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Lecture 10

ADMS 2200 Lecture Notes - Lecture 10: Chicagoland Television, Average Revenue Per User, Pinterest


Department
Administrative Studies
Course Code
ADMS 2200
Professor
Kim Snow
Lecture
10

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Marketing Program
Product
Brand
FITTING Z M
- Left: Full Logo
- Right: App Logo
- Black and White to allow the clothing brands we sell to shine
- Wrist watches represent the focus on apparel and time saved with the app
- Line is associated with speed and simplicity
Product Features
- The app will present multiple brands to choose from and the user may choose to
bookmark their favourite stores or styles
- Uses augmented reality on phones to allow users to try on clothes anywhere they
want
- Users can also input their own measurements into the app if they are
uncomfortable with using this technology
- The app will automatically choose the sizing for you based on your measurements,
but users can freely change this if they prefer
- You may also see how the clothing may look in different positions or movements
(waving, dancing, stretching etc.)
Price
- For premium: $34.99/year
- The marketing budget will be determined by knowing the market data to measure
the potential profit based on the potential customer’s lifetime value.
- There is a popular formula in the mobile application industry to help with this.
CLTV Formula:
- CLTV=ARPU/Churn rate + Referral value.
- CLTV: customer’s lifetime value.
- ARPU: Average value per user. (This is monetization)

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- Churn rate: The percentage of customer that we lose over a period of time. (This is
retention)
- Referral value: the value of new users whom are referred by the potential
customers. (This is virality)
CLTV Calculation:
- Since it is very hard to get an accurate on virality, we will leave it as zero.
- The ideal churn rate is under 10%, as a start-up product, our goal is to start with 10%
and lower it over the year.
- In order to make profit our CLTV must be maintained at a higher level than CPI
(cost per install). It is likely ideal that the gross margin for a new product to be 15 to
20%. As we are the first in the market, it is possible that we should set our goal at
20%.
- For premium: CLTV=34.99*0.2/0.1=69.98
Promotion Strategy
- Social Media
o Research shows that 78% of millennials in Canada use social media at least
twice a day. This will be our main promotion to reach our target market of
millennials.
o 83% of female internet users have an active Facebook account.
o 1 billion people use Instagram every month where 22.69 million are
Canadians. 27% of Canadians both male and female between the ages of 25-
34 said to have used Instagram in the last month. More than 500 million of
Instagram users use the platform every day
o Facebook and Instagram would be a good source of advertisement as it was
found women tend to shop online more.
o Instagram offers photo and carousel advertisements and can display these
ads on select users page that fit the location, demographics and interests.
We will use advertisements through Instagram to reach their target market.
o Instagram offers a precise target option called “behaviorsthat lets you
define your audience by activities they do on Instagram and Facebook.
o A promotional page on Facebook and Instagram will also be created where
people can follow and receive information on the product and promotions
daily.
o The promotional pages will occasionally hold sweepstakes and promote
discounts given in the app.
- Website

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o We will have a website available for consumers to view information about
the app, and contact us about any issues
o Some information will include what the product is, costs, how it can be used,
brands available on the app, etc.
o The website will also have quizzes for consumers to do such as “What is
your style?” and will yield results of clothing available on the app based on
their answers to act as a type of free sample.
o The website will have links that direct users to the download page on The
App Store and Google Play
- Billboards
o Billboards will be used to promote the app. Billboard locations will be
selected based on demographics on where the largest number of
millennials live and work.
o Alberta as it has the highest percentage of Millennials and Ontario based on
our target market having the highest percentage of spenders on fashion in
Canada.
- http://mediaincanada.com
o Accessed June 30th, 2019
- http://www.pewinternet.org
o Accessed June 30th, 2019
Costs:
- Facebook Ads:
o
Unit of costs
$0.27 per click
o
Frequency of use
~200 clicks per pay
o
Total Cost per year
$19710
- Instagram Ads:
o
Unit of costs
$6.70 per click
o
Frequency of use
~10,000 daily views
o
Total Cost per year
$24,455
- Promotional Pages:
o
Unit of costs
No cost
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