PABS

Highly Favored Creations, LLC is a privately owned company that brings awareness to breeders, handlers, and responsible pet owners to help reduce or eliminate the number of unwanted or accidental breeding.  Highly Favored Creations introduced a Pet Anti Breeding System (PABS) that caters strictly to the reproductive breeding area of dogs and other four legged animals, a chastity belt for pets.  PABS is an alternative solution to spaying and neutering, and ultimately helps control the over population of pets.

Since animals were important to Charles, the Highly Favored Creations founder, he knew he wanted to introduce a new produt that would help cater for the animals’ needs better. Not having enough experience to sue spraying and neutering, Charles had a difficult time figuring out what the best way was to control his dog’s breeding. Pet clinic employees were not very helpful. By talking to other pet owners, Charles realized that there were many other people in his situation. So he PABS, the produt that was specifically designed to lessen the burdens associated with controlling animals’ over-population.

PABS is positioned as the Saturn of the animal world.

Pricing

The projected selling price is $95.

PABS pricing is competitive with companies seling pet over-population control products. However, Highly Favored Creations offers better support than any of these choices. When buying from superstores, customers frequently get conflicting advice depending on which salesperson they talk to. And most mail order companies are not geared toward the unprofessional pet owner; buyers must know in advance what they need (Bogart, 1999). Highly Favored Creations employees, on the other hand, undergo a comprehensive training program in all aspects of the product, so they have extensive product knowledge. The company mission is to establish ongoing relationships with customers, to be there to answer questions and help solve problems, and to help customers with pets over-population and breeding.

Objectives

The objective is to sell 5000 PABS in the first year.

Strategy

• Define the target audience – those leading busy life and working full-time
• people going into second careers
• people who run home-based or freelance businesses
• retirees or empty-nesters
• part-time business owners
• Test direct response ads in various media
• Test direct mail with a test panel for each target group, talking to prospects one-on-one in plain language (Stone, 2000)

The first test will be a space ad and a direct mail piece. The direct mail piece will include a personalized letter from Charles explaining how bought his dog, how he had to go through the maze of clinic’s advice on pet control systems, and how he came to develop the PABS concept. The mailing will also include a brochure and a special offer for a one-year free subscription Charles’ newsletter. The newsletter will contain stories from real people about how they use their PABS products, and advice about how one can use them better. It will also include other educational information, teaching people to care for their pets. It will also feature profiles of Highly Favored Creations employees—their names, their family life, their personal interests and hobbies, how they use their own PABS products—so that customers can feel like they have an ongoing relationship with real people, not just a company.

Costs Estimates

The mailing of 50,000 pieces is estimated to cost $800 per thousand, or $40,000 total. The projection for this mailing is that it will pull between ³ / ₄ percent and 2 percent. Direct response space ads will also be tested. The budget for the ads will be between $23,000 and $25,000. The cost of the newsletter will depend on the quantity mailed, but the projected budget for the first year (when Charles will write the newsletter himself) is $3,000.

Contingency Plans

1. If Highly Favored Creations doesn’t pull at least ³ / ₄ percent, the offer will be reevaluated. Was the newsletter enough? Was the technical support enough?
2. Lists will be analyzed to determine which ones performed the best so that markets can be more closely targeted.
3. Targeted direct response advertising to get leads. Using the information gained from analyzing the lists and from initial direct response testing, two-step direct response ads will be placed in publications that reach Highly Favored Creations’ targeted audience for the smallest cost per order.
4. Research the possibility of an FSI in a newspaper or magazine with a low cost per thousand, or cooperative mailing opportunity with another noncompetitive product for common pet owners.
5. Discounted offers to appropriate associations, such as AARP. Although this may generate less of a profit margin, it would be worth it to generate more sales.
6. If the response rate is higher than 2 percent, a mailing will be rolled out to the best list immediately. At the same time, advertisers for the newsletter will be solicited (McDonald, 1999).

