PepsiCo's Strategic Focus

Today’s blog post is a repost from Evaluate Market Performance Lecturer, Geoff Fripp. Geoff has 25 years marketing experience working for organisations such as Telstra and St George Bank. During his distinguished corporate career, he has worked hands-on in most specialty areas of marketing, as well as holding senior strategic roles. He has also held several adjunct teaching appointments since 1988, with the Australian Institute of Management, the University of Sydney Centre for Continuing Education and the Business School.

I've just finished writing a case study for the recent launch of Pepsi Next into Australia in September 2012. No doubt you've probably been touched by some aspect of their Australian launch, ranging from guitar-playing babies with inept parents, to taste-test challenges across 300 outdoor locations, to heavy in-store promotion and discounting.

[image courtesy: http://www.pepsico.com]

By way of background, Pepsi Next is best described as a mid-calorie cola beverage, consisting of a half sugar and a half artificial sweetener formula. Upon first consideration you would think that this new product would find itself in no-man's land as it violates the first rule of modern marketing; appeal to a target market. And at first glance, the Pepsi Next product appears to be a good 'bad example' of how not to do this, by offering a product mid-way between the needs of two segments and probably appealing to neither very effectively.

However, my first glance at the product wasn't quite accurate. According to PepsiCo, this new product has a very defined target market - lapsed cola drinkers. Since 2005 in the US, the soft drink market has been in early decline with unit volumes slightly decreasing each year. Research has identified that sales are being predominately lost to bottled water and, to a much lesser extent, to energy drinks, sports drinks and juices and teas.

This shift in consumer drinking preferences isn't too much of a concern for PepsiCo across the board, being the second largest food and beverage firm in the world (behind Nestle) and boasting 22 brands that each generate over $1 billion in sales per year, including non-soft drinks brands such as Gatorade and Tropicana.

However, the concern at PepsiCo is more related to their flagship brand, Pepsi itself. Only last year it lost its long-term second place in the US market, with Diet Coke sales now exceeding Pepsi. In fact, Pepsi has lost about four market share points in the last ten years in the now declining US carbonated soft drink market.

[image courtesy: http://www.pepsico.com]

Hence, they introduced Pepsi Next in the US in February 2012; a brand that they hope will become the 'choice of the NEXT generation' and lure lapsed cola drinkers back into the market by providing a lower sugar alternative and to help re-energise the overall Pepsi brand.

But while all this sounds like a pretty straightforward strategic response to a more challenging marketing environment, where PepsiCo stands out in this case is with its incredible strategic focus. This is a firm that has tried and failed a number of times before with the same product concept. In fact, this is their fifth stab at a mid-calorie cola beverage; starting with a version Pepsi Light in the 1970's, Jake's Cola in the 1980's, Pepsi XL in the 1990's and Pepsi Edge as recently as the mid-2000's.

Many firms would have got the message from the market and walked away from such a troublesome idea. However, PepsiCo's persistence and commitment to their strategy has paid dividends throughout the corporation. Despite previous setbacks and failures with mid-calorie beverages they introduced Gatorade G2, which became the most successful food and beverage new product entry into the US market in 2008. This was followed by Trop50 in 2010, a mid-calorie version of Tropicana, which now generates over $150 million in annual sales in its own right.

While it's too early to determine whether Pepsi Next will survive in the highly competitive soft drink market, the commitment of PepsiCo's to this style of product provides a very important strategic lesson for all firms.

I think it was WC Fields who said, "If at first you don't succeed, try again, if you still don't succeed give up - there's no point being a damn fool about it". And it appears that this is a motto that many firms adopt and there are even firms that don't even try again the first time.

This style of approach to the market is going to lead to an organization being too flexible and inconsistent in their strategy development, as they lack the courage to pursue the market as they see it. But, of course, there's a fine line between strategic commitment and strategic stubbornness - the skill is in not only knowing the difference, but also convincing everyone else on the team that we should 'keep going'.

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

What can the Master of Marketing offer you? Alumni, Samara Davie

Samara Davie is an alumnus of the Master of Marketing. She is now Sponsorship Specialist, Corporate Marketing at Telstra. Hear what she has to say about her experience as a student with the University of Sydney Business School.

If you are interested in the Master of Marketing, why not attend our Postgraduate Information Session next week? The Master of Marketing is an invaluable opportunity to become an expert in marketing as well connecting you with real industry professionals

Have the opportunity to speak with lecturers and current students. 
Date: Wednesday 16th October 2013
Time: 6-8pm
Level 17, Stockland Building,
133 Castlereagh Street, Sydney NSW 2000

Register and find more information here.

What SHAPES a brand?

 

Throughout the Masters of Marketing program we have covered the subject of branding quite extensively, from building a strong brand (Innovative Marketing Strategies), measuring its effectiveness (Evaluating Marketing Performance), through to leveraging it internally (Internal Marketing).  But what does a brand manager actually do?  I caught up with a senior brand manager from Arnott’s to give us a little bit of insight.

