed on trade magazines
as well as promotional pieces that will be sent directly to the stores. All advertising will be
coordinated with the sales program.

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 Craft Zone

5.1 Budget

The budget for accomplishing Objective 1 will be $210,000. Advertising development costs
will account for 25% of the advertising budget. All advertisements and supporting
communications will be developed in-house. The remaining $157,500 allocated for
accomplishment of Objective 1 will be spent on advertising. Advertising will be the most
effective for establishing awareness of Craft Zone's service advantages.

The chart below illustrates the budget broken down into monthly expenditures. The prime
shopping season are April-June, August-September, and November-December, a higher
percentage of the IMC budget will be spent during these months.

While the total IMC budget for Objective 1 is $210,000 in 2002, it is recommended that the
budget be increased by 12% each year to ensure meeting the sales growth targets.

Table: IMC Budget by Consumer

IMC Budget by
Consumer
Budget 2003 2004 2005 2006 2007
Advertising $210,000 $235,200 $263,424 $295,035 $330,440
Consumer Promotions $0 $0 $0 $0 $0
Personal Selling $0 $0 $0 $0 $0
Sponsorships $0 $0 $0 $0 $0
Database Programs $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
Total $210,000 $235,200 $263,424 $295,035 $330,440
Average $35,000 $39,200 $43,904 $49,173 $55,073

IMC Budget by Consumer Monthly

$35,000

$30,000

$25,000 Advertising
Consumer Promotions
$20,000
Personal Selling
$15,000 Sponsorships
Database Programs
$10,000
Other
$5,000

$0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

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 Craft Zone

5.2 IMC Methodologies

Craft Zone's advertising focus will be "Get in the Zone!" All communications will focus on this
theme to enhance the position strategy of Craft Zone being a solid partner in the success of a
craft store. The primary message is that Craft Zone's sales staff will make your business
better.

5.2.1 Advertising

The primary goal of the advertising program is to build store awareness with the target
customer base. The advertising budget is $157,500.

The $52,500 allocated for ad development costs will provide three half-page advertisements
for the craft trade publications, like Jewelry Crafts Magazine and Craft Digest. The ads will
focus on the sales force and their ability to help a store be successful. Craft Zone will also
create five speciality promotional pieces that will be used to reinforce the sales program.

In developing the initial advertisement for Craft Zone, the following createive brief will be
used.

Objective: To create awareness of Craft Zone.

Target Audience Profile: The primary audience is the small independent craft store that
orders, on average, $20,000 to $30,000 in products a month from distributors.

Message Theme: The primary message theme is that Craft Zone's sales force provides
exceptional service.

The Support: Survey responses indicate that the small independent craft stores are looking
more face-to-face support from distributors.

The Constraints: The tagline "Get in the Zone!" is to be used in all communications.

In creating the advertisements for Craft Zone, the following means-end chain was developed.

• Attribute: A small craft store wants a company sales person rather than just a
brochure or a catalog.
• Benefit: Better resources in planning seasonal purchases.
• Personal value: A better connection with the company that is supplying critical
product to the store.
• Leverage point: The logo is a montage of craft supplies; ink, paper, scissors, etc.
Consistent with the brand image strategy, the brand development strategy and the
brand positioning strategy, Craft Zone will use the tagline "Get in the Zone!"

Executional framework: Combining the competence and expertise of Craft Zone

salespeople and the managers of small independent craft stores to form a successful business
team.

Advertising Design: A cognative strategy will be the focus of the print advertisement. The
advertisement will present a shelf of craft goods covered in cobwebs and dust. The tagline
will be "Less Dust, More Sales...Get into the Zone!"

The month-by-month advertising budget is illustrated in the chart below. The advertising
expenditures will be the lowest in November and December. Starting with January, the

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 Craft Zone
advertising spending will increase each month until it reaches it peak in July and August.

Future advertising expenditures are provided in the following table. It is projected that the
advertising budget will increase by 12% per year.

