CH14 NEW Mini Sim_Choosing the Right Customer

Mentoring Moment: Influencer Marketing Influencer marketing is one of the fastest-growing online marketing tactics; firms are spending over $100 billion on it annually. Influencer marketing capitalizes on the pre-existing relationships its target consumers have with the influencers they follow on social media, with influencers charging firms around $100 per 1000 followers. Consumers often perceive influencer marketing to be less intrusive than brand-managed communications and more like a word-of-mouth recommendation. Not surprisingly, consumers are less likely to ignore influencer marketing and are more likely to trust the recommendations and product endorsements they see on their influencer's social media. For each of the three influencer types below, indicate whether the level of reach, expense, and authenticity that the influencer provides is low, medium, or high, and then click Submit.

Mega Influencers Reach: High Expense: High Authenticity: Low Mid-Level Influencers Reach: Medium Expense: Medium Authenticity: Medium Micro-Level Influencers Reach: Low Expense: Low Authenticity: High

In your next meeting with your manager, she says, "Now that we have the demographics and psychographics of our target market determined, we need a promotional plan. We've always used a very traditional marketing strategy for our products and have relied heavily on those tried-and-true channels like print, radio, and television. Recently, I've noticed that our competitors have been going digital, including social media, to promote their products. I'm just not convinced that we should follow our competitors into the digital marketing world, and I'd like to hear your thoughts. To assist you with your analysis, here's some data we recently collected on Millennials' shopping and media habits." Now that you've had a chance to review the data, you need to allocate your promotional budget between traditional and digital (online) marketing channels. How will you allocate your $285,000 budget?

You chose 30% traditional media/70% digital media. This is the best choice. The data suggests that your target market is spending significantly more time with digital media than they are traditional media, more than 80% of Millennials' time. Spending your promotional budget where your consumers spend the most time makes sense.

​With influencer type determined, you need to choose a social media platform for your influencer to primarily utilize. You know that your target market uses many platforms, but you focus your attention on three of the most popular ones for parents: Instagram, Pinterest, and Facebook. Marketing research provided the following summary statistics and findings from their primary and secondary influencer research. Given this information, which of the social media platforms do you choose for your influencer campaign?

You chose Facebook. This is the best choice. Not only do 56% of moms turn to Facebook for product recommendations, but Facebook is also the most popular social platform channel among moms with the highest level of active social media engagement.

Before making a recommendation, you consider the profiles for the three segments: Generation X (Gen X) consists of those 66 million Americans born between 1965 and 1980...... Millennials (Generation Y or Gen Y) consists of those 75 million Americans born between 1981 and 1996....... Generation Z (Gen Z) consists of those 80 million Americans born between 1997 and 2012....... Given the profiles of the three generational cohorts, which cohort do you recommend targeting? Generation X Millenials (Generation Y) Generation Z

You chose Millennials (Generation Y). This is the best choice because the majority of this generation is in their 20s and 30s, which are the prime child-bearing years.

​It's time to design your influencer campaign, so you need to decide what type of influencer you want to hire. In your recent meeting with your manager, she reminded you that you allocated 70% of your promotional budget to digital channels, so you have a $200,000 budget. To help you make a decision, the research department has provided some valuable data on macro-influencers, mid-level influencers, and micro-influencers based on industry standards. As always, keep in mind that your goal is to increase traffic to the firm's website, specifically to the formula maker's product page. Given your budget, goals, and influencer research, which type of influencer should you choose? Micro-Influencer Mega-Influencer Mid-level Influencer

You chose a micro-influencer. This is the best choice. Micro-influencers have the lowest cost per engagement at $0.21, and with a $500 cost per post, your budget could support 400 influencer posts.

The influencer campaign has wrapped up, so your boss calls a meeting to discuss the results. She begins, "I have to admit, I wasn't sure that influencer marketing was the right choice for the formula maker, but the results look good. We saw a 30% increase in traffic to the website on the days that your influencer posted. Additionally, our formula maker sales this month were the highest we have ever seen, even higher than during the holiday season!" How should she respond? ​Influencer marketing was successful due to its wider reach as compared to traditional marketing Influencer marketing was successful due to its low cost as compared to traditional marketing​ ​Influencer marketing was successful due to its level of trust and authenticity as compared to traditional marketing

You chose high level of trust and authenticity. This is the best choice. Consumers often perceive influencer communication to be more believable and trustworthy than brand-managed communications.​

With the promotional budget allocation decided, your boss asks you to focus your attention on developing the digital marketing plan with a goal of using digital marketing to drive traffic to the firm's website. The marketing team discussed a number of digital options and narrowed them down to online advertising, brand-managed social media, and influencer marketing. Since digital marketing represents new ground for your firm, your boss wants to focus on one of the options to drive traffic and promote the formula maker with a plan to add more digital channels later. Based on the information you learned from the focus group reports, which of the digital marketing channels do you recommend starting with? Online advertising: display ads and search-related ads​ ​Influencer-managed social media: Facebook, Instagram, and/or Pinterest Firm-managed social media: Facebook, Twitter, and/or Instagram

You chose influencer-managed social media. This is the best choice because 92% of consumers trust user-generated content more than they trust marketer-generated content. Consumers are highly influenced by the opinions of their friends, family, and influencers that they see on social media.

Now that you've decided to target Millennials, you need to refine your strategy to pinpoint your market. You know that studying consumer lifestyles can provide greater insight into your target market's buying behavior since lifestyles reflect the activities, interests, and opinions that consumers value. Your market research team has provided you with three different lifestyles to consider before making a recommendation to your manager. Which of the three lifestyle segments would be the best target market for our automatic formula maker? Lifestyle 1 Lifestyle 2 Lifestyle 3

You chose lifestyle 1. This is the best choice. Dual income families that are short on time but financially stable often seek high-quality products and home appliances that make daily tasks easier and quicker so that they can enjoy more leisure time.

You've identified your micro-influencer and chosen your social media platform, so you now turn your attention to the different types of social media posts that you want your influencer to make keeping your $200,000 budget in mind. Influencers often use text-based stories, photo and image posts, and video posts to promote products and services on social media. These posts differ in both effectiveness and cost. You have reviewed the following cost-benefit analysis provided by marketing research and scheduled a meeting with your influencer to discuss the campaign strategy. Which of the three post types will you have your influencer focus on? Story Posts Image Posts Video Posts

You chose video posts. This is the best choice. Video posts are the most expensive type of posts, which means that you will have to reduce the total number of posts your influencer can make promoting the formula maker. However, the very high retention rate and effectiveness offset the higher cost per post.