Category: MBA Degree

The Scarcity Effect

On By ashleyfausIn Advertising, MBA Degree, Selling1 Comment

Wow, it’s been a fast and furious week! As I mentioned, I was on a business trip to one of our sister companies last week. I had a great inspiration for a blog post during a trip to Starbucks, and while contemplating this post, I made a connection to one of the theories we discussed in my Consumer Behavior class. I love making connections between my current academic pursuits and the real world! (Yes, I really am that much of a marketing nerd). We’ve been talking about the “scarcity effect” in my class, which basically states that when consumers feel like there is a limited amount of an item, the item must be more valuable. Think about collector’s items, or “limited edition” cars or toys. Everyone decides to stock up, because when the items run out, surely they’ll be worth more in the aftermarket.

Starbucks utilizes this effect all the time, particularly with their holiday offerings. Lots of customers wait in anticipation for the arrival of the Pumpkin Spice latte for the fall, and the Gingerbread latte for Christmas. This past year, Starbucks introduced the Caramel Brulee latte at Christmas, and it was a HIT. Personally, I LOVED this drink, and I would hit Starbucks a few extra times during the week to grab one, since I knew I wouldn’t be able to get it once the new year rolled around. I justified my additional purchases with the thought that I could only get it for a month, so I needed to stock up. The scarcity effect for these seasonal offerings has been marketing gold for Starbucks, as they’ve increased their sales when customers “stock up” on the limited edition product.

But what happens when you take the products off the market? During our trip last week, a barista mentioned that they STILL had customers asking for the Caramel Brulee latte. Upon hearing that they could not purchase this beverage, some customers abandoned the purchase altogether! Wait, Starbucks might be losing customers because they’ve stopped offering a popular product, that was known to be a limited time offering? Apparently so. This is where my marketing brain kicks in, and makes me ask, “Should Starbucks bring back the Caramel Brulee latte?” It doesn’t seem like customers have the same response to the Pumpkin Spice latte, so it would make sense to keep increasing short-term sales of each store by utilizing the scarcity effect for this beverage. But, if they’re losing customers after pulling a more popular seasonal offering, it might make sense to bring it back “for a limited time”, or add it to the menu as a regular offering. From my observation of one, I would be more likely to increase my purchases if they brought back the Caramel Brulee latte. I normally buy a Peppermint latte, which costs about $3.00. However, if Starbucks offered the Caramel Brulee latte, I would increase my purchase by $.75, at least every so often. I think it would be an interesting study for them to try bringing back the Caramel Brulee latte for a limited time this summer to see if it’s still got the clout that it had at Christmas. If it does, maybe Starbucks should consider the sales potential when the scarcity effect is NOT influencing the sales of this product.

So what do you think? Would you be willing to spend more, and spend often if they brought back a limited edition beverage? Are there seasonal offerings that you wish would be made available year-round?

An MBA “Aha” Moment

On By ashleyfausIn MBA Degree, Work and OfficeLeave a comment

So, I’m excited to report that I FINALLY had an “aha” moment with accounting! As a marketer, I am generally averse to all things accounting, as I find it boring and completely useless for my day-to-day tasks. I know, all the numbers people out there are shocked, and I’ve probably lost all credibility, but this post is about a redeeming moment for accounting! Last night, while studying for my mid-term, I was looking at allocating costs to different departments, one of which is marketing. I was thinking about how I’m always making sure that tradeshows costs are billed to the proper accounts, and how we could do all of that much more efficiently if we utilized the CRM. Then I started thinking about all the features I could implement on the CRM to track, forecast, budget and book all of our tradeshows for the next year. Then I got really excited, and sent myself an email 🙂 I know this stuff isn’t rocket science, and I’ve had some fleeting thoughts about additional ways to utilize our CRM tool, but this was the first time I could actually trace some of the features back to an accounting class. Good ‘ole cost accounting helped me hone in on some improvements to an existing tool to provide more value to different branches of the organization. See, us marketers CAN play nice with others…. even with accountants!

