Merry Christmas from the Masters of Marketing

I would like to wish all of the readers of the Marketing Matters blog a very merry Christmas. To celebrate the holiday season, this special blog is all about festive advertisements. It may not be snowing outside but let the countdown begin!

Monty the Penguin
Since this ad was launched in the build up to Christmas 2014 it has gained a staggering 26 million views. The advert tells the story of an unlikely friendship between a little boy named Sam and his penguin friend Monty. The soundtrack to the ad was a cover of John Lennon’s song ‘Real Love’ sung by Tom Odell.

The advert costed £1 million pounds to produce with the total campaign cost coming in at £7 million. The group used to create the CGI animation of Monty the penguin was the same team used in high budget movies such as Planet of the Apes and World War Z.

As soon as the advertisement came out, the stuffed toy version Monty instantly sold out in stores and were being resold online for more than six times their face value. Monty-mania drove John Lewis to have one of their most successful Christmas trading periods in their history.

WestJet Christmas Miracle
If you want a great example of how businesses can engage with their customers in a fun and unique way at Christmas, then look no further than the WestJet Christmas Miracle.

Upon boarding their flight in Ontario passengers were asked what gift they would like for Christmas. As soon as the plane takes off there is a mad dash from the WestJet employees to buy and wrap the presents for the passengers. A few hours later in Calgary the gifts are waiting on the baggage carousel for the unsuspecting customers. Everything from TVs, toys and even socks were delivered to the amazement and joy of the customers.

43 million views later, this advert still continues to spread some fun festive cheer.

Toys R Us
What says Christmas more than toys? This iconic advertisement first came out in 1989, which made me just 6 years old when I first watched it. Since that time it has been remade and updated, but always with the same catchy theme song.

I think it is a testament to really good consistent marketing that I can still remember every word to this ad over a quarter of a century later! There’s a magical place, we’re on our way there, with toys in there millions all under one roof, it’s called Toys ‘R’ Us!

Man on the Moon
If you cry easily, it’s time to look away now!

After the success of Monty the Penguin in 2015, John Lewis has done it again this year with the Man on the Moon. The story shows a young girl named Lily who is looking through her telescope at the man on the moon. Seeing the old man going about his day all alone she decides to send him a give to show him that’s he is loved this Christmas. 

I think this sends a really strong message at Christmas time to remember those who may be unable to speak to anyone. John Lewis partnered with the charity Age UK to help raise awareness and donations to this cause.

Man on the Moon: Parody
The budget retailers Aldi were quick to produce their own cheeky spoof of the John Lewis Man on the Moon Christmas ad. It features an old man sitting on a bench on the moon choosing between two telescopes. Of course the telescope he prefers is the cheaper one from Aldi!

Delivered in a fun way, the advert really captures Aldi’s commitment to offering quality products at low prices that shoppers will be over the moon with!

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Coca-Cola: The King of Christmas

If there was one brand that really captures the magic of Christmas it must be Coca-Cola. Who would have thought a drink simply made from corn syrup and water would evoke such emotion and have such ties to the festive holiday?

When you think of Santa Claus you usually picture a jolly old man in a red and white jacket with a fluffy white beard. What many people don’t realise is that the origin of this Santa was actually painted by the illustrator Haddon Sundblom and has become the image that we are most familiar with today.  While Coca-Cola had previously commissioned pictures to be drawn, it was Sundblom’s vision of Santa Claus that has become the most iconic. He continued to draw these pictures for Coke for over thirty years. 

Source: http://www.adbranch.com/

Coca-Cola has been featuring jolly old Santa in their ads since the 1920’s and has even helped to shape his very image. Some even go as far as to say that Coca-Cola were instrumental in dressing Santa in the traditional red and white clothing to mirror the brand image of Coke. While this may be a disputed claim, there is no doubting that the Santa and Coke history has been intertwined for almost a century.

For so many of us, the flashing lights of the Coca-Cola Christmas trucks are an essential part of getting into the Christmas spirit. The classic TV ad first appeared over 20 years ago on our screens but fell into disuse in 2001 after a restructure that meant all advertising campaigns would be produced locally for each country.

The ‘Holidays are coming’ campaign featured the famous red Coca-Cola delivery trucks decorated with Christmas lights driving through the snowy hills of Germany. As the truck passes through the town it causes the Christmas lights to turn on and shine with people watching in amazement. By 2007, Coca-Cola reintroduced the campaign back on to TVs around the globe. It is really quite amazing how successful this relatively simple advert has been and still stands the test of time today. In fact, in the UK, the truck has its very own nationwide tour, handing out free samples and opportunities to take pictures with the iconic vehicle.

Source: http://www.coca-colacompany.com/

Last week, Coca-Cola released its newest packaging which allows the owner to transform the bottles label into a festive bow. While these are limited edition and only available in selected markets I think it is another ingenious way to strengthen the products ties to Christmas.  The new packaging has already created quite a buzz on social media with users posting their festive bows adoring their Christmas trees.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Twelve Key Marketing Metrics (Part II)

7. Customer Satisfaction
Customer satisfaction (CSAT) is a very important metric to measure for a number of reasons. CSAT is a primary indicator of a consumer's future intentions and loyalty to a brand for repeat purchase. For many successful companies CSAT can also act as a point of differentiation in a crowded market place. High levels of CSAT also help to reduce customer churn, which is the turnover or loss of clients. It can also help to increase CLV by retaining profitable customers since they are often cheaper to maintain than acquire new ones.  Finally, good CSAT helps to reduce negative word of mouth, as customers who are unhappy are likely to tell others about their bad experiences.

8. Net Promoter Score
The net promoter score (NPS) is a metric which can be used to consider the loyalty and happiness of customers and how likely they are to recommend your company to others. Customers are surveyed and fall into three categories depending upon their NPS. Promoters are customers who consistently recommend your company and may include strong brand advocates. Passives are reasonably neutral and would neither recommend nor deter anyone from your company. Finally, detractors are individuals who would discourage people from buying from your company. The NPS is actually calculated by taking the percentage of people who promote your company and subtracting those who detract from it.

