The paper answers case questions that could help Julie Bornstein, Sephora Direct’s vice president, double the budget required for digital marketing and other social media initiatives.
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Budget allocation and Cutting Costs
Assuming that Julie Bornstein obtains the additional funding, the allocation of funds should be based on priorities. For example, the most profitable digital categories like online media platform should have a larger budget allocation compared to retail and Beauty Insider. This is because most of the clients especially the youth have embraced the internet as their major source of information (Ofek & Wagonfeld, 2012). Allocation should also be based on the revenue generated and the new customers that the media platform brings to the company. Reviews and ratings could also be used to determine the allocation of funds especially on social media. The platform with the most reviews and ratings should be allocated the most funds.
According to the company’s 2010 figures as provided in Exhibit 5, retail marketing which entails store animations, catalogs, and prints is allocated 45% of Sephora’s advertising budget, while 35% goes to online media (which entails social media, affiliates, and search), and Beauty Insider (which entails events, gifts, and emails) (Ofek & Wagonfeld, 2012). Based on these figures, traditional marketing strategy seems to be Sephora’s main strategy.
It is important that the company change this strategy as there has been a paradigm shift from traditional marketing to modern social media marketing. Therefore, Sephora’s could cut budget on catalogs and prints because the demand for mass print is rapidly decreasing. This makes it less cost effective and uneconomical compared to digital media and social media.
Prints and catalogs funding should be cut to the bare minimum as most of information provided via these two is being converted into digital form. It is imperative to note that both new media and traditional media play vital roles in Sephora Direct (Ofek & Wagonfeld, 2012). Therefore, it is important that Sephora Direct reduce the number of catalogs and prints. Besides, only selected customers should receive them.
Metrics to Measure Success
There are different metrics that could be used to measure Sephora Direct’s success forward movement such as clicks and click through rate (CTR) (Loomer, 2013). For example, CTR and Clicks would enable Bornstein to evaluate the progress made through digital efforts such as Facebook. By using compiled weekly metrics sheet, Bornstein would be in a position to note the growth of Sephora Direct “fans” and clicks on Facebook (Ofek & Wagonfeld, 2012).
Bornstein would also be in a position to note the number of recent downloads by customers on You Tube to. This would help her determine the frequency at which customers are accessing online media. In regards to Twitter page, Bornstein would be able to determine the number of Tweets, comments, or followers in the company’s twitter page, with the aim of determining Sephora consumer base.
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Sephora’s social and Digital Marketing Program
Sephora’s strategy is to capitalize on digital and social media marketing programs with the aim of increasing its presence, market share, and profitability. To help the CEO win the digital space, Bornstein should come up with a marketing mix that incorporates social and digital media platform. Dishman (2012) notes that Bornstein has promised a digital and smart social makeover at Sephora by using e-commerce strategies to boost consumer loyalty.
Dishman, L. (2012). Sephora’s Smart Social and Digital Makeover. Forbes Magazine. Web.
Loomer, J. (2013). How to measure Facebook advertising success: monitor these 5 metrics. Web.
Ofek, E., & Wagonfeld, A B. (2012). Sephora Direct: Investing in Social Media, Video, and Mobile (TN). Harvard Business School Case, 1-23.