In search of innovation in the entertainment industry

 

The internationally renowned Cirque du Soleil is now back in Sydney with a new big top production called OVO, an immersion into the colorful and energetic world of insects. With incredible stunts you did not even think were possible by the human body and mind-blowing production that takes you away from reality, it is hard not to become a fan once you have experienced one of their performances.

They started as a group of artists putting on a summer festival in Quebec in the 1980s and have now sold over 70 million tickets in 250 cities. Revenues are currently estimated to have exceeded $700 million with 15 productions presented on four continents. The huge success so far has been mainly attributed to reinventing the circus model, which removed animals from performances and included elements of theatre, story-telling and a live orchestra. Their sustainable competitive advantage undoubtedly resides on their creative expertise.

With this in mind, a recent case study from our Innovative Marketing Strategy unit provided us with the challenge of developing a long-term marketing strategy to once again bring innovation to the Cirque du Soleil and demonstrate how the company’s business model would look like in ten years from now. How could the circus disrupt the entertainment industry to sustain its leadership in the coming years?

Some of us suggested incorporating the growing trend of augmented reality to create a semi-virtual circus and offer new home entertainment products. Others envisaged the circus business merging with the tourism industry to created fantasy destinations for people wanting to be an integral part of the circus experience as opposed to just being the audience. Another team saw partnerships with corporate businesses creating conferences and trade show centers that offered world-class entertainment to executives. Even a zero-gravity circus was cogitated to exploit recent advances in technology and allow the audience to participate in the stunts. Ideas abounded and so did the curiosity to see where this creative enterprise will direct its resources in the years ahead.

What other companies can you think of which have disrupted their industries in order to create a brand new category and achieve sustainable competitive advantage? From a marketing perspective, what other types of innovation can you envisage in the Cirque du Soleil business model? And if you are lucky enough to see its new show, do share with us your experience!

Adriana H.
Current student in the Master of Marketing program at the University of Sydney

Are we all hard-wired to make bad decisions?

The Marketing Research for Decision Makers unit of the Master of Marketing program at the University of Sydney Business School has adopted a new approach this semester. Previously, the unit focused on teaching how to assess and evaluate marketing information so as to improve our decision making ability. This semester the learning objectives have been expanded to explicate psychological biases that cause us to routinely make bad decisions. Interestingly, these biases are a consequence of automatic and unconscious cognitive processes, which make it very difficult for us to not only avoid them, but increasingly difficult to even know when we are using them.

You would think that a person possessing high intelligence and extensive life experience would be relatively immune from cognitive biases. However, this is not so and this is what makes the unit both thought-provoking and challenging. To illustrate, in the most recent class the fundamental attribution error was discussed. This error concerns a universal tendency for people to overweight personality characteristics and underweight situational factors when attributing blame or the cause of a situation. In other words, people automatically attribute causes to the personality of others, even when situational factors are likely to be present. In the current US Presidential Election Campaign, Republican nominee Mitt Romney has made this error which has provided ammunition for President Barack Obama’s re-election advertising strategy.

In his now infamous gaffe, Romney suggested that 47% of Americans pay no income tax and will not vote for him because they believe they are victims who have become dependent upon government handouts. Further, he stated that these Americans believe “the government has a responsibility to care for them” and that they can never be motivated to take personal responsibility for their lives. Clearly Romney’s statement overweights personality characteristics because it assumes that all non-income tax paying Americans possess a free-loading disposition, believing the government owes them a living. Romney has seriously neglected salient situational circumstances that would explain why most of these Americans do not pay income tax. For instance, war veterans, seniors, blue-collar workers who currently earn low incomes; and college students do not pay income tax but you could not characterize them as people who are not taking personal responsibility for their lives.
Romney’s howler has provided President Obama with a telling message that he is canvassing in his “My Job” re-election advertising campaign. The strategy is distinctive because, sans President Obama’s endorsement at the beginning of the advertisement, contains no commentary from the President or his supporters. The advertisement implicitly advocates not voting for Romney by simply using his ill-chosen comments against images of people that represent the 47% of Americans he has miscategorised as lacking personal responsibility. It appears that Romney’s prediction that non-income tax paying Americans will definitely vote for the President could become a self-fulfilling prophecy!

How could an experienced political campaigner like Romney make such a critical error? As stated earlier, faulty biases tend to automatically influence our thought patterns. We do not necessarily know that they are distorting our cognitions when we are actually making decisions. It is most likely that Romney is now berating himself and cannot believe he said the comments he made. He probably now knows where his decision making process went wrong. However, it is generally easy to see the error in our ways after the fact; and in Romney’s case the error cannot be reversed and appears very damaging.

What can we do before we finalize our decisions that can assist us avoid these faulty cognitive biases? What we do know is that even knowledge of the different types of biases is no guarantee that we will not use them in our own decision making. Strategies to avoid cognitive biases are constantly being developed but generally focus on decision makers being more conscious of their thoughts and reasoning during each step of their decision making process. Ideally, a third party independent of the decision and with knowledge of cognitive biases should vet the process, highlighting areas of concern and then providing feedback. It is easier to detect cognitive biases in another person’s decisions as opposed to your own. Perhaps an independent person reviewing Romney’s speech with knowledge of the fundamental attribution error may have stopped these words ever being said.