On another note, it’s these kinds of moments that prompted, in part, my return to school. Going “back to the basics” in academics has already helped me open up my mind to consider some of the possibilities that usually get blocked by the day-to-day “noise” in the office. The academic environment usually presents concepts purely, or “in a perfect world”, so it allows you to go through all the options that you wouldn’t normally consider because of budget, time, or talent constraints. I’ve had several marketing ideas that I’ve been able to bring into the office and modify to work around the constraints. It’s only my first semester, but I am already seeing the value of going back to school. Especially for a degree like the MBA, which emphasizes well-rounded business knowledge, you can really take the classroom experiences into the workplace.

Behavioral Observations

On By ashleyfausIn Advertising, MBA Degree, SellingLeave a comment

Being in a Consumer Behavior class has heightened my senses when observing people as they make decisions and consume products. That’s part of the point of going back to school, right? Well, I’ve had to analyze a few different behaviors for school projects over the years, and a recent incident at work reminded me of how weird we all are!

It’s not really weird, but weird when you magnify it and realize that people are often very predictable once you have observed and identified a pattern. I was looking to purchase pens as promotional items for the company trade show, so I had the promotional rep send over some samples. I then took the samples around the office to poll for the most popular choice. Upon handing the pen to each person, I noticed the following in almost all members of the office:

1) They held up both pens side-by-side, and turned them each to the side and back to the front

2) They felt the weight of each pen in their writing hand, and then felt the weight in comparison buy loosely holding one pen in each hand

3) They clicked each pen several times

4) They wrote with each pen

5) They repeated all the steps again

This whole process took about 3 minutes, and it was a little funny to watch, as everyone took this process quite seriously. It’s funny to me as a marketer, because I doubt that any of these people stand in a store and run these same tests when buying their own pens. But, suddenly asking them for an opinion turns it into a huge purchase decision, requiring many tests to determine the best possible choice. It’s also interesting because while I’ve asked them to choose among two, there are literally thousands of pens from which to choose. So, if they don’t like either of the samples I’ve given, in theory they would speak up and say that they want something different than what I’ve shown. However, by only showing them two choices, it seems I effectively told them those were the only options. This type of bias has been shown to be much more detrimental in the case of suspect line-ups and suspect photo books. For pens, it’s not problem for my colleagues to feel like they must “settle” on one of the choices I’ve given them. But, what if victims feel that they must “settle” on a suspect, even if the person they really want to pick isn’t offered as a choice? You see this type of decision all the time in the real world, so observing it in a smaller setting can lead to bigger ramifications.

I had a project during my time as an undergrad that required me to interview 3-5 people about their habits when brushing their teeth. How long did they brush? What did they do with the toothbrush after they finished? Then I had to observe 1 or 2 people brushing their teeth, and put that in my report about behaviors when brushing. It’s amazing how differently people perform the same everyday task when you actually start watching them and asking them to tell you about their routine. It’s even more interesting when you ask them WHY they do what they do. Even now, I catch myself considering my nightly routine, and how it differs from that of my husband.

This information can be valuable for design decisions as well as marketing strategies, and most people just don’t think about these things as they go about their everyday lives. Looking at life through a marketing lens reveals the seemingly mundane tasks and small-impact decisions are actually really complex if you take time to look at them. What areas do you find interesting when you apply your expertise to the situation?

MBA Students Dress Better

On By ashleyfausIn MBA Degree, Outfits/Workwear1 Comment
From Corporate to Class

 

Early Spring Outfit for the Office

Like the outfit? See more details here.

 

I mentioned that I’d be sharing some thoughts about pursuing my MBA, and I thought this post would be the perfect time to share one of my most immediate observations about my classmates: they dress better! This may be especially true for the Part-Time Professional Program, as most of the students are working in addition to their classes. So, we’re all coming from our corporate jobs right after work, meaning we’re all in business attire. I don’t know about you, but my undergraduate days were spent in comfortable clothing.