Source: https://www.checkmarket.com

9. Share of Customers
Share of customers is also sometimes known as share of wallet and is the amount of a customer's total spend that a company captures through its business operations. By increasing the share of customer, organisations can boost revenue cheaper relative to efforts to increasing market share. The typical way to increase the share of customer is to offer new products or services to existing customers of the business. For example, Nike may capture a higher share of customers by bringing out new lines of trainers to increase its share of wallet.

10. Market Share
The market share metric is useful for marketers to better understand the overall size of a company in relation to the market as a whole and its competitors. Market share is the percentage of a market in total sales that is earned by a company over a specified period of time. It is a relatively simple calculation by taking the sales of the company over the period specified and dividing them by the total sales from the industry as a whole over the same period.

11. Bounce Rate
The bounce rate is an online metric used to analyse web traffic to a particular destination. It measures visitors who enter a website and then leave rather than continuing to click through to other areas. While this metric can be misleading, it can also give you vital information into the success of a campaign. Websites with a high bounce rate usually indicate that the website is not performing well in continuing the interest of visitors. However, Wikipedia pages would often have a high bounce rate as users may land on the page, find what they were looking for and then leave. Therefore, bounce rate should not be evaluated in isolation but can often be revealing.

Source: http://www.recruiting.com

12. Online Visitor Behaviour
Online visitor behaviour to a website can be analysed in a number of ways. For example, you can consider the number of users and visitors to a website by counting page views. Metrics can also be used to measure the length of time on a website and the number of users who return to that page. In converting behaviour to action, metrics such as click-through rate (CTR) can be used to measure the ratio of users who click-through to a particular page including the conversion of page views leading to a purchase.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Twelve Key Marketing Metrics (Part I)

Gone are the days when important marketing decisions were made on a whim.

Marketing has become increasingly scientific over the years with marketing performance measured and evaluated to assist decision-making. In this weeks blog I will be detailing twelve key marketing metrics to increase insight and overcome unpredictability in decision-making.

1. Customer Lifetime Value
Customer lifetime value (CLV) is the measurement used to predict the net profit of all future relationships with customers. CLV is an incredibly useful tool businesses use to analyse who are their most valuable customers. Knowing which customers are the most profitable is just as important as knowing which customer segments are less desirable to retain. Calculating CLV helps businesses manage their customer relationships as assets to the company and monitor the impact of marketing investments.


Source: http://csbcorrespondent.com/

2. Retention Rates
Retention in marketing is often used to count customers and track their activity over time. The retention rate is the ratio of customers retained by the company vs. those customers who are potentially at risk of leaving. While driving sales and engaging customers is important, failure to build a loyal customer base and retain the most important customers can undo all your business's hard work. After all, it is always cheaper to retain profitable customers than to acquire new ones.

3. Customer Acquisition Cost
Customer acquisition cost (CAC) is measured by calculating the costs associated with convincing a customer to purchase your product or service. The reason why this is such an important metric is that it is used in calculating the value of the customer to the company and how many resources should be used to attract a particular customer segment. CAC is particularly useful for established businesses that may be considering targeting new markets and customers.

4. Profit Margins
Profit margins are simply a measure of profitability. Today's marketing managers are often asked to evaluate the profitability of their campaigns. A campaign with a high margin reflects high levels of profitability, whereas a campaign with a low margin reflects low levels of overall profitability.
 

Source: http://www.industryweek.com

5. Return on Marketing Investment
Return on marketing investment (ROMI) calculates the contribution that marketing spending has made to profit. This metric can be used to measure the overall effectiveness of a campaign and help aid marketers in their decision making for future investments. ROMI is calculated by comparing revenue gained against a business's marketing investment. It is often useful to compare effectiveness across many marketing activities in percentage term, which makes ROMI particularly useful.

6. Internal Rate of Return/Net Present Value/Payback Period
The internal rate of return (IRR) metric is used to measure the profitability of potential investments. When considering if a marketing project is worthy of potential funding the IRR can be used to better evaluate the decision.

The internal rate of return is actually the discounted rate that makes up the net present value (NPV). NPV is a metric used to evaluate long-term projects and is also a key part of determining ROMI.

Payback period is simply the length of time that it takes to cover the cost of an investment. The length of this period can help to determine if a project is viable.

These metrics are key for marketers in order to justify new campaigns internally to other departments. It is also a useful practice to measure these when considering if a campaign has been a sound financial investment in the long term.

Be sure to check out part II tomorrow for the following six marketing metrics!

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Video Becoming An Effective Marketing Tool

It has been made apparent that we are all consumers within this mass digital age. With a plethora of platforms to use, a large percentage of marketers are moving their brands and organisations into branded content especially considering that digital video is becoming more of an important component of omnichannel strategies.

Whist we have the more traditional television viewings decreasing, the consumption of video on other devices is steadily growing. In reference to the recent Q2 2015, Australian multi-screen report released by Nielsen, 12% of all video viewings across the nation’s population take place on screens other than television.

This can be seen as super exciting times for marketers, especially the new generation of marketers. However, we need to ensure that we learn the best way we can operate in the new, rapid and constantly changing digital environment. Considering consumers are using more than one device, research is increasingly showing a decrease in the impact for television advertising.

Gone are the days when you could commission a big glossy TVC, place it in primetime, and wait for the results to pour in. Depending on who your consumer base is these days, they now might be busy on their iPhones while TV ads are playing in the background, or perhaps there not even watching traditional free-to-air TV at all considering we have all become so time poor.

The trend for shopping behaviour has also moved online, and consumers are now accessing various channels to search for particular products or product information. A retail customer today might find out about a certain product online, find more information about it on other sites via their mobile device and should they wish to go ahead, eventually purchase it in-store.

