Lesson 5/Week 12: Community Relations 2.0

I finished all the required material in the course today, watching:

• Camtasia video on Community Relations 2.0
• YouTube video on pace of change in society

The lesson 5 module asked us to look at a couple of questions this week with regards to 

1. Does your firm use social media in its communications effort? How?  Is it effective?
2. What types of messages do you think work best in Social media? Why?
3. Will social media make other Marketing Communication forms obsolete?

My firm, Sprint, definitely uses social media in our communications effort.  We recently launched an innovative plan called Framily, in which people can band together into groups and get discounts on their cell phone bills.  Each person has their own bill, so no one is responsible financially for other people.  We have been tracking social media responses to our plans from the launch.  Our IMC included specific messages on Twitter, Facebook, YouTube, and other social media outlets.  I'm not sure how effective the plan will be, but I have no doubt the social media we've used has made the impact larger.  So it is definitely effective.  The metrics we've tracked on clicks, impressions, page views, etc., have all indicated this is the fastest spreading offer we've ever launched.  

I think messages that work best in Social Media are the ones that are efficient and informative, and those that encourage a viral spread of the message.  The potential for messages to go viral are what makes social media so unique.  I also believe that defending against negative publicity is the type of communication that works best in Social Media, for the same reasons of how rapidly the information can be disseminated.  The cases we saw in class like Domino's pizza are instances where response time is of the essence.   

I do not think that social media will make other marketing communication forms obsolete.  People will always watch TV, listen to music, read periodicals, and visit the movies.  These are all ways that companies cannot afford to simply ignore in attempting to get their message to consumers.  

So with that, it has been an excellent quarter.  I thank the professor for organizing the class into a framework that made learning the subject very practical.  It was fun blogging, and this is my first experience with it.  Our consulting group still needs to compile our table of contents and executive summary for our Marketing Plan, but that's the last deliverable.  A week off after this, then back at it for the Summer!  Two quarters to go!!   

Lesson 5/Week 12: Every Day is Day One

Well, the 12 weeks have gone by quickly.  So far this week I've covered:

• Article "Community Relations 2.0"

We were asked for this week in general terms to consider what we've learned and reflect on what we think Marketing is at the end of our studies.  

I've learned a ton this quarter, and most of it will be helpful even outside of marketing.  Here are some of my key takeaways:

• Marketing is probably the most critical business discipline for success.  This is because it is the only area of business school that focuses on customers.
• Customers are everything.  They are what makes a company valuable, not what's on a company's balance sheet.  You have to obsess over them and exceed their expectations, even if you follow Apple's method of showing them what they want instead of asking them.  Even after you show a customer what they want, they will still develop expectations.  These have to be met.
• Marketing is so much more than just advertising, which is how I thought about it before the class.  Quantitative techniques like CLV and marketing analytics rival corporate finance in terms of data collection and analysis. 
• You have to compete to be different, as that's where sustainable competitive advantage will come from.  If you have strong positioning, based on solid STDP, positive outcomes are more likely.  
• The four P's is a great framework to think about marketing holistically.
• Brands are extremely valuable and difficult to compete against.  They can definitely be measured quantitatively and should be on company's balance sheets.

With these key learning points, I'd turn to my ending definition of marketing.  I really like a quote from the CLV article last week:  "marketing is quickly becoming the science and art of finding, retaining, and growing profitable customers."  

This pretty much covers every activity required by marketing, which is so much broader than I thought in week 1.  Some of it is quantitative and approaches science, like CLV's, and other activities like connecting with a customer's mind is more art.  However, just as the goal of a company is to maximize shareholder wealth, marketing's goal to find, retain, and grow profitable customers is the path to get there.  Sometimes volume and market share my be temporary goals, but I like this definition because a company that lets its marketers stray too far from this goal for too long will not maintain competitive advantage. 

Lesson 4/Week 10: Intro to Brand Valuation

Materials that I read/watched for this week include:

• Article on Brand Valuation
• Article "Why it's time to put brand on the balance sheet"
• Article "Avoid the Four Perils of CRM"
• Article "The mismanagement of customer loyalty"
• Watched CRM Camtasia video
• Watched Brand Valuation Breeze video

I also hopped on the quiz early and did it at the start of the week since this will be a very busy week in my other class.  As a result, this will probably be the only blog for this week.

The four questions were were asked to consider this week were:

1. What makes a brand valuable?
2. What do brands do?  How do they create value?
3. What are some of your most favorite brands?  Why?
4. Should Brands be on the balance sheet?  Why?  Why not?

First, brands are valuable because they create economic profits for the company and prolong the lifecycle of products.  They can help keep products differentiated indefinitely, and represent the best way to avoid competing on price.  A brand is perhaps the strongest method of building loyalty, and it encourages repurchases, referrals, and positive word-of-mouth.  Additionally, it allows a company to charge premiums compared with undifferentiated generic products. Brands are also valuable because they can contribute to organic growth.  For customers, brands create the benefit of forcing companies to innovate more frequently, and spend more on R&D.  This means customer needs are met quicker and more fully.

