Retailers are stuffing our mailboxes and email inboxes with last-minute specials, holiday dinners are in full swing, and Salvation Army bells are ringing. It can only mean one thing: It’s year end. And you know what that means: It’s budget time. It’s clear from my inbox that plenty of companies are in the throes of building their 2013 budgets and planning pricing projects.

As 2012 draws to a close, here are a few thoughts on how to budget for pricing.

1. Don’t Worry if Your Pricing Budget is Small

If you can’t allocate huge dollar amounts to pricing projects, start small. While it won’t get you everything on your wish list, you can begin to address the topic with even a few thousand dollars. Use this money for an evaluation of your pricing process, initial competitive research, or for a meeting to understand pricing issues and develop some pricing goals. It’s not all about having the biggest budget. With creative thinking, you can stretch a shoestring budget and accomplish more than you think. See where you can get with a toe in the water in 2013 and set the stage for additional work in 2014.

2. Be Sure Your Budget Isn’t Too Big

If you are fortunate to have a large pricing budget, scrutinize what you already spend. Are your vendors cost-efficient? Do you need every service for which you are paying? Do you conduct some projects out of habit, or because they are necessary on a continuous basis? Have you gotten the best value out of each product or service you purchase? Reviewing expenditures may reveal some budget savings for you and enable another department to embark upon projects they might not otherwise be able to undertake.

3. Evaluate Your Pricing Results

Pricing projects generate significantly high returns and pay for themselves. Consider the return on pricing past and future investments as a way to keep track of how they are helping (or would help) your company. This could help you retain your budget or add dollars where you have none.

4. Think Long Term

Set the stage for future years with your current budget exercise. Some pricing initiatives are one-time endeavors, while others require recurring work. Communicate this to the purse string-holders, and it will pave the way.

If you are lucky enough not to be on a Dec. 31 year end, enjoy the break and file this away for your next budget cycle. This advice will not expire.

On MSNBC’s 12/12/12 Morning Joe, Penn President Amy Gutmann, HOM’04, cited compromise as a potential force to break up the nation’s financial logjam.

“If we can compromise on fiscal-cliff measures,” she said, “ it will help us craft legislation on other important matters like immigration reform.”

Her hopeful prediction raised gauzy memories of deceased Wharton marketing professor Reavis Cox. When I arrived at Wharton in the mid-50s to pursue an MBA, Dr. Cox, a national figure, headed Wharton’s Marketing Department. An academic veteran, he’d already logged 20 years teaching Penn grads and undergrads. Although eager to learn, I had nothing to offer but a B.A. in English and two-plus years of active duty as a U.S. Marine first lieutenant. I knew little of business and less of the marketing concepts he described–concepts like “opportunity cost.”

Dr. Amy Gutmann, HOM’04

But the moment I heard Dr. Gutmann speak of the chance to reform our immigration policy, I saw myself back in Dr. Cox’s Marketing Management class listening to him discourse on opportunity cost. His ideas, still with me, cast an unflattering light on the vast amount of unproductive time today’s legislators have spent on fiscal cliff matters. Their unwavering focus on taxes and spending cuts has imposed on our country a burdensome opportunity cost.

Looked upon as the act of weighing an action against its unchosen alternative, opportunity cost plays a necessary role in helping us make economic choices. It places the selected option on a scale alongside the passed-over option. Yes, the selected option provides benefits. If it didn’t, we would never have chosen it. But what opportunities have been lost by not selecting that other action? The answer helps ensure the efficient employment of limited resources.

It motivates me to ask, “What has the country lost as a result of Congress’s single-minded attention to the fiscal cliff?”

To be sure, fiscal responsibility is of critical importance. But sadly, our legislators have fixed their attention on government spending and debt limits to the neglect of other important policy matters like immigration. The DREAM Act, an acronym for the Development, Relief and Education of Alien Minors, surfaced in an early form more than 10 years ago. It is yet to become law under that name.

Immigration is important, especially to the United States. People wishing to migrate make the U.S. their first choice three to one over the U.K., the second preference. “We’re a nation of immigrants,” falls daily from the lips of politicians and TV pundits. Yet the subject remains an unending source of conflict.

To the nations’ relief, Congress passed New Year’s Day legislation that broke the fiscal deadlock. But other budgetary issues—like health care costs—remain unresolved. Talks about our multitrillion debt and the need for spending cuts are virtually guaranteed to continue in 2013. While these talks go on, the subject of opportunity cost looms. What policy priorities are being passed over? Is it asking too much of our legislators to avoid lost opportunity and in 2013 deal with more than one matter at a time?

Campus is busy again. Photo credit: University Communications.

First of all, congrats to all of those who have been accepted to Wharton thus far (including my dear friend A.K.).

Winter break is over and spring semester started this week. I can’t believe I am 25 percent done with b-school! If you think college went by quickly, just wait until you get to b-school.

Tons of students went on amazing treks over winter break: Peru, Taiwan, Tahiti.

I spent most of my winter break at home in NYC and opted to take an intensive marketing seminar during the last week of winter break. The class consisted of about 70 students and was based on the SABRE marketing simulation.

To be honest, I was dreading having to take a class during my last week of winter break, but it was actually a lot of fun. David Reibstein, the William Stewart Woodside Professor, taught the course, and he was really engaging. He also happens to be the chairman of the board of the American Marketing Association. (Baller.)

We were broken out into teams of five or six and competed in six rounds to earn the highest market share in two different industries. I was on Team Orange, and we launched products such as Navel, Mandarin, Kumquat and Blood. The next few products that we planned to launch were Fanta and Sunny-D. The Yellow Team launched a product called Fever … ha!

I got to know a bunch of students that weren’t in my cohort. My groupmates and I went to Rosie’s every night for beers and storytelling. Overall, it was pretty awesome to be at Wharton in a group of only 70 students outside of my own cohort.

What lies ahead for the glorious Class of 2014? I have Dedicated Interview Period (DIP) week and a semester of four-day weekends because I got marketing done over winter break. Muahahaha!

Editor’s note: This post first appeared on the Wharton MBA Program’s Student Diarist blog on Jan. 6, 2013.

