An HBR Blog Network post titled “Does the 18-to-49 Demographic Matter Anymore?” (September 4, 2012) essentially asks this question. They use a fictional case scenario to make their point. The case could be used in class to supplement a discussion of the usefulness of demographics for segmentation or to raise the issue of the reliability of data from set-top boxes or other technology/”big data” sources. We have also posted this in Learn the 4 Ps with a few questions for students to think about.
For decades airlines have frequently changing prices in response to supply, demand, and competitive behavior — a practice called yield management. Now new analytics software and “big data” allow online retailers do the same. Many big online retailers, including Amazon.com, are taking advantage of these tools in an effort to make sure they have the lowest price when customers search online. You can learn more at “Coming Soon: Toilet Paper Priced Like Airline Tickets,” (Wall Street Journal, September 5, 2012 – non-subscribers may need to click here) or in the video interview below.
This is just one more example of how “big data” is transforming marketing practice. The forthcoming edition of Basic Marketing— which I am just finishing updating — focuses on these changes. This article provides an example that could be referenced when you cover the external market (technology), market research, or most obviously, pricing.
E-books are giving authors and publishers new insights about how readers consumer their books. E-readers like Kindle, Nook, and Kobo gather information about how readers read. This data shows what lines readers highlight, how long it takes them to read a book, what parts are read most quickly, how much do they read in one sitting, and for those who fail to finish the book – when do they quit? Barnes and Noble shares this information with publishers to help them create books that might better hold people’s attention. All in all, a great example of a different kind of marketing research. You can read more in this Wall Street Journal article, “Your E-Book Is Reading You,” (June 29, 2012, non-subscribers may need to click here).
I thought I understood how much my privacy was being compromised as I surfed the web — well I didn’t know the half of it. The future is now. Recently the NPR Fresh Air show titled “How Companies are ‘Defining Your Worth” Online” (February 22, 2012, the link will take you to the 39 minute interview as well as a shorter written set of highlights) included an interview with Joseph Turow (Professor at the Annnenberg School for Communication at University of Pennsylvania) about his new book The Daily You . Marketers are increasingly connecting data from our credit cards, web-surfing and search, Facebook, etc. to create fairly specific profiles of many individual consumers. Marketing managers can go to catalogs from companies like Acxiom and purchase e-mail or street addresses of target customers: a) likely to have diabetes, b) likely to vacation in an RV, c) who are overweight, and much more.
The interview raises a lot of questions about consumer privacy and ethics. On the one hand, receiving ads and perhaps coupons for new skis when we are in the market for new skis might be a good thing. I tell my students that it is only junk mail or spam when we don’t want it.
But what if we prefer our privacy? What if we are diabetic and there are new products to help make my life easier — do I want to know? Or if I am overweight — do I want to receive promotional materials from health clubs and diet programs? What if potential employers can also pull this information — and don’t want to hire me because my health problems might lead to higher health insurance costs down the line?
This whole issue is complex and in a state of flux. This interview and book might help get you up to speed. The topic can be used to stimulate a discussion of marketing practices and related legal and ethical issues.