Pizza SHAPES were my main source of nutrition as I travelled Australia back in 2003, and I have been a big fan ever since.  So you can imagine how happy I was to randomly bump into the senior brand manager for the entire SHAPES range. I had a lot of questions that needed answering. Why do I love pizza SHAPES so much? Why are they my ‘go-to’ snack? Why do I consider them healthier than other alternatives in the category? Why do I care that I can see flavour? Can I have a job please?

The answers lie within the marketing of the product and how the brand is mapped in my mind.  For me, pizza SHAPES are associated with: Australia; fun; treat; tasty; travel; friends; health (they are baked!); reward; snack; youth; box; purple; fresh; pizza dust; inexpensive.  These links to the brand are strongly connected, ensuring that pizza SHAPES are frequently at the front of my mind. Positioning is important, as it is a fast-moving good that requires low consumer involvement. This means it is important for brands to occupy a clear space in consumers’ minds and offer a consistently positive experience. Some of the associations are based on my experience of the brand, but the majority of them are due to effective management of the marketing mix. A brand manager is the person pulling all of these strings.

Central to any brand manager’s role is the strategy for the brand. Marketing activity will be SHAPED by where the brand is today, and where you want it to be in the future. This vision is determined by the brand manager and, for the SHAPES brand, realized by working closely alongside agency partners; product development; production (factory); sales teams and advertising. A brand manager needs to know their product, consumer and category inside out. In addition, they need to leverage this knowledge to manage internal and external parties to successfully deliver on the strategy. The diagram below illustrates a few of the parties that the SHAPES senior brand manager touches in their role.

As you can see, the brand manager’s role is very broad, spread internally and externally, and penetrates most aspects of the business.  They have to keep a lot of plates spinning and ensure all of these elements work together to ensure consistency and success within the market. Product development (within project management) is key to the long-term success of any brand, particularly within fast moving consumer goods. It keeps it fresh and exciting and ensures an ongoing dialogue with consumers. An example of this is the recent release of the SHAPES Soundz range, a new product development that epitomizes what Shapes is all about: fun and flavour!

So just as I am trying hard to kick my SHAPES habit, I can now add anything musical to my list of associations, giving me even more reasons to explain how an empty purple box ended up in my bin.
A prize to anyone who can use the word SHAPES more times in a blog post. Now go out and buy some of the new SHAPES Soundz!

Adam Kennedy
Current student in the Master of Marketing program at the University of Sydney Business School

Integrate fried chicken into your life

We’ve been learning a lot about Integrated Marketing Communications lately in our Master of Marketing. It’s been an eye opening experience, and now I see the world around me so much clearer. Maybe ‘clearer’ isn’t the right term… I see the world around me with a critical eye; constantly trying to decipher what is being communicated to me through subtle techniques, suggestive words and semiotics. I had become adjusted to the idea that advertisers are very clever with their ‘selling.’ This was until I turned on the T.V one night, and it all caught me off guard…

 

From 7pm, Channel Nine turns into a station dedicated for KFC. Okay, maybe I am exaggerating a bit. The TVC’s at every break of Big Brother is pretty standard when you are trying to buy up a primetime spot for your brand. But it was the conclusion of the episode that really made my jaw drop: after being on a restrictive diet, Big Brother rewards the housemates with KFC. Housemates go wild! KFC sales skyrocket?

I did a quick Google search, and since KFC were also the sponsors of last year’s Big Brother, there are endless moments where housemates enjoyed large amounts of fried food on screen. A conversation for another time is what about the ethical issues surrounding children seeing these fit, good-looking people on TV consuming large amounts of low nutrient, high-calorie food?

I understand this is pretty typical for sponsors to be integrated into shows – Top Gear does it, X Factor does it, but I couldn’t help but be irritated. The TVC’s were fine, they were executed with quality, I simply just got bored of it all – and having the episode close with another bucket of chicken really hit the nail in the coffin for me. I don’t usually watch Big Brother (or much of any reality T.V really), but I certainly won’t be tuning into KFC hour again.

Then it made me think: is this doing the same thing to other potential customers? Perhaps oversaturation can be just as detrimental to your brand as a lack of presence?

This idea of oversaturation can apply to amazing and inspiring TVC’s too. In our Integrated Marketing Communications class, we talked about how the most clever and original ads can lose its effect if audiences get bored of it quickly. It’s about walking the fine line of being interesting and being irritating.

I think it’s smart to sponsor a high-rated and popular T.V show. But I think it’s smarter if you can create a campaign that isn’t so transparent and will inspire your audience embrace your brand.

Hongi  Luo
Current student in the Master of Marketing program at the University of Sydney Business School

Barilla pasta’s distaste of gays: “Gays can go eat another brand”

Guido Barilla, owner of the global pasta brand, caused global backlash by saying he would never showcase a gay couple in Barilla ads. Moreover, he clearly articulated that homosexuals are not Barilla customers: “For us, the 'sacral family' remains one of the company’s core values. Our family is a traditional family,” he commented. Then Barilla’s chairman very forcefully stepped further by saying that if gays dislike this, “then they will not eat Barilla and they will eat another brand.” Read the full article.
There is no surprise that Barilla’s words have immediately turned into a boycott.