Colin Farrell - Lecturer – Masters of Marketing at the University of Sydney Business School

Market Strategy Wars – Apple vs Samsung

There is only a very select range of products that can successfully implement a marketing strategy that revolves around ‘low supply and high demand’, with with the goal of increasing the desirability of a product and ultimately increasing sales.

One company in particular has proven particularly adept at this strategy. Apple has successfully done this time and time again for the release of a number of its products, the iPhone 5 being the most recent.

It would not be at all surprising if Apple fans worldwide would be well and truly over waiting in line to get their hands on the latest (and supposedly) greatest from Apple, but that is not the case.

Apple has strategically regulated the volume of iPhone 5 handsets available in the market to be well below demand, justifying bragging rights to all who have been 'lucky' enough to get one.

Moving forward, Apple might need to rethink their marketing strategy, especially with the appealing features that their competitors are sporting. For instance, Samsung's Galaxy S3 has a number of advantages over the iPhone 5, including a larger screen, better resolution, and a significantly longer battery life both in standby mode as well as during talk time.

Samsung has used the hype of the iPhone 5 launch to their advantage by informing potential iPhone 5 buyers of the features of their Galaxy S3 smartphone through mainstream media as well as through social media channels.

Also, Samsung's presence outside Apple stores in several major cities during iPhone 5's launch week was subtle, but Samsung's message was clear and well in line with their tag line: 'It Doesn't Take a Genius'

The implication of that tagline being that it really doesn't take much thought to grasp the clear advantage the Galaxy S3 has over Apple's iPhone 5. Samsung's other tag line: 'The Next Big Thing Is Already Here' is a head on attack to Apple's tag line: 'The biggest thing to happen to iPhone since iPhone'.

After completing a class in Innovative Marketing Strategy as part of my Master of Marketing degree at the University of Sydney, I'm fascinated to see how Apple will adjust their marketing strategy for the future. It will also be very interesting to see how Samsung copes with more prominent up and coming competitors in the smart phone market , such as Nokia's new Lumina handset.

I’d be very interested in hearing your thoughts on the marketing strategies that Apple and Samsung are employing. Please feel free to have your say in the comments section below.

Mina D. - current student in the Master of Marketing program at the University of Sydney Business School

Facebook and Companies - Striking a balance between the Social and the Media aspects

A largely controversial decision made recently by the Advertising Standards Board (ASB) has deemed companies accountable for user-generated comments on their Facebook pages. Posts from ‘fans’ are now considered to be advertisement, which means these should adhere to the industry’s Code of Ethics and the Australian Consumer Law. Because companies have a ‘reasonable degree of control’ over third-party comments, they are expected to vet content that is sexist, racist or factually inaccurate.

The ruling was a result of complaints against third-party comments posted on the Facebook pages of both Diageo’s Smirnoff brand and Fosters’ VB brand. While Diageo’s complaints were not upheld, Fosters were found to breach sections 2.1, 2.4 and 2.5 of the Code due to the sexist, racist and generally offensive content of its page. The fact that Fosters confessed it did not screen or maintain their page was the main reason for the case to be upheld, which demonstrates the heart of the problem.

There seems to be a disconnect between what companies value and what they practice. According to a study by Deloitte, 58 per cent of company's top executives thought corporate reputation risk associated with social media practices should be part of the board room’s agenda; however, only 17 per cent of them had processes in place to actually monitor the data.

Large brands have massive volumes of posts to moderate and the ruling puts the burden on companies to ensure that social media campaigns are executed in a compliant manner, as well as to monitor and moderate the comments. Some companies argue the ruling has turned people's opinions into statements of facts and question whether they could have complied with the law simply by putting a disclaimer on top of their pages stating the posts are merely opinions of third parties.

On the other hand, small businesses worry about being pushed out of social media due to lack of resources to monitor comments. However, the ACCC states that it does take the size of a company into consideration. While large brands are expected to monitor their pages daily and remove non-compliant content within 24 hours, the expectations for smaller players is slightly less rigorous.

From a consumer’s perspective, the ruling is seen by many as an infringement on freedom of speech. It sets a legal precedent that could be applied to comments in other social media like Twitter and even personal blogs in Australia and beyond. Adding to the debate, Facebook Terms of Service states that a person owns all the content they post on Facebook, which would exempt the company from the responsibility. The Facebook Community Standards policy also covers many of the requirements of the AANA Code of Ethics; however, it is unlikely that Facebook would enforce these.

As a result of the ruling, The Communications Council (TCC) has launched a new social media code of conduct, covering best-practice in terms of business integrity, transparency and honesty. To ensure a company’s brand page is compliant with these standards, certain practices should be observed including adequate social media planning, moderation of comments and action within the stipulated timeframe. On that note, it is often best to reply and correct misleading or inaccurate comments than to delete them altogether. This will ensure companies comply with the Code without damaging the transparency and true spirit of social media.

