EBIN 510 Individual Coursework 2014-2015 In the US, the test preparation services are a $4 billion industry with the online approach serving as the biggest, low-cost growth area. The industry is anticipated to grow by 30% next year. The graduate Management Admission test (GMAT) 1 is a typical service that companies in this market provide. Zkewton, having launched six years ago, is a relatively new player in the scholastic test preparation (GMAT) market in the US. Using an online-only model that incorporates adaptive learning software, the company is able to provide maximum flexibility (i.e. you can take the course from anywhere at any time) and individual customization to each student’s progress. The absence of fixed overhead costs due to no brick-and-mortar presence enables the company to price competitively in the market. However, its business model is a departure from the traditional face-to-face interaction expected in this category. To communicate this differentiated positioning, Zkewton therefore uses a variety of online marketing efforts such as display ads and paid search. At the backdrop of the global recession, the company communicated to prospective customers that it would vary its price with the stock market indices (Zkewton’s price was linked to the stock market). Such communicated price changes are the main traditional marketing actions for Zkewton. To build customer and fan relationships online, the company also ran social media marketing campaigns, including blog posts, forum messages, Facebook and Twitter posts. Donald Gupta, the head of the marketing department at Zkewton, is keen to achieve the marketing objectives of the company through digital marketing communications. After running several online advertising campaigns over the last year, Mr. Gupta obtained a summary of the data pertaining to May-December, 2014. The data cover weekly information on visits to the website of the company, impressions, clicks, display ads on Amazon and US News, signups, sales in units, sales in value, refunds etc.2 To obtain more insights about the social media posts, Mr. Gupta collaborated with the ABC Boston, a specialized company in online word-of-mouth. Their technology relies on statistical algorithms that identify patterns of words used in conversations, and then recognize information from the conversation that is relevant to the user’s chosen topics.
1
GMAT is a standard application criterion for graduate business schools in the US, both at the MBA and PhD level. 2 The dataset and variable definitions can be found in the excel file called ‘Zkewton_data.xlsx’.
1