Design Principles: Effective Whitespace Usage

Today's Agenda

• Strategic Planning - where are we, what should we do?
  • Effective Mission Statements
  • Frameworks for Strategic Analysis
  • SWOT analysis
  • Set objective
  • Competitive advantage
  • Business Portfolio Matrix
• Ethics & CSR
  • 2 ethical theories
  • Developmental psychology of ethics

Marketing Mix

• Product
• Place
• Price
• Promotion

Overall Marketing View

• Assessing the Environment: Social, Demographic, Economic, Technological, Political, & Competitive Forces
• Analyzing the Market: Customers, Direct Competitors, and Company
• Approaching the Market: Segmenting, Targeting, and Positioning
• Using Tactics: Product, Place (Distribution), Price, Promotion (Advertising, Salespeople, Public Relations, Sales Promotion)

Zappos' Customer Focus

• CEO Tony Hsieh: "We are a service company that happens to sell shoes."
• "The payoff for great customer service is a year or two down the line."
• Training
• Bribes
• Reinforcement

Bad Example: United

• United Broke Guitar
  • Posted on July 6, 2009. Amassed 150,000 views within one day, over half a million hits by July 9, 5 million by mid-August 2009.
  • UAL opened at $3.31 on 6 July 2009, dipped to an intra-day low $3.07 (-7.25%) on 10 July 2009

Definitions of Marketing

• Textbook: the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
• AMA: an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

Brief Notions of Marketing

• "Business has only two basic functions: marketing and innovation. Marketing and innovation produce results; the rest are support."
• Creating value through exchange
• Managing profitable customer relationships

Why Study Marketing?

• Intellectual value
• Practical utility
• Career importance

Marketing Emphases

• Past Marketing Emphases
  • Product Leadership
  • Cost Optimization
  • Sales Orientation
• Current Marketing Emphases
  • Market Orientation
  • Societal Orientation

Past Marketing Emphases (Version A)

• Production Orientation
• Focus on product quality, performance, and features (aka Product Leadership)

Past Marketing Emphases (Version B)

• Production Orientation
• Focus on improving production efficiency and distribution (aka Cost Optimization)

Sales Orientation

• Focus on encouraging customers to make more purchases

Current Marketing Emphases

• Focus on understanding customers, delivering superior value, retaining customers for the long term (Thanks to the technology development)
• Lifetime value of customers to the organization

Societal Marketing Orientation (Sustainability)

• Focus on the above, and also society's Long-term interest

Today's Agenda (Page 17)

• Marketing Overview
  • What is Marketing?
  • Definition of Marketing
  • Marketing Emphases
• Break-even Analysis
• Your Marketing Plan

Break-even Analysis

• Break-even unit volume: how many units will we have to sell to cover our costs exactly? (i.e., no profit, no loss)

Example 3: Avatar 2

• James Cameron: $10m
• Cast: $30m
• Visual effects: $200m
• Post-production besides visual effects: $30m
• Advertising: $30m
• Average ticket price: $20
• Cost of playing (theater, etc.): $10
• What's the break-even unit volume?

Today's Agenda (Page 20)

• Marketing Overview
  • What is Marketing?
  • Definition of Marketing
  • Marketing Emphases
• Break-even Analysis
• Your Marketing Plan

1. Defining the Business Mission

- Mission Statements
    - Disney: We run theme parks.  We create fantasies — a place where America still works the way it's supposed to.
    - Hulu(Netflix Competitor): We are an online video service. We let people enjoy their favorite content any time, anywhere.
    - Wal-Mart: We run discount stores. We deliver low prices every day and give ordinary folks the chance to buy the same things as rich people.
    - Charles Schwab: We are a brokerage firm. We are the guardian of our customers' financial dreams.

An Ideal Mission Statement

• States one or two broad/fundamental goals
• Is consumer oriented; promises to satisfy basic consumer needs or wants
• Should provide motivation to the organization's employees/members

An Ideal Mission Statement: Examples

• "We will help people trade anything on earth. We will continue to enhance online trading experiences of all - collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers." - eBay
• "To organize the world's information and make it universally accessible and useful." - Google
• "To have any book ever printed, in any language, all available in under 60 seconds." - Amazon Kindle
• "Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings." - Apple
• Nokia: Connecting People

Global Market Share Nokia

• Global market share held by Nokia smartphones from 1st quarter 2007 to 2nd quarter 2013

