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Skullcandy Lowrider Ad Campaign

Gabi Nygaard May 22, 2012

Target Market Analysis

Demand: Headphones in general are a mature product and primary demand is strong. People from all walks of life need headphones for a variety of purposes such as for use with music players, laptops, cell phones and other consumer electronics. There arent quite any alternative product categories offering the same functional utility that headphones do in the market so there is currently no danger of decline. This being the case, producers must focus on cultivating selective demand and differentiating their products to fight for market share. Additionally, the increasing popularity of smartphones, tablets and other electronics helps solidify the position of headphones, a factor that Skullcandy has tuned into. Skullcandys 2011 prospectus argues that the growing demand for portable media and music devices, like smartphones and Apples iPod, is driving a massive demand for accessories such as headphones. The document points to IDC Research, which estimates that, from 2010 through 2014, the number of smartphones available worldwide will grow at an annual rate of 24 percent (Magnan). Primary demand for Skullcandys product category should benefit in tandem. Secondary demand for Skullcandy headphones is also strong. In a February 22 release, Skullcandy reported that in 2011 annual net sales increased 44.8 percent to $232.5 million with domestic net sales increasing 34 percent in the past year. Gross profit for 2011 was reported to be $115.5 million. In the same release, Jeremy Andrus, Skullcandys President and CEO, called 2011 the best year in Skullcandys history with strong net sales growth and sequential margin improvement. Andrus stated, We made key acquisitions during the year and continue to make investments in critical areas of the business to support long-term growth, including product development, international expansion, interactive media and point of sale merchandising. (Skullcandy Reports Record Fourth Quarter and 2011 Financial Results). Skullcandy has

3 experienced rapid growth and success since entering the market in 2003 and retains a strong base of loyal customers, most notably the niche of action sports enthusiasts. Standard & Poors ranks Skullcandy sixth among competitors including such giant corporations as Panasonic and Sony ("Competitors (All)."). Target market: Skullcandys brand reflects and appeals to music, fashion and action sports lifestyles. Skullcandy pioneered its distribution in specialty retailers focused on action sports and the youth lifestyle, thereafter expanding to select mass merchandisers, consumer electronics, sporting goods and mobile phone retailers (Investor FAQs). Skullcandys early success can be largely attributed to this unique distribution method. As Andrus stated in 2010, [Skullcandys] most important success has been bringing headphones into stores that never sold headphones before. Action sports and lifestyle fashion shops had never considered headphones until Skullcandy came along (Stewart and Little). Skullcandy has strong roots in action sports and is a respected and widely used name among skateboarders, snowboarders and surfers. The breadth of specialty stores that carry Skullcandys products as well as its endorsement by and affiliation with professional athletes attest to this. Action sports have provided a solid foundation from which Skullcandy has already begun to branch off. According to one distributors brand description, from its foundation in the action sports scene in 2003, market demand grew, requiring Skullcandy to produce even more styles, making sure that every person out there could find the style that they want in at least one item (About Skullcandy). These aspects prime Skullcandy for expansion in this campaigns proposed direction. To continue Skullcandys expansion and further its efforts to diversify, this advertising campaign focuses on the fashion aspects of the brand image to appeal to a target market with a

4 special interest in this realm. Skullcandy is already in a position to capitalize on its potential appeal to fashion lovers given its wide variety of designs and styles and its edgy vibe. This branding appeals particularly to a younger, hip audience. For the abovementioned reasons, a young, fashion-minded target audience has been selected for the advertising campaign. Skullcandy touts both high quality functionality and a desirable, attractive aesthetic and symbolism/status associated with its products that will appeal to this audience. Demographics: Age: 13-25, teenagers and young adult age groups Gender: male and female Occupation: students, clerical/sales Family life cycle: young, single Income: under $40,000

Behaviors: User status: potential user Loyalty status: none Readiness stage: unaware through desirous Marketing-factor sensitivity: advertising

