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Charles Schwab and Co Inc The Talk to Chuck Advertising Campaign Case Solution
The Schwab brand had lost its connection with its clients which had an adverse influence on its brand image. Also, with the passage of time, as new low-cost competitors entered the market, the company saw its clients switching to the competitors. There was therefore a strong need for Schwab to revitalize its corporate brand image to build back trust and credibility in the eyes of its customers. As a result, the company developed its TTC campaign that made use of different media mixes to attract the mass affluents that were the target consumers of the business and were expected to stabilize the revenue and profitability position of the business. The campaign was a success although it cost extra budget for the company, it was offset by the increase in accounts and net assets as more households were willing to consider Schwab against the low-cost competitors in the market. The company made use of a unified strategy that was consistent with promoting its strong brand image in the eyes of its consumers Hence, the company was able to improve its position financially and was set on the track for sustainable growth in the long run.
Following questions are answered in this case study solution
What circumstances motivated development of the TTC campaign?
Evaluate the company strategy behind the TTC campaign. Do you agree with that strategy?
How effective was the TTC test market? Evaluate the results. Be specific.
Would you support Saeger’s TTC budget request for 2006?
What changes would you recommend in budget, strategy or execution? Why?
How should the campaign’s effectiveness be measured in the future?
What are the key takeaways from this case that could be applied to other cases?
Case Analysis for Charles Schwab and Co Inc The Talk to Chuck Advertising Campaign
1. What circumstances motivated the development of the TTC campaign?
The reason why Schwab Charles created its TTC campaign was to engage with its customers on a personal level, who seemed to be switching to the competitors. The campaign was also focused on attracting new customers to increase the value of the company by increasing its customer base. Schwab targeted the financial market segment ad it offered unique and differentiated packages to its clients whose needs were previously not being met by the existing players resulting in a client satisfaction gap. As per the case, it can be seen that the firm had mainly entered the segment intending to reshape and transform the entire financial services industry. This is well justified by the fact that Schwab was the leading self-service brokerage firm in the industry as it provided the investors with an opportunity to be able to make their transactions and manage their assets without facing any assistance from the traditional brokers. The company introduced a distinct package that played an important role in increasing the demand for the services offered by Schwab and enabled the company to set an industry-low trade price throughout the equity sector. Although this allowed the company to significantly increase its revenue which had reached an all-time high, the relations between the company and its clients went downhill which ultimately had an adverse influence on the profitability of the business. Further, the competition intensified as low-cost brokerage providers entered the market including Etrade and Ameritrade. In order to manage its operational expenses, the company ended up increasing its prices which further contributed to its fall. Hence, the TTC campaign was developed by the company to re-establish customer relations as most of its customers had switched to low-cost providers.
2. Evaluate the company strategy behind the TTC campaign. Do you agree with that strategy?
When the TTC campaign was launched in the market, Schwab intended to target the mass affluent clients. as target customers who had a net worth of around 50k to 2 million as this would indicate that they would have a high amount of investable assets and this made up 8% of the total US population and 20% of the US investors. As the company focused on its existing base of clients, it aimed at resolving their pain points which could only be done by redefining its value proposition in the eyes of its target customers. This can be understood by the fact that the company focused on offering personalized investment advice from real people as part of its campaign rather than relying on computer algorithms for investment decisions that tend to be fairly standardized.
As part of its messaging strategy, Charles was constantly focused on providing investment advice that would help in boosting the trust of its clients. Also, as part of the campaign, the adverts that were made use of were colorful as the campaign make use of colorful ads, tv broadcasts, announcements on radios, and rotoscoping that was considered to have a strong impact on grabbing the attention of the target audience.
I agree with the strategy that was used for the campaign as it was focused on increasing the number of clients that would be willing to invest with the company. It became quite evident that the market research conducted was somewhat accurate as most of the clients started rating the firm as favorable, particularly after the campaign gained popularity in the eyes of its target consumers.
3. How effective was the TTC test market? Evaluate the results. Be specific.
TTC test market was focused on assessing the effectiveness of the TTC campaign through two dimensions which included tracking new clients with high-net-worth assets and determining the number of households that will be willing to invest with the company. The test campaign was conducted in the selected test markets which included Chicago, Denver, and Houston, and these were matched with similar control markets which included Washington D.C. Pheonix, and Dallas. This way it was possible for the company to control any unforeseen events like public emergencies, severe weather conditions, all of which could have an adverse influence on the test results.
The test campaign was conducted from April to September with all the same conditions being applied to all the test markets. It can be analyzed that the campaign generated positive results across all the test and control markets. After evaluating the results, it can be seen that the highest impact was across four dimensions including good value for money, distinct alternative as compared to other financial firms, rising business popularity, and net brand building. This can help understand the overall impact of the marketing campaign which was focused on increasing the brand awareness and creating higher value for the target customers of the business so that they could be stopped from switching to competitors even if they are cheaper and attract new customers to the business to increase customer lifetime value.
Also, it can be seen that the campaign had a strong impact nationwide as it helped in increasing the awareness of the business brand as people agreed that they were hearing a lot about the brand, even in those test markets where the business had no presence at all initially. Hence, it can be concluded that TTC test market was quite effective as it played an important role in increasing the brand awareness for Schwab.
4. Would you support Saeger’s TTC budget request for 2006?
As per the case, Saeger proposed a budget of around $200 million for 2006 out of which $55 million will be allocated to the TTC brand campaign. During 2005, the budget was raised from $160 million to $195 million which would include the TTC campaign tests. Against this budget, it was expected that the revenue would increase by 6% and the net income would rise by 153%. If we assume that the company will continue to grow by the same rate in terms of its revenue and net income which is a conservative estimation as the growth rate is expected to be much higher given the fact that the company will be targeting new markets, is increasing brand awareness, and is focused on building a strong relationship with its clients.
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