Marketing

Class #3

October 21, 2009

John W. Huppertz, Ph.D.

Associate Professor of Management

Christie M. Griner, MBA

Adjunct Instructor

Agenda

• Quick Review of Concepts• Presentations (10 minutes, and I mean it)• Social Network Marketing• Media planning & buying• Direct Marketing

Quick Review

• BDI & CDI• Target Market: Which customer offers the greatest opportunity?• Market Segmentation

– Demographic– Psychographic/Lifestyle– Purchase patterns– Other

• Three reasons to segment the market:– Select a target customer– Better understand the customer– Reach customers more efficiently

• Green Marketing Practices

Marketing “best practices”

Teams:1. Marketing Services

2. EES, EA, Clean Energy, REAP

3. Economic Development

4. New Technologies

 10 pages, 10 minutes.

Presentations

Quiz....

• Widget• Blog• Tweet• Status update• Social targeting• Adword

Social Networking Defined

Focuses on building online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others

Connecting and sharing information with other like-minded people via the Web

It’s not why are you on this site,…it’s why aren’t you?

Social Networking

• Facebook– Married, White, retired, extremely loyal, increased usage– 2nd highest income, average 121 connections

• MySpace– Single, Black, Hispanic, students

• Twitter– Part-time, average income $58K, average 28 followers, follow 32– Not loyal, 43% can live without it

• LinkedIn– Highest income $89K, into gym, spa, yoga, soap-operas,

gambling, gadgets, blue-ray– More men than women, can afford luxury itemsBulik, B., What Your Favorite Social Net Says About You. Advertising Age. (Midwest Region Edition). Chicago: July 13, 2009. Vol. 80, Iss. 25, p. 6 (1 pp.)

Why should Marketers consider this?

• 88% of marketers are now using some form of social media to market their business

• If a friend uses a brand—customer 5x more likely to respond to a marketing message

http://marketingwhitepapers.s3.amazonaws.com/smss09/SocialMediaMarketingIndustryReport.pdf

Business objectives accomplished

http://www.techsoup.org/learningcenter/internet/archives/page9215.cfm

Interesting Facts

• LinkedIn used primarily by small businesses (2-100 employees)– Preferred over blogging

• Twitter used by 94% of experienced marketers• Sole proprietors usage on the rise

– 30.2% reporting just getting started

• A social networker on average visits a social site 5x per week and checks in about 4x a day for a total of an hr each day

• Non-social networkers exist but not because they hate technology– Don’t have time– Don’t think it’s secure– Think it’s stupid

• Will use--within 3 months: 22%; within a year: 27%

Current Popular Social Networking Modes

http://marketingwhitepapers.s3.amazonaws.com/smss09/SocialMediaMarketingIndustryReport.pdf

Growth Trends

• Social Networks are now more popular than Email (68% v. 65%)– Facebook

• 300M WW• 35+ fastest growing

– MySpace• 76M

– LinkedIn• 48M

– Twitter • grew at 2,565%• Reached 14M

Retention Rates

• Confusion with purpose--Is FB turning into Twitter?

– 90% of Twitter activity is generated from 10% of users

– 60% of Twitter users drop off within a month

http://www.businessinsider.com/60-of-twitter-users-quit-after-a-month-2009-4

Statistics-Overlapping

• Audience duplication across networks

http://www.readwriteweb.com/archives/who_uses_social_networks_and_what_are_they_like_part_1.php

Statistics

• 48% of US adults have a MySpace or FB account– 16% update page daily

I. Twitter

• Brand Monitoring• Changed the way the world views news• Humanizes the brand

– Companies are following how consumers are shaping their brand

• It’s now in consumers hands• Tweets can be both +/- PR instantly

• Early warning system– Allows for rapid response before spillover occurs

.

I. Twitter: JetBlue

• JetBlue– Provide customer service,

i.e. promote travel deals, give flight schedules

• Importance of informal updates

– Discount airline

– 1,350,407 followers

I. Twitter: Zappos

• Evolved into corporate identity

• Complete transparency

• Online retailer

• 1,431,006 followers

• CEO Tony Hsieh tweets about his life and Zappos’ offbeat corporate culture

I. Twitter: Dell

• 20 accounts• Face with company• Feedback forum• Online retailer of refurbished Dell computers and

electronics• Used the site to sell more than $3 million in refurbished

computers (http://bits.blogs.nytimes.com/2009/06/12/dell-has-earned-3-million-from-twitter/)

I. Twitter: Dell

I. Twitter: Dell

NYSERDA

Case Study: Skittles

• “Taste the Rainbow” “Chat the Rainbow”– Prompts DOB– Homepage: Wikipedia

• “Skittles.com is home to everywhere you already are. Yes, it sounds strange, but it’s true.”