Psychographics: Lifestyle: strivers, achievers, actualizers Personality: Impulsive, gregarious, unconventional, active, energetic, enthusiastic Value: Self-expression VALS framework: Experiencers: Motivated by self-expressive needs with sufficient resources to purchase Skullcandy headphones. Experiencers are young and savor the

5 offbeat, matching Skullcandys rebellious image. As avid consumers who spend a comparatively high proportion of their income on fashion, entertainment, and socializing with purchases that reflect the emphasis that they place on looking good and having "cool" stuff, they are the perfect targets for Skullcandys products, which are used in entertainment pursuits, appeal to fashion sense and, simply, cool (Experiencers). MindBase framework: Expressive

Benefits sought: prestige, quality, symbolism/image, self-expression No geographic delimiters (nationwide distributors)

Product Situation Analysis

Product Analysis The Company History: Skullcandy was founded in 2003 by Rick Alden, originally selling a device connecting cell phones to portable music players known as the Skullcandy LINK. As an action sports enthusiast and entrepreneur, from the beginning, Alden saw Skullcandy as more of a lifestyle brand than a consumer electronics brand (Skullcandy, Inc.). Skullcandy introduced subsequent innovative audio products including a variety of designer and noise-canceling headphones, thereafter making headphones its focus (Skullcandy, Inc.). Skullcandy achieved large-scale success in branding the previously commoditized headphone, initially targeting an action sports audience and then expanding its mass market reach in 2007 when retail outlets Target, Best Buy and Circuit City began to carry the line (Skullcandy, Inc.). Mission: Although Skullcandys Facebook page lists World Domination as its mission, a more realistic statement can be found on many of its distributors websites, stating that Skullcandys mission is to put out the most stylish, affordable and innovative headphones that

6 can be easily integrated into your life. Our line of headphones is always expanding to meet the demands of our loyal customers. In response to an inquiry, Skullcandy customer service responded, Our Mission Statement is very simple: Being the leader in lifestyle and performance audio. Goals: Skullcandys motto is Every revolution needs a soundtrack. It is Skullcandys overarching goal to provide for that need to todays generation with its products and thereby position itself as leader in its category. Skullcandy strives to be an authentic lifestyle brand that makes lifelong connections and maintains mutually beneficial relationships with consumers. In its investor presentation, Skullcandy identifies the following specific, immediate goals related to significant growth opportunities: further penetrate the domestic retail channel, grow internationally, expand online platform and grow premium product offering (Skullcandy Investor Presentation). Scope of business: Skullcandy products are sold nationwide in the U.S. and in more than 70 other countries (Investor FAQs). In addition to its mainstay of headphones, Skullcandy also sells accessories and apparel including hats, T-shirts, socks, sweatshirts, backpacks, wallets, belts, and iPhone and iPod Touch cases (Skullcandy, Inc.). Skullcandy carries multiple lines of headphones at different price points. Its headphones fall under three main types: over-ear headphones, on-ear headphones and earbuds (in ear headphones). Within these model types are various lines that exhibit different features such as microphones and specifications that gear them for use during sports or for DJing. Generally, earbuds are the cheapest models, starting at $20, followed by on-ear headphones with over-ear headphones being the highest in price and quality, the most expensive model costing $300.

