Haas Faculty Pioneer Data-driven Marketing Evolution

When Chas Murphy, EWMBA 07, applied for a strategic planning job with Toyota's Advanced Product Strategy Group, he knew he was short in on-the-job marketing analysis experience. So Murphy (pictured above) sent Toyota two class projects from his Information- and Technology-based Marketing class (MBA 263) that ultimately convinced the world's largest automaker to give him the job.


University of California"It was a leap for me to move into a senior planning role from a district manager sales and marketing position without any planning experience," says Murphy, now a product manager who oversees the sports car line for Audi of America. "But this class prepared me with almost more market analysis than Toyota needed to see, which was great."

Haas is among only a handful of business schools to offer a class on data-driven marketing. Florian Zettelmeyer, an associate professor in the Haas Marketing Group, designed the Information- and Technology-based Marketing class to teach MBA students how to act intelligently on the flood of customer information that has inundated firms as a result of advances in technology. The class is just one of many examples of how Haas is at the forefront of an evolution in marketing from art to a data-driven science.

"We need a new marketing executive who is customer-centric, focused on metrics such as lifetime value, and savvy about communicating with analytics people," says Zettelmeyer, who has been teaching the Information- and Technology-based Marketing class for four years. He designed the course to develop managers who know how to direct a marketing analytics team.

Zettelmeyer starts with the premise that a company has a huge database of information on each individual customer and then teaches students how to use that information to make marketing decisions. Students work with databases of 50,000 to 100,000 customers on a weekly basis and are required to learn a powerful statistics software program called Stata.

Real-world Projects
Other Haas classes focused on data analysis include Pricing Policy (MBA 269) and Marketing Research (MBA 261). Each class gives students real-world experience through case studies or class projects.

LaLoo's Goat Milk Ice Cream Company, for example, needed to know if it should lower its prices to generate more sales. After conducting surveys and testing prices at different stores, a team of Berkeley MBA students in the Pricing Policy class found limited brand awareness – not price – was to blame for slow sales.

LaLoo decided not to lower prices, and students learned an important lesson. "When things are not selling, the first reaction shouldn't be cut price," explains Teck Ho, the William Halford Jr. Family Professor of Marketing, who teaches the pricing class.

Similarly, in his Marketing Research class, Assistant Professor Hai Che gives students hands-on practical techniques that they can take to their workplaces. Flavio Feferman, MBA 00, is using techniques in sampling and customer segmentation from the class to analyze customer demand as part of a feasibility study of a water reuse facility in Brazil.

Feferman is a partner at Terranova Bioenergy and director at Agland Investment Services, a consulting firm that helps craft new business ventures in developing countries. He spent a few hours each week commuting from San Francisco to Berkeley just to audit Che's class last spring. "One of the real strengths of Hai Che's course was his ability to provide a holistic picture of the marketing research process and how data can support marketing decisions," Feferman says.

Smart Markets Trailblazer
Haas took an early lead in the data-driven marketing movement with pioneering research by Rashi Glazer, a professor at the school since 1989 and currently faculty director of UC Berkeley's interdisciplinary Management of Technology Program. In 1991, Glazer wrote an awarding-winning article in the Journal of Marketing that presented a framework for thinking about the impact of information and information technology on marketing and suggested viewing knowledge about customers as an asset managed by a company.

In 1999, Glazer wrote another influential article, "Winning in Smart Markets," in which he defined a smart market as a turbulent, information-intensive field with abundant information and constantly changing products, customers, and competitors. Such markets, he argued, require a shift in performance goals from profitability per product to profitability per customer.

Glazer, a regular instructor of the core MBA marketing course, notes that technology has been a key driver in the emergence of smart markets. One big breakthrough: the bar-code and scanner systems that allow retailers to track each customer's every purchase. Then came a huge surge in storage capacity in the mid-1990s, followed by advances in database technology, customer-relationship management software, and, finally, the Internet.

"Today we know what billions of customers are doing every day," Glazer says. But he still believes data-driven marketing is in its infancy. "We have a long way to go in terms of using this data and seeing the value," he adds.

Although there is still progress to be made, Murphy is excited about using his market analysis training from Haas in his current position working in the sports car division of Audi of America, whose R8 is Automobile Magazine's 2008 Automobile of the Year. It's been his dream job ever since he saw two prototype sports cars on the cover of Road & Track magazine when he was 12 years old. "I remember thinking, 'If I could be the guy who helps put these amazing cars on the road, that would be the best job in the world,'" he says.




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