Final Project: CarMax IMC Plan

This project was designed to give you the opportunity to demonstrate your knowledge of integrated marketing communications in both an innovative and realistic way.You are encouraged to be creative in your solutions, use a variety of promotional tools andtactics, and provide specific, detailed information.

Client:  CarMax.  CarMax is America’s largest chain of used cars with 241 locations in 41 states.  CarMax revenue (sales) for the twelve months ending November 30, 2022, was $31.649B, a 7.73% increase year-over-year.in the St. Louis region. To put that in context, CarMax, founded in 1993 has revenue of about 1/4 of the Ford Motor Company worldwide operations.   Please review the

CarMax Case Study short.docx

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along with completing your own research.

Important considerations–please read!

-This paper will focus on the brand promise area that you identified in the assignment for week 3.  CarMax implements a focused communication that addresses the most common hurdles or obstacles that consumers face in committing to purchase a used car.  This paper, similar to CarMax own communication strategy, should not try and address their entire campaign.  It should focus on the brand promise area that you chose in Assignment 3.

Week 3: Exploring Options for Your Final Project

Why you should buy a used car from CarMaxLinks to an external site.

-This is a strategic paper, and your focus should be on the strategy.  You are not expected to create sample executions for each IMC area that you define.  You are expected to define which IMC areas you are going to implement, outline the communication or concept, how it will impact the target and what you would measure to be able to evaluate success.

-Please use feedback from your past assignments to make changes for your final project.  You are responsible for creating and submitting your own 7-part plan.

Your plan should follow this outline.

You are writing from the perspective of a marketer or a member of an ad agency, not the client. Your plan should cover each part below in detail. Use terminology from class when appropriate. Your paper should include the proper headings and subheadings.  Your outline should be clear and easy to follow. Feel free to use a combination of fully developed paragraphs and bullet points as needed. Be specific. Develop your ideas.

Your project should originate in this class.  If you don’t follow the 7-part outline, your project will receive significant deductions or a failing grade. Spelling, punctuation, grammar, and organization will also be factors in determining your grade.

PART I – MARKET SITUATION:

Client Overview

Begin your paper by describing the product or service you are offering.  Give any relevant background information. This overview should cover the following points that are relevant to your client.  Use headings for each of the points below:

Client’s products and services:Describe what your client is selling and any relevant background information.

Describe the retail environment(See the CarMax website or stop by a location.)

Review the list the locations of CarMax locations.

Visit us at 240 CarMax store locations nationwideLinks to an external site.

Pricing:  Identify current pricing strategy vs. the larger industry

Competitive Analysis:  List the names of CarMax competitors nationally as well as one metro market of your choice.  Recognize that most used car shopping is local.  Don’t discount the local competitors.  Identify whom you think are the top three local competitors and why.   List both direct and indirect competitors.  (Use related headings.)  Directcompetitors are in the same business.  Indirect competitors are businesses that fill the same need, but in a different way.  At the end of your list of competitors, provide a brief summary analysis of your client’s competitive situation.

Assessment of Current Promotional Tactics, Messaging and Creative Approach.

Provide a summary of current advertising and marketing communications activities.  Show examples.  Give your analysis of your client’s activities.

Trends:  Talk about general trends relevant to your client’s business.  This might be related to your client’s target audience, your product category, etc. This will require your own online research, (be sure to capture the url’s that you reference.)  A good example are articles like this one:  

Used Car Market: Who Are the Biggest Winners and Losers as Prices Drop? (yahoo.com)Links to an external site.

 Be sure to note the date that your research was published.  I would be careful with any article that is more than 3 or 4 years old.

SWOT Analysis:Use

this resourceLinks to an external site.

to help you create your SWOT analysis of your client. You will find an organizational SWOT analysis in the case study.  In this section, identify SWOT elements that relate to the brand promise area that you are working on.

Define the brand as it is now: Explain what you think CarMax stands for in the minds of consumers.  (Consider your own perception as well as what you learned online, from others, or at the CarMax facility.) This should be a focused statement–not a long list of things. Try to capture the essence of the CarMax brand. Your statement should be distinctive and set CarMax apart from other brands.  This could come from what CarMax is currently using or it could be a new brand positioning statement.