7 Profitability: Skullcandy has experienced consistent financial success since its founding. In a February 22 release, Skullcandy reported that in 2011 annual net sales increased 44.8 percent to $232.5 million with domestic net sales increasing 34 percent in the past year. Gross profit for 2011 was reported to be $115.5 million. In the same release, Jeremy Andrus, Skullcandys President and CEO, called 2011 the best year in Skullcandys history with strong net sales growth and sequential margin improvement with reports that the company expects continued growth in 2012, anticipating net sales of $275 million to $295 million for the full year (Skullcandy Reports Record Fourth Quarter and 2011 Financial Results). Reputation: Skullcandy refers to itself as the worlds most distinct audio brand in its press releases. The companys relationships with athletes, DJs, musicians and artists help to validate form, function and sound (Skullcandy Investor Presentation). Based on customer reviews and word of mouth, Skullcandy generally seems to have a positive reputation with quality, value and image being key assets. The Product: Skullcandy Lowrider Headphones Features: Lowrider headphones feature over-ear, padded 90 swivel articulating ear cups with 40mm diameter speakers. They have a lightweight (15.8 ounces, 7 in.x 6 in.x 3 in. dimensions), foldable and adjustable headband design. The cable is 1.2 meters in length and includes an in-line (on cord) microphone and play/pause/track control buttons functional with music players. The 3.5mm gold plated plug is compatible with standard headphone jacks. Lowrider headphones include a lifetime limited manufacturer warranty. They are available in a variety of colors and designs. Benefits: Lowrider headphones satisfy a host of utilitarian needs and offer tangible benefits, including, as per the standard function of headphones, quality audio performance. They

8 are reasonably priced and perceived at a high level of value by customers. The lightweight and foldable design makes the headphones easy to store and transport. The ear cups and headband are adjustable and comfortable, ensuring a snug fit and satisfactory user experience. In addition to function, Skullcandy has pioneered the provision for ego needs within its category, [revolutionizing] the headphone market by stylizing a previously-commoditized product (Investor FAQs). Lowrider headphones are available in a host of colors, patterns and designs, infusing style into the product and allowing consumers to mark their individuality, stand out and express themselves through their headphones. This provides an emotional and esteem or well-being related benefit, especially to Skullcandys primary youth target audience who particularly value separation from the mainstream and being cool. People routinely express themselves through their fashion and music choices. At the convergence point of the two, Skullcandy [capitalizes] on the increasing personalization of music by creating a new way for consumers to display coolness/fulfill esteem needs and express their individuality (Investor FAQs). This symbolism is a major benefit the product offers to consumers and one absent from competing products. Uses: These headphones are compatible with a wide range of consumer electronics, fitting any standard headphone jack, making them perfect for music players, computers, smartphones, tablets, and so on. They are also suitable for use during activities such as skateboarding and other action sports. Differentiating qualities: Skullcandy was the first to stylize headphones, bringing color, character and performance to an otherwise monochromatic space (Skullcandy Reports Record Fourth Quarter and 2011 Financial Results). The product itself is visibly different from the competition with not only a unique model design but variety of exclusive color and style options

9 unavailable elsewhere. Not only does the style of the product differentiate it from the competition, it also allows consumers to differentiate themselves from the crowd when they use it. The perceptible difference of design is also part of the branding that creates the induced difference of cool symbolism and image attached to the product. These factors make Lowrider headphones vastly different from products with comparable technological features. In addition, Lowrider headphones foldable design and portability is a strong point that similar products typically lack . Price: $39.95 Reputation: Reviews of the product are generally quite favorable as viewable online at the manufacturers and various distributers websites. Customers report satisfaction with the quality, value and comfort of the product. Much of the praise voiced is for the style and cool look of the product as well as for its portability with most negative comments regarding durability. However, the products lifetime warranty effectively compensates for this potential shortcoming. Competitive positioning: Standard & Poors ranks Skullcandy sixth among competitors including such giant corporations as Panasonic and Sony ("Competitors (All)."). However, Skullcandy has the edge of being the only lifestyle brand in the market. Although the competition offers products at similar price points fulfilling the same uses, the benefit of satisfying ego needs and the product attribute of style is unique to Skullcandys product. Sales: Information about sales of the particular product is not available. However, according to an Investor Presentation available on its website, in 2011 market share Skullcandy was number one in earbuds and number two in total units as ranked by unit volume market share (Skullcandy Investor Presentation). In 2011 Skullcandys annual net sales increased 44.8%