Facebook, regardless of its social nature, is after all another media channel and monitoring and moderating requires proper planning and allocation of resources. Frequently brands treat social media as a cheap form of advertising and fail to establish a true dialogue with their audience. Why create a social media presence if you are not listening, replying, engaging and intervening when required? This is essentially where the real value of social media lies.

For companies like Fosters, the ruling will ensure the observation of a common decency standard. They now have in place ‘house rules’ guidelines on their Facebook page, which is monitored twice daily. By contrast, ethical companies, who have already instigated good moderating practice, things will not change much. Essentially, best practice in social media has now just become part of the industry regulation.

So, how is your company dealing with the new rules in the social media environment?

Adriana H.
Current student in the Master of Marketing program at the University of Sydney

Will Apple’s iOS 6 Passbook App be the New Digital Wallet?

I enjoy traveling light. If I could have things my way, I would leave the house with just my wallet, phone and keys. Now Apple has created an app to bring their product users one step closer to the freedom of leaving the house with only their iPhone (or iPad) and keys… I could not be more thrilled.

Apple’s new iOS 6 Passbook App is an Apple users’ dream in terms of de-cluttering their lives. It seems that an increasing number of stores have their own loyalty and rewards cards. If you’re not selective, in a number of weeks you can easily end up with at least 10-20 loyalty or reward cards. Not only does that make your wallet as thick as a brick, but it complicates life with the hassle of tracking points earned with each loyalty program. Who has the time to do that these days? The Passbook App is Apple’s solution to the chaos, offering simplicity to many of our already hectic lifestyles. Passbook will have the ability to store loyalty and reward card details.

Passbook not only seems to be leaning down the track of removing the bulk of your wallet, by eliminating all those loyalty and reward cards, but it will have the ability for you to rethink buying that extra ink refill for your printer. Movie tickets, concert tickets, sporting event tickets, and even boarding passes can be accessed through Passbook, completely eliminating the need to print and carry around paper copies. Since Passbook will be time and location sensitive, it will have the ability to display boarding pass information as you approach the airport on your way to your flight.

Apple’s Passbook App is not perfect. It was not designed to replace cash, credit card or bank cards as a payment option. Google Wallet has offered a similar product with the primary aim of completely eliminating your wallet, but Google Wallet has not done well in Australia due to lack of use.

Apple’s Passbook App will also have the ability to get customers into the door as well as increasing their number of purchases by offering relevant discounts as customers are in the vicinity of the stores. This key feature can be a powerful marketing tool, strongly resonating with the younger tech savvy generation. This builds the participating store’s brand awareness and most importantly improves the customer’s experience by offering value.

Apple’s Passbook App can be used to a marketer’s advantage. How will you incorporate Apple’s Passbook App into your business strategy?

Building a successful personal brand: Barack Obama

Say the name “Barack Obama” to almost anyone, anywhere in the world and immediately, there is a picture of an imposing orator standing before the US flag. Obama has a personal brand that he and his staff carefully manage, trying to ensure that his identify is clearly differentiated from his opponents and is associated with the values for which he stands. Political figures like Obama know the power of building and maintaining their personal brand and so they invest hugely in trying to manage their most valuable asset.

In marketing, we tend to think largely about strategies and tactics we can employ to acquire and build relationships with chosen customers. However, we can use these same approaches to developing our own personal brand – and that is exactly what President Obama does so successfully. He has created a brand identity that is emotionally appealing, associated with integrity, fairness and a desire to fulfill the American Dream.

Although many people think of personal branding in terms of image building and personal selling, the concept can address a much broader range of personal marketing strategies. The key is to effectively identify and influence how others perceive you and how they position you relative to others. Personal branding involves implementing a positioning strategy that manages the perceptions of how others perceive you when they hear your name.

In today’s digital age, having a carefully managed personal brand has become even more important. Social media has made personal branding a complex management task. The immediate impact globally that positive or negative comments can have on a personal brand requires constant vigilance, monitoring and maintenance of all channels. Take for example the power of social media during the 2008 US presidential elections. Obama had over 2.3 million supporters on Facebook alone, while McCain had only 620,000. On You Tube there were almost 1800 Obama related videos with over 114,000 subscribers, while McCain had only 329 videos with 28,000 subscribers. Obama was taking his message to many more people and entering into a personal conversation with them so he could explain his views and respond immediately to challengers. It was clear at an early stage who would win the election, long before the polls closed. No doubt, Obama has a well-defined social media strategy in place as he goes towards the next election in November 2012.

In the current competitive climate of the US presidential election, Obama has played his trump card to revitalize his flagging personal brand. During the recent Democratic Convention, one of the most powerful images was not of the President making fiery speeches, but of his wife, Michelle Obama, addressing the delegates with passion, sincerity and humility that rekindled many of the brand values the President has struggled to maintain. The association of the two brands is a clever tactic to revitalize Barack’s personal brand and reconfirm to the world his values.

Building a personal brand is not just a task for celebrities. All of us have a brand, what we stand for and a promise that may be attractive and appealing to others. Few of us manage our brand strategically, working out a careful plan of how we would like others to perceive us, what are our aspirations, and what we are associated with. Do you manage your personal brand and if so, what do you think are the most important ways of building your personal brand?