“The marketing funnel no longer flows in a linear pattern,” Nielsen’s report explains.
“We are in a new era of marketing, where the consumer decides their own path from awareness to consideration to purchase, hence the need for an omnichannel content strategy.”

Video is one way your brand can communicate its point of difference and communicate meaningfully with your customers and prospects. Even though text and photo-based ads are inevitable to creating a strong online presence, video has found itself an important place within the digital marketing and e-commerce world. YouTube channels and video platforms like Ad words for video always help businesses promote products in the best manner. However, on e-commerce websites, videos have to be used in a more interactive and educational manner to create a greater shopping experience.

Some interesting facts regarding the impact of video on sales can be seen in the info graph below.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

Black Friday and Cyber Monday: A Marketer’s Perspective

Black Friday is an annual tradition observed in the United States on the day following Thanksgiving. This day officially marks the beginning of the shopping season and sees retailers slashing prices and offering “special deals” to customers. Cyber Monday occurs on the first Monday after Thanksgiving and was first coined in 2005 to encourage shoppers to purchase online. Since then it has become the busiest online shopping day for many countries around the world.

Source: http://3dprint.com/

In recent years these flash sales have seen shoppers spending increasing amounts in a feverish attempt to snap up the very best bargains on offer. This often results in chaos, crashed websites and unfortunately, even tragedy. However, more than 13 billion dollars was spent in the US between the Black Friday and Cyber Monday sales. The growing trend in recent years has seen increased spending online rather than physical in-store sales.

The Black Friday and Cyber Monday sales that originated in the United States have in recent years spread to the United Kingdom, Canada, Brazil, Portugal, Germany, Colombia and Japan. While not as commonplace just yet, Australian retailers have begun to embrace the tradition and jump on the Black Friday bandwagon. An estimated $329 million has been spent this year, which is almost double the previous years spending.

So is this all simply just hype? Or a clever “marketing” term to create artificial demand. Consumers these days are more perceptive than ever and are easily able to spot a bad deal from a good one with online comparison tools. With the rise of social media, consumers can easily spread that message loud and clear if they feel they are being mislead. One of the most interesting developments I have seen this year has come from companies shunning the tradition and declaring themselves against these flash sales. In fact, in the UK retailers such as Jeep, Aldi and John Lewis have used this stand as a marketing tool to promote their own on-going price reductions.

Source: http://i.haymarketindia.net/

One thing is however undeniable, Black Friday and Cyber Monday represent a fantastic opportunity for companies to sell products before the busy Christmas period and is somewhat of a marketers dream. For retailers, this is a time to send emails fearlessly to their databases offing smart discounts and activating their top customers. It also offers a chance to be active on social media and engage with customers through clever ads.

Mobile devices are making this instant flash sales shopping even easier for consumers with “shopping on the go”. In 2014, more than 60% of Amazon's US customers purchased using a mobile devise. The increased ability to shop online has made it significantly easier for shoppers to search for and stay connected to the deals that they are most interested in.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Celebrating a successful year on the Master of Marketing

Last week officially marked the end of my second semester studying on the Master of Marketing. As the academic year draws to a close it also marks the end of the examination period and the final assessments of the year.

To celebrate this success, the University of Sydney Business School were very kind to throw an end of year reception for the program at the Darlington Centre. A great time was had by all in attendance, from both the current cohort and alumni of the Masters of Marketing.

Joining the student body were also notable members from industry including Nicholas Ridis, Board Director for the Australian Marketing Institute. In addition, there was a three-way panel chaired by the course director, Pennie Frow, with Senior Consultant of Potentiate Global, Stephen Jenke, and Head of Marketing Intelligence at Tabcorp Kasia, Wilton-Wanstall. This provided a great opportunity to gain new insights into current marketing practices and an opportunity to network in a fun and relaxing environment. 

On behalf of the rest of the cohort I would like to say thank you to Terry Beed for organising a wonderful evening. I would also like to thank Associate Professor Geoff Frost who opened the event along with Associate Professor Pennie Frow who has been so instrumental in shaping the course. I would like to say a special thank you to our lecturers who have passed on their wisdom over the last ten months. 

I would also like to extend my congratulations to our alumni Taran and Seray who received awards for their excellent performance in the Marketing Consultancy Project. Both Lauren and myself were delighted to be recognised for our contributions to the social media for the course. We have very much enjoyed posting on the Marketing Matters blog and will continue to do so in the year ahead.

Early last week many of us were also fortunate to visit the new home of the University of Sydney Business School known as the Abercrombie Building. This state-of-the-art building holds an impressive 550-seat lecture theatre, three 300 seat lecture halls, eight 100 seat study rooms, 33 seminar rooms, a learning hub and 1500 square meters of informal learning space. 

What struck me most about the building was the amazing amount of natural light that lit up each room along with the excellent building structure designed to foster a blended learning environment. The new home will certainly add a great deal to the Darlington community and will be a fantastic home for the Business School for many years to come!

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Understanding People & Consumption: 10 Global Mega Trends to Watch

Coming to the end of another academic year we are pushed to go through some mentally challenging yet very relevant and interesting topics. As marketers we need to understand what is happening around us and need to up to date with the trends that will impact our careers on a global scale. 

Today the Marketing industry is drastically different to what it was a decade ago. We now live in a rapidly evolving technological age defined not only by constant change but by true paradigm shift where consumers have become producers, the concept of innovation is the “default” and data, which enables us to layer multiple data sets to come up with a more dynamic and comprehensive picture of consumers has become more important than ever. 

With this being said what is the future of marketing? What are some of the future trends that will impact the work we do and how we operate? How can we use an ever increasingly complex consumer landscape to understand behaviours and consumption?

To understand these questions it is important to see what has happened on a global scale in relation to both the past and also what will happen in the foreseeable future. Social tensions will impact how we live, how we feel about the future and will further provide us marketers, brand and services with an opportunity to help Australians improve their lifestyle

Ipsos Australia and New Zealand has recently released a list of the top 10 mega trends that they believe will shape the world’s future. 