10 to $232.5 million for a gross profit of $115.5 million (Skullcandy Reports Record Fourth Quarter and 2011 Financial Results"). As such, sales seem relatively strong. The Market Current customers: Skullcandys primary customer base has been called a low-attentionspan generation interested in listening to music all the time and disposable-income-rich demographic of 12-to-25-year-olds (Burger). Nationwide they buy the product online and in stores to fulfill the previously discussed uses and needs the product satisfies. Skullcandys foundation of loyal customers is an action sports market. The company pioneered its distribution in specialty retailers focused on action sports and the youth lifestyle, thereafter expanding to select consumer electronics, mass, sporting goods and mobile phone retailers (Investor FAQs). Skullcandys early success can be largely attributed to this unique distribution method and devoted customer base. As Andrus stated in 2010, [Skullcandys] most important success has been bringing headphones into stores that never sold headphones before. Action sports and lifestyle fashion shops had never considered headphones until Skullcandy came along (Stewart and Little). A major appeal to this group is the branding; "The striking designs draw their graphic imagery from hip-hop culture, accessorized with everything from rhinestones to faux animal skin. This enables the wearer to show that he is into the cool ski, surf and skate lifestyle" (Burger). As a skateboarder and snowboarder himself, Skullcandy founder Alden was well aware that participants in board sports were also very devoted to their music, and he targeted them as core customers for Skullcandy audio products (Skullcandy, Inc.). Alden said these original customers are the key to Skullcandys long-term growth, stating, "weve got to be edgy and keep our original consumer happy, because without him, we'll lose people like meold guys who want to buy cool young products, too (Skullcandy, Inc.). This action sports audience is the

11 lifeblood of Skullcandy. The credibility and image it has allowed Skullcandy to achieve allow the company to expand to further markets. Target market: To expand and diversify, this advertising campaign aims to appeal to a young, fashion-minded target market. Skullcandy is in a position to capitalize on its potential appeal to fashion lovers given its array of designs and edgy vibe. This branding appeals particularly to a younger, hip audience. The product touts both high quality functionality and a desirable, attractive aesthetic and symbolism/status associated with it that will appeal to this audience. Demographically, this market consists of young, single 13-25 year old males and females. Psychographically defined, they have an interest in fashion and value self-expression. This market is known as Experiencers in the VALS framework and consists of avid consumers who spend a comparatively high proportion of their income on fashion, entertainment, and socializing with purchases that reflect the emphasis that they place on looking good and having cool stuff, making them the perfect targets for the product, which can be used in entertainment pursuits, appeals to fashion sense and, simply, is cool (Experiencers). This target market has sufficient resources to purchase the product which is at one of Skullcandys mid-range price points. The benefits this market seeks include quality, symbolism/image and self-expression. Behaviorally they are potential users who may be in the unaware through desirous stages of readiness. Product SWOT Analysis Strengths: Skullcandy identifies its authentic lifestyle brand and targeted distribution model to constitute significant growth opportunities, but as they are internal factors they can also be viewed as strengths of the company (Skullcandy Investor Presentation). The main strength of the product suited for leverage in advertising is the self-expression benefit it offers. This is a unique asset that the competition does not have; Skullcandy is cool, its logo displayed

12 proudly by customers on car bumper stickers, for example (I challenge you to find a Sony bumper sticker) (Burger). Skullcandys image and positive reputation are essential to the products success. The products price is reasonable and seen as a value to its current customers. It is available from multiple distributors, making it easy to obtain and widening its appeal. Skullcandys relationships with and endorsement by athletes, DJs, musicians and artists can also lend credibility and desirability to the brand and product. Additionally, the companys online and mobile phone platforms deliver the flagship brand experience, allow direct interaction with our consumers, build the brand and establish lifetime relationships with consumers (Skullcandy Investor Presentation). Weakness: Conversely, some of Skullcandys strengths could be viewed as weaknesses to different members of the same audience, including image and price. Although this product is one of Skullcandys low-mid range price points, it could be too expensive for some members of the target audience, especially younger teens who may rely on parents for disposable income. Additionally, the edgy image may not be one that everyone finds appealing and wants to be associated with. If members of a fashion-minded target market believe Skullcandy products are meant solely for action sports enthusiasts, this could hurt sales to this group and thus should be something that advertising addresses, communicating that the brand is diverse and appeals to individuals outside the athlete niche as well. Opportunities: The increasing popularity of smartphones, tablets and other consumer electronics helps to solidify the position of the entire headphone product category and constitutes an opportunity. Skullcandys 2011 prospectus states that the growing demand for portable media and music devices, like smartphones and Apple's iPod, is driving a massive demand for accessories such as headphones. [Research] estimates that, from 2010 through 2014, the number