Pennie Frow
Associate Professor and Program Director of the Master of Marketing Program at the University of Sydney Business School

Advertise your flaws!

Another intensive weekend unit has begun and it looks like we are in for a treat with Kate Charlton as our Integrated Marketing Communications lecturer. Her enthusiasm for the subject is almost contagious!

In class this weekend we discussed the process of creating media campaigns. Kate’s experience working for large advertising firms such as Saatchi Design and RedBox Digital (to name a couple) lead to many interesting stories about the process of creating a media campaign.

During the planning stages of a media campaign, disconnects can easily happen if the client is not honest and open with the advertising firm they are working with. These can and lead to expensive unsuccessful marketing.

Conversely, we discussed successful advertising campaigns that were the result of open communication between all parties. When customers can be honest about their weaknesses, and can let the advertising company design and deliver an advertising campaign based on their interpretation of the situation at hand, great things can happen.

A perfect example of this can be seen with the one star hotel, backpackers’ hotel, The Hans Brinker, in Amsterdam. Before the owners of the The Hans Brinker Hotel met with KesselsKramer, an advertising agency, the hotel was struggling to get a sufficient number of ‘heads on beds’. The owners didn’t have the funding nor the desire to upgrade the facilities of their hotel, so instead, they invested in the marketing of their hotel.

KesselsKramer devised an absolutely brilliant advertising campaign that promoted The Hans Brinker Hotel as “the best of the worst hotels”. At the time, the market was dominated by 3 star hotels which were too expensive for backpackers and didn’t necessarily meet their needs of cheap accommodation. The ads that KesselsKramer devised brilliantly embraced The Hans Brinker’s one star status and glorified itself in an uncluttered market space which eventually lead to outstanding results!

Currently, The Hans Brinker web site brags of what a disappointment the hotel has been for travellers, that the comfort guest should expect is at a low, and that occasionally the plumbing works. For those looking to backpack overseas, these qualities makes this hotel stand out, essentially adding to the customer experience. If you have had the ‘opportunity’ to stay at the Hans Brinker hotel, you truly have earned life long bragging rights for your experience.

Have you ever had the opportunity to promote a product based on what could be considered undesirable traits?

Billabong – Where Marketing Really Does Matter

When Launa Inman took over as CEO of Billabong in May 2012, she knew she had a huge challenge ahead of her to turn around the company. Launa recently announced a $275.6 million loss at Billabong, which means she has a daunting task of turning around the fortunes of the company. However, her previous experience at Target and Officeworks, along with her passion for marketing is likely to stand her in good stead. 

Billabong is an iconic Australian brand, closely associated with surf, sun and fun – all great ingredients for an Aussie marketing success. But along the way, Billabong lost its  direction – especially in terms of its customer strategy, knowing who are its loyal customers and exactly what they want in terms of athletic products.

The previous CEO of Billabong, Derek O’Neill, made a fatal mistake that is common in companies faced with a financial crisis. He cut the marketing budget and pulled back from investing in the Billabong brand. Instead of seeing the company recover from flagging sales, O’Neill steered the company down a path of further self destruction. The company closed numerous stores and sold off inventory at reduced prices, but did little to develop its presence in key markets. Then, a major American customer, PacSun, began manufacturing its own house brand, providing strong competition to Billabong and further reducing sales in the US.

Marketing lies at the heart of Launa Inman’s turnaround strategy. Interestingly, the Billabong brand has high awareness globally, but until now, this asset has not translated into sales. For example, in Australia, brand awareness is 86% of the population, yet only 46% have actually bought the Billabong label. Globally, this difference is similar and Inman recognizes the high brand awareness means there is a huge opportunity for the Billabong brand.  

Despite the strength of the brand, Billabong struggles to differentiate itself in the marketplace from some of its competitors, including its rival Quicksilver. For both brands, their core customers are sports enthusiasts. Yet neither brand has established a strong identity of its own. One of Inman’s first tasks will be to set out a strategy that positions the Billabong brand in an uncluttered space within the sportswear market.  

Billabong customers are passionate about the surf, snowboarding or skating. However, there is a significant customer segment who share in Billabong’s brand values of a healthy and active lifestyle, but do not actually participate in sports. This group offers huge potential for Billabong, but the company must work hard to make the brand more attractive. This is true, especially within its retail spaces. The cluttered merchandising in Billabong stores needs to change to reflect the brand image of  new and exciting lifestyles. Inman has set out plans to tackle the retail experience and adopt a fresher, contemporary look.

Tracking if Inman’s strategy changes the fortunes of Billabong will make an interesting marketing study. If you were in Launa Inman’s role as CEO of Billabong, what would you do to turn around the company?

Pennie Frow
Associate Professor and Program Director of the Master of Marketing Program at the University of Sydney

Book Review: Outlook: Australian Entertainment and Media 2012-2016

In an evening hosted by the Masters of Marketing Discipline at the University of Sydney, Megan Brownlow, Executive Director and Editor at PwC presented an interesting recently released report: Outlook: Australian Entertainment and Media 2012-2016 at the PwC head office in Sydney. Megan was one of three panelists to present at The Changing Media Marketplace night which attracted over 70 attendees from industry and academia.