For a few years now, a notion has been building momentum in the e-commerce world (and brick and mortar) that you must have a social media presence with a carefully thought-out strategy. It is a gigantic bandwagon, and if you aren’t on it you feel like a prehistoric outsider, banished from the clan. Is it really the right strategy for everyone?

I developed a company blog for our site. It doesn’t get that much traffic. I advertised on Facebook in the early days only to see terrible results. I setup a company Facebook page, a Twitter feed and a Pinterest account. With some regular postings, I slowly grew the audience. But the big question was loomed: Did any of that amount to anything? One day I checked, and all of it combined is less than a fraction of 1 percent of sales.

I thought that I was doing something wrong. But the more I thought about it, the more I realized that my company is a bit of a supermarket (albeit a niche one), and most people don’t “like” or “follow” their supermarket. Even if they do, it doesn’t really affect their purchasing decisions.

So, whom does all of this social media buzz work for? It works for “cool” brands or products that you’d want to tell your friends about. It works if you need to help spread the word about a significant sale— where the passing on of information adds value. It might even work for me, if my strategy changed and I dedicated a large proportion of resources towards it … maybe.

I had dinner recently with a good friend and fellow Wharton graduate, who works with the top e-commerce companies in helping them to better understand their customers and then to market to the different segments. I posed my social media frustrations, and he asked whether I measured the success of a sale based only on the last method through which someone came to my site. Unfortunately, this is one of the only easy metrics to see: What did someone click on to get to me? He proposed that while people may not necessarily be clicking over to my site and making a purchase from a social media hyperlink, it may be affecting their purchase decision overall.

We concluded that given the size and nature of my particular business, it doesn’t really make sense to try and do all of the work that would be required to research the details of that question, nor would it make sense to dedicate a large amount of resources to trying to make it a success. There are simply too many more lucrative opportunities to move my business ahead by.

I see a lot of people blindly thinking they need to have a social media strategy, but before jumping into it, I think business owners need to figure out if it is really something that is worthwhile for their particular business—and to what degree they should dedicate resources to social media..

A Philadelphia running store received the “Retailer of the Year 2013” award by the Greater Philadelphia Chamber of Commerce, a recognition honoring small businesses in the region. It seems like a well-deserved trophy. Operating three local stores, the company successfully competes with national sports store chains such as Foot Locker, City Sports, Lululemon and Athleta—all of which have shops within blocks of its Center City store.

At a time when customer service, experience and engagement are big topics in retail, what can retailers learn from them? Here are some distinguishing features.

Customer service and store team: The owners and staff are very knowledgeable about running gear, especially shoes, and give advice based on a customer’s running history, goals, workout plan and gait analysis. They are friendly, take time and are not aggressive salespeople. Because many are lifelong—often accomplished—runners, they understand and connect well with customers. The store records purchases for future look-up and offers a generous return policy. But the service goes beyond selling: An online reviewer reported that the store not only gave her a list of local Thanksgiving races when she asked but “Google-mapped directions” to one of the races—without a purchase.

Athletic, educational and social events: Besides free weekly group runs, the store has established a popular Valentine’s run and social for singles, trail races and urban scavenger hunts. It co-founded the Team Philly race training program and has organized an Olympics viewing party and meet-ups for runners after local races. In-store events for new runners on injury prevention and fashion shows are informative and fun. They make the store more than just a selling space and engage customers with the staff and other like-minded people.

Community involvement and partnerships: It has supported a range of local organizations by promoting races, donating to a nonprofit running program and organizing a holiday run as a toy drive. It has also teamed up with physical therapists, massage providers and a gym. In addition, people from the store participate in local races.

Informative, engaging communication: The store publishes an e-mail newsletter and is on Facebook and Twitter. The content is mostly informative (e.g.: about races and interesting articles) and partly store-related (e.g., new merchandise and sales), and it is presented in a conversational, fun way. Social media posts often engage followers—for example, through questions like the recent one about people’s New Year’s running resolutions. Someone responded wanting to run a sub-four-hour marathon. The store’s reply: “You go sub-4 in 2013 and your next shoes are on us.”

Localization: Everything the store does is tailored to the local market’s needs, interests, current happenings and opportunities. It’s this degree of customization that distinguishes it from many competitors.

Gamification—applying digital game design techniques to real-world problems—may still be a new concept for many businesspeople, but it’s rapidly taking hold in a surprising range of contexts.

Video games are a big business, generating roughly $70 billion in annual revenues worldwide. The Pew Research Center found that 97 percent of Americans between ages 12 and 17 play video games, and, it’s not just them; according to the Entertainment Software Association, the average gamer is 30 years old.

In video games’ 40-year history, game designers have developed a raft of insights about how to motivate people. It’s those approaches that propelled a simple-looking slingshot game like Angry Birds to over 1 billion downloads and that enticed users to spend greater than $1 billion in real money buying virtual goods on Zynga’s Farmville.

What if we could capture the techniques those game designers used to motivate people in other contexts? That’s the promise of gamification. It’s what led global consulting firm Deloitte to embed game missions, badges and leaderboards into its training program, Deloitte Leadership Academy, increasing participation by 37 percent. It’s what made Microsoft turn Windows localization testing into a team competition among its offices, motivating employees to review half a million dialogue boxes and identify more than 6,000 problems, all as volunteers. And it’s what caused the Office of Science and Technology Policy at the White House to organize game-based efforts to address R&D, public health, energy use and other major public challenges.

Last year, I began teaching courses on gamification at Wharton. I also co-wrote a book, For the Win: How Game Thinking Can Revolutionize Your Business, published recently by Wharton Digital Press. When people ask me why such as bleeding-edge subject belongs in the Wharton curriculum, I tell them it’s our job to train the business leaders of tomorrow. Many of the early examples of gamification focused narrowly on basic marketing goals such as motivating customers to spend more time on a website. Today, gamification is being applied to virtually every area of business: human resources, leadership, operations, innovation and more.

It turns out that gamifying business is actually a very old technique. In his famous self-help bestseller, How to Win Friends and Influence People, Dale Carnegie relates the story of Bethlehem Steel CEO Charles Schwab, who motivated mill workers by scratching a number on the ground that represented the output of each shift. When the next shift arrived, they naturally saw it as a challenge and jumped at the task of beating the number. Simply by introducing feedback and competition, Schwab improved performance.