13 of smartphones available worldwide will grow at an annual rate of 24 percent (Magnan). Primary demand for Skullcandys product category should benefit in tandem. Positioning its product as suitable for smartphone use is an external opportunity to leverage the products success. Threats: One of the only threats to the success of the product is competition. Competition includes large companies with vast resources such as Sony and Panasonic. These and other competitors have copycatted Skullcandy in introducing brightly colored headphones a at comparable prices but have yet been able to achieve the same level of success as Skullcandy. The competition simply does not offer the lifestyle entree that Skullcandy does and is not as attuned to youth tastes, making threat to Skullcandys hold on its young target market minimal.

Advertising Objectives
The campaigns top three advertising objectives are: communicate existence of the product to a total audience of 15 million; develop comprehension of the products brand image in two-thirds of the aware group; and convince two-thirds of the comprehending group that the product offers the benefit of self-expression. Within these objectives, conviction ranks primary, comprehension secondary and awareness of tertiary importance, although the chronological order in which these would logically be achieved is in the opposite (initially listed) order. Developing conviction of the benefit the product offers is the top objective because this benefit is the key strength of the product to be leveraged in advertising and what seems to be the most convincing stimulus to action for the target market. Achieving this objective will most contribute to the products success, and as such is considered primary. Potential customers must be aware of the products availability to consider buying it. As such, communicating its existence is a basic foundational step that must be achieved, one that can easily be paired with a message

14 aimed at achieving other objectives since any advertising about the product should communicate its existence. After awareness and conducive to conviction is the objective of comprehension of the brands image, an objective which can be seen as intermediate and supportive of the primary goal. As such, it is ranked as secondary. If the audience understands the products image, theyll be more receptive to the brand and the idea that the product provides the self-expression benefit.

Creative Brief
Problem/opportunity Skullcandy is often perceived as a brand intended primarily for action sport enthusiasts because of the companys history and roots with this group. A prime audience for the product, one whose interest can be piqued by the individuality and fashion-embracing facet of Skullcandy, is not being targeted. Skullcandy is in an ideal position to capitalize on its potential appeal to fashion-conscious teens and young adults and expand to this new market given its attractive, cool symbolism and vast array of hip product styles. Expanding the narrow image of the brand and addressing this audience will augment success. Communication objective Objectives: To develop comprehension of the brand image and conviction of the products self-expressive use to the target market. By providing the consumer with knowledge about the nature of the brands image, beliefs that will ultimately drive demand for the product can be shaped. The goal is to reach the new target audience with a message about the benefit the product provides, establishing a clearer image of the brand in the process. Target audience The target audience is composed of single 13-25-year-old males and females who have an interest in fashion and value self-expression. Their purchases reflect the emphasis that they

