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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