What companies are doing today with techniques from video games is just a must more sophisticated and scalable application of Schwab’s insight.

I like Dale Carnegie’s story for one other reason. Schwab formed Bethlehem Steel with a partner, a man who wasn’t known for gamification, but left his legacy in another way. His name was Joseph Wharton.

Jonah Berger employs an interesting marketing maneuver at the very end of the “advance reader’s edition” for his new book, Contagious. On the last page, the publisher invites anyone cool enough to receive an advance copy to request another for a friend, loved one or colleague—anyone who might be interested in the topic of viral marketing, or anyone you might want to impress. Simon & Schuster would then mail a complimentary copy to them. What makes it interesting is not necessarily that Simon & Schuster would give away so many copies. It’s that they are employing the very same tactics that Berger, Wharton’s James G. Campbell Assistant Professor of Marketing, promotes in his book to make products and ideas spread.

Prof. Jonah Berger

Written in a prose that flows almost as fast as Berger talks in real life, Contagious offers a heaping portion of insight into as few pages as necessary. The gist is that the conventional wisdom of how things spread by word of mouth and go viral is wrong. The idea that a few “influencers,” “exceptional people” and “connectors” drive the tastes and attentions of the masses—made popular by Malcolm Gladwell in The Tipping Point—is not necessarily true.

Instead, after more than a decade of research, Berger has found that contagious ideas, products, videos, social media campaigns and the like tend to spread because they have some or all of six key ingredients. Contagious releases on March 5, but if you cannot wait until then—or have not received the advance copy that I requested for you—a quick snapshot of the six principles is below:

Social Currency: Encourage people to talk about your product by making them seem smart and cool by doing so. People love to talk about themselves, and they love to appear smart and cool.

Public: Given the cliché “monkey see, monkey do,” it makes sense that products and ideas easy to observe in public are easier to spread.

Triggers: Make it easy for people to share your product or idea with others long into the future; remind them with environmental triggers, associating your product or idea with a time of day—lunch, for instance—or sunny weather.

Emotions: Evoke the right blend of “high arousal” emotions, good and bad, from your target audience, and they will talk about you.

Practical Value: Your product must deliver real value, and that value must be easy to identify and share with others.

Stories: Package your marketing message in a story. People love to tell and hear stories. Keep in mind that your story only makes sense if your marketing message is wrapped into it.

These six ingredients—per Berger’s acronym, STEPPS—give hope to those of us who don’t have hundreds of thousands of Twitter followers or pay a millionaire celebrity for promotion. Then again, even STEPPS does not ensure viral success. We’ll try them out here at the Wharton Blog Network, though. Let us know how they work.

In the past five years, the average American has reduced her monthly consumption of TV by 12 hours, her in-person socializing bytwo hours, and her phone and email activity by one hour. Today, we live in an information rich but time poor, society. This minute’s newfound idea is tomorrow’s “best marketing plan ever.” We are quick to act—creating a culture of reactivity instead of proactivity. And, when it comes to consumers, they are more challenging than ever.

These opportunities (read: “not problems”) create the possibility of generating deep, emotional engagement from your audience, translating into bottom line impact. But you must allocate your marketing time and resources as efficiently as possible.

Today, the average urban consumer stumbles upon 5,000 brand messages per day. The number of marketing tactics has grown from traditional basics such as TV, radio, print, in-store promotion and relationship building to new opportunities such as Tumblr, Pinterest, Instagram and tomorrow’s newest social platform.

Likewise, the opportunities to learn through research have expanded from traditional focus groups and quantitative surveys to social listening, ethnographic research and online chats.  As marketing opportunities emerge, implementation to take advantage of all of these opportunities becomes more and more time consuming.

It can be just as high impact to say no to marketing opportunities, as it is to say yes.  If you are bogged down in low impact initiatives, you will be distracted from achieving your goals.

So when developing your marketing objectives, make sure they are SMART: specific, measurable, attainable, realistic and trackable.

Below, I have outlined common situations and the corresponding marketing goals, along with the impact of tactics that you will choose.

Situation 1:  Market-leading brand seeks to consolidate its leadership position

Objective 1A:  Consolidate leadership position by increasing brand loyalty

Objective 1B:  Leverage leadership position to drive revenue by cross-selling new products

Commentary:  You can see how objectives 1A and 1B are complementary, but very different.  For objective 1A, you would want to increase engagement and likeability of your brand with a long-term view.  For objective 1B, your focus will be to make customers aware of new product offerings.  .

Now, consider another scenario.

Situation 2:  Upstart B2B company that seeks to rapidly expand its client base

Objective 2A:  Become established as a thought leader with a premium offering

Objective 2B:  Accelerate lead generation to build a pipeline of prospects and generate trial

Commentary:  Again, these objectives can work very well hand-in-hand.  However, prioritization is still important.  For Objective 2A, the company will likely raise the visibility of the company and offering, inclusive of executive visibility.  However, in the case of 2B, the focus will be to generate leads through search marketing, relationship building at conferences, sales calls, growing the newsletter list and other targeted advertising.  Even the purpose of tactics will be very different.  For example, social marketing in 2A will highlight thought leadership, whereas social marketing in 2B will focus on product education and trial, and will even be used to reinforce search marketing.

The above cases have been simplified.  Of course, in many organizations, many more marketing objectives cancompete for time and attention.  Don’t fall victim to spreading yourself too thin.  Ask the question, “What is the focus?” If the answer to the question is “Everything is the focus,” then you have no focus at all—that is a recipe for failure.

For additional inspiration, read fellow Wharton Magazine blogger Roslyn Courtney’s entry on “Ruthless Focus.”

Email’s come a long way since the CAN-SPAM Act of 2003. We marketers have learned to emphasize targeting, working with permission-based data sources and intelligently using email to build strong customer relationships.

Despite these best efforts, a recent study from email intelligence service Return Path shows that 70 percent of all spam stems from legitimate marketers. This comes alongside findings from the Retail Email Blog that show a record setting 93 percent of major online retailers sent at least one promotional message on Cyber Monday. This is certainly a sign that email’s still effective, but if ISPs classify many of those messages as spam, perhaps marketers still have more to learn.

So, what can we do to escape this damaging cycle? Start by following these tips for improving the way you work with your subscriber list.