15 place on looking good and having cool stuff (Experiencers). The shared need of the audience that the brand can fulfill is one of self-expression. Typically, separation from the mainstream, expressing individuality and being cool are of particular importance to youth. Personal fashion and music choices are among the most common delineators of individuality and personal taste in modern society. Brand personality Skullcandy meets the audiences shared need both with its branding associated with coolness and through the product itself. Available in a host of colors and designs, from metallic pink to Rastafarian inspired and vibrant red to sleek navy, the product allows consumers to mark their individuality, stand out and express their personal style. This addresses the shared need by giving consumers an outlet for self-expression as well as entre into the cool lifestyle associated with the brand. Skullcandy embodies youth and rebellion. The brand experience revolves around standing out from the crowd and being unique and bold. Skullcandy offers many different styles to match the specific personality and style of the consumer. Skullcandy products provide the base of a cool vibe that the consumer can supplement with their personal fashion choices. The overarching personality of the brand is cool and young whilst offering a variety of options allowing it to suit the individual and be integrated into any style. Skullcandy embraces the vibrancy and vitality of the youth lifestyle. It pioneered its distribution with an action sports audience but is not exclusively suited to this niche. Although the edgy vibe that action sports embody is shared by Skullcandy, not all Skullcandy consumers need necessarily belong to this group. Skullcandy, in its loud, bright and fashion-forward style and branding, has something for everyone; as its motto suggests, every revolution needs a soundtrack, i.e. Skullcandys product.

16 The Skullcandy brand experience hinges on youth and coolness, but beyond that, is what the consumers make of it, allowing them to express their individuality and personal style. The mood/tone should be fun, cool and young. It must be palatable to both current customers and the target. Emphasis on sports can be sacrificed, and references to it in fact should not appear, in order to appeal to a wider audience. However, the edgy vibe associated with this lifestyle that is at the core of the brand experience must persist and emanate through the other features of the ad such as the logo so as to maintain consistency and stay true to the brands roots, avoiding alienation of current customers. Benefits The benefit to be communicated is the products satisfaction of self-expression needs. Skullcandy should be positioned as a conduit for expressing individuality and coolness. As one article describes, its "striking designs draw their graphic imagery from hip-hop culture, accessorized with everything from rhinestones to faux animal skin. This enables the wearer to show that he is into the cool ski, surf and skate lifestyle" (Burger). However, as of late, the cool ski, surf and skate lifestyle that Skullcandy was predicated on has expanded to a more broad, simply cool and youthful one. The personality of Skullcandy should also be made apparent and comprehensible to the audience. Skullcandy symbolizes youth and rebellion and embodies the motto "Every revolution needs a soundtrack" (Investor FAQs). As such, it encourages boldness and creativity and allows consumers to express themselves and what makes them cool and distinct. Support This message is appropriate to Skullcandy, a brand that was the first to stylize and individualize in the previously undifferentiated, commoditized headphone product category,

17 bringing color, character and performance to an otherwise monochromatic space (Skullcandy Reports Record Fourth Quarter and 2011 Financial Results). Just as Skullcandy brought color to the category, the brand can also help the individual bring color to his or her life and express a unique flair. Skullcandy stands out in its category. Whereas the competition produces products focused on merely satisfying the utilitarian function of the product, Skullcandy is first and foremost more of a lifestyle brand than a consumer electronics brand, delivering quality performance on-level with competitors whilst keeping lifestyle in the front seat (Skullcandy, Inc.). Skullcandy is unique as the first to stylize the product, and is famous for its cool branding; Skullcandy is as cool and unique as it promises to make its consumer, qualifying it for the task. Evidence can be found in consumer reviews of the product on the companys website in which Lowriders are described as cool-looking, pretty sweet, stylish, and awesome. Additionally, one reviewer notes that they are very comfortable on your ears and even when sitting around your neck for the style, suggesting a use beyond the utilitarian for the product; even when not in use, they can be worn for the sole purpose of augmenting ones style. Other reviews add that the Lowriders make you look cool at school and outside, with one stating that all my friends ask where I got them, hinting at the social status the product can confer. Suggestions/other considerations The advertising should utilize or, at minimum, visibly include the Skullcandy logo and motto Every revolution needs a soundtrack.