PART II – TARGET AUDIENCE:

Create a Target Profile of your primary target audience. Use the terms: demographics, geographics, psychographics,and purchase behavior.  Include headings, bullet points, and clearly describe your target.  (Use the same format as the Week 2 Target Profile assignment.)

PART III – OBJECTIVES:

Based on your understanding of your client’s needs, as well as the brand promise area identified in week 3 assignment, outline what you expect your marketing communications plan to accomplishin one year?  This is not about sales figures; it should focus on the goals of your marketing communications tools and tactics.

Objectives to consider are:

Create awareness

Build brand image

Create preference of your product or service over the competition

Increase product knowledge

Stimulate trial purchase – or first visit

Change attitudes

Establish a market position

This list is just a sample of objectives your plan can accomplish.  Also check the CarMax Case Study for other objectives you might want to include.

You do not need tell how you will accomplish these objectives. (This is the purpose of Part IV.)   Simply create a bullet point list of objectives for your one-year plan. This is the shortest part of your project, but essential. The activities in the next section should accomplish the objectives you identified in this section.

PART IV – PROMOTIONAL ACTIVITIES AND MEDIA CHOICES:

This is the longest and most important part of your final project. Your activities should be creative, specific and effective. Read all the details in this section very carefully.

The purpose of Part IV is to identify a combination of promotional tools and tactics that will accomplish your objectives.  Consider using most of these tools: advertising, sales promotion, PR, event sponsorship, direct mail, web marketing, POP and personal selling.

Be sure to include your rational.Why are you choosing these tools and tactics?  Develop real ideas to “wow” your client.  Be specific.  (Don’t just say “contest.”  Give details.  Talk about the prize you will give away, etc.) Use headings for each promotional tool.  This should be the longest and most creative part of your project.

Regarding Media Choices:  What specific communications vehicles will you use to deliver your message?  For example, name specific newspapers, magazines, and radio stations. Give your rationale regarding why you made the choices you did.

Media Notes:  For radio—if you can’t identify a specific station, describe the format.  Examples include news and sports, talk radio, alternative rock, easy listening, Christian radio, Contemporary Country Western, etc.  For TV:  Identify specific television programs.  For Social Media:  Define the platforms and types of posts that you plan to implement.  For Website, search marketing or influencer marketing: Define the communication and tactic that you plan to execute.  For onsite and event executions: Define what you want do, when you plan to do it and results that would define success.

PART V – MESSAGES:

Key Message:What is the key message you want your audience to take away from your communications?  (Make it brief: one or two sentences.)  Include the rationale for your key message.  Why is this the main point you want your target audience to know?

Creative Technique:How will your key message be delivered in terms of a creative approach?  What is the style of your communications?   Identify one or more creative techniques and tell how and why you will use this technique for your client.  Include the rationale for your ideas.

Note:In this section, you need to talk about what you want to say and how you want to say it. Your key message should be focused and relate to your target audience.  Don’t try to be everything to everyone.  When you talk about creative techniques, use the terminology from course material.

PART VI – SCHEDULE:

What is the schedule for your plan?  What tools/tactics/activities will be used during each season? Use terminology such as continuous, pulsing, and flighting. Remember, your plan is for one year.

Start this section with a paragraph which gives an overview of your schedule.  What month will you start and why?  When will you be spending the largest part of your budget?  You can create a calendar for when activities take place.  (You will see a sample in class.)

PART VII – EVALUATION:

How will you evaluate the success of your program?  How will you obtain feedback?  Consider all the tactics you have used that are measurable.  (For example, you plan on implementing a social media campaign then define the engagement score that you feel would define success for this tactic.   What else can be tracked?  Note:  Look back at your objectives.  What will need to take place from in order for you to accomplish your objectives?

