School of Journalism

UNIVERSITY OF MISSOURI-COLUMBIA           



                           UNICOM BANK *



     Create Value for a Cost-Per-Point-Oriented Account





     Unicom Bank is the oldest bank in the area, and one of the

few independent banks left in Megopolis, one of the top five

markets in the United States. Unicom invests a higher percentage

of its revenues in advertising than its competitors do. The bank

feels this is the only way it can stay competitive and independent 

in a market that has seen a plethora of bank takeovers by

large, national bank holding companies that aggressively market

their banks.

     Unicom Bank prides itself on being a local, independent bank

and a responsible member of the community. In fact, in its

advertising, Unicom stresses community involvement, and "we're

your neighbor, not just your bank" is their tag line. The bank's

media mix includes newspaper (about 25% of its media budget),

television (about 40% of its media budget), outdoor (about 15% of

its media budget), and radio (about 10% of its media budget, or

$500,000), and a mix of magazines, promotional events, and

partnerships with local schools (about 10% of its media budget).

This latter 10% of the budget and outdoor Unicom places locally,

but the rest of the advertising budget is placed by a New York

buying service.

     Unicom's creative is handled by a small New York boutique

agency. The bank's television commercials are warm, fuzzy, and

have a deep emotional appeal, and they have won several national

and regional creative awards over the years. The board of

directors and top executives of the bank are in love with their

television commercials because all of their friends at their

country clubs continually compliment them on the soft-sell,

charming approach. 

     The radio creative consists of slightly modifying the

television sound track. The notion is to make an impact with

television and then hope that people play the TV commercial back

in their heads when they hear the radio. 

     Unicom's newspaper advertising is dull, common, and

informational: interest rates, checking account information, etc.

It makes little attempt to differentiate Unicom.

     Unicom's buying service is a typical buying service. It

assumes television and radio station time is a commodity and buys

accordingly. Cost-per-point (CPP) is all it will hear about. The

buying service has grown substantially over the last several

years by bragging that it can buy cheaper (lower CPPs) than any

other agency and buying service, and seemingly has been able to

deliver on the promise--at least it has that perception, which it

will fight to the death to maintain. 

     The buyer for Unicom, Sally, is an especially mean-spirited,

nasty, highly competitive negotiator, even for this buying

service. Even though radio is only 10% of Unicom's budget, it is

still a substantial budget for Megopolis. Sally negotiates once a

year for the Unicom business and insists on, and usually gets,

big discounts, often because stations want the prestigious Unicom

business and don't want to be locked out for a year.

     The Unicom marketing and advertising people are very

satisfied with their advertising arrangement--they love their

creative and believe their buying service gets them the best

deals possible. In fact, they firmly believe that the combination

of these two elements gives them a major competitive advantage.

     However, Unicom's growth has flattened out in the last two

years, and in the get-well year of 2002, even though Unicom

showed growth, it lost market share to three hard-charging

national competitors. Unicom's new CEO is known to be worried

about the slow growth, although nothing has been hinted about

changing its advertising approach.

     WPCB-AM is an all-news station, which is ranked eighth in

12+ 6:00 a.m.-12:00 midnight, Monday-Sunday, average-quarter-hour

ratings, sixth 25-54, third in 12+ cume, and second 25-54 in AM

Drive. WPCB-AM's demos are typical of an all-news station: older skew,

suburban, higher income, executives, high percentage of credit

card users and luxury car buyers, etc.

     Sally consistently shuts out WPCB-AM from her buys for

several reasons: 1) WPCB-AM's CPPs in the demos are consistently

15-50% higher than competing stations; 2) Sally insists on AM

Drive only, which, according to the way WPCB-AM packages, raises

the CPP even higher; 3) Sally is notorious for being on the take,

and other stations will meet her demands for tickets, TV sets,

VCRs, and computer hardware, whereas WPCB-AM will not. WPCB-AM

and its national sales representative firm have resigned themselves

to not getting any Unicom Bank business because the station will not

meet her demands.

     However, there is a sudden ray of hope in the Unicom Bank

cloudy, overcast outlook. WPCB-AM's attractive, single V.P.,

General Manager is having a romantic relationship with the new,

attractive, single CEO of Unicom Bank. During pillow talk, the

general manager has learned that the CEO is worried about the

soft-sell advertising approach, the slowed growth, and the

aggressive, community-oriented approach of a few competitors (the

previous year, one competitor made a highly visible commitment

with the leading television station in the market to sponsor "For

Kids Sake," and received excellent press). The general manager

has gotten a commitment from the CEO of Unicom to listen to a 

presentation from the station--a one-hour-long meeting next week.

     The general manager of the station believes that sponsorship of

one of several community affairs projects or the station's monthly 

Business Breakfasts will appeal to the CEO.  None of these are CPP

efficient.

     Sally has heard through the grapevine about the meeting and

is furious. She has told WPCB's national rep that if the station makes the

presentation and sells the bank anything she does not approve of,

she will never spend another dollar on any of the rep's list of

stations for all of her clients (Sally's buying service has a

large number of radio clients). The national rep has conferred with the

station and told WPCB-AM that it doesn't know if Sally is

bluffing or not, but they do know she has carried out such

threats in the past.

     The general sales manager of WPCB-AM has called a meeting

with the station's general and local sales manager, three senior account 

executives, the marketing director, the promotion director, the manager of 

the national rep's local office (who has been in communication with the 

President of the rep), and the rep salesperson from the New York office who 

calls on Sally. The general sales manager opens the meeting by relating the 

above facts and by saying, "We have one week to prepare a presentation to 

the CEO of Unicom Bank. Here is what we have to decide in this meeting:

1.   Are we going to present something that Sally wouldn't buy

     and thus jeopardize our future business and the national rep's

     business with other stations?

2.   What is our strategy with the CEO going to be?

3.   What information do we need?

4.   How are we going to create value for the station?

5.   What specifically are we going to offer?

6.   How much money are we going to ask for?

7.   And, most important, how are we going to get demonstrable

     results for Unicom Bank?"
                             ASSIGNMENT
  1. Answer the above questions according to what you think WPCB-AM ought to do.
 
* This case was prepared by Charles Warner