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Creative Concept
:30 TV advertisement: Concept for a live action commercial using a voice-over, supers, a lifestyle technique and some components of a slice of life commercial. Open on video of a bland outfit of a white shirt and white pants as a voice-over says you wouldnt wear this. Cut to an iPod as voice-over says or listen to this and boring elevator music plays. Video cuts to tangled, plain white earbuds as the voice-over says so why should you use these? The music abruptly stops with a record scratch sound effect as, paralleling these boring images, stylish versions are shown; first the video cuts to a close-up of a hand buttoning a stylish shirt, followed by video of the same hand pressing play on an iPod and cool/upbeat techno or similar popular, young music starts. Then the person wearing the shirt, a stylish young man, is shown from behind putting on Lowriders as the voice-over says the product name, Skullcandy Lowriders. Cut to video of the stylish young man walking down a crowded city street toward the camera as the people on the street visibly notice him and the voice-over asks what does your music say about you? A stylish girl walking the opposite direction passes the man, then turns and looks back at him over her shoulder and both smile. The video cuts to a close-up of the product which flashes through various colors/designs along with a super of the Skullcandy logo and slogan every revolution needs a soundtrack (See attached storyboard). The big idea is to utilize parallel structure and juxtapose the boring and undifferentiated items (outfit, music, headphones) with cool and unique examples to demonstrate the products self-expression benefit. This strategy also invokes how music is considered connected to selfexpression and suggests how ones individuality that stems from taste in music and fashion can be outwardly portrayed with the product. Showing another person noticing the user of the

19 product will also communicate how it confers a certain status/serves ego needs and makes the user stand out.

Media Plan
Media Objectives Audience objectives: To reach a target audience composed of single 13-25-year-old males and females who have an interest in fashion and value self-expression. They place emphasis on looking good and having cool stuff (Experiencers). Message-distribution objectives: Desired message weight (total audience size) for the campaign: 15 million (gross impressions, ignoring overlap and duplication) Geographic reach: Nationwide Timing: 2-month campaign around the peak selling Christmas season because of the products purchase cycle (not regularly purchased) Desired average frequency of exposure to the ad: 5

Media Strategy Classes of media to use in the campaign Magazine: Teen fashion magazines. The hip and young tone desired for the ad matches that of the medium. The ad will benefit from the lively, fashionable environment this medium provides and will also be imbued with its authority on style and whats cool. The audience selectivity magazines offer makes it possible to speak directly to the target market with virtually no waste. The national reach mirrors the availability of the product. Magazines offer reasonable CPM and proven selling power, and the readers of teen fashion magazines fit the female portion of the target market perfectly, making it a cost efficient medium for the ad.

20 Cable/satellite TV: Placing the ad on a select cable channel will utilize the mediums selectivity, reaching a narrower niche and minimizing waste as opposed to broadcast TV which would reach many outside of the target market and is also generally more expensive. A channel with an environment and lifestyle matching the brand can be selected. The channel can also lend prestige and authority associated with it to the ad. Radio: Radio can be used to reinforce the other media classes and create synergy. Its possibilities for the creation of repetition and frequency can enhance success of the ads run in the more costly print and TV media channels. Radio also reaches those unavailable through other media, i.e. the males who dont read fashion magazines. It is cost efficient and appropriate to the product which is music related. Media vehicles to use in the campaign Magazine: Seventeen Magazine: Seventeen is the largest selling teen beauty and fashion magazine with a primary audience of females 12-19. The median age of readers is 16.5. The readers of Seventeen fall within the target demographic and psychographic as they are interested in fashion, cool products and pop culture. Seventeens young, hip and vibrant tone suits the proposed advertising. Cable: MTV: MTV owns the youth demographic on cable TV. The target of teens and young adults turn to MTV as an authority on music, fashion, lifestyle and pop culture. The median viewer age is 21, significantly younger than that of other cable channels, and young adults 12-34 name MTV as the most recognized network (MTV). MTVs cool lifestyle also provides an appropriate environment for the ad.