Hygiene

Working with clean, accurate data is the best way to avoid spam traps, build strong relationships with ISPs, and ensure that your messages make it to the inbox. Your mailing frequency and volume dictate how often you want to hygiene your list. When you do hygiene, you’ll want to remove spam traps, unsubscribers, distribution accounts like sales@company.com, malformed addresses, and anything else that’s invalid or inactive.

 Segmentation

Another report from Return Path shows that 55 percent of senior marketing executives surveyed are not segmenting their list. If you’re unaware, segmentation involves breaking your list into groupings along shared attributes—criteria like age, gender, income—to better target campaigns. By segmenting, you’re better able to create campaigns that are relevant to your subscribers. This increases the likelihood that your subscribers will open, read and act on your messages. ISPs actively monitor this engagement, and it can go a long way towards keeping your emails in the inbox.

Content Strategy

Content has an impact as well. You may hygiene and segment already, but if you’re still seeing poor engagement from subscribers, it could be your messaging strategy. People have a tendency to hit the spam complaint button instead of manually unsubscribing if you aren’t keeping their interest.

Don’ts

Knowing what not to do is just as important as knowing what to do, so here’s a list of tactics you should avoid:

• Working with disreputable data sources. While cheap, this data is rife with inaccuracies that lead to ineffective campaigns, ruined sender reputations and potential blacklisting by ISPs.

• Hiding the unsubscribe link. This is a direct violation of CAN-SPAM, and it increases the likelihood that recipients will mark your email as spam instead of unsubscribing.

• Blindly using email as a marketing channel. Email, especially for customer acquisition, won’t work for every brand. Take a hard look at your metrics and decide if email is a channel you should continue using.

These are just a few of the many ways you can work to keep your campaigns landing in the inbox, but they’re also some of the most overlooked. If you take a renewed approach to your email marketing strategy with these tips in mind, I‘m confident you’ll see performance more in line with what you’re expecting. Furthermore, email benefits from a process of testing and iteration. Constantly test and refine your audience targeting, sending times, offers, email design and copy until you hit on the combination that works best for your brand.

The daily press is full of branding news. Amazon debuted a TV ad campaign to position itself as a fashion destination; Macy’s launched two brands for juniors, Marilyn Monroe and Teen Vogue; Wendy’s redesigned its logo; Louis Vuitton will use fewer logos on its products; and Target opened its first stores in Canada, introducing itself as the friendly new neighbor.

Branding decisions are more complex than ever as markets become increasingly global, product assortments are growing and consumers interact with brands through social media.

Prof. Barbara Kahn

In response to these market dynamics, brands must be customer focused and global. This is a key message of the new book, Global Brand Power: Leveraging Branding for Long-Term Growth, by Barbara Kahn, the Patty and Jay H. Baker Professor and director of the Baker Retailing Center. Drawing from her extensive research in consumer behavior and consulting, the book provides a wealth of insight on positioning, measuring and managing brands.

Here are some highlights:

• Customer focus means that brand managers must consider the total customer experience, including customers’ psychological responses like brand perceptions, mental associations and emotional attitudes. A classic example is the failed launch of New Coke, designed to replace Classic Coke to better compete with Pepsi. Pepsi had come out ahead in blind taste tests, but what the taste tests ignored was that the brand—emotional attachment, cherished memories and other associations—matters greatly to consumers’ perceptions and choices. Brands are much more than just product features.

• Clear positioning is the key to successful branding, and that starts with understanding the whole shopping process—from customer needs to information search to purchase, use and repurchase. Campbell’s comprehensive study of soup shoppers throughout the shopping process, including outside of the store, is a showcase of thorough customer research.

• The best-positioned brands differentiate themselves (e.g., 7UP is the “un-cola”) and have a sustainable competitive advantage. They segment the market and focus on target segments. Good examples are Chanel, positioned for slim, wealthy fashionistas, and Apple, positioned for creative, innovative, design-minded users. Even if a broader population ultimately uses these brands, the positioning remains.

• Authenticity, trustworthiness and brand personality foster brand positioning, while emotional elements and engaging marketing activities attach customers to the brand. Gamification is a good way to engage customers, such as when Green Giant gave Farm Cash to FarmVille players for stickers on its items.

In the end, brands need to create a coherent experience across all touch points. Starbucks is a good example with its cafe experience, barista interaction, grocery store products, and social media. The retailer Origins is another. Their store design (e.g., wood, earth tones, decorative product ingredients such as vanilla and coffee beans), do-it-yourself sampling, product presentation by skin need, clever product names (e.g., Checks and Balances), package recycling and social media all convey Origins’ focus on natural skin care and customer needs.

The complexity of today’s brand management requires constantly keeping track of consumers’ brand perceptions, attitudes and mental maps, as well as brands’ values and underlying drivers. The book provides different techniques for both qualitative and quantitative measurement.

Disclaimers are a normal part of advertising. Sellers use them to provide potential customers with useful information. Sellers also use disclaimers to protect themselves against disappointed customers, bad publicity and claims of harm. Researchers have found that sellers’ disclaimers are beneficial.

But what about disclaimers mandated by governments?

There is no fine print in the First Amendment to the Constitution; no conditions impinge on freedom of speech. Yet for nearly two-fifths of the Bill of Rights’ 221-year life, government lawmakers have restricted the speech of sellers. Moreover, courts have frequently accepted the lawmakers’ speech restrictions. In effect, lawmakers and judges have nullified the First Amendment based only on their judgments that the benefits outweigh the costs of speech restrictions.

In 2002, the U.S. Supreme Court decided not to hear a case about a Florida mandate that dentists advertising implant dentistry qualifications needed to include a disclaimer (Borgner et al. v. Florida Board of Dentistry et al.). In their dissent, Justices Thomas and Ginsburg stated, “If the disclaimer creates confusion, rather than eliminating it, the only possible constitutional justification for this speech regulation is defeated.”