Apple iPhone Unit Sales

• Apple iPhone Unit Sales by Calendar Quarter

2. Next Step: SWOT

• External
  • Largely uncontrollable to the company
  • E.g., COVID, global warming
• Internal
  • Things the company has reasonable control
  • E.g., the 4Ps

SWOT Analysis

• Internal
  • Market share
  • Customer retention
  • Seasonality
  • Product quality
  • Cost of capital
  • Flexible workforce, etc.
• External
  • Marketing “environment”: new tech, regulation changes, economic trends, etc.
  • Size of potential market
  • Change in channels used by customers

3. Set Objectives

• Realistic
• Measurable
• Time-specific
• Compared to a benchmark

4. Choosing a Strategy for Competitive Advantage

• Cost - lower cost than competition
• Niche - focus intensively on smaller target market
• Differentiation - offering unique value beyond similar price

Planning Strategy: Business "Portfolio Matrix"

• High Stars
• Question Marks
• Cash Cows
• Dogs

Portfolio Matrix Example (For Apple)

• Airpods (Star)
• iPhone (Cash Cows)
• Apple Watch (Question Marks)
• iPod (Dogs)

CSR (Corporate Social Responsibility)

• For: It's the right thing to do; Government will create new regulations and levy fines if firms aren't socially responsible; It can enhance a company’s profitability
• Against: the job of the corporation is to maximize profits for stockholders; Businesses are better suited to produce goods and services and not to be involved in welfare services; If global competitors don't have to be socially responsible, they will have lower costs and can compete more effectively in the global marketplace

Ethics in Marketing

• Definition of Ethics: "moral principles and values that generally govern the conduct of an individual" vs. laws
• Ethical Theories
  • Deontology: unchanging rule, standard, or “ought”, obligation or duty
  • Utilitarianism (greatest good for the greatest number)
• The Trolley Problem

Ford Pinto

• Model years 1971–1980, over 3m produced.

Benefits and Costs Relating to Fuel Leakage

• Savings - 180 burn deaths, 180 serious burn injuries, 2100 burned vehicles.
• Unit Cost - $200,000 per death, $67,000 per injury, $700 per vehicle.
• Total Benefit - $49.5 million.
• Costs - 11 million cars, 1.5 million light trucks.
• Unit Cost - $ll per car, $ll per truck.
• Total Cost - $137 million.

Process

• WIS has been asked by CSCS (our client) on behalf of Johnson & Johnson to purchase all MOTRIN IB Caplet 8ct Vial in the stores.
• You should simply "act" like a regular customer.
• Avoid mentioning that this is a recall.
• If asked, simply state that your employer is checking the distribution chain and needs some of the product purchased for a project.
• With your purchase, request a bag for the product to keep separate from other purchases.
• Immediately after each purchase and while in car, fill out the Product Purchase & Ship Instructions form, and include a copy for each store.
• Fill out the WIS Daily Activity Sheet with details from each stop and repeat the process for each visit.

Is This Ethical?

• Buys own product
• Buy Instagram/Twitter/Facebook followers
• Buy (positive) reviews
• Overbooking

Developmental Psychology and Ethics

• 3 levels of ethical thinking and decisions
  • Preconventional: self-centered, decisions based on immediate punishments or rewards.
  • Conventional: loyalty to group or society most important.
  • Postconventional: focus on long-run consequences.

Apple Battery Gate

• Apple Agrees to Pay $113 Million to Settle 'Batterygate' Case Over iPhone Slowdowns (November 18, 2020)

Google

• "Don't be evil"
• Drug suit

Half a Million Dollars Lost to Fraudsters

• Google ads are spoofing bank hotlines.
• Losses amounted to at least S$495,000 (Jan 19).

Digital Readiness for Teaching and Learning (DRTL)

• Week 5 (No in-person class): 2 hours online open-book quiz (due 11:59 pm Friday, Week 5). Exclusively multiple-choice questions covering all week's contents
• Group works explained: Product topic submission (eLearn). Optional, not graded (Due 11:59 pm, the day before week 6's class)

Today's Agenda (Page 48)

• Marketing Environment
  • Demographics
  • Social change
  • Economics
  • Political/Legal
  • Technology
  • Competition

Overview of Marketing Research

• Techniques to describe, diagnose, predict and improve decision-making for organizations and their products, customers etc.