Table: Advertising Budget by Consumer

Advertising Budget by Consumer

Budget 2003 2004 2005 2006 2007
Trade Magazines $88,000 $98,560 $110,387 $123,634 $138,470
Promotionals $69,500 $77,840 $87,181 $97,642 $109,360
Ad Development $52,500 $58,800 $65,856 $73,759 $82,610
Total $210,000 $235,200 $263,424 $295,035 $330,440
Average $70,000 $78,400 $87,808 $98,345 $110,147

Advertising Budget by Consumer Monthly

$35,000

$30,000

$25,000

$20,000 Trade Magazines

Promotionals
$15,000
Ad Development
$10,000

$5,000

$0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

5.2.2 Personal Selling

Craft Zone's entire advertising campaign is focused on personal selling. The advertising will
be coordinated to maximize the sales staff's effectiveness. The Craft Zone salespeople will
focus on creating a stronger long-term connection with the customers. They will assist the
stores in planning out seasonal inventory and follow-up with visits to access sales progress.
In short, they will form a partnership with the stores' managers.

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 Craft Zone

5.2.3 Database Programs

Craft Zone will expand its store database to include all the small independent stores in the
West Coast region. All transactions and sales visits will be entered into the database. From
this data, Craft Zone will create seasonal promotionals. The primary goal of the database will
be to organize the cumulative sales data so the the sales staff can share this data with store
managers.

5.3 Media Plan

The prime shopping seasons are April-June, August-September, and November-December, a

higher percentage of the IMC budget will be spent during these months. Craft Zone's media
plan will focus on increasing the company's visibility prior to the peak shopping seasons.

Advertising in the fifteen trade magazines will be heavy from August-September, November-
December, and April-June. Half-page ads will be placed in the magazines. The total cost is
$88,000.

Promotional material will be heavy from August-September, November-December, and April-

June. The total cost is $69,500.

5.4 Evaluation

In November, a survey will be conducted that will eventually contact over 500 West Coast
craft stores in order to measure success of the advertising objectives. Brand awareness,
image analysis, advertising recall will be the focus of this survey which will continue over a
four month period. From the survey data, brand awareness and image will be charted. In
addition, the advertisements' effectiveness in delivering the company's message will also be
evaluated. If Craft Zone is not achieving its image goal, then adjustments can be made in the
Spring campaign. The goal will be to assure that Craft Zone is being successful in delivering
its message to target customer groups.

A positioning analysis survey will be conducted in May. In this survey, 100 West Coast craft
stores will be contacted. From the responses, Craft Zone will evaluate how successful its
positioning strategy has been. The goal of this survey will be to improve future advertising.

6.0 IMC Objective Two (Distribution Channel)

The primary relationship goal between Craft Zone and the craft products manufacturers is to
assure on-time delivery of products. Craft Zone has expanded its warehouse space to
accommodate the increase in sales that is anticipated over the next three years.

Most critical to the sales expansion is on-time shipments from the manufacturers to the Craft
Zone warehouse. This will require additional due diligence on the part of Craft Zone's
shipping staff. To improve the ordering and delivery process and remove any potential
obstacles from the pipeline, Craft Zone will be strengthening its relationship with craft
products manufacturers.

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 Craft Zone

6.1 Budget

The budget for IMC Objective Two is only $100,000.

The entire budget is focused on traveling expenses and the personal selling that is critical to
quickly removing obstacles in the delivery chain. Craft Zone is committed to developing
strong relationships with manufacturers that are pivotal to their expansion success.

The monthly IMC budget for the distribution channel is illustrated in the chart below. The
following table shows the budget over the next five years. The IMC budget for this objective
should increase only 5% per year.

Table: IMC Budget by Distribution Channel

IMC Budget by Distribution Channel

Budget 2003 2004 2005 2006 2007
Advertising $0 $0 $0 $0 $0
Trade Promotions $0 $0 $0 $0 $0
Personal Selling $100,000 $105,000 $110,250 $115,763 $121,551
Database Programs $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
Total $100,000 $105,000 $110,250 $115,763 $121,551
Average $20,000 $21,000 $22,050 $23,153 $24,310

IMC Budget by Distribution Channel Monthly

$9,000

$8,000

$7,000

$6,000 Advertising
$5,000 Trade Promotions

$4,000 Personal Selling

Database Programs
$3,000
Other
$2,000

$1,000

$0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

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 Craft Zone

6.2 IMC Methodologies

The primary IMC methodology that will be used is a database of orders and deliveries that
will be used to assess the success of the process. Records of on-time deliveries, and product
or delivery complaints will be critical in planning future product needs. It is critical that any
problems in the pipeline are addressed proactively with no adverse impact on delivery
expectations.