Topics that Megan discussed included:

• Entertainment and Media growth rates: Australia’s growth rate is 4.1%, which is about a third higher than that of Japan, but much lower than other Asia Pacific countries, including Vietnam, Indonesia, China, India, and Pakistan.


• Internet advertising spend in Australia had a compound annual growth rate (CAGR) of 12% in 2011. The 2011 CAGR for advertising spend in consumer magazines and newspapers showed a negative growth and is projected to drop further in the following five years.


• IPTV (Internet Protocol Television) provides a clear cost and convenience advantage over free to air television. Many Australian households already have the hardware to support this media format. Appealing content offerings will be paramount to securing new customers in the coming years.

PwC generously donated a copy of the highly sought after Outlook: Australian Entertainment and Media book as a lucky door prize. For more information about Outlook: Australian Entertainment and Media 2012-2016, 11th edition go to http://www.pwc.com.au/industry/entertainment-media/publications/outlook/index.htm

The War on Privacy!

With the explosion of social media activity, the rise of on line retailing, and real time bidding to reach the ever-increasing online audience, the spotlight is well and truly focussed on privacy. More than ever, this is a hot topic in the daily media and in the legislators’ agenda. This is a fertile field for shock headlines and fierce political debate, with prominent commercial players such as Facebook and Google often in the firing line for alleged transgressions of the right to privacy. This is now a worldwide, borderless phenomenon.

Some privacy researchers are suggesting that privacy comes at a price, turning on the trade off between the consumer’s desire to share personal details in exchange for the benefits and convenience of the new styles of communication and consumption. In the backwash, the line between professional marketing research and the unqualified exploitation of “big data” laden with consumers’ details is becoming increasingly blurred.

No longer is the collection, processing, analysis and reporting of data the exclusive domain of the market and social researcher. Indeed, the advent of freely accessible on-line surveys, now being aggressively marketed well beyond the sphere of the professional market and social research community takes the established forms of our research into a new realm. In this context, users’ adherence to quality standards and best practice is not necessarily the case. This poses a dilemma for the professional market and social research community by raising the possibility that its hard won image for the protection of respondents’ privacy, an integral feature of quality assured research, is under threat.

To underline the difference between a professional versus an unregulated approach, most market and social research organisations in Australia now choose to operate within the regulatory framework of the Market and Social Research Privacy Principles and Code under the Commonwealth Privacy Act 1988. The Australian Privacy Commissioner is the adjudicator of this code. This sends the strongest possible signal to research respondents about the industry’s intent to protect their privacy. Have you felt your privacy has been violated through the use of social media, or as a result of a marketing activity?

Terry Beed
Associate Professor of Marketing at the University of Sydney Business School

What’s happening in Innovative Marketing Strategy class?

We are nearing the completion of the unit on Innovative Marketing Strategies. The unit coordinator, Professor Donnel Briley (Chair of the Marketing Discipline), has imparted his truly global interpretation of marketing strategies. Having lived and studied in North America, Europe and Australia, Donnel’s vast cultural experiences are exemplified through the cases studies he presents.

My favorite part of class is when we contrast regionally or culturally dependent marketing strategies versus strategies that have a more universal appeal. There seems to be no ‘one size fits all’ when it comes to marketing strategies as human needs and social boundaries define humor and success from one region to the next.

In this economic climate, marketers can be faced with developing marketing strategies that can be easily adapted to be suitable for varied cultures. Has there been a marketing strategy that has really struck you as universally appealing?

McDonald's Sponsorship Case Study

Another Olympic Games has come and gone. And while Australian swimming may not have done as well as usual and are looking to review their performance, one organization that performed well in this period was McDonald's in Australia.

Obviously, we're not privy to the detailed financial results of McDonald's or their ROI on their significant investment as a major sponsor of the Olympics in London. But what is impressive is the way that McDonald's in Australia leveraged their Olympic association.

Love them or hate them and no doubt some people will argue that McDonald's should not be associated with sporting events - but that is not the point here. The point is that the way that McDonald's has executed its Olympic sponsorship provides a great case study for how other firms need to implement sponsorship strategies.

Sponsorships have become a common part of a communications platform, particularly for larger firms. It is estimated that around 1% of marketing budgets are allocated to sponsorships, as they have unique advantages over other forms of promotion, particularly in the area of building a positive brand association.

Gone are the days where the sponsorship arrangement would simply be the payment of the funds and then adopt a 'hope for the best' approach. These days, most sponsoring firms would recognize that they have to work hard at leveraging and highlighting their sponsorship connection.

That's why McDonald's approach in Australia provides an excellent case study. They introduced a range of short-term menu items, with each tied to a previous Olympics, such as the Sydney Stack and the Beijing Chicken, along with a Coca-Cola Olympic glass give-away sales promotion.
This overall campaign clearly connected McDonald's and the Olympics, gave them additional products to sell, added variety for their regular customers, and gave the opportunity for different promotional messages and a value-adding sales promotion.

Overall, McDonald's has demonstrated a far more effective way of leveraging a sponsorship, rather than simply running ads saying that they are 'proud sponsors’. What are your thought on the issues surrounding the Olympic sponsorships? Should a company such as McDonald’s be a sponsor of the Olympics?