The marketing plan is not something one creates, glances at, and throws away. It’s important that Charles keeps it close by and refer to it throughout the length of the campaign. If he is disappointed in the results of his first mailing, for instance, he may go back to his marketing plan and find that he actually did better than he projected in the plan. Carl may not remember all the contingency plans he developed, so reviewing his plan every few months can serve as a reminder and keep him from having to reinvent the wheel.

The point of such examination of marketing performance is that, if properly designed and implemented, it provides hard evidence of what works and what does not work--what delivers inquirers and customers and helps build relationships with customers. No expert opinions, checklists, laboratory experiments, or observations in a theater or shopping mall can match the reality-based validity of true field experiments that are represented by incorporating some form of direct response in all marketing and then measuring the difference between one marketing effort and another by comparing the number of responses received and sales made in an experiment, also referred to as A-B split-run tests (Rapp and Collins 1990a).

This paper uses the studies published in the Direct Marketing by Stan Rapp and Tom Collins (1990b) in order to illustrate how measuring marketing effectiveness works. The two requirements of scientific inquiry are met by A-B split run tests reported by the Rapp and Collins (1990b): (1) two groups of subjects, a test group that receives the new treatment (an exposure to the new ad) and a control group that does not receive a new treatment (no ad exposure or exposure to an ad from the old campaign) and (2) random assignment of each selected subject equally to one of the two groups before applying the treatment conditions. Thus, the two groups are scientifically the same before and while being exposed to the two treatment conditions. The observed difference between the two groups after applying the treatments is due to the performance of the treatment conditions. The influences of all other variables that might have caused the difference in performance between the two groups have been controlled. For example, for an A-B split-run test of a new versus old ad offering a free mail-order seed catalog, reductions in inquiry requests caused by heavy rains falling for several weeks during the test period would be experienced by both randomly created groups of subjects; thus, comparing the inquiry response rates between the two groups provides scientific cause-and-effect information on the performance of the new versus old ads (Rapp and Collins 1990b).

In behavioral research A-B split-run tests are more generally known as “posttest-only, control-group designs” (Bogart 1999, p. 35). Such a scientific research design to measure performance was used in the 1950s to assess the performance of the Salk and Sabin polio vaccines, and in the 1980s to assess the performance of the drug AZT in slowing the process of dying from the AIDS virus (Bogart 1999).

The questions asked by the managers measuring the marketing effectiveness of a particular campaign or the whole department are related to what happens after the actions of a marketer has caused an inquiry to occur, for example, a prospective customer has been generated in the form of a direct-mail coupon, toll-free telephone, or reader-service card inquiry.

In their more book, Rapp and Collins (1990a) referred to the problem of measuring marketing effectiveness as the “Casanova Syndrome” in marketing—“we see advertisers frantically moving on to the next 'conquest' while losing interest in yesterday's love” (p. 58 ). They make the following plea and report the low direct-marketing fulfillment performance:

The same kind and amount of attention and loving care that is expended up front must also be devoted to the back end, to everything that happens after the prospect responds to the first advertising message or makes the first purchase. Yet again and again we have answered ads offering a free sample or a booklet or a membership and received a cheap looking package with either a curt businesslike form letter or, more often, no letter at all--a practice that makes a direct order merchant hoot with derision (Rapp and Collins 1990a, p. 58).

Five common failings can be identified in the marketing strategies as they are implemented by marketers

Rapp and Collins (2004, pp. 189-191) described the first four:

1. No letter or a poor letter instead of a friendly, personal typewriter-type looking letter that is personally addressed to the inquirer.

2.  Hard-to-read typography: examples of such bad typography are long stretches of fulfillment text literature set in unreadable white letters on a black background; type too small to read; great variations in tone of full-color halftones. 

3.  Slow response. Industrial advertising monitoring shows only 44 percent of advertisers respond within 60 days to inquiries prompted by ads or publicity releases.

4.  Unclear or inadequate purchasing alternatives: two simple, but seldom used, words, either and or, are likely to cause sales to occur that otherwise would be lost. The prospect can either obtain the product at the nearby dealer listed in the fulfillment literature or can order directly. 