This resonates with me in so many ways. As a human being, I do believe that regardless of gender, race, shape or sexuality all people deserve to be regarded equally. As a human being from Russia, I am still answering the question ‘what the hell is going on in Russia with anti-gay legislation?’ Yet, from a marketing point of view, this pasta case isn’t so controversial compared with other blunders. It can sound extremely cynical, but a single brand cannot satisfy everyone; there is an obvious marketing lesson to align your brand with your target audience. This is exactly what Guido Barilla embraced.

But the problem is that there is always someone at the end of any marketing action that can be affected by such straightforward marketing approach. And it in this instance, those affected are the customers who are loyal to the brand after all this time. What position is Barilla putting these loyal customers if they are not aligned with their CEO’s views on sexuality? “I was raised on Barilla,” said one upset customer “My mom told me that this morning she looked in her cabinets and they were still filled with Barilla pasta, and after I told her what Mr. Barilla said, she said she was going to be dumping out all those boxes of pasta and switching brands.” Read more here.

The Barilla issue then causes a stir in social media, with number of memes popping up indicating pasta as a new symbol of homophobia. Not surprisingly, amongst all of this anti-gay controversy someone cleverly came up with the tagline: Barilla is the Russian President’s favorite choice. Barilla’s intentions of making clear their values has turned into ethical, human, and political storm.

Perhaps, this is why Guido Barilla finally handed out an apology statement by saying: "I apologise very much for having offended the sensibilities of many. I have the deepest respect for all the people without distinction."

Baring the Barilla case in mind, I have argued, that although Barilla as well as any other companies has to maintain the core value they stand for, playing with people’s sensitivity is not the way to do so. This seems to be a risky way to take a stand, as we never know what backlash it can create. More importantly, beyond any marketing intentions, you have to be wary of who you may offend when you are taking a stand.

Elena Sveshnikova
Current student in the Master of Marketing program at the University of Sydney Business School

Alumni Adele Tarnewski from Interbrand

The Master of Marketing has offered so many opportunities in and outside of the classroom – one of them being the chance to attend industry events. You may remember a while ago some of our students were lucky enough to attend Interbrand’s annual event, and now we can showcase our very own talent – Adele from Interbrand, and graduate of the Master of Marketing.

If you are interested in the Master of Marketing, you can attend our Postgraduate Information on Wednesday 16th October 2013, 6-8pm at the Sydney CBD Campus (133 Castlereagh Street, Sydney). You can register and find more information on the Postgraduate Information Session website.

Is Abercrombie’s value proposition damaging?

We've been talking a lot in class about value propositions and brand meanings. Most of the time, we study exemplary cases – where brands have offered outstanding value for customers, and customers in turn have responded with trust and loyalty. It’s a two way street. We do, however, forget there are brands out there using the same set of marketing tools – but making a mess of things…

A recent article on SMH urged that perhaps it’s time for Abercrombie & Fitch CEO, Michael Jeffries to move on from the company, as the strategy behind the company may be the very reason for the decline in sales. Not one to be shy, Jeffries has been very vocal about who – or more specifically, who isn’t - Abercrombie & Fitch’s audience. A quick Google can reveal the many lawsuits, comments and slip ups where A&F have managed to step on the toes of the majority, while simply trying to target their audience. A target audience that seems to be getting smaller and smaller.

While theoretically they are doing the right thing, really pinpointing their target customer, they are doing it in a way that alienates pretty much everyone else. Alongside this, in a world where we are increasingly growing suspicious of large corporations and their agendas, A&F are not showing appropriate Corporate Social Responsibility and their role in shaping the opinions of young people. Should they be really pushing the idea that being thin and cool are the only things to strive for in life? Surely education, community, happiness – or countless other attributes – are far more inspiring for young people to aspire to.

“In every school there are the cool and popular kids, and then there are the not-so-cool kids...Candidly, we go after the cool kids," Jefferies was quoted as saying. "We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely."

The problem with this very exclusionary way of branding is that people can retaliate against you. In the case of A&F, writer Greg Karber launched a controversial social media campaign to reposition the brand by donating A&F to the homeless. Although Karber has received criticism for exploiting those in need to illustrate a point, his campaign gained momentum and brought to light the behaviour of A&F. "When (the brand's) clothing is damaged, instead of donating it to the poor or unfortunate, they burn them," says Karber.



In my opinion, just because you have all the tools, doesn’t mean you will know how to use them properly! Abercrombie & Fitch demonstrate how a lack of understanding of customers can really damage your brand, cause retaliation and bad press. Oh! And one more thing, it’s pretty strange for a company that sells clothing that your ad campaigns very rarely feature any clothes – just food for thought!

Hongi Luo
Current student in the Master of Marketing program at the University of Sydney Business School

Mini Ads Get Personal

The weekend’s Integrated Marketing Communication class was almost completely all about how critical it is for marketers to communicate with the single person who is our target audience. To what certain extent can marketing communication be personalised? Actually, it’s not really a new idea that I've never heard of before, but the challenge is how to define the exact individual behind the masses, and how to build engagement with him or her.

The recent Mini billboard has handled this perfectly. It was extremely personalised communication through digital displays showing individually tailored massages to each of the Mini’s drivers. The ad is activated by spotters with iPads, taking photos of Mini’s drivers in their cars, and their image was then shown on the billboard further down the road.