As expert witnesses for a follow-on case, Ducoin v. Viamonte Ros, I helped to conduct an experiment as an answer to Justices Thomas and Ginsburg’s call for evidence on the effects of speech restrictions. Our fieldworkers showed two advertisements for dentists offering implant dentistry to 317 people, who were recruited in a Florida shopping mall. All subjects were shown an ad for a dentist who made no claim to have credentials for performing implant dentistry and another ad for a dentist certified by the American Academy of Implant Dentistry (AAID). Half of the subjects were shown a version of the credentialed dentist’s ad that included the Florida mandatory disclaimer, which stated that the American Dental Association did not recognize the AAID as “a bona fide specialty accrediting organization.”

Our fieldworkers asked the subjects which dentist they would recommend to a friend in need of implant dentistry services. The subjects exposed to the mandatory disclaimer were more likely to recommend the dentist without credentials. Moreover, the subjects who saw the disclaimer drew false and damaging inferences about the credentialed dentist. Women and less-educated subjects were particularly prone to be influenced by the disclaimer in these damaging ways. Our findings convinced the Florida Circuit Court judge that the disclaimer was unjustified.

Ours was not the only relevant study. Previously published experiments have shown that admonishments to change or avoid behaviors typically have effects opposite to the original intention. More specifically, all of the 18 experimental studies providing evidence relevant to mandatory disclaimers found that they increased confusion. In addition, the disclaimers were ineffective or harmful in all of the 15 studies that examined perceptions, attitudes or decisions.

Our findings were published in “Evidence on the Effects of Mandatory Disclaimers in Advertising” in a recent issue of the Journal of Public Policy & Marketing, along with commentaries. In our reply to the commentators, “Should We Put a Price on Free Speech?” we argue that there is another reason to support free speech—it is a basic right guaranteed by the Constitution.

Wharton Digital Press delivers again, this time with a Wharton Executive Essentials book about brand management.

Strong brands are more than globally recognizable. They are critical assets that can make a significant contribution to a company’s bottom line. In her latest book, Global Brand Power: Leveraging Branding for Long-Term Growth, Barbara E. Kahn, Wharton’s Patty and Jay H. Baker Professor and director of the Jay H. Baker Retail Center, provides 21st century guidance on how to manage, grow and assess a brand’s value. Below is an excerpt:

Brands today must be global. They must offer value across different countries and diverse cultures: that is, they must be porous enough to allow for reasonable brand and product-line extensions, broad enough to change with dynamic market conditions, consistent enough so that consumers who travel physically or virtually won’t be confused, and precise enough to provide clear differentiation from the competition.

In this age of total transparency— one slip-up can go around the world via social media instantaneously—a strong global brand must express the same core meanings regardless of the market it is in. If those core meanings are not stable across markets, the authenticity of the brand is threatened. Consumers who travel virtually or physically will be confused, and the brand will lose its power. But brands and products are not the same thing. While brands must be global, products introduced to new markets should be implemented with a clear understanding of the local culture and conventions, and advertised, distributed and priced with local market conditions in mind.

The distinction between brands and products became clear in 1985. Brands had existed before then, but neither customers nor marketing managers genuinely understood their true power or realized that they had a life of their own independent from the products’ attributes. Almost without exception, pre-1985 brands were product focused. Think Coca-Cola, Gillette, Nabisco, Campbell, Lipton, Goodyear, and Kellogg. Each one of these was—and still is—a very, very strong brand, but each one also, at least initially, was identified with specific product attributes, which limited growth potential and global credibility.

Then, in 1985, the Coca-Cola Company introduced New Coke and removed what the company subsequently called Classic Coke from store shelves. There were good market reasons for developing the new product. Coca-Cola was a much bigger global company than Pepsi Cola, thanks to Coke’s global expansion and domination of the restaurant and vending machine markets. However, the market share of Coca-Cola was lagging in supermarkets, the only channel where consumers could choose for themselves. Pepsi Cola had launched the “Pepsi Challenge” advertising campaign, which suggested that consumers preferred the taste of Pepsi to that of Coke. In response, after significant market testing, Coca-Cola launched New Coke, which had a product taste that consumers seemed to prefer in blind taste tests. When Coca-Cola executives removed Classic Coke from the shelves, they removed more than a product; they took away something dear to their customers’ hearts. Subsequent market research revealed that consumers felt betrayed. This shocking reaction proved to Coca-Cola and the world that consumers were loyal to brands in and of themselves, and not necessarily to product features. This realization radically changed the way both academics and business practitioners thought about brands. Now, more than 25 years later, we have amassed significant knowledge about how branding works.

We have learned how to build such brands, how to position them appropriately, how to create emotional bonds and how to continually reposition these brands to keep pace with changing market dynamics. Bottom line: We now know how to leverage and manage brands to help the firm grow. Good brands are not accidents. Their long-term value to the firm has to be developed and managed over time. The best brands form relationships with their customers. In doing so, brand meanings may also be co-created through social media communities and customer-engagement strategies. Grappling with all these issues is the challenge that every marketer faces.

Editor’s note: Reprinted by permission of Wharton Digital Press.

Don Draper (played by Jon Hamm). Photo credit: AMC.

Whether you attribute the quote to John Wanamaker or Lord Leverhulme, the time-honored truth in marketing has been, “We know that half of advertising is wasted, but we just don’t know which half.”  And so tradition holds that we need men like Don Draper (the fictional protagonist in TV’s Mad Men) to convince nervous clients that this is the right ad and the right medium to sell their product.

Well, don’t tell Don, but times are changing quickly. The rapid rise of digital media and the “we trust in data, not people” culture of the industry have revolutionized advertising. In a world where we can easily track which ads lead to more online shopping visits and purchases, we can finally figure out the specific ads that are most effective. Data scientists are now gunning for Don’s job, using data analytics to persuade clients that their advertising dollars are bringing quantifiable ROI.

As rapidly as advertising has changed, there is still a long way to go. Many companies feel they are only beginning to scratch the surface in collecting—let alone fully leveraging—the vast amounts of advertising and consumer-response data available. Many look to the academic community for guidance in creating analytic methods to measure advertising effectiveness.

So  join us in  this conversation. The Wharton Customer Analytics Initiative (WCAI), led by Peter Fader, the Frances and Pei-Yuan Chia Professor, and Eric Bradlow, the K.P. Chao Professor and vice dean/director of the Wharton Doctoral Programs, and the Future of Advertising Project, let by Lauder Professor Jerry Wind, felt the time was right to bring together a group of leading advertising professionals and analytics-oriented academics to discuss Innovative Approaches to Measuring Advertising Effectiveness.