1. Dynamic populations – which represent both opportunities and threats to society. For example, two thirds of the global middle class will live in Asia by 2030 creating significant opportunity for Australian brands and services to tap into this growing, affluent market. Understanding these consumers will be crucial to tap into the vast wealth that is being created.

2. Growing opportunity and growing inequality – while some of us are becoming wealthier others are becoming poorer. A class divide is becoming increasingly apparent in Australia for the first time. We are witnessing growing inequality in Australia especially through housing affordability in our largest cities creating a generation of have-nots who will struggle to enjoy the same lifestyle as their parents.

3. Megacities: urban superpowers or human disasters – people are flocking to our largest cities, creating more pressure on infrastructure, housing and jobs, while also representing social challenges. Travel times are increasing creating potential future productivity concerns for our nation. Sydney is about to embark on an infrastructure boom, but will it be enough?

4. Increasing connectedness and decreasing privacy – we’re spending more time online and buying more while we’re there but many of us worry about who – government or business – can track our ‘digital footprint’ (what we search for, what content we consume, what we say and to whom and what we buy) – and how long that footprint will live online.

5. Healthier and sicker – life expectancy is increasing every year and creating new industries and services across Australia. While people are living longer and trying to live healthier lifestyles, levels of obesity are climbing and our environment is getting sicker – but will it be enough to force us to change our habits?

6. Rise of individual choice and decline of the mass market – we have unrivalled choice and it’s growing faster than ever before. The proliferation of international brands opening in Australia gives us greater choice and lower prices. Some Australian icons are now struggling.

7. Rise of the individual and decline of social cohesion – the rise of ‘me-culture’ vs concern and responsibility for the collective ‘us’ is set to continue. Meanwhile on the personal front, significant social changes are underway reinventing the very concept of the ‘average family’. Many families are headed by single parents, while single households are growing quickly and fewer people are getting married (and later).

8. Cultural convergence and increasing extremism – how well are Australians coming together? Sydney is the most multicultural city in the world and a great example of brands/services/foods where you can buy almost anything. However, like many other countries, we are also witnessing increasing social tension around immigration and the threat of home grown extremism.

9. Always on and off the grid – being ‘always on’ is driving some to ‘go off the grid’ for relief, relaxation and a chance to reconnect with the present moment and seek a greater work/life balance. Social consciousness continues to grow in importance. Companies that have a powerful social conscience are seen as compelling organisations to be part of. Flexible working environments will grow quickly over the next 10 years.

10. Public opinion as a revolutionary force – social media has heralded the role of mass social activism or ‘clicktivism’ where global social movements can appear overnight via the click of the ‘like’ button on Facebook. Protests are on the rise again with the public demanding to be more involved to express a point of view to impact decisions.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

Pret A Manger dares to be different this Christmas

The UK’s fastest growing coffee chain Pret A Manger has caused quite a stir this week with news that they will donate their entire Christmas digital marketing budget to charity.

In the weeks leading to Christmas campaigns usually go in to overdrive to capture increased consumer spending. This year will be no different for Pret, but with another focus in mind. Shunning the traditional Christmas campaign-spending spree, the company have instead opted to dedicate there marketing channels and digital media spend to five separate charities. The charities form part of the Pret Foundation Trust and will also receive 50p from each sandwich sold in store over the holiday period.

Source: http://www.fruitnet.com/

The campaign officially kicked off last Monday where a store in London’s Broadwick Street was decorated as a giant Christmas present. Customers were encouraged to break through the Christmas wrappings to receive the free festive turkey and stuffing sandwiches inside.

To raise awareness of Pret’s Foundation, the company launched a campaign called ‘A little Thank You’ on both its website and social media. This features news about the charities along with pictures and videos of the trusts' work in the community. The group director of Pret said “We’re delighted to donate our marketing channels and media, both physical and digital, to the Pret Foundation Trust and the charities we work with. It’s our way of saying ‘a little thank you’”.

Back in April I wrote about Pret’s unusual approach to marketing, giving away free coffee to customers at the discretion of the staff. Although unusual, it was a great way to build customer loyalty in the ultra competitive coffee market. I think this is another classic example of ‘being noticeably different’. Using a non-traditional approach to advertising will win the support of customers. Rather than being bombarded with sales messages in the festive period, the company will use its money to increase awareness of important issues. More than two million customers will see the charity logos on coffee cups and in store advertising.

By taking this bold decision, Pret is helping to raise the profile of its charity partners and alleviate poverty by directly tackling the issue of homelessness. This is a great move to continue building good will among its community of customers, while raising an anticipated £1.6 million pounds for charity.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Top 20 decision-making biases and heuristics: Part II

In part II we continue our countdown of the twenty most common decision making biases and heuristics.

11. Loss aversion

We kick off with experience of loss aversion, which has been tied to the endowment effect, sunk cost trap and even the status quo bias. The pain of losing is felt stronger relative to the pleasure of gaining. How much you ask? Almost twice as much! This makes people twice as likely to take risks to avoid losses.

12. Prospect theory
   
The behavioural model of Prospect theory is a central component of loss aversion. The prospect theory model shows how people make decisions between choices that involve risk or uncertainty. The “S” shaped graph is steeper for losses than for gains, which supports the theory of loss aversion.

Source: https://econfix.files.wordpress.com/

13. Gamblers fallacy

Past results do not represent future outcomes. The gamblers fallacy occurs when a person assumes a run of results one-way means that the other result is more likely. If you flip a coin ten times in a row landing on heads every time, it does not mean the next flip will be any more likely to result in it landing on tails. Similarly, a sports team who looses a number of games in a row is no more likely to win the next game based on the justification that they are ‘due a win’.