The personal digital message then turns into real interaction like free tanks of petrol, or a lovely breakfast with 2000 other Mini's drivers. It is definintely out of the ordinary to see, instead of a regular old billboard, and a personalised message saying "Early start, Mr. Grey Mini driver? … Need a pick me up? … Fancy a tasty bacon butty? … Mini's buying … See you at the next garage."

Mini's digital billboard performance was only one part of its global marketing campaign “not normal” run by Iris Worldwide. By launching this first brand campaign after almost six years, Mini wanted to celebrate the special relationship the company has with its customers. Using the insight that Mini customers see their car in very unique and creative way, ad agencies then created the campaign that gets Mini drivers to feel like a part of extraordinary “not normal” community.

Whether Mini’s marketers desired to only satisfy their exciting customers, or to grab attention from potential Mini’s buyers with such a fun campaign, they have found a new approach to communicate with Mini’s audience on a totally personal level. I definitely like this “not normal” campaign itself and the way Mini has so successfully used consumers’ insight to delight Mini’s drivers.

Elena Sveshnikova
Current student in the Master of Marketing program at the University of Sydney Business School

Interview with Head of Marketing, Google Search at the University of Sydney

A while ago, we imparted some wisdom from when we sat down with Deepak Ramanathan and learned what kind of people Google likes to hire and their approach to marketing. How lucky are we to have opportunities like this? You can get a little taste of the morning with the Q&A video below.

Hongi Luo
Current student in the Master of Marketing program at the University of Sydney Business School

Marketing for the Good. Watch Greenpeace’s daring protest.

Last week in our Regulatory Environment and Ethics class, a few of our Master of Marketing cohorts spoke about the controversial marketing tactics of PETA, People for Ethical Treatment of Animals. Hotly debated – was PETA’s actions unethical, or just clever advertising?

We’ve touched on this topic before, in class and our on blog when we looked at Queensland RSPCA’s campaign to promote animal rights. When it comes to marketing and communication for NGOs or ecological groups, the way to go about it can be very tricky.

Never shy in the face of injustice, Greenpeace comes along once again to stir up some action. On the 29th August at 6 a.m., 35 activists, some dressed as polar bears, snuck into Shell’s largest Danish refinery, scaling its huge smokestacks and oil tanks to unfurl a rebranded Shell logo.

In 2012, Shell began exploring the Arctic, looking to tap crude. One of the most violate ecosystems, the Arctic is also one of the most difficult to clean up if an accident occurred. Along with breaking many safety and environmental violations, Shell would also be endangering the natural Polar Bear Habitat.

Although Shell’s plans for drilling in the Arctic may not be making breaking international news, organisations like Greenpeace are constantly fighting for the information to be available for all. But has it worked?

While this video has not been produced for a TVC or any specific campaign, it is part of the long running guerilla tactics that Greenpeace have been using to get attention for their agenda. From a content marketing perspective, their footage, while provocative and compelling, perhaps lacks in the “why should I share” department. “Why should I care?” well, for most people who are sharing this video, it is quite possible that ecological issues are already at the forefront of their interests. But what Greenpeace, among many other organisations really needs is content that is applicable, and relatable to people outside of their usual demographic. I’m reminded again of PETA, and their provocative poster.

By employing tactics usually used by the very industries they are trying to fight (e.g. fashion), PETA are able to really strike a chord. I can’t say for certain that they’ve converted many vegans this way, but at least the conversation has become a broader one.

Perhaps Greenpeace should take a leaf out of the books of some of the most shared ads of 2012. I’m sure you’ve all seen “A DRAMATIC SURPRISE ON A QUIET SQUARE”, an entertaining and surprising video, which actually turns out to be an advertisement for a television channel. By finding an interesting and unexpected way to deliver your message, people are more likely to share with their friends.

Although daring has always been in the repertoire of Greenpeace, perhaps to appeal to a larger audience, the words “funny” or “enlightening” or “captivating” should be added? For me, I can definitely think of a few more ways to use those polar bear costumes!

Hongi Luo
Current student in the Master of Marketing program at the University of Sydney Business School

Ready to vote?

It seems pretty interesting getting through an election race without actually having to be involved as a voter. As we are both are non-Australian, we have an unbiased look at the current election campaigns and how they have shaped our thoughts. To be honest, neither Kevin Rudd nor Tony Abbott seem like very inspiring speakers, yet there are a number of questions in regards to political and economy matters that they are going head to head on. What is the most surprising to us is how far both campaigns have gone with their extremely negative massages. Not only is the content negative, the tone encourages the general public to not only not vote for, but to also fear the opposing party. To the outside observer, the campaigns seem to lose the real value of the candidates and what they stand for.

We discussed an example of this in our Marketing Research for Decision Markers class. Take for example the below advertisements employed by Australian Labor party in their current re-election campaign. This very dispiriting campaign has used what is called the Prospect Theory (http://en.wikipedia.org/wiki/Prospect_theory) to encourage people to vote for Labor. But wait, hold on a minute…In these images, no where does it actually say “Vote Labor” as you would expect. This is because according to the Prospect theory, if you are in a ‘winning’ state of mind, or if things are neither good nor bad, you tend to be loss averse and stick with status quo instead of taking the risk of the new guy stuffing things up. However, if you are in a losing frame, or when things are not as good, you are risk seeking, and you would be looking for change – think Obama 2008.