5.  No second, third, or additional follow-ups made to help convert the prospect into a customer and build a relationship. Is a second, direct contact profitable? For example, is it profitable to do another mailing or a telephone call to the prospect generated from an advertised offer of a brochure or other forms of requested information who does not buy after receiving an initial requested literature? It is. No one in marketing bothers to test the profitability of making a second follow-up (Stone 2000). 

Rapp and Collins (2004) provided details on six responses to requests they made to marketing offers. For example, “We answered a full-color ad in Vogue about wonderful Hawaii, 'The Big Island,' with a coupon offering more information. The information arrived six weeks later, a self-mailer booklet. No letter” (p. 12).

Several additional examples of specific inquiry-request fulfillment strategies as implemented by marketers are included in Rapp and Collins (1990a) book. Here is one example they offer of high performance:

If you would like to hold in your hands and study a veritable textbook of relationship building, write to Garden Way Manufacturing Co., 102nd St. and 9th Ave., Troy, NY 12180. Much of their newspaper is written by their customers, a poor way to win advertising awards but a great way to build a warm feeling of community and sell goods. (1990a, 58)

Given that examples of high versus low levels of performance may represent exceptions to the realities of industry wide performance behavior, scholars designed a study to assess both the efficiency and effectiveness of marketing strategies. Most of the research on the response rates to various types of manipulations have been focused on what causes high versus low response rates to survey questionnaires rather than on directly assessing the performance of marketing fulfillment strategies (Kotler et al. 2001).

Marketing and management theoreticians have argued that performance is a multidimensional construct. Optimizing on any single dimension of performance may require improving other dimensions (Kotler et al. 2001).

Efficiency - one dimension of the performance construct

Efficiency is often measured on the bases of correctly performing the tasks selected, speed in completing tasks correctly, and profitability. Measures of profitability tell one how well the organization is able to take available input--raw materials, capital, labor--and by providing appropriate product, price, place, and promotional utility, provide value to customers that exceeds the cost incurred in the transformation process and provide the marketer with a positive rate of return (Hofer and Schendel 2002).

Effectiveness is another major dimension of the performance construct. Effectiveness is often measured on the bases of selecting and performing the most important tasks. Effectiveness reflects “how well the organization relates to its environment” (Hofer and Schendel 2002, p. 4). The ultimate survival of an organization is likely to depend first on effectiveness including the organization's ability to obtain resources and support from external sources, particularly customers, whose retaining is crucial to the organization's success. The theory of strategy suggests that efficiency alone, an operational attribute, cannot maintain success in the long run--that is, effectiveness dominates efficiency (Ogilvy 2000).

While the fulfillment strategies as illustrated in the study cited in this paper by a few marketers indicate high performance, authors conclude that more than one-fourth of the marketers flunked a reasonable test of expected performance, that is, (1) fulfillment literature received by a prospect within two months of inquiry and (2) the marketer making at least one additional follow-up contact (Rapp and Collins 1990b).

If one assumes that high efficiency in direct-marketing fulfillment includes the prospect receiving the fulfillment within two weeks following a toll-free or direct-mail inquiry, then, if using an A-to-F grading scale, the average grade is a C-, which Rapp and Collins (1990b) assign to both the business and consumer marketers. The average grades for effectiveness would be a D for the business marketers and an F for the consumer marketers, given that 78 percent of the responding business and 55 percent of the consumer marketers used a cover letter and only 25 percent offered a second fulfillment (Rapp and Collins 1990b).

If the findings and conclusions reported in the study by Rapp and Collins (1990, b) are valid for marketing in general, then only a few, not the majority of the marketers are attempting to achieve high performance. The findings reported by these authors provide strong indications that many marketers are not actively striving to reach high performance goals in their implemented fulfillment strategies. Many marketers may lack accurate information on their own implemented fulfillment strategies and most do not have an active, monthly reporting system in place on fulfillment performance. These hypotheses should be examined in future research by gaining the cooperation of representative samples of marketers and examining available reporting systems.