Geoff Fripp
Lecturer – Masters of Marketing at the University of Sydney Business School

When’s the best time to return to University?

Is there really a best time to return to university? After a few years into your career you might begin feeling less sense of achievement. Perhaps the challenges you originally thrived on are gone. The determined amongst us are contemplating our next move. That could involve a change of careers, or perhaps even climbing a rung or two higher on the career ladder.

Many people who feel this way have reached a crossroad. Their options include either continuing what they are doing or to return to study to advance their career. How old is too old to return to university as a post grad student? It seems that the average age for a post-grad student in Australia is 35 years old. Rather than benchmarking yourself against that number, perhaps it’s better to think about what you want to achieve by having a postgraduate qualification.

What are the benefits of doing a post graduate degree such as a Masters of Marketing early in your career life as opposed to after 10 years of work experience?

Is the macro-environment really a PEST?

When marketing students learn to consider the macro-environment in the development of their marketing plans and strategies, they are provided with the acronym PEST as a simple way of recalling political, economic, social and technology factors.

But this view stems from the traditional business outlook that environmental change was essentially a nuisance and that stability was preferable.

But one only needs to look at the recent financial results of Apple to see how outdated that view is in today's world. Currently, Apple generates 75% of its revenue from products it did not have five years ago. Their highly successful iPhone and iPad products were hardly on the Apple drawing board in 2004, yet today are responsible for an amazing transformation of this company.

Back in 2005, Apple looked to protect their flagship product, the iPod, from potential sales damage from the enhanced capability of smart phones. And due to their limited technical expertise in this market at that time, Apple's first foray into the smart phone market was via a joint venture with Motorola. It was only after this disappointing effort that they decided to go it alone and in mid-2007 the first iPhone was launched.

Within five years, Apple was essentially transformed into a different organization. They are now among the most profitable companies, and are also ranked as one of the valuable brands, in the world. Here is a firm that is now brimming with confidence, resources and profitability and eagerly awaiting further environmental change.

 So is the macro-environment really a PEST? A simple rearrangement of these letters transforms it into STEP. A step forward, a step upward - certainly true for Apple and perhaps a much better way to think about change and the opportunities it can provide organizations. What are your thoughts?

Geoff Fripp
Lecturer – Masters of Marketing at the University of Sydney Business School

Marketing is getting infinitely complex.

Marketing is getting infinitely complex.
But here is some context to help you deal with that complexity.

Today’s marketer not only has more channel choices than at any other time in history, but the number of channels is increasing every day. Plus they are often operating with effectively less budget, to deliver higher, more accountable performance, while a waterfall of data thunders down upon them.

No wonder we often feel overwhelmed. No wonder many marketers are suffering decision paralysis as they wade through the mountains of options and data trying to decide the best strategy.

In response our reptilian mid-brain has us longing for a simpler time, as a way of protecting us from an ever-lurking fear of failure.

The problem is not complexity
 
Let's bring some context to this complexity.

In 1999, the IBM Knowledge Management Team developed a Cynefin Framework (a welsh word), which provides new approaches to communication and decision-making in complex social environments. Sounds like a good description of the marketing function - right?

The Cynefin framework has four main domains: 

• Simple in which the relationship between cause and effect is obvious to all.
• Complicated in which the relationship between cause and effect requires analysis or investigation.
• Complex in which the relationship between cause and effect can only be perceived in retrospect.
• And Chaotic in which there is no relationship between cause and effect at all.

In the context of marketing, the market systems we deal with are at best complicated, but usually complex. Yet often we find ourselves mistakenly developing strategies based on the incorrect assumption of a simple system where cause and effect are obvious.

Understanding that marketing sits in the complex domain creates opportunities for better dealing with the challenges of complexity.

Change your approach to testing and learning
 
The first insight is that in this domain it is impossible to develop best practice, or even good practice. Instead, relationships between cause and effect manifest as emerging practice. This requires us to probe, sense and respond to the market. It means that marketing activities are actually probing the system, observing the changes that occur and responding to these changes, both negative and positive. This is seen in practice as marketing moves from a succession of individual campaigns to a process of constant engagement.

Collaborate to create new solutions and mutual value –

The second insight is that complex systems require us to develop truly collaborative approaches to market. Not simply co-ordination and cooperation, but collaboration leading to creating mutual benefit and value with the many stakeholders within the system. In media we are seeing this collaboration between many of the traditional and the newer media providers and their customers leading to new intellectual property, functionality and utility.

Simply learn to deal with complexity
 
At the core of our survival mechanism we crave simplicity, the fact is that marketing has never been simple. There were perhaps fewer options in the past, but within the context of the Cynefin framework marketing primarily exists in the complex domain, never the simple.

Marketers need to embrace this complexity and evolve processes and strategies for dealing with complex systems. This means that many of the modes of operating that are based on the simple domain assumption of an obvious relationship between cause and effect will need to change too.