So according to these ads, the prospect theory, and The Labor party, Australians must be in a pretty okay situation. And the clever marketing tactics employed here are working to heighten the feeling of risk in switching governments. Whether this risk is real or not is debateable. But voting, like many other decisions we make, can be influenced by these tactics which tap into the psychology of our decision-making.

Another thing we are noticing is that these campaigns are getting digital. A first in Australian election history, both candidates are heavily utilizing social media to tap into minds of over 12 million Australian Facebook or Twitter users. While Kevin Rudd, like Obama’s previous campaigns, actively exploits Twitter with 1,414,783 Followers, compared with Abbott’s 165,852 Followers, Tony Abbott tends to win Facebook battle with 229,775 “Likes” against his rival with only 114,671 “Likes.” http://www.smh.com.au/federal-politics/federal-election-2013/social-media Whether social media directly represents real voters’ preferences, it is clearly the most effective tool to engage with voters in real time.

What we can also see is the huge influence of Obama’s campaign on this Australian election race. It started with Kevin Rudd, who recruited a former strategist for Obama. This created a huge public and media backlash – while communicates restrictions for overseas professionals, he is more than happy to nab them for this election campaign. But the problem is as we see it, is that there are some unique skills, assets, and value that cannot be simply copied. We think, probably why Labor doesn’t go further than Twitter.

On the other side, Tony Abbott heavily exploits Obama’s strong roadshow campaigning. We can think of least two main public rallies in which he has been dressed up quite similar to Obama, with skinny suits and white shirts – your stylish political choice. But even more noticeably is how Abbott’s family is involved with his campaign. And it makes for great content. Forgetting policy and politics, it seems the Abbott daughters drum up much excitement and adoration from media and public alike.

In conclusion, we feel we are very lucky for not having to make a tough decision this election day. From a marketers point of view, we’ve been able to sit back, relax, and really take a critical eye to this year’s election campaigning.

 Elena Sveshnikova and Hongi Luo Current students in the Master of Marketing program at the University of Sydney Business School

Coca-Cola departs from Classic Coke Red to a greener look

I’ve learnt a lot during my studies in the Master of Marketing. Actually, I think that may be an understatement. I walk around now constantly bewildered by my environment, analysing packaging, advertising, reading into the most minute aspects of the world. This is because since undertaking my masters, I have understood that is someone at the end of the chain, making a decision for every minute element of most things.

Along with this, I have gained a lot of respect for the Coca-Cola Company. I’ve written about them before. And despite my status as a ‘lapsed’ customer (I kicked my Diet Coke habit a few years ago), I still pay attention to their products. This is why I am deeply intrigued by their recent new product, Life. Launched into the Argentinian summer, Coca-Cola Life is positioned as a low-cal alternative that is sweetened naturally. Featuring a mix of sugar and stevia, Life has 108 calories and is an offering that sits between Original and Diet offerings. Along with this, the bottle version of Life also boasts the company's award-winning PlantBottle, which is made from petroleum-based materials and up to 30% plant-based materials. Ever the image of a socially responsible global giant, the company hopes to be able to have a 100% plant-based bottle eventually in their line.

Not only is it a risky move, migrating away from the adored and iconic red colour (I recall the New Coke disaster, or when they made their can silver for Christmas), Coke has entered into an uncertain position in the market. Although previously Coke and Pepsi have dipped their toes into the waters of the ‘mid-calorie’ offering, Pepsi currently is swimming with their Pepsi Next offering. Pepsi Next was examined by most of the students of the Master of Marketing in our Evaluate Market Performance class, taught by Geoff Fripp, Industry Specialist Lecturer in Marketing. Although Next, used to be partially sweetened with artificial sweeteners, they have announced that as of June they have changed the formula to only use natural ingredients. This makes the two offerings very, very similar. Perhaps the change of ingredients from Pepsi was in response to Life entering the marketplace.

As with most things, I like to speculate the performance of the new products as they go head to head in the ‘mid-calorie’ market using all the tools I’ve taken away from the course thus far. However, in this instance, I think I might let my thoughts distill a bit longer, unwilling to make the wrong call. I will say however, that I believe this mid-calorie direction is the way carbonated drinks will be headed for the future. I wouldn’t mind my life being a little bit greener!

Would a totally naturally flavoured Coke motivate you to purchase?

Hongi Luo 
Current student in the Master of Marketing program at the University of Sydney Business School

Be a part of our Marketing community at Open day on the 31th of August! If not now, when?

Whether you are preparing for the forthcoming Master of Marketing application session, or are scurrying off to find out more about which marketing course you want to apply for, or even if you have already accepted a position – The University of Sydney Open Day on 31th of August 2013 is a definitely must do for this weekend. Even though there is lots of pertinent information you can gain from the University of Sydney website or our social media, take up the chance to really soak up the atmosphere at Open Day.