Next, a brand helps consumers sift through the endless choices.  With so many retailers developing private brand labels, it is becoming harder for shoppers to discern what differences actually are between competing products. They all seem to offer the same basic features and functionality.  A brand cuts through all this and offers a simple and lasting message that sticks with customers.  They create value by building trust, and customers become reluctant to purchase an unknown unless they are absolutely sure they are getting the same quality.  Brands also create value by conferring status on the buyer.  Even if jeans are functionally the same, the pair from Abercrombe will carry with it more social status than the generic brand from Wal-Mart.  Finally, brands also create value because they can last for extremely long periods of time, sometimes over a 100 years, like Coke.  

As some of my previous posts have probably hinted at, one of my favorite brands is Google.  It doesn't matter what they do, they are disruptive and always have the cool factor.  I like them over Apple, because Google's products are just as well designed, but they aren't trying to go after huge premiums from end users.  I'm sure they get great margins from their ads, but they make the world a better place by allowing all of us to get to information easily.  One of my favorite products is simply Google Maps.  I cannot live without it, and it's free.  I choose Android phones because of it.  My last posts discussed my affinity for Google Fiber.  The multicolored rabbit is a great symbol for their product.  To me, it conveys happiness and speed.  Finally, although expensive right now, Google Glass is just really cool.  I know that Google's brand image means it will work well, and it will be cutting edge.  

                

Another of my favorite brands is Chic-Fil-A.  Their commercials are just awesome.  I have been amazed, eating at various locations throughout the country, how they manage to create such a consistent experience.  They always have the best customer service, and the food is always the highest quality for fast food.  Their restaurant areas convey a sense of family, with large indoor children's play areas, and the booths and chairs are padded.  I've asked owners why this is, and they explain that they are not trying to get people to come in, eat quick, and make room for more volume.  They want to engage with the customer and build a relationship.  If I could pick any franchise to purchase, it would be one of these.  Their brand is all about family and a wholesome atmosphere.  

  

Finally, I absolutely think that brands should be on the balance sheet.  It seems ridiculous reading the articles for this week that IFRS and other parts of the world have embraced this already, and GAAP hasn't.  At least, not with respect to internally created brands.  M&A has always been an area where brands were recognized as goodwill.  Why would they not be included when they are organically created?  Maybe there isn't a great valuation methodology yet, but the articles we read seem to show that there are some methods that are great starting points and have enough adoption to be contenders.  Simply put, everyone knows that brand equity is a huge part of the value of many of the most successful companies.  We have to find a way to quantify it and communicate that in financial statements.  It cannot just be ignored. 

  

Lesson 3/Week 9: Culinarian Cookware

This week my team is responsible for submitting a case memo on the Culinarian case, so there will be no blog.

Lesson 3/Week 8: Pricing/Channels and IMC

On to the last two questions for this week.  First, how does Google utilize price and place to enhance the value of its offerings and why does their choice work well together?

For Google Fiber, their price point of $120 includes not only the fastest internet in the country, at GB/s speeds, it also includes the boxes that people need to actually receive the cable.  Sometimes, these can cost another $10/month or more with other providers.  I get angry now whenever I see the $59.99 cards in the mail for TV/Internet bundling.  This is because after you add all the fees (like HDTV access), taxes, equipment rentals, etc., it will cost more than Google and you get an inferior product.  People thus perceive a lot of value at that price point. 

Google utilizes place in this offering by going into markets that they feel they can capture a significant portion right off the bat.  Most cable areas are served by only one company, maybe two.  So Google has tried to focus on mid-size cities where it can potentially dominate.  That’s why Kansas City and Austin were chosen first.   They are large enough to provide enough customers to make the fiber build worth it.

For other products like Chromebook and the Nexus Smartphone, they have tried to bring prices down to make their products accessible to customers, and provide a contrast to higher priced Apple products.  Its primary channels are Best Buy, cellular retail stores, and Amazon.  With Amazon, the place enhances value because a low price for the Chromebook is reinforced by the convenience of ordering online.  Many times there is free shipping on Amazon, reinforcing a low cost strategy.

Last, we were asked about whether the company has a unique approach to communicating with their target audience and if that approach is well suited to other elements of their mix.  I think the company has a very unique approach to communicating with Google Fiber.  The process starts by working with the respective city to sign agreements to allow the building of the fiber network.  Concurrently, neighborhoods are hit with television and mail advertising, providing a window of time to commit to buying Google service.  In this way, they find out if the market will support the development costs before they incur high CAPEX.  It also causes potential customers to become marketers for the product, because if enough people do not sign up, the development is abandoned.  Those that really want it become recruiters for more customers.  It all causes more word of mouth and buzz.   

This approach is a good fit with the other elements of their mix.  They don’t launch unless it’s going to be profitable, but the price point is compelling enough that their direct communications work to create ‘pull’.