• Risk– Let consumers speak for brand

image– Encouraging false conversation

Case Study: Skittles

II. Facebook

• Is about friends, not news (like Twitter)• Allows for a deeper dive into details

– Individual Profiles

– Creates brand advocacy

– Greater control of privacy

• Group Pages• Fan Pages• Events• Applications• Advertising

II. FB Applications: Green Your PC

II. FB Application: Green Your PC

• Optimizes computer power settings for energy efficiency– External: support.com

• Guided by recommendations from Energy Star and Carbonfund.org, support.com makes sure your computer is not using too much electricity

• Quantifies how the user helped environment

II. FB: Group Pages

• Better for viral marketing, meaning that any group member can also send bulk invites to their friends

– Better for hosting an active discussion and attracting quick attention

• Example- Empire State Wine Club• Free market research• Invite only, allows control of branding

– Promotes exclusivity

II. FB Group: Empire State Wine Club

II. FB Group: Empire State Wine Club

II. FB: Fan Pages

• Better for a long-term relationships with your fans, readers and customers– Users make decision to connect with company

• Giveaways, contests, coupons attract fans• 52% of social networkers have “friended” or become a fan of

at least one brand– Somewhat interrelates to Twitter’s main platform

II. FB: Green Energy Watch Fan Page

• Example- Green Energy Watch Fan Page• Provides link to website on company

– Lets you track fans without being “friends”– Allows picture posting– Allows for instant communication to “fans”– Can write on wall which whole group can see– Populates in newsfeed automatically when “friends” Become Fans,

creating automatic marketing potential

II. FB: Green Energy Watch Fan Page

Google Ad-Words

Seven Deadly Sins

1. Don’t Spam– Seek out people who will be truly interested in what you have to say

2. Don’t be a Stranger– Social networking thrives on relationships-the more the better

3. Don’t be Noise– Once you have people’s attention, focus on adding value

4. Don’t be Lazy– You have to participate to get anything out of SN. Don’t just build a profile and let it

gather dust while you wait for people to notice, they won’t

5. Don’t put your eggs in one basket– Diversify efforts. Seek out specialized social networks for advertisers and in the

fields you serve

6. Don’t be Fake– Don’t pretend to be a satisfied user of a product, for example. When you’re found

out, the backlash will far outstrip any short-term gain

7. Don’t be Selfish– SN is about community, not about you. “You must contribute more than you want to

get out of it”

Kugler, L. Make Social Networks Work For You. Advertising Age. (Midwest Region Edition). Chicago: Sep 22, 2008. Vol. 79, Iss. 35, pg. C6, 2 pgs.

References

• Bulik, B., What Your Favorite Social Net Says About You. Advertising Age. (Midwest Region Edition). Chicago: July 13, 2009. Vol. 80, Iss. 25, p. 6 (1 pp.)

• Kugler, L. Make Social Networks Work For You. Advertising Age. (Midwest Region Edition). Chicago: Sep 22, 2008. Vol. 79, Iss. 35, pg. C6, 2 pgs.

• McKay, L. Skittles: A Rainbow of Social Media Marketing. Customer Relationship Management. Medford: May 2009 Vol. 13, Iss. 5, p. 18 (1 pp.)

• Morrissey, B. Connect The Thoughts. Adweek. June 29, 2009. Vol. 50, Iss. 26. pg. AM10• Stelzner, M. Social Media Marketing Industry Report: How Marketers Are Using Social Media to Grow Their

Businesses. March 2009. Found at: http://www.whitepapersource.com/socialmediamarketing• http://www.techsoup.org/learningcenter/internet/archives/page9215.cfm• http://www.readwriteweb.com/archives/who_uses_social_networks_and_what_are_they_like_part_1.php• http://www.businessinsider.com/60-of-twitter-users-quit-after-a-month-2009-4

QUIZ

• What’s the most popular show on TV tonight?

Nielsen Overnights, Monday October 19

Time Net Show18-49 Rating/Share

Viewers (Millons)

8:00 FOX ALCS Overrun 4.8/13 14.00CBS How I Met Your Mother 3.5/10 8.76ABC Dancing With the Stars 3.3/9 15.98NBC Heroes 2.5/7 5.67CW One Tree Hill 1.1/3 2.29

8:30 FOX ALCS Overrun/House 4.2/11 11.24CBS Accidentally on Purpose 3.4/9 8.62

9:00 CBS Two and a Half Men 4.7/12 13.83FOX House 4.1/10 10.17ABC Dancing With the Stars 3.8/9 17.04NBC Trauma 1.8/4 5.52CW Gossip Girl 1.0/2 1.93

9:30 CBS The Big Bang Theory 5.1/12 13.12FOX House/Lie To Me 3.5/8 9.33

10:00 CBS CSI: Miami 3.8/10 12.65FOX Lie To Me 2.6/7 7.45ABC Castle 2.4/6 9.88NBC The Jay Leno Show 1.4/4 4.74

10:30 FOX Lie To Me/Various 1.9/5 5.26

Where does this information come from?

• See Nielsen handouts.

Advertising Concepts

• DMA: Designated Market Area - Traditionally, the geography defined by strength of broadcast signals from metropolitan markets.

• HUT: Households Using Television• PUT: Persons Using Television• GRP Gross Rating Point: 1% of the TV or radio households *• Share: Number of HH’s tuned in to a program/station divided by

number of HHs or persons watching TV in time period (HUTs or PUTs).