By attending Open Day and really getting into the University environment you actually can learn much more about what you can expect from the Marketing course. As for me, Open Day was a great chance to get my numerous questions answered by Marketing teachers and current students. For sure, it’s certainly worth your time to casually chat with marketing community members and get their perception on what the Marketing Discipline at The University of Sydney is all about, and how it can benefit you.

I clearly remember the last year Open Day when I made my decision to be a Master of Marketing student. There was a lot of hustle and bustle at the event, with study seekers all eager to fulfill their questions. It may sound too instructive, but it helps to have done some research before the event. From my experience, it really helped me to formulate the exact points I wanted to discuss. Making the decision to go back to study can be a hard one, so Open Day is a great opportunity to understand how to make the transition.

For this year you will meet with Associate Professor Pennie Frow, Program Director of the Master of Marketing program at the University of Sydney Business School and many other representatives from the Marketing Discipline.

You can find us at the PostGraduate Expo. And of course, if you have any questions about Marketing Discipline, or just how we, as students, have found the course, please do not hesitate to ask a question.

Find out more on our marketing website.

Elena Sveshnikova
Current student in the Master of Marketing program at the University of Sydney Business School

Belonging to great communities like The University of Sydney, Hilti and Google

For me, one of the great advantages of being a Master of Marketing student at the University of Sydney is the feeling of belonging to a society of truly talented and proactive people. This doesn’t only relate to our tribal affiliations, but also includes additional challenges and projects that our student community takes part in.

An example of this is the 2013 Google Online Marketing Challenge. Six Master of Marketing students: Rita, Yuriko, Yilian, Lillias, Sally and I decided to enter the Google AdWords competition. We were lucky to work with Hilti through this campaign. Many thanks to the team, our faculty supporters and most importantly our marketing partners at Hilti.

I’ve asked our team leader, Sally to explain the key features of this campaign on behalf of our team:

What was your motivation for participating in the Google Online Marketing Challenge 2013?
I’d previously used AdWords as part of marketing campaigns; however I had never actively planned and executed campaigns myself. The choice was based on a desire to learn more about how AdWords works at a granular level, and to experience guiding a client through the process.

What was the most valuable take-away from your AdWords campaign?
Our team was focused on reaching professional Tradesmen in the construction industry. The product we were promoting was a range of high-end cordless drills, the keywords in this category cross into the DIY consumer market; therefore target market messaging was particularly important as we were talking to tradies not DIY consumers.

Analytics help to adjust for QualityScore, which improved our ad position so that’s an important factor and helps to reduce budget not impact.

What was the most difficult part of competition?
Initially, coordinating team member diaries was a challenge, so when face-to-face chats weren’t possible we used group functions in a social networking site to collaborate and the cloud to update our plans and to stay on track.

What was the most exciting moment apart from the results?
Looking at the number of Impressions and CTR was really exciting. We all got a buzz out of watching Google go to work. It was extremely easy to monitor and measure the performance and I found that really exciting and valuable.

Your team included members from different cultures, countries and professional backgrounds, what is your advice to people management?
Recognise that everyone has a different perspective, listen and adjust to ensure you can make the most out of this. It's also important to ensure each person understands what they need to deliver, when and how that contributes to the project.

Getting through this AdWords competition wasn’t only about handling digital stuff, concurrently we picked up a lot about the market Hilti operates on. Nicole and Christina, Hilti marketing managers actively supported and navigated us through such challenge.

I’ve asked Nicole as a Hilti spokesman to answer a few questions regarding Adwords campaign:

What was the company’s motivation to take part in the Google AdWords Competition with Master of Marketing students?
Hilti currently partners with a number of universities on various projects, so we are always open to take part in these types of activities, especially if they relate to our current business objectives. The Google AdWords project is something we were particularly interested in being involved with, as Hilti has had fairly limited exposure to this form of digital marketing in the past. We were eager to see how the students would approach the campaign, and what learnings and recommendations we could take away for our future digital marketing activities.

What are the most interesting or even surprising aspects that you uncovered through that campaign?
While not surprising, the Google AdWords campaign reinforced the importance of creating a unique message and value proposition that was still aligned to our premium brand and personality. In a highly competitive and price sensitive cordless power tool market, the team needed to be creative in coming up with a cut-through message, that would generate the best possible results. Also interesting for us was the much higher percentage of impressions and clicks from tablet users, as opposed to desktop users and even mobile phone users.

Was it useful experience for Hilti in terms of its overall digital marketing strategy?
Definitely. The student team delivered a well prepared and executed campaign, along with recommendations that we can consider as part of our future digital strategy. The focus that was placed on message development, which was adapted accordingly through the duration of the campaign, can be used to inform future campaigns.

In summary it was a good experience that the team has learned a lot from. We’re still waiting to hear the results for this year’s challenge, so fingers crossed!

Elena Sveshnikova
Current student in the Master of Marketing program at the University of Sydney Business School

The science behind shopping

Did you know that emotion and value are handled by the same part of the brain? According to research from Duke University, this is the reason why we impulsively buy things that perhaps we don’t really need or want.

As marketers, we know already know some aspects of this. In many of our Master of Marketing classes we talk about the Perceived Value of products. This may or may not match up to the real, functional value of products – but value is in the eye of the beholder. How much value you perceive will affect your happiness, satisfaction and how much you are willing to pay.