During a fast-paced, one day program, participants will learn what academics are doing to advance capabilities in advertising measurement in areas such as: experimentation, attribution and marketing mix modeling, and new measurement techniques like eye tracking and emotional responses measurement. To encourage a lively discussion on what these cutting-edge findings mean for today’s marketing analytics professionals, the program will feature short research presentations combined with panel discussions.  The conference will be held on May 16 on the Wharton campus.

Editor’s note: View agenda and registration information at http://bit.ly/Xb70to. Please contact WCAI with any questions at wcai-events@wharton.upenn.edu.

Where have all the students gone? Summer internships. Photo credit: University Communications.

First year done. I can’t believe it. It moves faster than you expect. I find myself frantically planning out my last couple weeks, grabbing coffees every day with as many of my classmates as I can.

This summer, I’ll be at Facebook in NYC, working as a “creative social media strategist.” (My four favorite words, mashed up into one job.) The position is a combination role; Facebook needed someone as creative as they are quantitative, as imaginative as they are practical. I’ll be working with top advertisers and their creative agencies to invent new ways for them to engage with their customers. Obviously, effective monetization is extraordinarily important to Facebook, so they have a vested interested in developing a new suite of tools for businesses to use.

This role actually appeared through the campus internship listings, which is pretty amazing given how nontraditional it is. It’s definitely a testament to Wharton MBA Career Management; their advocacy for us has made finding awesome jobs like this one a lot easier on us students.

Good luck at Facebook, John!

Before I go, however, here are the favorite parts of my first year at Wharton:

Creating Marketing for Out4Business: Club life is really rewarding at Wharton. This is where you meet students outside of your cohort and outside of your graduation year. Pulling off huge events is really rewarding and lets you play around with roles you may never have had a chance to fill before.

Student Entrepreneurs: I’ve met so many students who are pursuing their own projects, from psychiatric telemedicine to restaurants to toys. These students are passionate and driven and add a lot to classroom discussions.

My Professors: I had some great professors this year. Learning how to perform regression analysis with Robert Stine, professor of statistics, was my favorite part about my first semester. He was so focused on making what we learned actionable, on making sure we retained the bits that we might need for our careers. He also didn’t accept sloppy thinking or bad work. He was fantastic. My second semester I had Eric Bradlow as my marketing professor. His class made you realize how exciting marketing is. He cold-called, which got more students speaking in class and ensured everyone did the readings. (Editor’s note: Bradlow serves as the K.P. Chao Professor, the vice dean of Wharton Doctoral Programs and co-director of the Wharton Customer Analytics Initiative.)

The Walk Home: After class was through for the afternoon, I liked to network on my way home. I would find a classmate that I didn’t know very well and chat as we trekked back to Center City. My classmates are fascinating, both professionally and personally.

Welcome Weekend: Meeting newly admitted students was a blast. They are so ready to get here, to get started, that it made me remember why I decided to go to Wharton in the first place. They’re also going to be an important part of my next year here. They’re going to come with experiences and networks to share with us, and I hope to share with them how to get the most out of their time at Wharton.

Editor’s note: This post first appeared on the Wharton MBA Program’s Student Diarist blog on Apr. 29, 2013.

Social media—you can’t live with it, and you can’t live without it if you’re a marketer.

Ron Surfield, WG’06, a senior vice president at Edelman who leads its Atlanta digital practice, reported that the P.R. firm’s largest clients are struggling with how and when to spend their ad dollars—and how to calculate actual social media ROI. It’s an even bigger challenge for business-to-business marketers, Surfield said, because so many other marketing streams are involved that could impact an ultimate sale.

Listening attentively at the “Innovative Approaches to Measuring Advertising Effectiveness” conference. Photo credits: Shira Yudkoff.

Surfield spoke at the “Innovative Approaches to Measuring Advertising Effectiveness” conference hosted by the Wharton Customer Analytics Initiative (WCAI) and the Wharton Future of Advertising Program (WFoA). The event was a prime time for practitioners and academics to discuss how “big data” and new tracking data have the potential to transform—and in many cases, already are changing—an industry used to listening to the intuition of Madison Avenue’s “Mad Men.”

The academics presented highlights from their innovative research. Eva Anderl and Jan H. Schumann of Germany’s Universität Passau, for instance, discussed their model for determining the partial value of each marketing contact along a consumer’s route to purchasing something. Anderl noted how such a model would be especial worthwhile to small and midsize firms without the statistics resources in their marketing departments. Traditionally, SMEs give the last contact in such chains all the credit.

Jose-Domingo Mora, an assistant professor of marketing at the Charlton College of Business, University of Massachusetts Dartmouth, presented his research on television viewers in Mexico and how co-exposure affects how they watch programs and respond to advertisements. Essentially, people tend to behave differently when they watch TV alone versus with, say, a daughter or wife.

For all of the excitement that the latest academic research generated, it was counterbalanced at the WCAI event by the tell-it-like-it-is insights of practitioners.

David Reibstein, the William Stewart Woodside Professor, was one of the marketing academics in attendance.

For all that talk about the importance of social media advertising, Andy Fisher, chief analytics officer of Merkle, said that TV still represents the largest outlet where companies spend their marketing dollars: roughly 33 percent on TV versus, at most, 15 percent on digital—though he added that marketers now realize the two mediums are interdependent, with TV driving consumers to search online.

As for big data? Yes, Fortune 500 firms typically work from 400 to 500 data sources, said Fisher, yet the companies that know how to make sense of the information—for example, by melding together “media mix modeling” with how they attribute sales to particular marketing channels—do not share their successes.

“A lot of the advanced analytics really happens behind the scenes,” Merkle said.

This perhaps only provides ammunition to big data skeptics out there.

At least at the WCAI event, the knowledge was being freely passed around.

The Wharton Customer Analytics Initiative is the pre-eminent academic research center focusing on the development and application of customer analytic methods. It is co-directed by Eric T. Bradlow, the K.P. Chao Professor and vice dean of Wharton Doctoral Programs, and Peter S. Fader, the Frances and Pei-Yuan Chia Professor. The Wharton Future of Advertising Program provides a global intellectual hub to challenge prevailing mental models by inspiring, engaging and bridging academics and practitioners in advertising. Yoram “Jerry” Wind, the Lauder Professor and director of SEI Center for Advanced Studies in Management, serves as the WFoA director.