6.2.1 Personal Selling

The relationships of Craft Zone with manufacturers who are also supplying the competition is
the critical focus of personal selling. Craft Zone staff interactions with these companies will
have a positive or adverse impact on how orders are processed and shipped out. Craft Zone
is committed to establishing the same level of partnership with manufacturers as will be
created with craft store managers.

The goal is to remove all surprises from the supply chain.

6.2.2 Database Programs

A database of orders and deliveries that will be used to assess the success of the process.
Records of on-time deliveries, and product or delivery complaints will be critical in planning
future product needs. More importantly, the database will keep track of seasonal bottlenecks
that can adversely impact delivery schedules. This will allow Craft Zone to implement
solutions to avoid the problems.

6.3 Evaluation

The evaluation of this second IMC Objective will occur by creating a database of product
delivery and the strength of the relationships with the manufacturers. A scale from on-time
delivery to responsiveness to order processing issues will be established. The goal is to create
a trust relationship between the Craft Zone and manufacturers. The goal of the evaluation
process is to improve the trust and efficiency of the partnership between Craft Zone and
manufacturers.

7.0 IMC Objective Three (Business-to-Business)

The intent of the business-to-business IMC Objective is to develop exceptionally strong

business relationships with small independent craft stores. Unlike the competition, Craft Zone
offers a brand identity that will respond to the #1 concern of these businesses; pre/post sales
support. Craft Zone will base its entire marketing thrust on establishing the company as an
invaluable partner to small independent craft stores. The company has hired 22 new sales
people to implement this campaign.

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 Craft Zone

7.1 Budget

The budget for the IMC Objective Three is $230,000. This will be spent creating craft-specific
specialty promotional material and personal selling. The prime shopping seasons are April-
June, August-September, and November-December, a higher%age of the IMC budget will be
spent during these months.
• Promotional Material: $100,000
• Personal Selling: $130,000

The monthly IMC budget for the business-to-business portion of the IMC plan is illustrated in
the chart below.

Total expenditures for the third IMC Objective will be increased an average of 15% per year.
The business-to-business advertising will be increased by 15% per year.

Table: IMC Budget by Business-to-Business

IMC Budget by Business-to-

Business
Budget 2003 2004 2005 2006 2007
Advertising $100,000 $115,000 $132,250 $152,088 $174,901
Business-to-Business Promotions $0 $0 $0 $0 $0
Personal Selling $130,000 $149,500 $171,925 $197,714 $227,371
Sponsorships $0 $0 $0 $0 $0
Database Programs $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
Total $230,000 $264,500 $304,175 $349,802 $402,272
Average $38,333 $44,083 $50,696 $58,300 $67,045

IMC Budget by Business-to-Business Monthly

$35,000

$30,000

$25,000
Advertising
$20,000 Business-to-Business Promotions
$15,000 Personal Selling
Sponsorships
$10,000
Database Programs
$5,000

$0

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 Craft Zone

7.2 IMC Methodologies

The focus of the third IMC Objective will be to implement the core objective of the advertising
campaign. The position strategy is that Craft Zone is a full partner with the small independent
craft store. With the tagline "Get in the Zone!", the company seeks to establish customer
loyalty by providing invaluable pre/post sales assistance to the store.

The primary methodology that will be used is implementing seasonal planning programs with
the stores that will improve the store's bottom line. The sales staff will receive training in
implementing the inventory planning program. Their services will be offered free to store
managers.

7.2.1 Advertising

The primary goal of the advertising program is to build store awareness of Craft Zone with
the target customer base. The advertising budget is $100,000.

