teachthe4ps.com - For instructors of marketing.

One of the world’s leading market research firms, The Nielsen Company, occasionally shares some of its “Top 10″ lists.  In “Kid Wins in October’s Most Popular New Spot, Kid Loses in the Best-Remembered” (AdAge, November 11, 2011), you can see lists of the 10 most likeable and 10 most remembered TV ads from October 2011.

I suggest you review the research methodology (described in detail below each list), as the indices provide an opportunity to demonstrate both a market research technique and the value of an index to simply report findings.

Interestingly, there was no overlap across these Recall and Likeability Indexes for October 2011.  the Travelocity ad below was the most remembered — recalled more than twice as much as the average ad.  This finding might lead to a discussion about whether either is an appropriate measure of advertising success?  I usually let my students debate that a bit before reminding them that we need to tie the measure to the organization’s promotional objectives.

I love this recent story that David Meerman Scott tells over at his Web Ink Now blog.  The post, “Persona based content marketing at the Nobis Hotel,” describes how this Stockholm hotel uses a deep understanding of its target customers (Scott calls them “buyer personas” — we call them target customers) to create a unique travel experience.  I love how the marketing manager uses customer reviews at TripAdvisor to understand how customers talk about the hotel — and then reflects those same words back in its advertising and search engine optimization.  Scott tells the story well — so jump over to his blog and read more.  For marketing instructors, I think it provides an excellent example of customer behavior, market research, positioning, and social media.

This is a great story of customer needs, marketing research, and new product development.  Those of us eating French fries while driving know that the squeeze packets didn’t work real well.  Actually, the squeeze packages don’t work well in a fast food joint either.  Ketchup-maker Heinz knows that better than any of us.  So they set about to change the packet — and came up with a great solution.  The new packets allow you to squeeze the ketchup onto a sandwich or if you tear off the top, to easily dip your fries.  The packets cost more, but customers use fewer packages and fast food restaurants hope that the new packages heat up slow sales of fries that the drive-thru window.

You can read more — including examples of some of the marketing research Heinz used to develop the new packaging in “Old Ketchup Packet Heads for the Trash,” (Wall Street Journal, September 19, 2011, non-subscribers may have to click here).  The article provides you with useful examples of customer needs, marketing research, new product development, and functional packaging.

The business side of online games is quite fascinating.  In our text book, the segmentation chapter opens with a case highlighting how Nintendo grew the gaming market by designing products for new gamers.  The easy-to-use Nintendo DS hand-held and the Wii console targeted girls and senior citizens with easy to learn, fun games.  Zynga did Nintendo one better when it developed online games for Facebook.  Its FarmVille soared in popularity with 10% of all Facebook users growing virtual crops online.

This example is a bit complicated, but it demonstrates a number of important marketing concepts:

• Price and the freemium business model.  Freemium refers to a business model where most customers use a product for free, while a few power users cover costs.  More than 95% of Zynga’s 150 million monthly visitors pay nothing to play its games.  The other 5% pay hundreds and even thousands a year for virtual products that enhance their gaming experience.  For example, $5 might get you a chicken in FarmVille, a skyscraper in CityVille, or an anglerfish in FishVille.  Of course they love to sell these low cost virtual products…
• Fixed and variable costs.  There are minimal fixed costs for creating a new anglerfish, but the variable cost of producing hundreds of thousands of them is very small.  Almost no variable cost.Segmentation and targeting.  In this post at TechCruch (“Who Spends The Most Money In Freemium Games?” September 8, 2011), you can see by age group, who uses mobile freemium games — and who “spends”.  Not surprisingly, while more than half of users are under age 24 — this younger market contributes just 21% of the spending.  Consequently, most of the action in online games targets an older demographic.  And of course a little analytics can identify what products encourage spending…
• Marketing research.   In “Virtual Products, Real Profits,” (Wall Street Journal, September 9, 2011, non-subscribers click here), Zynga’s president of data-analytics says, “We’re an analytics company masquerading as a games company.”  Zynga analyzes game player behavior and adapts the game to get players to play longer or spend more.  For example, after finding that FishVille players bought the translucent anglerfish much more often than other sea creatures, they created more variations on the anglerfish.

I don’t play these games — but I have Facebook friends who love them.  Some of your students might relate to these examples.  Also posted at Learn the 4 Ps.

That (see title) is the goal of neuromarketing research firms.  These market research providers use MRIs and EEGs to check out how your brain responds to various stimuli — like different olive oil labels.   The research firm NeuroFocus claims to see things consumers don’t even know about themselves.  For example, did you know that snackers “enjoy” a “sense of giddy subversion” when they have that orange dust from Cheetos on our fingers?  I didn’t know that either.   NeuroFocus looked at how women responded to Baked Lays — and the results influenced the subsequent advertising campaign and the introduction of single-serving packages.

The article, “NeuroFocus Uses Neuromarketing To Hack Your Brain” (Fast Company, August 8, 2011) is very long, but it includes lots of details and examples.  The article mostly advocates the practice — though a few critics are quoted.  I don’t think there is a lot of empirical evidence supporting (or refuting) its reliability and validity as a research method.  Time will tell — in the meantime, it is interesting.  For a related story, see a T4Ps previous post “New Product Development — For Pop Songs?“

Many U.S. grocer stores use multi-unit price promotions — for example, 4 12-packs of any Coca Cola product for $12.  This article, “At Stores, Making 5 for $5 a Bigger Draw Than 1 for $1” (New York Times, July 17, 2011) describes the practice with a variety of good examples and some interviews with managers.  While most stores allow consumers to buy fewer items at the fractional price (one 12 pack of Coke for $3 in the previous example), the promotions typically encourage consumers to stock up.  So it provides an example of how marketers can influence consumer behavior.

I also found it interesting how much retailers monitor and tweak the strategy — looking very closely at which combinations bump sales the most.  That provides a different type of example of marketing research and consumer behavior — and of course this example can also be used in pricing or sales promotion.

This might be a fun comic to show when you cover marketing research — or cross-functional interaction.  Remember, to bring this into your classroom, you can place your cursor over the strip, right click – “copy image”, and then “paste” it into your PowerPoint.

Brain researchers at Emory University have found that brain scans can help predict the future success of new music.  Oh what is the world coming to?  This would be fun to show as an example of market research or new product development.  It might be fun to ask students what they think of the approach?  The article “Songs Stick in Teens’ Heads” (Wall Street Journal, June 13, 2011, non-subscribers click here) and companion video should be of interest to our student — many of whom have an interest (if only as consumers) in the music industry. We have also posted this over at Learn the 4 Ps.

We have previously posted about Ace Metrix’s method for measuring advertising.  Sometimes it is nice to show students ads that score well on some objective measurement criteria (see the Ace score components here)– then use the example as a segue to a discuss the challenges of measuring advertising.  That connection could be made using Google’s recent “Dear Sophie” ad (1:32) when you talk about market research or advertising.

Social media is getting less confusing.  Best practices are emerging.  Marketing managers are better understanding how which marketing objectives might be best addressed with social media.  This article, “Are You Talking to Me?” (Wall Street Journal, April 25, 2011, non-subscribers click here) suggests five best practices used by companies with some success in social media.  Many of the lessons come from “listening” closely to customers via social media.  The early heavy users of social media are listening, learning, and adapting.  Anyway, the article has some good examples of using Facebook and Twitter that you can bring to a class discussion about Promotion, social media, and market research.  Also posted at Learn the 4 Ps.