Types of Data: Secondary vs Primary

• Secondary data is gathered for other purposes/often incomplete. Internal and external sources (CRM, sales records, etc.)
• Primary data is collected for a specific research question/more comprehensive/more expensive

Types of Primary Data Collection: Qualitative vs Quantitative

• Qualitative data is exploratory, focused on understanding motivations (in-depth interviews, focus groups)
• Quantitative data is confirmatory, useful for comparisons (surveys, experiments)

Quantitative Methods: Lab Experiments, Field Experiments, Natural Experiments

• Lab experiments: controlled environment, typically no real-world consequences (pro: accurate, con: not generalizable)
• Field experiments: real-world environment, participants don't know they're in study, participants can be exposed to real-world consequences (pro: generalizable)
• Natural experiments: control conditions determined by nature (e.g., changes in weather affecting sales). Impossible field experiments (made real by others)

Big Data

• Previously known as “junk data”, now providing marginally better results
• Combining data from many different sources to create insights that aren't immediately clear from standard data analytics tools.
• Data sources include browsing history, location, demographics, likes and dislikes, and social media activity.

Sample Finding by Recent Research

• Why are ratings for great products ever-decreasing?

Data Analysis

• “All models are wrong, some are useful”
• We want to draw casual inference (A -> B) from data analysis
• However, there are some traps in data analysis
  • Correlation ≠ Causation: Correlation could imply causation (A -> B), but it may be a coincidence, reverse causality, or the implication of an unobserved third factor (C).
  • Endogeneity
    • Unobserved/unexpected cause in a correlation that might lead to spurious conclusions

Real Causation

• Supermarkets place chocolate & candies at checkout counters to promote impulse purchases.
• Probably causation there. But may become less useful as customers can kill time with smartphones.

Traps in Data Analysis: Flukes

• Urban myth: Stores placing diapers and beers together due to data analysis showing they're often bought together (likely from a correlation, not causation).
• Example of diaper-beer data correlation.

Traps in Data Analysis: Reverse Causality

• Example cartoon illustrating reverse causality.
• Casual inference: an unobserved cause (C) might be the real cause of the observed effects.

Traps in Data Analysis: Endogeneity

Finding the Safest Car

• Driver death per million registered cars

Should I Use Celebrity Endorsements?

• How many customers can endorsers bring?
• What is the probability that endorsements will involve scandals?
• How serious will the scandal be?
• How long will the impacts last?

Textbook's Definition

• The process of planning, collecting, and analyzing data relevant to a marketing decision.
• Goals: describe, diagnose, predict -> better decisions; tracking problems; keep customers; understanding the market.

Quantitative Methods: Observational

• Observational methods: In-person vs. mechanical
• E.g., gates

Quantitative Methods: Experiments

• Experimental & control groups : Double-blind design in medical research
• Manipulate independent variable across groups (e.g., placebo vs. real medicine). Keep everything else constant.

Qualitative and Quantitative Methods of Data Collection

• Qualitative
  • Discovery/exploration of new ideas
  • Preliminary understanding of key variables
  • Deep understanding of (hidden) motivations
  • Open-ended, unstructured format
  • Small, representative samples
  • Descriptive and interpretive analysis
• Quantitative
  • Validation/confirmation of estimates
  • Mostly structured format
  • Large, varied samples
  • Statistical and descriptive analysis

Overview of Marketing Research

• Types of Data: Secondary vs. Primary
  • Secondary: Data collected for other purposes; may not fully address current needs
  • Primary: Data collected for a specific need; more complete, but might be more expensive to gather

Today's Agenda (Page 168,180)

• Overview of marketing research
• Types of data: secondary vs. primary
• Types of primary data collection: qualitative vs quantitative
• Quantitative methods: lab experiments, field experiments, natural experiments
• Big data: what it is

Primary Data Collection

• Qualitative
  • Depth interviews
  • Focus groups
• Quantitative
  • Surveys
  • Observational
  • Lab experiments
  • Field experiments
  • Natural experiments

Qualitative Methods: Examples

• Depth interviews: "Anthropological" one-on-one study. Researcher speaks very little.
• Focus groups: Moderator leads discussion with group

Consumer Decision-Making Process: 5 Steps

• Need recognition
• Information search
• Evaluation of Alternatives
• Purchase
• Postpurchase behavior

Explore the importance of whitespace in design through this quiz. Discover how it impacts visual hierarchy and common misconceptions surrounding its use. Test your knowledge on effective whitespace application in various layouts.