Although shopping is definitely a trait passed down from our hunter-gatherer days, researchers are continually trying to understand better the science behind shopping. In an article by the Sydney Morning Herald, the link between emotion and decision-making in shopping explains why we go after those impulse purchases. Using brain-scanning technology, researchers are able to see that while we make both long-term and short-term decisions, impulse purchases are motivated by the temptation to satisfy immediate benefits because our brains put more emphasis on the present than the future.

I know we’ve all probably gone through it. I definitely have. Instead of thinking, “those shoes are too expensive, and I really can’t afford them” my emotional my emotional brain kicks in with “those shoes are BEAUTIFUL and they will go with everything in my wardrobe, and they are worth so much more than the money!” My emotional value for the shoes skyrockets, and impulsively, I buy the shoes.

Shops know about our behaviour, and clever marketers use this information to encourage us to buy and spend more. Here’s one trick shops use from learning about our brain’s behaviour:

Shop Right: did you know that most people walk to the right when they enter a store? This is because the majority of the population is right handed. This means shops use this opportunity to guide customers through a shopping journey where you will see the brighter displays, more expensive shinier items that will pull on your emotional value system.

You can read more on the science behind shopping.

Thanks to Associate Professor Marylouise Caldwell for the blog idea!

Hongi Luo
Current student in the Master of Marketing program at the University of Sydney Business School

Alexander Wang causes a stir with his free-for-all

In fashion it’s all about exclusivity. So when you get invited to a “One-time-Only” Special event, you line up for five hours in the hot New York humidity, and you go! Especially if it’s held by Alexander Wang.

Last month, the darling of high fashion caused a stir when an undisclosed event turned out to be a free giveaway of hundreds of thousands of dollars worth of clothing. While first hand accounts told of the mayhem that followed, as devotees of fashion were welcomed by a video of Alexander himself explaining “Take as much as you physically can, because there are no shopping bags, no shopping carts” and that everything was free. Screams, catfights, destruction – thank goodness no one was trampled.

However… the saga continues! What was just a cool publicity stunt, maybe clearing out some static inventory, has now been released online for all to see.

Nothing, and I mean NOTHING can be a display of brand loyalty better than this video.

 The designer said in a statement, “I love reaching out directly to our audience; to have a dialog that provokes and at the same time has a sense of wit and irony.” And maybe he’s got the formula to co-creation right? “ This project was viral and street at the same time, which allowed us not only to communicate with our audience through different avenues, but to activate them. I liked the idea of creating a destination that’s unknown, mysterious, and fun, where people can connect.”

Not only has Wang engaged with customers on a personal level – at least those who lived to tell the tale of the free-for-all – he’s also using this opportunity to engage on a different platform with customers around the world, YouTube. Although currently only 40 videos deep, the designer has been making more and more of these candid, odd, weird and funny videos. Although your mums and dads haven’t heard, it’s making a stir with the right crowd.

 In our digital age, it’s easy just to tick the boxes of social media. Facebook, check. Twitter, check. But to engage, REALLY engage with a platform and create content that adds value for your customer is extremely difficult. I know I sound like one of those mad fans in the video, but Alexander, you’ve got my seal of approval.

Hongi Luo 
Current student in the Master of Marketing program at the University of Sydney Business School

“Ethical behaviour by corporations is justified only if it leads to greater profits.”

There is one topic I have been procrastinating for a while to write about - whether employing provocative content in marketing communications or campaigns is justified by sales, or is it just not worth it to compromise our legal and moral obligations. I wanted to put off having such a discussion, even when the latest Rolling Stone issue putting Dzhokhar Tsarnaev’s - “Boston bomber” photo on its cover. It got me really mad, but I am still not sure where I stand in this ethical dilemma.

However, identifying and collecting such ethical marketing issues has now become a part of my coursework in our Regulatory Environment and Ethics class, there is no further excuse to postpone the discussion.

Yes, as marketers we are pretty clear that sometimes even backlash created by marketing activities seems much better in comparison with absolute lack of consumers’ interest. So, there is no surprise why in today’s highly connected world such marketing tactics has become even more acceptable. On Twitter for example, as one UK marketing agency reveals, controversial content is a main driver of a successful social media marketing campaign. In a bid to stand out, and thus to capture greater customer attention, many firms are progressively testing how far they can go with controversial or even offensive content.

While for some companies this strategy may bring valuable marketing outcomes, Rolling Stone recent case instead has showed how it also could be pulled in a Boycott Rolling Stone campaign. Once its controversial cover appeared on the Rolling Stone's website, it immediately became a wide spread buzz topic across all social media. Not surprisingly, that nearly all the comments were highly negative. Here is one comment written by a very tolerant respondent: “CONGRATULATIONS, ROLLING STONE. YOU SOLD YOUR SOUL FOR SALES” .

With this Rolling Stone case I am pretty clear where I am. However, according to AdWeek, Boycott Rolling Stone hasn’t affected the magazine’s sales in any way, I would like to argue that even from a marketing perspective not all publicity is a good publicity. Growing sales cannot be a simple justification for being offensive. For me, the main risk of breaking the moral line is not whether an offensive campaign gains or losses in sales, but whether I, as a marketer, act in an ethically reasonable fashion.