Javante Jackson
Professor Smith
Advt. 5100
January 29, 2023
1, Brand Promise Area of Focus (Why to buy from CarMax
consumer promise area): Stress Free Car Buying
2.
– Name of Target Audience A: Families
– Demographics
– Middle Class
– Married
– 30-55
– Kids
– Suburban
– Professionals/Working
– Psychographic
– Families that want to shop smart
– Trust Customer support
This would be a lucrative target audience because they are in
need of a reliable place to get their car from. They don’t have time
to be getting the run around or having to stress over getting a car,
especially having kids.
– Name of Target Audience B: First Time Car Buyers
– Demographics
– College Graduates
– Single
– 23-28
– No Kids
– Early professionals
– Psychographic
– Looking for trustable brands
– Pays attention
First time buyers would be lucrative because they are most likely
to go with a company that’s can give them a great first
impression. One they feel like they can trust and has a pretty
good reputation.
3. Position 1: Identify one position strategy: Position by the
competition
A. This is relevant because there are a lot of competitors for
CarMax around so being able to market about how they beat
out their competition is a win for them. Them letting people
know that they can deliver their car to them or beat out the
down payment required is a key marketing tactic.
B. First time Buyer; this would be a benefit position for them
because of course they want to shop with the best option the
first time around.
C. I would point out in my ad how other car brands don’t care
about their customers like CarMax. I would use real life people
that have used CarMax before and let them speak for the
brand as far as their experlnecie verses competitors.
D. CarMax could claim that position because selling cars is all
about who is going to provide the best service and best deal.
It’s all about beating the competition when you are selling a
car to someone.
Position 2: Identify one position strategy: Position the product by
an emotional benefit
A. This is relevant because buying a car can be a headache or it
can put you in a very great emotional place. Depending on the
experience.
B. Families; for sure would benefits from this position be cause if
they leave happy, unstressed, complete and feeling like their
emotions were fulfilled from choosing CarMax its a win for the
Brand and the Consumer.
C. I would make a print Ad showing a family very stressed out
and sad before shopping with CarMax vs. After emotions of
being happy elated because they went with CarMax.
D. CarMax could claim this position because buying cars could
be stressful and it could leave someone emotionless of just in
a frantic when dealing with certain brands or company. So
showing that they care about people emotions and feeling
would really stand out for them.
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Javante Jackson
Professor Smith
Advt. 5100
February 12, 2023
Client’s products and services:
Our company, CarMax, Inc., is a retail auto dealer whose main products are new and
used cars and other car-related services. The firm retails different types of vehicles, including
trucks, sedans, convertibles, sports cars, coupes, electric vehicles, vans, and crossovers are
offered. Multiple brands of different types of cars are also available (Forbes, 2023). They include
Ford, Audi, Hyundai, Toyota, Mazda, Mitsubishi, Lexus, and Nissan. CarMax firm also offers
multiple services, including vehicle financing to buyers purchasing retail vehicles, diagnostic and
repair services, tyre services, maintenance, car wash, oil change, and fleet maintenance and
services.
Any relevant background information.
Our client’s headquarters are in Richmond, VA. We have more than 30000 employees in
our different stations that provide various services in 241 locations in 41 states.
Describe the retail environment.
CarMax has a complex retail environment in its 240 locations, characterized by physical
stores divided into departments. Cars, workers, and customers are shopping for various products
and services. For example, the Boynton Beach store in Florida has a service and repair
department with workers offering car repair services. The store also offers walk-in and
appointment, 24-hour test drives, and delivery within 60 miles. Car lots and showrooms are
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parked with different car brands, including Subaru, Jeep, Chevrolet, Ford, Mercedes Benz,
Honda, and Cadillac. The cars come in different colors, such as white, black, and maroon.
Different types of customers visit the store to shop or for different services. They include single
and married people who visit the store as families of husband, wife, and children. The store
opens and closes on weekdays, Monday to Friday, from 10 AM to 9 PM, and from 9 AM TO 9
PM on Saturday. The opening hours for Sunday are from 12 PM to 7 PM. The store offers
service and repair services from Monday to Friday, starting from 7:30 AM to 6 PM.
Review the list the locations of CarMax locations.
One can visit CarMax in its 240 store locations in the United States. The stores are
located in various states, with different numbers of stores. For example, there are 31 stores in
California, 5 in Arizona, 24 in Florida, 12 in Georgia, 11 in Illinois, 4 in Indiana, 2 in Kansas,
