Thursday, March 18, 2010

MBA: Demand

Advertisements and marketing affect the demand of our product quite a bit, especially when the advertisement or marketing crosses mediums. For example, the ESPN television audience is hundreds of times larger than the audience. So when ESPN promotes an feature or product on SportsCenter, the traffic for that feature or product climbs exponentially.

Another determinant is current events. This is the determinant we see most in my group, which builds peer-to-peer and social networking applications. For example, my team built message boards and conversation pages (which are user comments on a particular story or game). When Barry Bonds approached Hank Aaron’s all-time home run record, the traffic and participation increase was obvious. Normally, a story will generate about 1000 comments, but stories about Bonds reached upward of 10,000. The same held true for Roger Clemens and his steroid saga.

Some of these events, we cannot plan for. Others, however, we can and do plan for. The Bowl Championship Standings, which determines the national champion in college football each year, always draws a ton of debate from our fans. We use this knowledge to promote other products inside conversation pages and message boards. Last year, the final BCS release drew nearly 90,000 comments.

I have not been made aware of any key elasticities used in decision-making. Mostly, in .com, decision makers have made decisions based on history and tradition. Since starting the class, however, I am pushing for estimates to be derived.

The key take away for ESPN, and, specifically, my group, is to plan ahead whenever possible. Synergy provides a powerful tool for us. And we should capitalize on events to promote our products for us and increase demand for our new and existing products.
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