Craft Zone will create five speciality promotional pieces that will be used to reinforce the sales
program. The material will include seasonal planning guides and Craft Zone advertisements.
The ads will focus on sales force and their ability to help a store be successful.

In developing the initial advertisement for Craft Zone, the following createive brief will be
used.

Objective: To create awareness of Craft Zone.

Target Audience Profile: The primary audience small independent craft stores that order,
on average, $20,000 to $30,000 in products a month from distributors.

Message Theme: The primary message theme is that Craft Zone's sales force provides
exceptional service.

The Support: Survey responses indicate that the small independent craft stores are looking
more face-to-face support from distributors.

The Constraints: The tagline "Get in the Zone!" is to be used in all communications.

In creating the advertisements for Craft Zone, the following means-end chain was developed.

• Attribute: A small craft store wants a company sales person rather than just a
brochure or a catalog.
• Benefit: Better seasonal in planning seasonal purchases.
• Personal value: A better connection with the company that is supplying critical
product to the store.
• Leverage point: The logo is a montage of craft supplies; ink, paper, scissors, etc.
Consistent with the brand image strategy, the brand development strategy and the
brand positioning strategy, Craft Zone will use the tagline "Get in the Zone!"

Executional framework: Combining the competence and expertise of Craft Zone

salespeople and the managers of small independent craft stores to form a successful business
team.

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 Craft Zone
Advertising Design: A cognative strategy will be the focus of the print advertisement. The
advertisement will present a shelf of craft goods covered in cobwebs and dust. The tagline
will be "Less Dust, More Sales...Get into the Zone!"

The month-by-month advertising budget is illustrated in the chart below. The advertising
expenditures will be the lowest in November and December. Starting with January, the
advertising spending will increase each month until it reaches it peak in July and August.

Future advertising expenditures are provided in the following table. It is projected that the
advertising budget will increase by 15% per year.

7.2.1.1 Advertising Budget

Table: Advertising Budget by Business-to-Business

Advertising Budget by Business-to-

Business
Budget 2003 2004 2005 2006 2007
Advertising $0 $0 $0 $0 $0
Promotional Material $100,000 $115,000 $132,250 $152,088 $174,901
Other $0 $0 $0 $0 $0
Total $100,000 $115,000 $132,250 $152,088 $174,901
Average $33,333 $38,333 $44,083 $50,696 $58,300

Advertising Budget by Business-to-Business Monthly

$16,000

$14,000

$12,000

$10,000
Advertising
$8,000
Promotional Material
$6,000 Other

$4,000

$2,000

$0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

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 Craft Zone

7.2.2 Business-to-Business Promotions

The sales force will be trained in using a new inventory planning program. They will offer this
service to small independent craft stores at no charge. The goal of this program is have a
mechanism that will build trust between Craft Zone's sales force and seasonal customers.

The program also serves as a excellent vehicle to sell Craft Zone's product line.

7.2.3 Personal Selling

For the business-to-business sector, personal selling is core goal of the IMC plan. Craft Zone
has added enough salespeople to provide customers with the kind of support and assistance
that will lead to increased sales. The company wants to create a symbiotic relationship where
the success of the store reflects the success of the sales force.

7.2.4 Database Programs

A database of orders and deliveries that will be used to assess the success of the process.
Records of on-time deliveries, and product or delivery complaints will be critical to improving
Craft Zone delivery process. More importantly, the database will keep track of seasonal
bottlenecks that can adversely impact delivery schedules. This will allow Craft Zone to
implement solutions to avoid the problems.

In addition, the store data can be used by salespeople to assemble presentations for specific
stores, specific crafts, or specific geographic areas.

7.3 Media Plan

The media plan for IMC Objective Three will be promotional material that will be developed
for presentation by the sales staff.

7.4 Evaluation

The database will be a key for evaluating the business-to-business objective. First, the
number of business relationships of the sales staff with stores and the depth of those
relationships will be the first evaluative measure. This will, of course, be measured against
sales. Second, once a year, a survey will be conducted with the stores. In this telephone
survey, brand recall and brand comprehension will be measured. Attitude towards Craft Zone
will be evaluated as well as the image of the company and the quality of its product,
especially the value of the inventory planning program.

