Lowe’s Companies, Inc.: Optimizing the Marketing Communications Mix In early 2009 Lowe’s Companies, Inc., a leading home products retailer, launched an ambitious new project to gain customer mind share in the kitchen remodeling arena. The project, called the next-generation installed sales (NGIS) initiative, was a concerted effort by Lowe’s to expand its service offerings to become an end-to-end solution provider for customers’ kitchen remodeling projects. Brad Simpson, a marketing manager at Lowe’s, explained that the NGIS would be a very different approach from Lowe’s traditional marketing and sales initiatives: Through this new approach, we will deliver more than just supplies to the customer. We will deliver kitchen remodeling solutions. Lowe’s will provide free in-home consultations and will work with customers throughout the design, purchase, and installation processes. This is a big shift from our current product-driven approach in the kitchen space. While kitchen remodeling solutions was a promising opportunity for Lowe’s, it also posed difficult marketing challenges for Simpson and his new business development team. In the past, Lowe’s had mostly relied upon traditional marketing media, such as television ads, flyers, and point-of-sale displays, to promote its offerings. With the move toward an end-to-end service- centric offering, however, Simpson believed that digital media should play an important role in educating customers about the Lowe’s solution and convincing them of its value. He also believed that digital media and traditional media worked in complementary ways, and that Lowe’s needed to create an integrated marketing communications plan that would combine traditional as well as emerging marketing communications channels. Lowe’s needed to determine how to stay top-of-mind for prospective customers during the long incubation period that typically preceded a kitchen remodeling project. Simpson knew that Lowe’s would have to engage its customers at various touch points during this period, but he needed more information before he could design an effective plan. What did the customer decision process for a kitchen remodeling project look like? What information and messages were customers looking for at each stage? At what stages in the decision process would digital media be the most effective way to engage with customers? What criteria should be used to select the best digital marketing tactics among the plethora of options? And how should the marketing spending be allocated across the various traditional and digital marketing media channels? ©2011 by the Kellogg School of Management at Northwestern University. This case was prepared by Aarti Kumar ’09, Hilary Meyer ’09, Coby Neuenschwander ’09, Sang’ona Oriedo ’09, Mallika Pradhan ’09, and Garima Sethi ’09 and revised by Pallavi Goodman under the supervision of Professor Mohanbir Sawhney. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685 (or 617-783-7600 outside the United States or Canada) or e-mail email@example.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Kellogg School of Management. KEL563
LOWE’S: OPTIMIZING MARKETING COMMUNICATIONS
History of Lowe’s
Lowe’s was founded in 1946 in Mooresville, North Carolina. The company’s strategy centered on offering customers everyday low prices, which it accomplished by working directly with manufacturers. Lowe’s went public in 1961, and by 1982 the company had surpassed $1 billion in sales and reported serving a new market segment—the do-it-yourself (DIY) homeowner. By 2008 Lowe’s had...
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