MT631
LECTURE #11
OUTLINE

A complete communication program begins with a situation audit. This situational analysis asks "Where are we and how did we get here?" This effort defines the factors necessary for competitive advantage. It is followed by communication, objective setting, and strategy determination. The formal budgets flows out of this process and must be consistent with the established goals and objectives. The "specifics" or tactical considerations of the media mix, themes or whatever, are the means of implementing that budget. The primary point is that the accounting manipulations are not the main focus of the analysis. They are simply means by which the strategic effort is evaluated and controlled. Any set of numbers can be "correct" in that they are reasonable given a stated set of objectives, the true worth of a communication program is in how appropriate the strategic goals are to the situation at hand. The Club Med Espana case offers additional practice in linking pro forma outcomes with strategic planning.

Discussion questions
  1. How would you characterize Club Med's strategy for Spain and its success to date?
  2. Does an advertising (promotional) opportunity exist for Club Med Espana?
  3. What are the appropriate communication objectives for Club Med Espana?
  4. Is the communication budget appropriate for these objectives? If not, how much should they spend?
  5. How would you allocate the budget between its strategic elements?
  6. How would you allocate the advertising portion among the different media?

    The listings above are to provide structural assistance to your study. They are not attended to be inclusive of every item/topic that was presented in the lecture period.

Additional Study Questions and Drill Exercises
A target market penetration of 10 percent of the estimated "premium priced package holidays" was established for Club Med Espana, to be accomplished within a five year period. In the pro forma analysis this goal was used to set not only the number of members but the amount of revenue, and by extension several of the other income statement items. Thus the approach was one of guesstimating the results and then manipulating the means by which on might achieve those outcomes. Describe the obvious flaw in this logic and then outline a conceptually sound solution.

Any numeric solution to this case requires considerable exchange rate conversions to equate effort across international boundaries. Using the conversions given in the case, recalculate the total public relations cost in Spanish pesetas (Pta) under the assumption of six events per year, normal agency costs and the cost per event at 35,000 French francs (FF) each.

In 1991, Club Med Espana's membership represented what proportion of Club Med's worldwide customer base?