Ok, I’ll admit it… I went to class in yoga pants and a sweatshirt for most of my freshman and sophomore year! I upgraded from this habit slightly after a semi-embarrassing moment in the spring semester of my sophomore year. I had an 8 am class in an auditorium with about 200 other students, so my yoga pants and a sweatshirt were rarely noticed among the other pajama-clad students. A guest professor came to speak about a new program that was accepting applicants, and he requested that we give him a call at his office if we were interested in applying for the program. I called right after class, since I was only on campus 3 days per week, to set up a meeting for another time. It turns out he only had an opening within the hour, and was heading out of town for a conference for the next 2 weeks! He requested that I head to his office right then to discuss the program, which I was clearly reluctant to do, since I was NOT dressed to meet with a professor for, essentially, an interview. Needless to say, after attending that meeting in my gym clothes (and apologizing for my shoddy appearance), I determined that I should attend class dressed in jeans at minimum.

Fast forward a few years to my MBA days, where you’ll generally find me in suit pants, button-down shirt, and a blazer. Now that it’s warming up, you’ll probably find me in skirts and cardigans more often. It’s kind of nice to be presentation-ready at all times, and I’m glad I don’t feel the need to re-schedule based on how I’m dressed. It’s also nice to see my classmates looking professional, as it lends some additional credibility to the fact that we’re all hard-working professionals with a specific goal in mind. It’s also interesting because the professors don’t put “business attire required” on our presentation criteria anymore, since everyone seems to know the dress code. It always surprised me in undergrad presentations when people didn’t know how to “dress up”, so it’s been a pleasant surprise to see professional attire in each class. How do you dress for the different obligations in your day? Like the outfit? See more details here.

Going Back to School

On By ashleyfausIn MBA Degree1 Comment

I started my MBA degree at the University of Texas at Dallas this semester! I’m doing the part-time program in the evenings, which should take me about 2.5-3 years to complete the required 53 hours. I’ve got 7 hours this semester, comprised of Financial Accounting for 2 credit hours the first 8 weeks, Managerial Accounting for 2 credit hours the second 8 weeks, and Consumer Behavior for 3 credit hours for the full 16 weeks. The good news is, I only have to take two classes concurrently this semester. The bad news is, the accounting classes are accelerated, and accounting is not my strong suit! I’ve known I wanted to go back to grad school since high school, so it was only a matter of picking which graduate degree to pursue. After hours of research, I determined that the MBA was the most profitable endeavor. Why not the Master’s in Marketing you ask? Let’s take a look at a few of my reasons for toughing out the core hours  (consisting of all the general business class AGAIN) over pursuing the subject I’m most passionate about professionally:

All the jobs I want ask for the MBA. For marketing, the tipping point in experience for the “good job” is 5-7 years experience. In addition to 5-7 years of experience, all the jobs I want also prefer or require the MBA. As in most fields, managing people and implementing strategic, long-term plans is the next rung on the career ladder. These positions don’t require more “book knowledge” of my craft, but rather overall “business” acumen and a different way of thinking. The MBA is a well-rounded degree that teaches me to think about the big picture issues facing managers, in addition to my operating knowledge of Marketing.

The MBA puts me on a career track vs. an academic track. From what I’ve seen and discussed, the Master’s in Marketing is more for those seeking to advance into the academic world. Because it dives deeper into one subject, most people pursuing the Master’s in Marketing ultimately end up in academics, helping to research and shape the theory and abstract aspects of Marketing. While I enjoy going down the rabbit hole occasionally, I’m passionate about helping real companies and real people find real solutions. I know that while theory backs a lot of my day-to-day practice, the true impact is coming from tangible steps and measurable action items.

Higher earning potential. Let’s be honest… most people pursuing a business degree are looking to increase their earning potential. While I enjoy gaining more knowledge, I can do that for free at the library, the internet, or any number of organizations and seminars. The formal education in an MBA increases my earning potential more than informal education, and this increase occurs sooner than if I keep going on a path of just informal education through more experience. Again, because the MBA puts me on a career track, I’m going to earn much more much sooner than if I was on an academic track, which requires years of service to gain tenure and a high salary.

I’m excited to get back to the “pure” study of business and Marketing, and I’m already seeing some gains in my work on the job as well. I’ll be posting some insights, struggles, and tips while I pursue my MBA, and I’m looking forward to 46 more hours until graduation!