21 Radio: Contemporary Hit/Top 40 format that is known to appeal to teens (could utilize a national radio network to simplify and potentially save money as opposed to the time consuming process of placing ads locally throughout the nation) Size/length of ads TV: 30 seconds, typical commercial length and sufficient time to communicate the message Radio: 30 seconds Magazine: full page (costs $48,650 more than a half-page option, but is worth the price to avoid clutter of being placed near other ads and to enhance impact. Bigger ads also gain more readership and recall) Positioning of ads No special positioning, not directly related to a specific show on the selected cable channel or in a certain time on the radio to vary when ads are broadcast across various dayparts to expand reach and to save costs TV: Spot Radio: Run-of-station (ROS) Magazine: Standard full page, no special positioning (ROB) Schedule of insertions: Magazine: December cover date issue (leading up to Christmas, a prime purchase season; the young target will be on the lookout for cool products and might ask for it as a gift or receive money at Christmas enabling them to purchase) TV: pulsing, 30 spots over a period of 2 months around Christmas so as to never be completely absent from airwaves but also not so excessive as to wear the audience out Radio: same as TV but higher frequency, e.g. once daily

22 Budget:
Media Vehicle Seventeen magazine MTV Ad size/length Full page, 4-color :30 spot Cost per Frequency Total insertion cost for schedule $138,430 1 $138,430 Audience size 2,000,000 x1= 2,000,000 CPM

$69.21

$11,884*

30

$356,520

488,000** $24.35 x 30 = CPM 14,640,000 16,640,000

Totals

$410,340

*Cost estimate based on the average rate for 30 seconds of airtime on a top-15 cable network last quarter (from http://www.adweek.com/news/advertising-branding/broadcast-spotpricing-continues-creep-138106) **Nielsen statistic from the Cabletelevision Advertising Bureau (from http://www.thecab.tv/php/networkprofiles/12profileData/2012pdf/12MTV.pdf) References "About Skullcandy." Zappos.com. <http://www.zappos.com/skullcandy>. Burger, David. "Skullcandy Feeds Your Head." The Salt Lake Tribune 16 Apr. 2009. The Salt Lake Tribune. <http://www.sltrib.com/ci_12149760>. "Competitors (All)." Standard & Poor's. <http://www.netadvantage.standardandpoors.com.ezproxy.linfield.edu:2048/NASApp/Ne tAdvantage/cp/companyAllCompetitors.do>. "Experiencers." Strategic Business Insights. <http://strategicbusinessinsights.com/vals/ustypes/experiencers.shtml>. "Investor FAQs." Skullcandy, Inc. <http://investors.skullcandy.com/faq.cfm>. Magnan, Michelle. "Sounds Like A Hot Investment." Maclean's 124.6 (2011): 40. Business Source Premier. <https://ezproxy.linfield.edu/login?url=http://search.ebscohost.com/login.aspx?direct=tru

23 e&db=buh&AN=58152428&site=ehost-live> "MTV." Cabletelevision Advertising Bureau. <http://www.thecab.tv/php/networkprofiles/12profileData/2012pdf/12MTV.pdf>. "MTV." Parents Television Council. <http://www.parentstv.org/PTC/campaigns/Skins/MTV%20Music%20Television%20Pro file.htm>. Seventeen Media Kit. Hearst Magazines. <http://www.seventeenmediakit.com/>. "Skullcandy, Inc." International Directory of Company Histories, Vol. 123. St. James Press, 2011. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.: Gale Group. 2012. "Skullcandy Investor Presentation." Skullcandy, Inc. <http://files.shareholder.com/downloads/ABEA5FMQI8/1741148066x0x548289/DE072 634-D64B-4F6A-8E83-A5684A82FCFF/Skullcandy_Investor_Presentation_3-8-12.pdf>. "Skullcandy Reports Record Fourth Quarter and 2011 Financial Results." Skullcandy, Inc., 22 Feb. 2012. <http://investors.skullcandy.com/releasedetail.cfm?releaseid=650672>. Stewart, Heather, and Candace M. Little. "Fast 50." Utah Business Sept. 2010: 44-48. Utah Business. Utah Business Publishers LLC, Sept. 2010.