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"Moneyball" Marketing :: Video

1/22/2013 --

Case study illustrates how marketing statistics can help smaller companies get more bang for their marketing buck.

ANN ARBOR, Mich. — Getting a new product onto grocery store shelves isn't easy, especially when the marketing budget is dwarfed by those of larger rivals. Any money spent has to show results, and traditional ad blitzes are out of the question.

A new case study by Hyun-Soo Ahn, associate professor of technology and operations, along with his former student, Caroline Dickerson, MBA '11, shows how statistics and data analytics become a major ally for smaller companies in marketing wars. Tools such as regression analysis and ANOVA (analysis of variance) can show what's working, what's not, and make campaigns more effective, much like how the small-market Oakland Athletics baseball club used advanced statistics (known as Sabermetrics) to compete with big-spending rivals.

"It's a Moneyball approach to marketing," says Ahn, referring to the book and movie that chronicled the statistics revolution in baseball. "I think you're seeing more firms turning toward analytic validation of marketing and promotions. For smaller companies, a bad launch can jeopardize the whole company, and good analytics can really help."

The case study, "GoodBelly: Using Statistics to Justify the Marketing Expense," details NextFoods Inc.'s promotion of its GoodBelly line of probiotic juice. It succeeded in getting shelf space at national retailers such as Whole Foods and Safeway, but needed more awareness.

NextFoods decided on in-store demonstrations, where consumers could taste GoodBelly and the sales rep could answer questions about it and the probiotics, which are active cultures that aid digestion and have other health benefits. The company also paid for "endcap" placements in stores — prominent displays at the end of aisles.

But after a while, some at the company questioned the expense and turned to the marketing manager for answers. Was it working? How well? To help answer that, the manager turned to Dickerson, who was an intern at NextFoods in 2010 and had taken statistics as an MBA core class.

Together, they worked to make sense of data from the field and ran regression analyses to find the answers. In this video, Dickerson details how she and her colleagues got the job done.

They found the promotion was effective in high-volume stores, but also found sales reps needed more information to answer some of the questions posed by consumers. GoodBelly was able to adjust the in-store demos, provide more information to the sales reps, and improve the effectiveness of the campaign.

"There's a notion some people have that statistics are out in left field," Ahn says. "But it ties in nicely with other tools and allows you to go beyond intuition and gut feelings. You can prove what you're doing makes sense, or you can cut your losses and find something else that works."

The case also shows how former students can inform the curriculum after they leave. Ahn uses the case in the statistics core class for MBAs and Executive MBAs, where students are given a similar data set and tasked to perform the kinds of analyses Dickerson used.

"It's great to see former students giving back by way of teaching material to help students just coming into the core program," he says.

Watch Video

— Terry Kosdrosky



For more information, contact:
Terry Kosdrosky, (734) 936-2502, terrykos@umich.edu