Royco Minute Soup – Wom Campaign

ROYCO MINUTE SOUP – WOM CAMPAIGN

From the case, the objective of Royco is to increase the sales, and transform the image pf product from a basic snack for famillies and elderly people to a healthy snack consumed in the office by young / middle age proffesional women. There are various ways of promotion to support their campaign, such as TV advertisement, Social media, sampling for potential customer, and Word-of-mouth(WOM). The result of research showed that the estimated size of the identified target group was around 300.000 for Parys, Lyon and Angers combined.

Question : “Should Royco spend 40.000 euros for 2.500 g0 or not?”

Calculation:

Royco planning to distribute 50.000 sampling of their product

Budget : 5% x 5% x 1.200.000 euros = 60.000 euros

Objective = 300.000 conversations generated in 2014.

Trnd Rates = 40.000 for 2.500g0 (exclude external cost 23.238)

Multiplier ratios: g0 → g1 : 23,4 → g2 : 4,2

Royco multiplier ratios:

Minimum = 187.500 conversations generated

Maximum = 2.500 x 23,4 x 4,2 = 245.700 conversations generated

Conclusion : So, with cost 63.238 euros, Royco can generated 187.500 - 245.700 conversations from 2.500 g0. It is almost reach the company’s objective (300.000 conversations) but exceed the forecast of marketing budget (sampling budget) for 2014 (60.000 euros). If I was Marion, I would still propose this WOM Marketing, and asked for additional budget from other post, because the WOM by trnd is the best alternatif that will give big impact to introduce their new product image and increase the sales, because it would narrowly targetted rather than just give product sample to random people.

If Royco wants to achieve the company’s objective they need to increase the g0 :

g0 x 23,4 x 4,2 =  300.000

                      g0 =  300.000

  23,4 x 4,2

                      g0 = 3.052,50 → 3.053

If 40.000 euros = 2.500 g0

= 1g0 = 16 euros

So, 3.053 x 16 euros = 48.848 (exclude external cost)