COURSE SYLLABUS. Return on Marketing Investment

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1 COURSE SYLLABUS Return on Marketing Investment Instructor: Alexander V. Krasnikov, PhD Assistant Professor of Marketing, School of Business, George Washington University Course objectives Effectiveness and productivity of marketing are fundamental to stock market valuations, which often rest upon the aggressive assumptions about customer acquisitions and organic growth. Despite its importance, marketing is one of the least understood, least measured function at many companies. In today s environment, Marketing Managers require tools and techniques to both quantify the strategic value of marketing initiatives, and to maximize marketing campaign performance. This course is designed to help marketers demonstrate the return on investment (ROI) of marketing and leverage data from marketing analytics to make better and more informed marketing decisions. The course covers marketing performance management, customer relationship management strategy and execution, internet marketing click through analysis, and basis of analytic marketing and value driven segmentation. Content covered is especially applicable to those pursuing careers as marketing and or brand managers. Through the use of both lecture material, and case applications, students will apply their knowledge and experience in these areas to solve marketing problems. By the end of course, you will be able Design metrics and measure ROMI for variety of company marketing initiatives, including branding, customer acquisition, advertisement, online communications etc. Interpret and critically evaluate ROI of such activities Suggest ways to improve and grow profitability of different marketing activities Propose dashboard for measurement ROMI at your company Course content Topic 1. Basic principles in estimation of Return on Marketing Investment Topic 2. Measuring market based assets. Marketing metrics Topic 3. Customer Relationship Management strategy and execution Topic 4. Marketing performance management Topic 5. Internet Marketing 1

2 Teaching Philosophy I strongly believe in the active learning approach which builds on your input and experiences to share and refine key concepts and tools from my experience. I encourage decision making via the use of actual case studies. Participation in case discussions is essential. Each student is expected to be an active participant and to make meaningful contributions to cases being discussed. In particular, you will (1) propose ROMI initiatives to your colleagues, (2) evaluate the ROMIinitiatives of your colleagues and (3) defend your point of view in written and oral form. As typical in business and academia, I will allow you to revise and refine your work in response to comments (before I officially grade it). Moreover, your input in the syllabus is strongly encouraged, and you have a choice in terms of (1) who to work with in a team, (2) which case to pick up for written analysis, and (3) when to spend most of your time efforts regarding class case discussions. 2

3 Tentative Schedule (subject to change with notice) Topic 1. Basic principles in estimation of Return on Marketing Investment Class 1. Getting the ROI Basics Preliminary Required readings for class: Mark W. Johnson, Clayton M. Christensen, and Henning Kagermann (2008), Reinventing Your Business Model Harvard Business Review, 86(December), Individual 1 due at the end of the first class: Why are you interested in this topic? What marketing metrics or methods would you like to learn during this course? Choose two cases from classes 5 10 that you would like to present and/or write case analysis. Expected length not more than two pages. Date: February 15 th, Addressing ambiguity in marketing outcomes and shortfalls in marketing measurements Outline stages in ROMI process Class 2. Investment and Return Patterns in Marketing Preliminary Required readings for class: Roland T. Rust, Tim Ambler, Gregory S. Carpenter; V. Kumar, Rajendra K. Srivastava (2004), Measuring Marketing Productivity: Current Knowledge and Future Directions, Journal of Marketing, 68 (October), Date: February 16 th, Comparison of Acquisitions and Retention Marketing Accounting of costs and residual value in marketing Long term vs. short term effects of marketing investments Topic 2. Measuring market based assets. Marketing metrics Class 3. Measurements in Marketing: How to Get Necessary Data? Preliminary Required readings for class: Reichheld, Frederick F (2003) The One Number You Need to Grow, Harvard Business Review, 81(December), Date: February 17 th, Establishing financial measures for strategic initiatives Aligning measures with decisions ROMI vs. other metrics (LTV) 3

4 Topic 3. Customer Relationship Management Strategy and Execution Class 4. Understanding customer value metrics and growing customer profitability V. Kumar, Rajkumar Venkatesan, and Werner Reinartz (2006), Knowing What to Sell, When, and to Whom, Harvard Business Review, 84(March), Case: B&K Distributors Individual 2 due at the beginning of class 5 Date: February 18 th, Describe marketing analytics tools in CRM Understand customer value metrics Growing customer profitability through satisfaction and loyalty Class 5. Execution of CRM Rigby, Darrell K., Frederick F. Reichheld, Phil Schefter (2002), Avoid the Four Perils of CRM, Harvard Business Review, 84(March), Case: ROI for a Customer Relationship Management Initiative at GST Date: February 19 th, Execution of CRM strategy in customer centered organizations Describe the role of IT in successful implementation of CRM Topic 4. Marketing Performance Management Class 6. Managing channels for profit Sales Force and Channel Management in Farris, Bendle, Pfeifer, and Reibstein (2006) Marketing Metrics: 50+ Metrics Every Executive Should Master, Wharton School Publishing, Upper Saddle River, NJ Case 1: Living DuPont.CA: Virtual Business, Real Money Case 2: Internet Marketing at Air France Date: March 1 st, Evaluate costs/benefits of addition of new channel Organizational systems to manage channel profitability 4

5 Class 7. Marketing Campaign Profitability Management Managing Campaign Profitability in Lenskold (2003) Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability, McGraw Hill Cases 1 &2: TBD Date: March 2 nd, Describe the steps in assessing marketing campaign profitability Explain role of marketing manager in tracking campaign profitability Topic 5. Internet Marketing Class 8. Web Metrics and Advertisement in Media Case: Marketing at Microsoft Date: March 3 rd, Describe importance of online channels in marketing communications Explain similarities and differences between advertisement online and traditional electronic and mass media Class 9. Word of Mouth Marketing V. Kumar, J. Andrew Petersen, and Robert P. Leone (2007), How Valuable Is Word of Mouth? Harvard Business Review, 85(October), Case 1: Resident Evil 5 WOM campaign Case 2: TBD Date: March 4 th, Define WOM and buzz marketing Explain how social networks for promotion and advertisement 5

6 Class 10. Final Session Readings and Q&A session Cases presentations Deliverables are due Date: March 5 th, Office hours for individual consultations: If you have any questions about the material please reach out to me. Office hours (and location) will be announced early in. Calendar plan of current and final evaluation Pre exam consultation: March 5th, Final Exam Due: Noon (Moscow Time), March 19 th, Announcement of exam results: March 29 th, Deadlines for case study report Beginning class on day of discussion of specific case Grading system Assignments 10% Class Participation 10% Case study presentation 15% Case study report 25% Final exam 40% Optional Readings Marketing and the Bottom Line by Tim Ambler, Second Edition, 2003 Market Response Models: Econometric and Time Series Analysis, Second Edition, by Dominique M. Hanssens, Leonard J. Parsons and Randall L. Schultz, 2001 Marketing Metrics: 50+ Metrics Every Executive Should Master, by Paul Farris, Neil T. Bendle, Phillip E. Pfeifer, and David J. Reibstein, 2006 Also, students are encouraged to read major business periodicals (such as Wall Street Journal, Business Week, Financial Times, Fortune, etc) as well as specialized sources (Marketing News, Advertising Age, etc) 6