When it comes to lead generation, many marketers aren’t sure which tactics they should use to provide their company with qualified leads. In fact, many marketers aren’t even sure which marketing tactics should be used as lead generation tactics.

There are seven marketing tactics—I call them the “Magnificent 7″—that are the best tactics for providing companies with large numbers of leads and a significant return on marketing investment (ROMI).

The Online Lead Generation Tactics

First, there are the “online lead generation advertising” tactics:

Search engine marketing (SEM) involves setting up ad campaigns on Google and Bing. When your target customers search for certain search terms (e.g., “golf shoes”), your SEM ad will appear at the top of their search results.

With social media advertising, you use banner ads to target users on Facebook and LinkedIn (e.g., a “honeymoon cruises” ad will appear on the Facebook pages of users whose status is “engaged”). Even Twitter now offers social advertising through “promoted tweets.”

You can use display ads (a.k.a. banner ads) to generate leads on websites. Also, marketers are now getting high response rates with interactive mobile ads for smartphones and tablets.

Email marketing is another effective online lead generation tactic. Many marketers are reluctant to try it, because they’re afraid their marketing emails will be mistaken for spam. But if you use targeted, permission-based mailing lists and follow the 2003 CAN-SPAM Act guidelines, you can help to ensure that your emails will get through to your target customers.

The “Tried-and-True” Tactics

These three “old school” tactics still bring in thousands of leads for companies that use them.

Direct mail is a great tactic for explaining the benefits of a complex product or service in detail. But it’s an expensive tactic, so use it only if you’re selling something (e.g., cars) that gives you a high ROMI, or if your customer has a long-term lifetime value (such as in the insurance space).

Cold calling works best today if you’re selling B2B products. In cold calling, you use a targeted call list of customers (e.g., business executives) who might have a need for your products or services.

Finally, trade shows are still a great way to collect leads because they bring you face to face with customers who may be looking to buy your products or services.

Which Tactics Should You Use?

As many as will work successfully for your type of business, and provide a positive ROMI. Ideally, you should test all seven lead generation tactics, and use the tactics that work best and are the most cost-effective.

Editor’s note: In his book, The New Rules of Lead Generation, David provides greater detail on strategies to help marketers maximize their ROMI through successful lead generation marketing. 

These days, it is fashionable to sell a product or a service as an “experience.”

“We don’t sell homes,” a big builder’s recent advertisement proclaimed, “We give you a lifetime of experience.”

Excuse me, Mr. Builder, but is that a residential building or an amusement park we are talking about?

People who claim to sell experiences rarely understand what it takes to really do so. A frozen lasagna in a supermarket is a product, delivering it to your door is a service, but serving it with a smile in a restaurant is an experience. What characterizes a true experience that makes it so hard to deliver?

Is that a shirt you’re shopping for, or an experience?

For starters, it is hard to sell an experience because it is a nebulous and subjective concept that can neither be seen like a product, nor described and spec’d like a service. That requires a greater leap of faith for a customer.

An experience also needs constant engagement between the buyer and the seller throughout the life of that experience. Such engagement is necessary because an experience does not have a “warranty period.” You would not like a restaurant that guarantees only the first hour of your lunch. The seller better be around the whole time to ensure that they deliver the total experience. Mr. Builder will leave after the warranty period and you are left with a dream—or a nightmare.

An experience is also more than the sum of its product and service. In a restaurant, beyond the food and service, what also matters is the ambience, other patrons and many minor details. Any of these have the potential to mar the entire experience. Unlike a car that can be customized or replaced, or a home that can be remodeled to your liking, a customer cannot or does not do that to an experience. That is because an experience is inherently short-lived (but long-remembered) and often completely discretionary. Hence, the onus is on the provider to get it right in its entirety, every time, for every customer with every quirk and pet peeve.

A short-duration experience, such as a meal in a restaurant, is inherently harder to sell and deliver than a longer-duration one. The shorter the duration of the experience, the more amplified every little annoyance the customer feels. A kid screaming at the next table can mar a two-hour restaurant experience more easily than it can a two-week vacation.

A true experience is where the expected value proposition is the experience itself; not just the product or service, but all of it. I go to a shop to buy a shirt—not an experience. I may have a memorable or forgettable journey along the way, but my perceived value is in the shirt, not the experience of buying it. The seller has to focus only on their value proposition: the shirt and how it is sold.

That is why Mr. Builder makes those of us who sell true experiences mad. Just ask your local restaurateur.

This summer, while some of my friends are working in metropolitan cities, volunteering in third-world countries or simply relaxing at home, I stayed in Philly and looked for a job. I came across a “Student Researcher and Project Admin” position for the Wharton Future of Advertising Program (WFoA) on the Penn Student Employment Office website.

I immediately applied and interviewed, and after a few weeks, I was notified that I had gotten the position. For the past two months, I have worked closely with the entire WFoA team as they prepared  for the much-anticipated “Co-Creating Advertising 2020″ seminar. The seminar was presented by Jerry Wind, the Lauder Professor of Marketing, and Catharine Hays, the executive director of WFoA, at the Cannes Lions 60th International Festival of Creativity in June 2013.

To give a little bit of background, the Advertising 2020 project asked more than 200 leaders from around the world to share their ideas on what advertising could look like in eight years, and what they could do to get there. My main task was to collaborate with the WFoA program coordinator, Alexa de los Reyes, and a group of other student researchers to identify 10 recurring response categories and find relevant examples to go with them. My other tasks included maintaining the WFoA website and engaging contributors on Twitter. During the last two weeks before the seminar, I worked closely with Professor Wind and Hays on the PowerPoint presentation, fine-tuning the themes we wanted to emphasize.

Prof. Jerry Wind

During the week leading up to the event, I stayed late at the office or worked remotely from home, finalizing slides and making last-minute adjustments to the presentation. In the end, everyone’s hard work paid off. After the event, it felt great reading Hays’ email informing us that the presentation was a success. Many of our themes for the future of advertising resonated with the attendees and many were interested in experimenting with the concepts we presented.

