Grafica Inc Case

EXECUTIVE SUMMARY

Grafica Inc. was an advertising firm started my Ms Debra Taeschler in 1986 with her colleague, working in Landmark Associates and her husband John Taeschler.

By 1998 Grafica had grown in full-service advertising agency. It was located in Chester New Jersey and it was particularly well-known for its expertise in integrated marketing approach to customer relationship management and its expertise in using digital technologies in marketing communications and advertising.In 1999 the Grafica was presented with an opportunity to bid for the New Jersey Lottery account. The New Jersey Lottery account would be a very big gain for Grafica as the account wanted an agency which could provide them with a whole range of services- television, radio, print, outdoor advertisements and would also get to provide professional consulting, ongoing marketing strategy and market research. It was in perfect congruence with Grafica’s core competency of umbrella or integrated marketing.

CASE ANALYSIS Grafica Inc. as started by Debra Taeschler and John Puglionisi in the year 1986 in the Taeschlers’ basement apartment. By the year 1998 it had grown into a full service advertising agency. It was well known for its integrated marketing approach to customer relationship management and its expertise using digital technologies in marketing communications and advertising. The New Jersey Lottery The New Jersey Lottery was created by an amendment to the state’s constitution in the year 1969 and started the sale of lottery tickets in December 1970.

Starting with revenue of $72million in the first year the annual sales grew to $1. 6 billion in the year 1998. Out of the total sales 51% of it went to the players in the form of prizes. In 1998, 52million winners had taken home more than $868 million in winning prizes. Against the popular perception of public that only those who were poor, uneducated, and “down their luck” purchased tickets and it took advantage of this lack of education by pushing a product that its target audience could ill afford, it was generating funds for the state.In total it had generated $9.

5 billion in state funds since its inception. These state funds benefited various state education programs and institutions. Mission Statement: “The mission of the New Jersey Lottery is to raise revenue for maximum contribution to education and institutions benefiting the citizens of New Jersey through sale of lottery products. We accomplish this by providing entertaining products through a dynamic public business enterprise built upon honesty, integrity, customer satisfaction, teamwork and public/private partnerships. None since 1997, other than billboards| No recent support| No recent support| Almost entire budget used to promote new instant game introductions| Issues Faced by the New Jersey Lottery

• * Shrinking sales of mature products as indicated in the products table above
• * Low public awareness of the benefits of this program which contributed about 39% of total revenues to state funds
• * Public perception that lottery tickets are purchased by poor, uneducated and people down on their luck.
• They believed that it took advantage of the lack of education of such people and New Jersey Lottery pushed products which its audience could ill afford
• * Decrease in media expenditures due to state wide budget cuts which limited it to focus on newer products and forced it to cut its expenditure on its flagship brands

Competition Faced

The major competitors were bordering states that administered government-sanctioned lotteries as well as various legal forms of wager-type entertainment, such as gambling in Atlantic City and horse racing.Key Points from RFP(Request For Proposal) circulated by state The key marketing objectives of the New Jersey Lottery are as follows:

• * Increase sales of mature lottery products with existing core and occasional lottery players and also introduce new and innovative games to attract new players.
• * Develop new online and instant ticket games and also suggest enhancements to the existing games.
• * Conduct market research to determine potential of new games, player demographics and cannibalization effect.
• * A detailed proposal for the launch of the new Instant Scratch-Off game called Spades.

The RFP had issued to advertising agencies a 1999 budget of $3. 5 million for marketing communications exclusive of printing costs. Why winning this account mattered for Grafica Inc? In order to add to its growing profile winning the account of New Jersey Lottery portfolio comprising of complete media promotions ranging from all traditional media like producing television, radio, print, outdoor material, collateral, transit to point-of-sale. Moreover it would also get to provide professional consulting, ongoing marketing strategy, and market research as well.Hence this account will help Grafica Inc.

to increase it stature in the market and bring more clients in the future. Strategy for Marketing Communication Out of the two options that Taeschler felt Grafica team had we suggest to develop a new “umbrella” campaign for the entire Lottery Portfolio despite the constrained budget. Without criticizing the New Jersey Lottery, Grafica could suggest that there was a strong correlation between increasing ticket sales for the instant games and increasing marketing focus on them.By using an umbrella programme the other games would be marketed along with the new games which would arrest the falling sales of the traditional games like Pick-6 Lotto, Pick-4 etc. The marketing communication mix for the same is presented in the next section.

We primarily suggest this because:

• 1. The New Jersey Lottery was suffering from wrong image perception in public and it needed a complete image makeover which is possible only by having a umbrella campaign focusing not only on product mix but as well as brand equity to be built through campaign.
• 2. It was necessary to communicate the mission statement through the marketing communication to develop a strong brand image as the message conveyed by the product communication would focus on the product rather than the brand image of the product.
• 3. Economies of scale on advertising will increase by integrating all other advertising efforts into one umbrella advertisement.
• 4. The marketing objectives provided in RFP focused on increasing the sales of the mature lottery products with core lottery players and occasional lottery players as well which would also be covered in the “umbrella” campaign as flagship brands
• 5. Umbrella campaign will also promote and develop repositioning statement as a Lottery for all the sections of the society by promoting it as a brand which is for the benefit of the state by highlighting the facts how lottery playing helps state develop educational infrastructure.
• 6. Also since “jackpot fatigue” has entered into the lottery players and they require more excitement in products that can be achieved by a integrated marketing communication mix which will try to relate the lottery playing with the kind of excitement experience and fortune changing dilemma of the lottery playing
• 7. The focus of this campaign would not only be to generate repeat and convert trials into purchase but also to spread awareness and develop a positive attitude of the non consumers which cannot be achieved entirely by product focused campaign

Deciding on Marketing Communication Mix for Umbrella Campaign

Since the target market is in fact all sections of the population and the total advertising budget is only $3.

5 million we would have to use a mix of traditional and nontraditional marketing. The campaign would focus on building a positive brand image of the NJ Lottery as a whole and not focus on only the new product offerings.The traditional advertising campaign would run on Television, Radio and print. The advertising campaign would focus on how New Jersey Lottery helps support many state projects. This would generate awareness and help the NJ lottery improve its image among the majority of the target segment. Based on the information given on market demographics, Grafica can create the advertisement primarily targeting markets: the age group b/w 25 and 44, higher income, and educated male in order to create an upscale image.

There would be a special focus on the new game ‘Spades’ in the marketing campaign with the new game featured prominently. This is done to placate the NJ Lottery’s strategy of heavily promoting the new products. County fairs and local concerts can be used to effectively communicate with the lower income, uneducated segment in the 25-55 age group. BUDGETING We have a total budget of only $3. 5 million which is a 24% decrease from the previous media expenditure.However to make the ‘umbrella’ campaign successful, we would have to use Television, Radio and print to reach out to the masses.

Out-of-Home spend could be cut as all NJ Lottery products would be covered in the advertising campaign and so Billboard advertising for specific games could be foregone. Based on the parameters set out for the campaign in the previous sections we estimate the following media expenditure: Category | FY 1999 (figures in ‘000 dollars)| Television| 800| Radio| 850| Out-of-Home| 600| Print| 100|Media Production| 150| Non-Media Production| 1000| Total| $3,500| CONCLUSION The primary reason for falling sales of NJ Lottery’s flagship products like Pick-6 Lotto, Pick-4 and Pick-3 is a complete lack of marketing endeavor targeted towards these products. The integrated or umbrella campaign would address this issue and also create a new brand image which appeals to all sections of the society. It would, by highlighting the positive aspects, help change the negative perception and ultimately lead to an increase in sales.