14. Peak-end rule

The two moments which are most memorable to people are the peak and the end. This has huge implications on marketing, particularly in the way that a product or service is evaluated.

15. Halo effect

The halo effect bias results in a person perceiving the qualities in one thing relating to the perceived qualities of another. The halo effect is frequently present in advertising where a company associates itself with another to receive its positive benefits.

Source: http://www.brandingstrategyinsider.com/

16. Herd behaviour

When people or groups of people end up doing what others are doing, this is usually a result of herd behaviour. This mentality is particularly prevalent in the finance industry where stock market bubbles appear due to investors following each others' behaviours.

17. Hindsight bias

Have you ever watched a movie with a friend who exclaims at the end, ‘I knew it all along!’. Everything is easier in hindsight. This bias can distort judgments about the probability that an event will occur because the outcome of the event is perceived as predictable.

18. Habit

Many decisions we make are often as a result of habit. These patterns of behaviour build over time in specific situations. The repetition builds associative learning with triggers than cue typical responses.

19. Optimism bias

On the whole, people are much more likely to overestimate the probability of a positive event occurring and underestimate the probability of a negative event. This is often associated with the term ‘rose coloured glasses’.

Source: https://cdn.psychologytoday.com

20. Representativeness heuristic

Representativeness is a general heuristic where by a person judges the probability that characteristic A belongs to group B by judging the degree to which A represents B. This assumption is largely based on stereotyping when judging how one thing represents another. The representativeness heuristic is highly prevalent where detailed scenarios can serve to mislead people in to error. 

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Top 20 decision-making biases and heuristics: Part I

In this special two-part blog I am going to be counting down the top twenty biases and heuristics which impact decision-making. As marketers we make decisions every single day. From our decision to get out of bed in the morning to investing in a new promotional idea, we are constantly making decisions.

Of course, some decisions are more important than others, but decision-making often involves both conscious and unconscious thoughts. All humans are flawed when it comes to making decisions. Most decisions are subject to biases or are made using heuristics, essentially rules of thumb to make quick estimate answers. Heuristics are by no means systematic, but provide a practical solution to meet an immediate goal.

Increasing our understanding of biases and heuristics improves our ability to identify and minimise those that are a liability to decision-making. So with no further ado, its time to start the countdown!

Source: http://www.blacktower.com

1. Status quo bias

People generally prefer things to stay the same and look for decisions that involve the least amount of change. The status quo bias explains why statistically people are likely to favour a default option when overwhelmed with a number of choices.

2. Choice overload

Choice overload often gives us decision fatigue, which makes us more susceptible to heuristics and biases. Giving customers too many choices can result in unhappiness, as it often results in discomfort. For example, ordering food from a take away menu with too many items can result in choosing the same food as last time.

3. Endowment affect

The endowment affect is closely linked to the status quo bias. Once something is owned its value becomes much higher in value to the owner. Overvaluing a good that we own can explain why so many people find it hard to part with an item once they have established ownership of it.

4. Sunk cost trap

Have you ever ordered too much food at a restaurant and then over eaten to get your moneys worth? If so, you would likely have encountered the sunk cost trap. This is when we consider already invested resources when making decisions. Rather than only considering the future costs and benefits, we often consider the resources already invested.

Source: http://www.inflexusmgmt.com/

5. Cognitive dissonance

Dissonance is a painful experience resulting from a lack of harmony. Cognitive dissonance therefore occurs when a person hold two thoughts which are psychologically inconsistent. Contradicting thoughts can result in irrational and biased decision-making due to the tension, which motivates people to seek harmony. High commitment purchases such as houses, cars or expensive vacations may result in high levels of cognitive dissonance. It is important to consider the impact of post purchase dissonance on customer satisfaction when marketing and selling products.

6. Overconfidence

Overconfidence is one of the most prevalent biases in decision-making. As humans we like to create an illusion of control and overestimate the extent to which we can achieve certain outcomes. Overconfidence stems from exaggerating the amount to which you can control an outcome.

7. Over precision

Fuelled by overconfidence, we tend to be over precise in our judgments. This is particularly prevalent when we are making decisions that are outside of our areas of expertise. Allowing more margin for error can help to remedy the over precision bias, particularly in times of uncertainty.

8. Anchoring

The anchoring bias is the tendency to be unconsciously influenced by irrelevant numbers when making decisions. The anchor can be set internally from our own perceptions or externally from an outside source. The implications of anchoring on marketing can be substantial! For example, if you were to place a promotional sign limiting customers in a supermarket to ten cans of soup each, the external anchor would likely result in customers purchasing more cans than they had originally intended.

9. Confirmation bias
Confirmation bias is the tendency to focus on information that supports our beliefs rather than seeking information that contradicts it. One of the best ways to avoid confirmation bias is to deliberately seek out opposing viewpoints when making important decisions.

10. Availability heuristic

People will often make decisions based on the availability of information that comes to mind. If an event or outcome is easy to imagine, it is much more likely to impact decision-making. On the contrary, events that are difficult to imagine may also reduce the likelihood of the event occurring. A vivid experience can also alter a person’s perception and thus decision-making.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

“Coke come alive” – The campaign that takes innovation to a new level

Imagine having a drink that’s packaging changes with the temperature as you drink it. Pretty cool right. Well, we all know Coca-Cola is infamous for their innovative marketing campaigns, and with their newest “Coke come alive” campaign said to launch this summer, you will most certainly NOT be disappointed!

At the beginning of this month, Coca-Cola South Pacific announced the launch of a new summer campaign featuring packaging which will change colour based on the drink’s temperature. This design, based on temperature control, is a first for Coke and will further feature on most of their packaging sizes including the 250ml cans and the 390ml, 600ml, 1L, and 1.25L bottles and frozen cups. The image recognition technology that will be used will also be able to recognise ‘Come Alive’ colour packs across other Coke products: Diet Coke, Coke Zero and Coke Life.