• Reach: Percentage of the HH’s (audience) reached by advertising.• Frequency: # of times advertising reaches the audience.• Reach x Frequency = GRPs.

* TRP Target Rating Point: = 1% of the TV or radio audience in your target demographic group (e.g., Females ages 25-54).

Advertising Concepts

Reach x Frequency = GRPs.

Example:

4.8 + 3.8 + 3.4 + 1.4 = 13.4x 4 weeks = 53.6 GRP’s

Reach: 21.4% of audienceFrequency: 2.5 times

Time Net Show18-49 Rating/Share

Viewers (Millons)

8:00 FOX ALCS Overrun 4.8/13 14.00CBS How I Met Your Mother 3.5/10 8.76ABC Dancing With the Stars 3.3/9 15.98NBC Heroes 2.5/7 5.67CW One Tree Hill 1.1/3 2.29

8:30 FOX ALCS Overrun/House 4.2/11 11.24CBS Accidentally on Purpose 3.4/9 8.62

9:00 CBS Two and a Half Men 4.7/12 13.83FOX House 4.1/10 10.17ABC Dancing With the Stars 3.8/9 17.04NBC Trauma 1.8/4 5.52CW Gossip Girl 1.0/2 1.93

9:30 CBS The Big Bang Theory 5.1/12 13.12FOX House/Lie To Me 3.5/8 9.33

10:00 CBS CSI: Miami 3.8/10 12.65FOX Lie To Me 2.6/7 7.45ABC Castle 2.4/6 9.88NBC The Jay Leno Show 1.4/4 4.74

10:30 FOX Lie To Me/Various 1.9/5 5.26

Advertising Concepts

CPM: Cost per thousand = $ you spend to reach 1,000 audience members.

• Example: Pharmaceutical TV (Aleve)

• ABC Evening News, Sunday 6:30 pm, :30 spot = $950

• Ratings Audience:HH = 7 rating (i.e., 7% x 554,970 = 38,850 households)

CPM = ($2,000 / 38.8 thousand) =

P 50+ = 9 rating (i.e., 9% x 442,000 = 39,800 people ages 50+)

CPM = ($950 / 39.8 thousand) =

Advertising Concepts

CPM: Cost per thousand = $ you spend to reach 1,000 audience members.

• Example: Pharmaceutical TV (Aleve)

• ABC Evening News, Sunday 6:30 pm, :30 spot = $950• Ratings Audience:

HH = 7 rating (i.e., 7% x 554,970 = 38,850 households)CPM = ($950 / 38.8 thousand) =

HH = 7 rating (i.e., 7% x 13.6% x 554,970 = 5,283 households)

CPM = ($950 / 5.28 thousand) =

"arthritis" = all rheumatic diseases

Est. prevalence = 13.6%

Advertising Objectives

• Informative advertising• Inform• Educate• Build awareness

• Competitive / Persuasive Advertising• Build brand preference• Encourage brand switching• Change customer perceptions• Buy now• Persuade customer to go to next step

• Reminder Advertising• Remind customer where to buy it• Keep product in mind, off the purchase cycle• Maintain awareness

Major types of media

Medium Advantages Disadvantages Newspapers Flexibility, timeliness, local

market coverage, credibility Short life, poor reproduction quality, declining audience, older demographic.

TV Mass market coverage, low cpm, combines sight+sound+motion, creative appeal.

High absolute costs, high clutter, fleeting exposure, hard to target the audience.

Radio High target selectivity, low cost

Audio, fleeting exposure, fragmented audience.

Direct mail High audience targeting, flexibility, personalization.

High cpm, junk mail image.

Magazines Demographic selectivity & targeting, high quality reproduction, pass-along readership.

Lead time, high cpm, fragmentation, clutter.

Outdoor Geographic selectivity, high frequency, low cpm.

No audience selectivity, message limitations.

Internet High selectivity, low cost, immediacy, interactive capability.

Small, demographically skewed audience, increasing clutter, suspicions of marketers.

Sales Promotion

“A short-term inducement to buy...” (Berkowitz)

• energy fairs• trade shows• exhibits• demonstrations• contests and games• premiums and gifts• other

Sales Promotion - Events/Contests

Public Relations

“Free” media?

“We got 1,000 people at our event this weekend!”

You spent $20,000 in out-of-pocket costs and staff time.

What’s the CPM?

Marketing-Oriented Public Relations

ReactiveProactive

Build positive WOMStrengthen brandGenerate interestSupport marketing comm.Generate news coverage

Get out of troubleDemonstrate concernRepair brand damageReduce interestTurn off spotlight

Direct Marketing

“Occupant” Mailing Targeted & Personalized

Direct Marketing

• Remember our CPM example?

• For Direct Mail:

– Letter, envelope, brochure, printing, etc. $ 0.80 each– Pre-sort 1st class postage (automated) $ 0.335 each– Handling, fulfillment expenses $ 0.155 each

TOTAL: $ 1.29 each

What is the CPM?

Direct Marketing

Ability to track responses is essential.

Summary

• What did we learn today?

Next up:

• Marketing Planning