Hays even told me that after the presentation, a line of people gathered outside their dressing room, wanting to take part in the Advertising 2020 project. Most importantly, I was excited to hear that people in the advertising and marketing industry felt more empowered to challenge the traditional agency model as a result of taking part in the project.

For me, this summer was about exploring different paths as I get ready to select a major. These past couple of months have really opened my eyes to what advertising and marketing has to offer, both as a concentration and as an ever-evolving industry. I have really enjoyed working with the WFoA team. They have taught and showed me so much in just a short amount of time: how to clearly report findings and work under pressure, and how to keep my eyes alert for the coming changes in the industry. While I haven’t declared a major yet, my time with WFoA has led me to consider pursuing a combination that Professor Wind highly encouraged: a dual-degree major in finance and marketing.

Four reasons you should read the Wharton Executive Essentials series from Wharton Digital Press.

The books in the Wharton Executive Essentials series from Wharton Digital Press are available both as ebooks  and as paperback editions sold through  online retailers. Each offers a quick read and penetrating, comprehensive  summaries of the knowledge needed to lead and excel in today’s competitive business environment.

In much the same vein, we give you a quick-reading summary of why the series is worth your attention. The books are: 

1. Inspired by Wharton’s Executive Education program

2. Authored by internationally known Wharton professors George  S. Day, Peter Fader, Barbara E. Kahn and Richard A. Lambert. 

3. Filled with real-life business examples and actionable advice 

4. Available in mobile and paperback formats   

Here are additional details on the books in the Wharton Executive Essentials series:   

Innovation Prowess:  A framework for achieving superior rates of organic growth

Achieving superior growth through innovation is a  top strategic priority for  all companies. Yet most  management teams struggle  to reach their firm’s ambitious  targets and suffer slow growth.  What distinguishes these  laggards from growth leaders  like IBM, Nike, LEGO , American  Express, Amazon and Samsung?  George S. Day, the Geoffrey  T. Boisi Professor and codirector  of the Mack Institute for Innovation Management, reveals  how growth leaders use their  innovation prowess to accelerate  development. In this essential  guide, Day shows how to build  this prowess by combining  discipline in growth-seeking  activities with an organizational  ability to innovate. 

Global Brand Power:  The branding bible for  today’s globalized world

Today, brands have become even more important than the products they represent: their stories travel with lightning speed through social media  and across countries and  diverse cultures. Strong  brands are more than globally  recognizable; they are  critical assets that can make  a significant contribution  to a company’s bottom  line. Global Brand Power by Barbara E. Kahn, the Patty and Jay H. Baker Professor of Marketing and director of the Jay H. Baker Retailing  Center, is filled with stories  that reveal the latest in what leading companies  are doing today to leverage their brands. 

Financial Literacy:  The language of business

To understand how your business is performing and how to evaluate and devise new strategies to boost  future performance, you  need information. Financial statements are a critical source. In direct and simple  terms, Richard A. Lambert,  Wharton’s Miller-Sherrerd  Professor of Accounting,  demystifies financial  statements and concepts and  shows the reader how to apply  this information to make  better business decisions for  long-term profit. Learn from the likes of Pepsi, Krispy Kreme and General Motors,  and apply financial know-how to develop a coherent business strategy.  

 Customer Centricity:  Not all customers are created equal 

Despite what the tired adage says, the customer is not always right. Not all customers deserve your best efforts. In the world of customer centricity, there  are good customers…and then there is pretty much everybody else. Renowned behavioral data expert Peter Fader, the Frances and Pei-Yuan Chia Professor of Marketing and co-director of the Wharton Customer Analytics Initiative, provides insights to help organizations revamp their performance metrics, product development and customer relationship management to make sure they focus directly on the needs of  their most valuable customers and increase profits for the long term. 

One of the main strategies we used in 2004 when we started Minimus.biz, our e-commerce site for travel-sized items, was to get our name out there fast and inexpensively through public relations.  We did it all ourselves and were able to garner mentions in more than 50 national media outlets within the first year.  Twice we tried to outsource the job to a boutique PR firm, with a three-month engagement at $3,000 to $4,000 a month.  With both, there was not a single mention earned.  I became a believer in the do-it-yourself PR method.

We originally used some paid services like PR Newswire’s Media Atlas and their ProfNet service, and then we tried MyMediaInfo. These services posted inquiries from reporters that we could respond to with pitches and the services provided up-to-date databases of media contacts and the topics they cover, allowing us to create press release distribution lists. 

These days, we find ourselves primarily using one of several free services to get daily inquiries from reporters to pitch our stories. The most useful is Help a Reporter Out (HARO). They send out a few emails a day that contain several dozen story needs from journalists across a variety of topics. 

(A leading press release distribution company admitted to me that classic releases are really just used for search engine optimization (SEO), so that releases get auto-posted on a lot of websites that provide links back to your website.)

Beyond using a service like HARO, a worthwhile method of getting useful PR is to find specific journalists who cover what you do and build relationships with them. This can be done by emailing them about a story of theirs that you read, dropping a line about what you are up to, sending them a referral from something unrelated to you that might help them with a story, joining an industry-related organization, connecting with them through social media  or even meeting them  at a trade show.

Remember these tips when corresponding with a journalist:

• Be short and to the point.

• Put yourself in an unbiased reader’s shoes and make sure you provide the journalist with enough of a “hook” that would be of interest to a reader. Recognize that your passion for your business or product isn’t going to magically connect with a reader in the same way.

• Instead of talking about what your product does, focus on what the product can do for them and make that “solution” to the end user be the lead-in for the pitch. 

The enemy of every entrepreneur is time.  You want to make sure that the time you put into your PR effort has a return.  When we wanted as many mentions as we could garner to broaden SEO, spread the news by word of mouth and build trust in our site, every blogger was important.  As time went on, we learned what types of media outlets generated the best return.  A sentence with a hyperlink in a highly targeted online media outlet can be more effective than being on a national television show. People can click right over to your site from the website, but they have to be at a computer or remember who you were from the brief segment on the TV broadcast. 

You’ll want to find some tools to reach journalists, and always be aware of creating your hook. Study the results to understand what works for your business and then cultivate the relationships that you make.