Some might be thinking how does it work? The “Coke come alive” campaign will see the drink packaging change colour when the drink reaches “optimal temperature for enjoyment”. This new marketing ploy will hopefully aim at introducing new consumers to the drink with particular focus of the younger market and also aim at engaging existing consumers who are loyal to the Coke brand.

In the process of providing cross-channel content to its consumers via social media, Coke has brought in help from teenage celebrities and key-teen influences in attracting a younger demographic.

“Coke come alive” will be part of a multi-million dollar integrated campaign that will push and evolve the "Color your summer" campaign. It will include image recognition technology where consumers are able to take an image of their drinks when it changes colors to win unique experiences, content and event access.

As we know, a successful campaign must continually innovate and integrate a range of mediums to ensure it effectively gets its brand message out to its consumers. To further drive its summer campaign, Coke will strategically implement outdoor advertising in locations deemed as “youth hot spots”, as well as point-of-sale merchandising in stores nation wide.

Group marketing manager, Dianne Everett says, “We are thrilled to launch the next exciting phase of the Coke Come Alive campaign. We believe it will provide a platform which will excite people about this iconic brand over summer”. I personally cannot wait to go out and buy one of these super cool coke bottles during summer.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School 

Trick or treat: A marketers guide to Halloween

My favourite day of the year is almost here! Happy HALLOWEEN! 

A recent survey found that 25% of all Australians plan on celebrating Halloween this year. This number is steadily growing year-on-year but is still relatively small when compared to the 64% of Americans who celebrate the festive holiday by spending an estimated $6.9 billion annually. With its growing significance in the minds of the consumers, many companies are looking for novel ways to tie in to the festival with playfully spooky advertising. 
Earlier this week, Coca-Cola South Pacific announced the launch of its new campaign ‘Tastes Like’ Halloween. Through an integrated marketing campaign the brand will look to target both mums and teenagers. The brand manager for Fanta, Ramona Spiteri, said, "The 'Tastes Like' Halloween campaign is a direct reaction to the increasing popularity of Halloween celebrations in Australia and its role in driving significant growth across products in the Fanta portfolio in recent years.”

Source: http://www.bandt.com.au/

Over in the UK, Burger King has released its infamous “black burger” just in time for Halloween.  However, this won’t be the same as the Japanese version of the burger, which comes with black cheese made from bamboo charcoal and sauce coloured with squid ink. Instead it will feature traditional whopper fillings but with an unusually dark sesame seed bun. Burger Kings director of marketing, Matthew Bresnahan, said, ‘'We love creating new and innovative experiences for our guests and we felt that Halloween was the perfect occasion to satisfy this demand!'

Source: http://www.wvgazettemail.com/

Perhaps my favourite Halloween themed campaign came last year from Oreo. In the Oreo Laboratorium they cooked up the idea of the spooky cookie creatures called ‘nomsters’.
Each day the cookie manufacturer created new videos using stop-motion technology and invited fans around the globe to suggest new names for their creations. I think this is a really great example of how to successfully engage your social media community through Twitter and Facebook to become more involved with the product.

Source: https://twitter.com/oreo/status/526841765232660480

The award for the most frightening marketing campaign goes to the website Booking.com, who dared customers to stay at some of its most haunted properties during the scariest week of the year. In 2013, the hotel booking website picked its most haunted hotels and created scary movie style posters for each with accompanying horror stories for its “stay if you dare” campaign. The pick of the bunch was for The Stanley Hotel, which is best known for its role in the Stephen King novel “The Shining”. They also featured the historic Gettysburg Hotel, whose resident Civil War ghost nurse Rachel is said to walk the hallways at night waking residents.

Source: http://booking.resn.co.nz/ 

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Woolies new priced-based marketing campaign

To reinforce its $500 million dollar investment into lower grocery prices, Woolworths has launched a new price-based marketing campaign. The new campaign, "Always at Woolworths", will substitute the previous Cheap Cheap campaign. The integrated marketing campaign is said to run on a range of media, including print, online, television and radio, highlighting the everyday value in Woolworth’s supermarkets rather than one-off discounts.

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As a result of the new campaign, analysts have been impelled to question whether “Woolworths' new supermarkets team, led by Brad Banducci and Dave Chambers, is shifting towards an everyday-low-value pricing (EDLP) strategy rather than a high-low pricing model in an attempt to win back the trust of consumers.”

Based on other media releases, Woolworths is said to further invest more than $500 million dollars in reducing grocery prices in the aim of "neutralising" Coles and "containing" Aldi. So far the retail giant has invested more than $200 million into reducing prices this year, and claims its prices are now as cheap, if not slightly cheaper, than a similar basket of groceries at Coles.

Aimed at launching its new price position, the campaign called ‘’ The Always at Woolworths” was put together by Advertising agency Leo Burnett.

The Woolworths spokesman stated that the retail giant will always call out its value offer to their customers, and the new 'low prices, always' campaign does just that". The campaign reinforces to customers that with the hundreds of products for sale, prices can be expected to stay the same low price – week-in, week-out.

In August of this year, Woolworths’ food group managing director said that we would see their marketing strategy evolve and their key themes of “fresh food and cheaper prices” would remain the same, however the messages portrayed would become more cohesive. Some analysts are of the belief that the $200 million dollar price investment Woolworths has spent has not gained traction with consumers as of yet and is likely to have had little impact on same-store sales in the September quarter.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

It’s time to go ‘Back to the Future’!

At precisely 4:29pm on October 21st 2015, Dr. Emmett Brown, Marty McFly and his girlfriend Jennifer Parker will arrive in Hill Valley. Of course, if you have watched the legendary time travelling film when it was released back in 1985, you would already know that this Wednesday we can finally celebrate ‘Back to the Future’ week!

The popular sequel in the movie franchise made many bold predictions on how life would look in future of 2015. Unfortunately hoverboards are not yet commonplace and flying cars are still some way away. However, this week of celebration has thrown up some unique marketing opportunities for companies featured in the movie.