Darren Woolley
Managing Director and Founder
TrinityP3 Strategic Marketing Management

The Different types of Creativity in Marketing

For one of our final group projects for the Master of Marketing, we were given the chance to not only design a marketing campaign but also the actual product we wish to bring to market with our campaign. I mentioned about this in the post about A visit to Smart. This project was very exciting for me because I can finally find the connection between marketing and design. Yay!!!

In preparing for the project, we had countless group meetings, research briefs and brain-storming sessions, as well as useful guest speakers to open our eyes to the possibilities of creating a great campaign for a product we came up with. Three weeks after we handed in our brief we had an intensive concept generation session with 5 creative directors. Three of them were from Smart and they were all very helpful from different perspectives.

They shared experiences about everything, but they all stressed on the method of presentation. How well we can express our ideas and sell our product. But our focus at the time was to come up with the product first.

Our product was a bike sharing system and slightly controversial due to the helmet laws and geographical limitations in Sydney (that being very hilly). After sorting that out (well the helmet issue kind of sorted itself out and we decided to use the Audi concept bike designed by Arish Karimi to combat the hills of Sydney.) we had to decide the art directions of the campaign, the budget and sponsorship allocations, and finally what advertising mediums to use. Our final poster (print is a mandatory medium for this project) is in line with current fashion trends as you can see below, and we placed a heavy emphasis on social media because our single minded proposition is ‘Share your ride”.

Our final campaign poster

Finally we had to put together the presentation. This was the most frustrating part as all the fun for me was in designing the product and the marketing campaign, but it HAD to be done and done well, otherwise all our hard work and creativity will not be seen. This perhaps took us the longest to do because we came up with this product and campaign, so we have countless things to say about it. How to put it into a 20 minute presentation with equal emphasis on the main areas and to cover every aspect was the most difficult part.

Our postcard/coaster/sticker concept

In doing this project for the Master of Marketing program, we not only understood the importance of creativity in the field of marketing, but also how to express this creativity in a form that the audience can comprehend. The collaboration of various forms of creativity is also very important for us as creativity in presentation methods is something I lack, and luckily someone else in the group is able to fill me in.

Successful campaigns are usually the memorable ones such as those I have mentioned in my previous blog posts. And I think our project is far from being comparable with those, but it was an extremely memorable experience for us and a great piece of work to put in our portfolio.

We’re letting people try the service for $1 to generate buzz and increase awareness

So if anyone is interested in knowing more about this project please do not hesitate to contact me. Also I will be in China for the next three weeks for Christmas and New Year. So I’ll keep my eye out for any interesting marketing tricks while I’m there. Till next time, happy holidays, be well and stay lovely!

Partnering with not for profit organisations – Should we give free head hours for good publicity?

For most businesses, the biggest objective is to make money. Marketing as the Master of Marketing program puts it, does it’s bit by letting people know about the product, how well it does its job and most importantly, tell them they need it, and why.

For not-for-profit organisations, the more exposure they have, the higher chances they will get donations. Surely their marketing budget is much smaller than international corporations, but somehow we see the “Salvos” everywhere. That’s because not all the work is being paid for.

The Salvation Army has always been one of the most influential charities in Australia and the large amount of marketing and promotional materials they put out plays a major part of it. For our integrated marketing communications subject in the Master of Marketing, we had the honor of speaking to the marketing agency working with the Salvation Army.

They put in a lot more head hours then they got paid for and create extremely effective campaigns. But there are issues associated with that. First of all the Salvo’s is a Christian charity so the team assigned to work with them within the Agency has to be comfortable with that. Secondly, a charity will never say no to sponsorships. A local print shop might offer to do 200 of their posters and the Salvos will ask the agency to print 200 copies less. And because a lot of the ad spaces are donated, it is hard to determine who will see the ad, and therefore had to produce campaigns that are targeting specific markets.

There were also cases where the agency has launched the new campaign, and because some advertising spaces were donated at the last minute with no time to print out the new material, the Salvos decided to put up the old one just so the opportunity isn’t wasted. This type of inconsistency in the message they send out could be counterproductive, but like all things brand equity related, is difficult to determine.



So is going through all these difficulties as well as putting in free head hours worth the good publicity? The agency think so. At the end of the day, they are proud of their work and it is a campaign that will be perhaps more memorable because of the association with the Salvation Army. We as Master of Marketing students are taught an important lesson, we must be ready to make compromises for the good of the organisation. Just think about the damage it could do to the Salvos brand if they rejected donation of free ad spot just because the new campaign posters are not ready. One of the rules of the Salvation Army is to accept all types of donations, no matter how small.

This marks the end of the post. Have you ever worked for any not-for-profit organisation? Feel free to leave me your feedback.

A Visit to Smart

Hello everyone!

The Master of Marketing program at the University of Sydney Business School aims to have a balance of academic and industry knowledge to cover all aspects of marketing, in-house or agency based. At the beginning of semester two, we were given the chance to attend a re-enactment of a creative pitch Smart did for Appletiser.

Smart is a full service creative agency with offices in Sydney, Melbourne, Queensland and Auckland and key clients include Coca-Cola, DrinkWise, Specsavers, Horticulture Australia, Betstar and the NSW, Victorian, Queensland and Federal Governments. Smart acquired The Foundry in 2010 and aims to become Australia’s biggest independent agency. This seems to be a growing trend and preferred business model in the marketing industry as seen in many case studies we came across in the Master of Marketing course.

