Essays on Talk to Chuck Advertising Campaign Assignment

The paper 'Talk to Chuck Advertising Campaign' is a wonderful example of a Business Assignment.   Customers in the brokerage industry have faced a number of challenges. Charles Schwab & Co., Inc was not immune to these challenges. For instance, the company grappled with the perceived differentiation which went down to about 66%. This also affected the Company’ s relevance which also went down by a margin of 40%. The data analysis representing these changes is available in appendix 1. Another key motivator for the TTC campaign was the brand name that began losing its credibility.

This was complicated by its diminishing profitability and market shares as well as growing doubt about its brand by its customers. It is described that the Company erred when it decided to restrict the amount of information customers could obtain and this further complicated its transactions thus need for the TTC campaign. Evaluate the company strategy behind the TTC campaign. For the sake of the existence of the Company as well as trying to save it from the issues discussed above, new campaign was officially launched by Schwab where investors aggrieved were given opportunity to have a talk with Chuck.

One of the key elements of the Company’ s strategy was to focus on its strong point. That is, the age group chosen (35-54) was the baseline of its investment, and trying to reach out for these ages could ultimately save when most of its competitors were escalating their budget on the same (see appendix 2). Another way the campaign regained its position was through focussing on unsure and high touch segments of people who invested in it thus making Charles Schwab approachable and ‘ Mr.

Fix-It All’ in front of investors (see appendix 3 for campaign strategy and responsibility allocations) How effective was the TTC test market? Evaluate the results. Basing on popular market reaction, the campaign was a success. After the end of the TTC test campaign, comparative analyses on clients’ assessment pitted the Company at a place where one could get good value for money, a good source of information as well as a place where to get a substitute account opening among others (Exhibit 7). Other notable changes included field sales, call centers, and customer contacts.

In terms of data results, fresh accounts escalated by an average of 111% and with a lift of 98% on the already existing households. There was also a remarkable increase in net new assets that stood at about 205%. The ultimate effectiveness of the TTC test on the market was done through the above metrics. Would you support Saeger’ s TTC budget request for 2006? The budget estimate as presented is strongly recommended and I would give it a go-ahead. The $200 million fits well with the marketing budget for the year.

This support follows an increase in the TTC campaign affairs such as new assets (increased by 10%) and revenue increases. Looking at the figure cited, approximately 50 million will be used in the TTC campaign which is actually a realistic figure. As also seen, there is an increase in marketing expenditure in 2005 which has already been approved (figure rose from $160-198). This brings the confidence that new incomes and assets in 2006 will be enough to allow the expansion of the budget to the quoted figure ($200 million) (see appendix 4) APPENDIXES Appendix 1: Appendix 2: U. S.

Advertising Expenditures for Retail Brokerage Firms, 2004-2005($ millions)   Top Advertisers                                                              2004 ($)                  2005 ($)                                          % Difference   Fidelity Investments                                                  $89                                  $108                                                      21 TD Waterhouse                                                                    56                                        73                                                      30 Charles Schwab                                                                  83                                          72                                                    -31 E*Trade Securitites, Inc.                                       28                                            69                                                  146        Merrill Lynch                                                                          10                                              20                                                100 All other brands                                                                740                                          809                                                  9                       Category Total                                          1,005                                    1,151                                                15 Source: Adapted from case writer from Competitrack/company documents Appendix 4: Selected Financial and Operating Data for Schwab 2001-2005             Year Ended December 31 2005 2004 2003 2002 2001             Results of Operations (In millions except as noted)           Revenues           Asset Based and other  revenues             3,685.0             3,117.0             2,706.0             2,603.0             2,685.0 Trading Revenue                     779.0             1,025.0             1,190.0             1,341.0             1,383.0 Total Revenue             4,464.0             4,202.0             3,896.0             3,944.0             4,068.0             Expenses           Compensation and Benefits             1,902.0             1,877.0             1,685.0             1,846.0             1,895.0 Occupancy and Equipment                     331.0                     389.0                     430.0                     456.0                     470.0 Professional Services                     253.0                     245.0                     175.0                     172.0                     196.0 Depreciation and Amortization                     208.0                     226.0                     277.0                     317.0                     331.0 Communications                     192.0                     223.0                     228.0                     256.0                     331.0 Advertisement and Marketing Development                     179.0                     184.0                     139.0                     208.0                     243.0 Restructuring Charges                         17.0                     214.0                         76.0                     358.0                     402.0 Impairment Charges                                   -                                      -                                  5.0                         37.0                                   -    Other                     198.0                     199.0                     184.0                         45.0                         73.0 Total Expenses excluding Interest             3,279.0             3,557.0             3,179.0             3,695.0             3,941.0 Income from continuing Operations                     730.0                     414.0                     476.0                     149.0                         75.0 Net Income                     725.0                     286.0                     472.0                     109.0                     199.0 Basic earnings per share                               0.6                               0.2                               0.4                               0.1                               0.1 Dividends declared per common share                               0.1                               0.1                               0.1                               0.0                               0.0 Performance Measures           Revenue Growth                               0.1                               0.1                         (0.0)                         (0.0)                         (0.2) Pretax profit                               0.3                               0.2                               0.2                               0.1                               0.0 Return on stockholders’ equity                               0.2                               0.1                               0.1                               0.0                               0.1 financial condition at year end           Total Schwabs assets         47,351.0         47,133.0         45,866.0         39,705.0         40,464.0 Long-term debt                     514.0                     585.0                     772.0                     642.0                     730.0 Stock holders’ equity             4,450.0             4,386.0             4,461.0             4,011.0             4,163.0 Client information (at the yearend)           Client assets under management(billions)             1,199.0             1,081.0                     967.0                     765.0                     846.0 Net new clients accounts (millions)                         75.0                         50.3                         56.2                         47.6                         73.6 Active clients’ accounts (billions)                               7.1                               7.3                               7.5                               8.0                               7.8 independent investment advisor clients asset (Billions)                     406.0                     348.0                     287.0                     222.0                     235.0 independent investment client account (thousands)             1,413.0             1,316.0             1,239.0             1,182.0             1,082.0 number of domestic offices                     328.0                     273.0                     376.0                     422.0                     429.0 Daily average revenue trades (thousands)                     198.0                     156.0                     141.0                     134.0                     160.0 Average revenue  earned per traded                         15.6                         26.3                         34.1                         37.8                         35.0 Accounts that traded during the year (millions)                               2.7                               2.7                               2.7                               2.9                               3.0 Employee information           Full-time equivalent employees (at year end, thousands)                         14.0                         14.2                         16.0                         16.4                         19.2 Revenue per average full time equivalent employees thousands)                     323.0                     269.0                     245.0                     214.0                     183.0