On Wednesday Pepsi will be releasing the “Pepsi Perfect” soda drunk by the time traveller Marty in the second instalment of the films franchise. The unique Pepsi bottle designed to look exactly like the one ordered in the futuristic Hill Valley cafe. The marketing director for PepsiCo, Lou Arbetter said, "Pepsi fans asked and we heard them loud and clear, the 'Back to the Future' trilogy was as big a moment in pop culture history then as it is now, 30 years later."

Source: http://www.adweek.com/

One of the biggest stars of the movie was unquestionably the futuristic Nike self-lacing sneakers. These were worn by Marty as he tried to blend in with the ultramodern hi-tech dress code of 2015. Nike confirmed that they would finally be producing the famous “power laces” with patents filed for the technology back in 2008. Tinker Hatfield who designed the original sneakers for the movie confirmed that the shoes would be available to purchase by the end of the year.


Source: http://www.businessinsider.com.au/

In a famous scene of ‘Back to the Future II’, Marty McFly is swallowed by a gigantic holographic image of the shark Jaws. This was to promote the movie ‘Jaws 19’ and celebrate the future of 3D films which are now commonplace. Earlier this week, Universal Studios Entertainment released a trailer for a fictitious ‘Jaws 19’ movie. While in reality no actual film will be made, I think this is fantastic marketing and a great way of connecting with fans of the franchise.
   
Although Toyota only played a very small part in the blockbuster movie they managed to find an interesting way to tie-in to the film’s anniversary. Backed by the creative of Droga5 and Saatchi & Saatchi Los Angeles, Toyota created an integrated marketing campaign centred on the Hydrogen Fuel Cell for its new car ‘The Mirai’. This played off the Mr Fusion generator from the movie that allows the DeLorean time machine to generate the 1.21 gigawats to travel through the space-time continuum.

http://www.toyota.com

To build excitement for the new car launch Toyota reunited the film’s actors, Michael J. Fox and Christopher Lloyd, for a short video hyping the car’s upcoming release. This was supported by a launch event in California where influential car reviewers and bloggers were invited using special 80’s style wristwatches. For many weeks Toyota has been releasing subtle teasers on its microsite, slowly revealing their tie-in to the BTTF franchise.

As a huge fan of the ‘Back to the Future’ films, it has been great to see so much creative marketing around a 30 year old movie.  I only hope for more surprises as we near the anniversary date, even if it’s not a Mattel hoverboard.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

You got it! Pepsi is launching smartphones in china

Source: http://www.larazon.com.ar/interesa/Pepsi-propio-smartphone_IECIMA20151013_0065_7.jpg

In today’s world where we have an absurd number of unusual corporate branding decisions, Pepsi Co. has announced plans to launch smartphones as part of a bold new marketing strategy in hopes to attract more customers.

The notorious food giant has established that it will not be manufacturing the phones; it will instead license its brand for use on a new smartphone available only in China to market Pepsi gear. Targeting the growing Chinese middle class, the Pepsi will market products such as apparel, accessories, soda and food.

Pepsi spokesman stated, "Technology is a key cultural pillar at the heart of consumer interaction. Pepsi has no plans to get into the mobile phone manufacturing business, but we are committed to engaging with consumers in innovative ways to grow our brand."

Tech blogger Mobipicker states that the new smartphone, powered by Google’s android operating system, will be called Pepsi P1 and will more than likely be manufactured by China-based, Shenzhen Technology Co.

Source: http://businessandtech.com/wp-content/uploads/Pepsi-lancerà-uno-smartphone-tutto-suo.jpg

The phone will feature:
• Camera
• 16 gigabytes of storage
• It will retail for $205

Comparing Pepsi’s smartphones to giant retailer Apple, Apple has done exceptionally well selling iPhones in China’s booming smartphone market, where more than 500 million people access the Internet through a mobile device.

It could be argued, however, that Pepsi’s brand along with a price lower than the competition they might be able to reach a higher volume of consumers. It wouldn't be expected for this product this to hit the US or Europe, but don't be surprised if Coca-Cola follows suit.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

Marketing Campaign: Melanoma Likes Me

Oh boy, what a wonderful long sunny weekend!

As the temperatures sizzled and the beaches packed, I couldn’t but help think about one of the best marketing campaigns of the year. Aussies love the sun, and love telling friends about it on social media. But every time we do, we make a new friend, _melenoma.

Melanoma is a skin cancer that kills 1500 Australians each year and is the most lethal cancer in 15-30 year olds. Melanoma Likes Me was created by Melanoma Patients Australia as a digital advertising campaign to raise awareness of the dangers of prolonged dangerous exposure to the sun.

The first step of the campaign was to create an online persona for Melanoma to communicate with the target audience. Using a unique algorithm, the _melenoma page was able to search for and respond to popular hashtags on Instagram and Twitter. Words such as #beach #sunbake and #poolside were targeted, along with geo-located images such as @bondi.

Users who uploaded a photo would receive an unexpected 'like' from _melanoma with unique tailored messages from their new ‘friend’. These were sent right at the moment which mattered the most, as the audience were exposed to the sun.

Source: Ellen Fromm Youtube

The single-minded proposition for the campaign was to educate and raise awareness at the point of exhibiting unsafe sun behaviour. What was so clever about this campaign is the way it was able to connect through the use of technology to young Australians spending time out in the sun. More than 2 million people have already received a message from _melanoma, resulting in a 1371% increase in unique visits to the Skincheck mobile website.

The campaign, developed by George Patterson Y&R, has since been recognised with multiple awards at the Cannes Lions 2015 festival. What I think is so special about its delivery is the ability to effectively target the audience in real time. Advertising is as much about getting attention as it is about changing behaviour. The personalised messages serve as a reminder to always use sunscreen or put on a hat to protect yourself from sun damage. 