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 Craft Zone

8.0 Samples

8.1 Sample Logo

8.2 Sample Consumer Advertisement

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 Craft Zone

8.3 Sample Business-to-Business Advertisement

8.4 Sample Storyboard

8.5 Sample Web Page

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 Appendix

Appendix Table: IMC Budget

IMC Budget Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Consumer $16,375 $10,375 $17,375 $17,375 $12,375 $21,375 $21,375 $12,375 $12,375 $12,375 $22,375 $33,875
Distribution Channel $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,337
Business-to-Business $10,000 $27,000 $27,000 $11,000 $28,000 $27,000 $9,000 $9,000 $10,000 $27,000 $35,000 $10,000
Total Budget $34,708 $45,708 $52,708 $36,708 $48,708 $56,708 $38,708 $29,708 $30,708 $47,708 $65,708 $52,212

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 Appendix

Appendix Table: IMC Budget by Consumer

IMC Budget by Consumer

Budget Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Advertising $16,375 $10,375 $17,375 $17,375 $12,375 $21,375 $21,375 $12,375 $12,375 $12,375 $22,375 $33,875
Consumer Promotions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Personal Selling $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sponsorships $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Database Programs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $16,375 $10,375 $17,375 $17,375 $12,375 $21,375 $21,375 $12,375 $12,375 $12,375 $22,375 $33,875
Average $2,729 $1,729 $2,896 $2,896 $2,063 $3,563 $3,563 $2,063 $2,063 $2,063 $3,729 $5,646

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 Appendix

Appendix Table: Advertising Budget by Consumer

Advertising Budget by Consumer

Budget Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Trade Magazines $8,000 $3,000 $7,000 $7,000 $4,000 $11,000 $11,000 $4,000 $4,000 $4,000 $10,000 $15,000
Promotionals $4,000 $3,000 $6,000 $6,000 $4,000 $6,000 $6,000 $4,000 $4,000 $4,000 $8,000 $14,500
Ad Development $4,375 $4,375 $4,375 $4,375 $4,375 $4,375 $4,375 $4,375 $4,375 $4,375 $4,375 $4,375
Total $16,375 $10,375 $17,375 $17,375 $12,375 $21,375 $21,375 $12,375 $12,375 $12,375 $22,375 $33,875
Average $5,458 $3,458 $5,792 $5,792 $4,125 $7,125 $7,125 $4,125 $4,125 $4,125 $7,458 $11,292

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 Appendix

Appendix Table: IMC Budget by Distribution Channel

IMC Budget by Distribution Channel

Budget Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Advertising $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Trade Promotions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Personal Selling $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,337
Database Programs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,337
Average $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667

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 Appendix

Appendix Table: IMC Budget by Business-to-Business

IMC Budget by Business-to-Business

Budget Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Advertising $4,000 $12,000 $12,000 $5,000 $12,000 $12,000 $4,000 $4,000 $4,000 $12,000 $15,000 $4,000
Business-to-Business Promotions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Personal Selling $6,000 $15,000 $15,000 $6,000 $16,000 $15,000 $5,000 $5,000 $6,000 $15,000 $20,000 $6,000
Sponsorships $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Database Programs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $10,000 $27,000 $27,000 $11,000 $28,000 $27,000 $9,000 $9,000 $10,000 $27,000 $35,000 $10,000
Average $1,667 $4,500 $4,500 $1,833 $4,667 $4,500 $1,500 $1,500 $1,667 $4,500 $5,833 $1,667

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 Appendix

Appendix Table: Advertising Budget by Business-to-Business

Advertising Budget by Business-to-Business

Budget Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Advertising $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Promotional Material $4,000 $12,000 $12,000 $5,000 $12,000 $12,000 $4,000 $4,000 $4,000 $12,000 $15,000 $4,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $4,000 $12,000 $12,000 $5,000 $12,000 $12,000 $4,000 $4,000 $4,000 $12,000 $15,000 $4,000
Average $1,333 $4,000 $4,000 $1,667 $4,000 $4,000 $1,333 $1,333 $1,333 $4,000 $5,000 $1,333

Page 6