An article about Smart on Mumbrella, Smart CEO Ben Lilley comments on this business model stating: "This marks Smart’s fourth acquisition in as many years (including Kindred in Sydney and Turner Sands and Logan Meo Walters in Queensland). We have now refined a mergers and acquisitions model that is proving very successful for our own business, our clients and the businesses we have acquired. This model is proving hugely effective in allowing the talent in each agency we acquire to realise the equity value in their companies, while allowing them to work on in an independent creative offering.”

The event was held at their cosy Sydney office near central station around 6pm. They provided light snacks and refreshments upon arrival, and the whole creative team was nice enough to stay back to attend the presentation.

We were greeted by the creative director Daniel Gregory - who is a part of the panel on Gruen Transfer (please read my piece on Gruen if you haven’t done so), and client services director Nicole Gardner.
in the concept being presented.

Daniel Gregory on the Gruen Transfer

Youtube link: http://www.youtube.com/watch?v=wej9JVbQk1U

We were then introduced to the team and presented with the campaign as they would to the client, using graphics, animations and other visual tools to help us understand the concept. The presentation was casual and interactive, and we were also given a brief history of the agency and what they do to set the scene.

Question time was allowed at the end of the presentation and all the team members jumped in to answer questions related to their area of expertise. The presentation really highlights the importance of teamwork; everyone must thoroughly understand and believe.

The visit was not purely for entertainment purposes. We’re required to watch the presentation carefully, taking notes and asking questions to prepare for two assignments later. The first is an individual assignment which asks us to write a review for the pitch including a score card rating system by AANA. This assignment is analytical bases and focus on attention to detail.

The second assignment is a group assignment aimed to develop a marketing strategy to launch a brand new product in a specific category (which I will write about later). This assignment is more creative and strategic based, covering areas of product design, campaign design and marketing research to come up with the most suitable campaign for the product which appeals to the target market.

In the Master of Marketing program and evident in those two assignments, we are required to think ahead and review the presentation provided by Smart from both the client perspective and the agency perspective. This pitching presentation also sets the bar for the quality of work required at a professional level, which is useful whichever side you decide to work for in the future. These assignments are just one of the ways The Master of Marketing at The University of Sydney combines theory with industry knowledge and experience.

This marks the end of this blog post, hope you enjoyed reading it.

Qantas Corporate Spinning Failure Damages Brand Image Badly

Hello everyone. In my attempt to be “current” I have dragged Qantas into the water. Qantas is officially back in the air yesterday at 4pm, after Fair Work Australia ended the unprecedented two-day grounding of its aircraft sparked by a divisive industrial dispute.
Qantas’s recent attempts in reshaping the airline have become a PR disaster. This defective use of PR by Qantas is a perfect example of corporate spinning failure which greatly damaged the brand. Alan Joyce's problem is that no matter how hard he tries to beat the national icon drum, his customers know it's not true where it matters: service and efficient movement from Point A to Point B.

ATEC managing director Felicia Mariani says the industry has started assessing the damage the weekend's grounding of the Qantas fleet has caused and whether it has done more harm than the long-running dispute between the airline's management and workers.





Qantas spent $2 million buying wraparounds and full-page ads in the nation's newspapers to soften the fall. These are full page ads claiming to be building a ‘stronger Qantas’ while remaining in a state of denial over the management failures that have so badly damaged the carrier. Qantas management’s answer to dismal fleet planning is to cut 1000 jobs. But it hasn’t announced anything that will recruit new Australian customers, win back the lost legions, nor even keep those who have remained loyal. In addition, Qantas continues to damage its reputation by playing the blame game, accusing the Transport Workers Union of holding the airline to ransom and disrupting passengers and completely grounding it’s fleet.

Prime Minister Julia Gillard has blamed Qantas for leaving thousands of passengers stranded in Australia and around the world, insisting the airline didn't need to take the "extreme" action of grounding its fleet.

Building a stronger Qantas print campaign

Qantas wrap around in the Australian

A group that co-ordinates a national response to major shocks to the tourism industry was assessing the impact of the turmoil at Qantas, she said. Tourism and Transport Forum (TTF) boss John Lee sees the weekend grounding as a "forgettable event" which won't do long-term harm to the industry. Mr Lee said the swiftness of the Government's response to the grounding had given the tourism industry certainty and helped prevent lasting damage.

"It's not as long-lasting as the earthquakes in Turkey or the recent flooding in Bangkok, so in the eyes of potential international visitors this probably isn't going to last in their memories," he said. "This recent phenomenon we all have in our modern lives, with so much information through technology, will mean this will be a pretty forgettable event come Christmas."

Many travellers reflect they chose to fly Qantas because they consider Qantas to be safe and reliable, which they no longer do. As for Australians, Qantas’s betrayal to move off-shore will destroy their value of being an Australian owned brand, one of their biggest selling points.

Do you think Qantas have gone too far this time? Or do you think the union has been too harsh?

Also check out blog post by Sydney Uni Business School Marketing Professor Charles Areni @ the Big opportunity blog.