Why I’m Fascinated By Marketing 101

Why am I in this industry?

Someone asked me the other day, why do I enjoy Marketing? Naturally this is a question I heard A LOT over my four years at Carnegie Mellon as CMU is a school known for technology more than anything else. For me my answer boils down to the fact, marketing is such a unique field that combines a ton of other fields and to do well as a marketing strategist you need to be a jack of all trades. For example, in traditional marketing channels (T.V., product design, etc) most marketing strategies have a combination of sociology, psychology, and economics that goes into a marketing plan. One story I continually go back to is the case study of P&G’s Downy Unstopables.

*As a side note, this was a case study that was told by a P&G marketing executive visiting CMU so I do not have any solid numbers*

The Economics

Backtrack to a few years ago when the consumer goods industry started to sell fragrance boosters for washing machines (this is an extra ingredient you throw into the washer just for scent). At the time many companies were trying to get into the same space and one of the successful competitors were Purex Crystals. P&G was late to the party, but they (or so the marketing executive claims) had a superior product compared to Purex. So what did they do ?

Every business/economics student is probably familiar with that dreadful graph above and so did the business analysts at P&G. Naturally they lowered their price against the competitor and it didn’t work. It didn’t work at all. Sales were completely off the mark. So they had to go back to the drawing board.

The Sociology

So Marketing 101, P&G went back to the basics. They conducted mass market research to figure out what consumers were thinking about their product and they were shocked. Most people thought of their product as a sort of laundry deodorant. They thought this was more of a product to use when your cheap detergent just couldn’t do the job. P&G people were flabbergasted, the whole time they had made this product to be kind of like a laundry perfume. It would impart an amazing scent to make your clothes stand out from everyone else. Not as a deodorant to make up for the shitty detergent you were using.

The Psychology

So recognizing this gap of the product being perceived as a laundry deodorant vs a laundry perfume, they had to change their image fast. They started to ask the question, what do you think of when you hear perfume? If you’re like me, you think of something expensive, luxurious, and sexy. So they went about doing that. They repackaged the container to have a sleek black exterior. They ran campaigns to teach consumers how to use it. They even TRIPLED the prices to make it give off the expensive feel. The end result was this…

It gives you the perfume vibe doesn’t it?

And it worked. Sales skyrocketed, and the product received more attention than they initially got before the rebranding.

So What?

I think this story is a great example of how marketing requires you to understand a variety of fields. If P&G had relied on just economics they never would have let the pricing team TRIPLE their prices, but it made sense because they understood the psychology and sociology behind this decision.

How about in your daily life?

I love talking about this because there are always so many sneaky ways marketers get you. Lets list a few of them so you can understand some of the decisions that affect even you.

  1. Grocery Stores: I’m a son of a grocery store owner. Everyone in the business knows the trick of putting staple groceries like milk in the back of the store to make you walk around. There’s a ton of other tricks like putting expensive products at your eye level as you are more likely to buy those. Or lets not forget about the fast music that plays during rush hour to incentivize you to get in and get out. I remember reading case studies of Costco every now and then moving popular products to other locations to force customers to walk around more than their usual shopping pattern.
  2. Restaurants: One common strategy for restaurant pricing is to have a slightly more expensive premium product that they know won’t sell. Like when you walked into that nice italian restaurant and most things are ~$15 but there’s that one veal marsala dish that’s $20+. They know the veal dish might not sell that much, but that’s not why it’s there. The real reason is it makes that $18 chicken parmesan seem not so expensive in comparison to that veal dish. Let’s face it chicken parmesan is not worth $18, you can make it at home for like $5, but in the moment it doesn’t seem that bad at all.
  3. ADS EVERYWHERE: The bane of marketing, why are there so many damn advertisements everywhere? Simple, research has shown that ads shown just once rarely lead to big ticket conversions. When I was at IBM I remember seeing an internal graph that showed for their customers (high level CEO’s) they needed to see the same advertisements around 10 times before making a decision. When you walk around try looking for different advertisements and try counting how many times you’ll see the same ad. Maybe it’s the one ad you see on the way to work and back from work. You might not realize it, but your brain is recording it ever so subtly.

So what’s different about digital marketing?

This is another one of my favorite questions because I can go in depth on how digital has changed marketing forever. The simple and short answer for me is that, digital marketing takes all the complexity of traditional marketing and adds another layer of analytics and technology skills into the mix.

I’ve done search marketing a few times over the years and I am always shocked at how much data comes from one click. What advertisement you clicked, where you are geographically, how long you stayed on the page after clicking, etc etc. There’s so much data on customers because the digital medium makes it so easy. This brings amazing advantages for example:

A/B Testing

Like it or not you are probably being subjected to A/B tests everyday. The premise of A/B tests is that you split your digital customer base into a few different categories and show them slight variations of anything. For example, if you and I go on Amazon.com, there’s a chance there might be a slight difference in our screens. Maybe the buy now button is in slightly different positions. The google search ad you saw might be different for two people searching the SAME keywords. Digital marketing has given marketers so much more control compared to the old days of more traditional mediums. (Not that I’m shitting on traditional mediums btw, I think they are still necessary but not as important)

Speed

So this is one of those defining advertisements of digital marketers.

For a little bit of context, during the 2013 Superbowl there was an issue with the power and all the lights went out. Imagine the devastation for marketers. Your company spent $4 Million dollars and months of effort to produce your advertisement expecting the typical massive super bowl crowd. An event like this might mean thousands of viewers turning off the TV and missing your advertisements.

The genius’s at Oreos marketing team (360i, the same guys Capital One uses) took advantage of the blackout and came up with this tweet. Simple, timely, and funny. It blew up instantly. In the first hour it was retweeted almost 10,000 times. Imagine how many people would see this advertisement for a fraction of the cost.

Fun fact, I met one of the people who worked on this Ad when I was at IBM. He hates that it’s become a gold standard for social media marketing because he heard about it so much over the next year. He told me how this advertisement took them less than 15 minutes in total with a team of around 12 people. A few minutes to create the ad, a few minutes to get legal approval, and a few minutes to get it on social media. Oreo had gotten a huge viewership of their ad in minutes for practically 0 cost (besides the marketing staff salaries).

Where’s marketing going next?

Honestly, I have no idea but I for sure am putting all my bets on digital marketing being a key factor in the development of marketing. There’s so many ways it can evolve and that excites me. My guess is that the next big step will be incorporating all of the big data available on marketing to make a truly personalized marketing experience. I’ll save this discussion for a post another day 🙂