and 8 in Maryland (CarMax, n.d.). The firm has 13 stores in North Carolina, 4 in New York, 2 in
New Mexico, 4 in Nevada, 6 in Ohio, 3 in Oregon, and 2 in Minnesota.
•
Pricing: Identify the current pricing strategy vs. the larger industry
CarMax uses a ‘‘no-haggle’ pricing strategy, which means that prices are non-negotiable.
The strategy differs from the pricing in the larger industry, where prices are negotiable (CarMax,
n.d.). However, it delivers cars to various locations at no cost. It also charges a non-refundable
shipping fee for cars transported between CarMax stores.
•
Competitive Analysis: List the names of CarMax competitors nationally and one
metro market of your choice.
Our client faces competition from direct and indirect competitors. Direct competitors are
companies offering similar products and services to CarMax. Its top three local and direct
competitors nationally include Penske Automotive Group, AutoNation, and Sonic Automotive.
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The competitors are identified depending on the number of employees and revenue compared to
CarMax. The Penske Automotive Group, whose headquarters are in Michigan, provides
automotive dealership services, such as retail of new and used cars, vehicle shipping services,
and vehicle parts (Penske Automotive, n.d.). The company is a bigger competitor, considering it
had 26,980 employees and made more revenue than CarMax in the last four years. For example,
its revenue for 2019 was $23.179 billion, while CarMax made $18.173 billion.
Autonation is a competitor of CarMax, headquartered in Fort Lauderdale, Florida. It sells
used vehicles and offers automotive dealership services in more than 360 locations in the US.
The firm had 25000 employees in 2019. It made more revenue in the last few years, such as in
2019, when it made $21.33 billion. Sonic Automotive is the third largest competitor of CarMax
because of its number of employees, revenue, and several stores. The firm operates more than
100 stores in the US, has 9300 employees, and has revenue worth $10.45 billion in 2019 (Sonic
Automotive Revenue, n.d.). The firm also faces indirect competition from indirect competitors.
They include rental car companies that provide car hire services to their customers. Examples
include City Rent-A car in Regional Rental Car in Texas. The companies for transportation and
other related services, such as repair services. CarMax’s competitive situation is good based on
the analysis of direct competitor competitors. The firm stands a better chance to be a leader in the
automobile market in the next few years, depending on how it utilizes its competitive
advantages.
Metro market
One metro market likely to compete with CarMax is Carvana. It is a fast-growing online
automobile dealer in the US. It had a revenue of 12.8 billion in 2021 and 21000 employees as of
November 2022.
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•
Assessment of Current Promotional Tactics, Messaging, and Creative
Approach.
•
Trends:
CarMax utilizes advertising and marketing communication services to promote its sales.
It uses its website to list various car offers and social media platforms like YouTube and
Instagram to market its products.
SWOT Analysis:
A SWOT analysis for CarMax shows its various strengths, weaknesses, opportunities,
and threats. The firm’s strengths include the location of stores, brand image, and hassle-free
buying and selling experience. It has many of its stores in cities with high-income earners and
high demand for cars. It has a strong brand image characterized by a strong reputation for
customer satisfaction and quality products and services. It offers a hassle free-buying and selling
experience by eliminating transfer fees within a regional market (CarMax, n.d.). Elements of the
weakness of CarMax that may impact customers’ purchase decisions include a lack of important
information about its products. There needs to be more responsiveness to negative customers
review on its website and information about HID xenon headlights. Opportunities include
increased age of light vehicles that would need service and repairs. Potential threats to CarMax
include increased rental car companies that provide cars for hire at cheaper prices.
Define the brand as it is now:
CarMax is America’s largest and fast-growing car retailer that offers all types of cars
from multiple brands. It uses a customer-oriented sales process with no haggle-pricing,
transforming the car buying and selling experience.
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References
CarMax. (n.d.). About CarMax: Quality Cars and No Haggle Prices.
CarMax.com. https://www.carmax.com/about-carmax
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Forbes. (2023). https://www.forbes.com/companies/carmax/?sh=4048d9165801
Forbes. (2023.). Carvana: Company Overview and News.
Forbes.com. https://www.forbes.com/companies/carvana/?sh=1f855753959e
Penske Automotive (n.d.).About Penske Automotive.
https://www.penskeautomotive.com/home/default.aspx
Ragimov, R. (2019). Analysis of Social Media Management Software and Identification of
Potential Functions for a New SMMS Tool.
Sonic Automotive Revenue. (n.d.). Sonic automotive revenue 2010-2022 | SAH. Macrotrends |
The Long Term Perspective on
Markets. https://www.macrotrends.net/stocks/charts/SAH/sonic-automotive/revenue