It is definitely an endless discussion when it comes to where to draw the line for provocative marketing campaigns. Is this statement: “Ethical behaviour by corporations is justified only if it leads to greater profits” true? Luckily, we get a great chance at gaining a broader view on that through our Regulatory Environment and Ethics class this semester in Master of Marketing program at The University of Sydney Business School.

Elena Sveshnikova
Current student in the Master of Marketing program at the University of Sydney Business School

Virgin Mobile’s Content Marketing is LOL on Buzzfeed

It’s no secret that the webpage you just stumbled upon, littered with funny cats and embarrassing photos, is a really a sponsored advertisement. If you don’t notice the back slash hidden in the URL (in this case /virginmobilelive) you’ll probably notice that instead of some staff writer, trawling the Internet for pictures of dogs eating birthday cake, it’s the avatar belonging to a leading mobile service provider.

Buzzfeed’s viral success is due to their magic formula of understanding the Internet, and providing the type of content that people will share. Companies like Virgin pay about $100,000 a month in order to obtain a joint venture with the platform and publisher. That's money very cleverly spent, considering Buzzfeed claim they have found the secret to virality. In a recent interview with New York Magazine Jonah Peretti, Founder and CEO, speaks about how they’ve found the “secret formula” to “viral optimisation.” A part of this process is monitoring the performance of posts, promoting ones that do well, and ruthlessly dropping ones that do not perform. That’s why you may have noticed the same few titles and pictures floating around – they get to stay because they attract more people to the site.

Whether or not this formula works, companies are eager to jump on the content bandwagon. Creating new, original content that will gain traction is difficult. It’s an art form. So why not use something that’s already working?

I can’t decide whether Virgin’s collaboration with Buzzfeed is innovative or not. It definitely works though. There is no doubt that people around the world are sharing “11 Things No One Wants To See You Instagram” and “27 Cats That Just Can’t Handle It” but the relationship to how this activity is selling product will be a secret kept by the companies – a difficult ROI to work out. There are other marketing elements however, like making impressions and generating a personality for your brand. Perhaps these intangible elements are even more important in a digital age where people are trying to affirm their own individual identities through the content they consume and share.

Regardless, Buzzfeed’s traffic has doubled within the last 6 months. It doesn’t seem to be going anywhere as a leading platform to communicate with the masses. Perhaps we should take a leaf from Virgin Mobile and embrace collaborative content creation for better, more LOL exposure on the internet.

Hongi Luo 
Current student in the Master of Marketing program at the University of Sydney Business School

What if your firm closed its doors on customer service?

What do you usually expect to receive while ordering something online? Hopefully exactly what you ordered, even though there is always a risk of getting something completely different. It could be the wrong colour or the apparel doesn’t fit you well. When such annoying things happen, you hope the company will want to help you resolve your issue.

In our Internal Marketing class, and in a way through our entire last semester at the University of Sydney Business School, I have learned that at the end of any marketing strategy, CRM, big data and many other hidden weapons of the marketing industry, there is a customer. For the firm, to satisfy his or her needs is the objective of their company.

Banana Republic, with its recent online ordering slip-up, seems definitely falling far short of their customer expectation. An American couple were bowled over when they got the parcel from Banana Republic. As Huffington Post reports instead of a tie and pocket square they expected, the package from Banana Republic instead contained sensitive “employee documents: Social Security numbers, tax forms, resignation letters, legal notices, doctors' notes and performance reviews.”

What a shame, but honestly this stuff happens with any firm. The only difference between truly consumer-oriented and others is how the company deals with such situations. You would think from such mature companies like Gap Inc, which Banana Republic is a part of, customers, even those of us who are students of marketing, expect a certain level of customer service.

But what surprised me even more is how much efforts those customers had put in force to reach the attention of Gap’s customer service. They tried to get at the company through regular customer channels, but there were no responses from the firm. The couple only got a serious response when they had employed their social media, communicating their issue through Twitter and Tumblr accounts.

Although a Gap representative finally apologised by saying: “We take the confidentiality of personal information very seriously and we strive to deliver a perfect customer experience, every time… Regrettably, human mistakes happen and this was one of them,” there is still one question for the company: has the company expressed the same apology to its employees whose personal data and information could have been compromised?

I am wondering if Gap has dealt with this situation wisely. This recent Gap case is a vibrant example of how important is to take customer request and complaints seriously and keep your customer service door opened. If Gap has promptly dealt with this particular complaint, we would not be scrutinising them in the media, proving the importance of good customer service for any company.

Elena Sveshnikova
Current student in the Master of Marketing program at the University of Sydney Business School

Welcome Semester 2 with open arms!

I cannot believe that for most of our cohort, we are halfway through our Masters of Marketing degree! It’s been such an eventful six months, and I anticipate just as much excitement and learning in the next semester. For the first time, mid-year intake has been available for the Master of Marketing at the University of Sydney Business School. This means some new students will join us this week. I’d like to take the time to welcome everyone who will be a part of our marketing family! And to current students, let’s get right back in to learning together!