Source: http://www.wpp.com/

So next time you share a photo on social media with an associated hashtag, you may too receive a message from _melenoma.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

Mobile Marketing for the Oldies

When you think of marketing to “Older People” what comes to mind? Is it images of retired couples sitting back in a rocking chair? Is it couples that still have a so-called “brick” as a mobile telephone? Make no mistake here; these misconceptions in marketing for the elderly should be cleared up straight away.



In today’s ever-evolving technological world, brands and companies tend to overlook the over-65 demographic, perceiving them as not being tech savvy enough. Many also believe that older audiences are not prepared to switch brands, and therefore aim for younger audiences, hoping to win them as lifetime clients.

While this might have had relevance a few years ago, today’s reality is drastically different. People 65 and over now live longer, and are much more active and involved in the online world. Smart phones, social media, and online communities! You name it and they’re there. It is quite astounding to think that the elderly represent the fastest growing group of social media users, and are using it for the exact same purposes as other age groups.

With this being said, here are a few tips we as marketers can use when appealing to seniors particularly when it comes to mobile marketing.

Keep it Simple Stupid! The infamous KISS rule should be kept in the back of each advertiser and marketer’s mind when creating captivating mobile campaigns that target the 65+ age group. Even though they represent the fastest growing group when it comes to social media and new mobile devices, it can be argued that they are equally as influenced by ads that are much more simple when it comes to both text and image.

Based on research, when it comes to the text, use relatable language. It would make no sense to use colloquial and hip phrases seen on platforms such as “the LAD bible” because most of the time they have no idea what you are saying. It is important to ensure you are putting forth educational facts that will aid your consumers to make an informed decision about your product or service. Then we have image! Like our teachers used to tell us, a picture is worth a thousand words. Ensure that when creating your campaign you use simpler images. You will find that they are more visually appealing to those aged 65 years and older to make a stronger impact.
 

Congratulations! You have passed the first level of marketing to seniors. However, be careful as it is not over just yet. Once you have influenced your 65-year-old consumer to download your app there is another major focal point that you must get right if you want success. This focal point is the sign up/ set up. Generally once an app is downloaded, the user must enter a few of his or her personal details. If this sign up process requires too many steps, you’re bounds to lose users right away.

Keep in mind, those that are 65 years and older certainly did not grow up with technology as a fundamental part of daily life. So, taking this into consideration, many of the actions that feel natural to us “younger people”, require them to think twice. To solve the problem, lets make life easier for them! When designing an app, make sure to strip back the la-di-da fluff, simplify any in-app processes, enlarge small buttons and text, and explain each time you request personal information why you need it and how it’s going to improve their experience.

Lauren Musat
Current student in the Master of Marketing program at the University of Sydney Business School

Ambush marketing: A threat or an opportunity?

Ambush marketing is a strategy in which advertisers “ambush” or take over an event to gain exposure for an advertising purpose. The unauthorised use of an event for marketing publicity it not a new phenomenon. The first recognised example of ambush marketing came shortly after VISA was made an official sponsor of the 1984 Summer Olympic games over its rival American Express. The phrase "ambush marketing" was first coined by the head of marketing at American Express, who proclaimed his company “Have not only the right, but an obligation to shareholders to take advantage of such events”. For the very first time, laws on being the “official” sponsors of the event were starting to be enforced.

Source: http://21mktg.com/

By becoming an official sponsor or partner of an event you are paying for the privilege to associate yourself with that brand. That may be through the use of certain words, phrases or logos intended to raise your company's profile. Even though ambush marketing is a legally dubious practice, this has not stopped many organisations throughout the years from using this tactic to gain notable publicity. The Wimbledon Championships have long been protective over their classy and traditional five star brand image. They have long standing advertising deals with high status brands such as watchmaker Rolex and Champaign producer Lanson as official sponsors. The official water sponsors for the tournament are Evian, who feature their products regularly alongside the athletes. However, this has not stopped rival companies from handing out free bottles of water to spectators entering centre court in an effort to be noticed. In 2009 Pringles handed out 24,000 free tubes of its snack carrying the logo “these are not tennis balls”. The stunt gained widespread praise in the media for being innovative but drew criticism from the events organisers. 

Source: http://magicinads.empowernetwork.com/

In fact, ambush marketing has become such a problem at Wimbledon that the events organisers released a statement this year that they would take a “firm stance” on any ambush marketing. This includes refusing entry to any spectator they believe may be associated with ambush marketing and taking away branded items such as hats, rain capes, umbrellas, sun creams, radios and water bottles.
Ambush marketing can however be highly creative and has produced some very memorable publicity for major brands. The 1996 Summer Olympic games where held in Atlanta saw the then 100m champion Linford Christie defending his title as fastest man in the world. The official sponsor for the athlete’s footwear was Reebok who secured exclusive promotion rights. At a press conference before the race the champion appeared wearing contact lenses showing the Puma logo. This was later shown on the front covers of newspapers around the world, gaining great exposure for the Puma brand.

Perhaps one of the most notable examples of ambush marketing came in the World Cup 2010 when 36 women dressed in orange were ejected from a game between Holland and Denmark. Wearing short dresses and the national colours of the Netherlands the women drew lots of attention from fans in the stadium along with the cameras capturing the event. The stunt had been organised by the Dutch brewery company Bavaria to gain free publicity on a global stage. Shortly after the incident two of the event organisers were arrested with FIFA pressing for legal action to be taken against the brewery for breaching the Merchandise Marks Act.

 Source: http://www.news.com.au/

Ambush marketing appears to be a growing threat that continues to undermine the development of commercial sponsorship. It presents both an opportunity and threat for companies seeking publicity at major events.  However, ambush marketing raises both legal and ethical issues that must not be ignored. While there is certainly a responsibility for marketers to “do the right thing” there must also be counter measures and strategies to deter this behavior.

Even with stricter laws in place, the prospect of having your brand attached to a major cultural event, even in an unofficial way, may be too much for many companies to resist.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School