Marketing Management

MKTG3P24 2024
Instructor: Dr. Waqar Nadeem

Session 5 and 6
Agenda for Session 5 and 6
Viral Nation: The
COVID-19
Pandemic and the
Entrepreneurial
Venture Sale
Decision
 Viral nation, influencer marketing
company based in Ontario started in 2014
• Founders: Joe Gagliese and Mathew Micheli

North America’s leading influencer

marketing company
• Brokered deals between social media stars and companies
•
Introduction
Wide presence

Overall, the state of social media

influencers, and influencer marketing
• Reciprocity
• Fraud and un-fair businesses
• Brands expected to spend over $15 billion by 2022, up from
$8 billion in 2019.

COVID-19 hit in March,2020

 What are the decisions to be made:

Introduction • To sell or not to sell?

• Continue to grow organically in an
uncertain environment
 Future
growth
Prospects
of
Influencer
Marketing
 Future growth prospects of influencer
marketing
Are there any businesses that have surged or
declined because of COVID-19?
• Surging: e-commerce, social commerce, IT related industries
• Declining: Tourism, Airlines, Hotels, Restaurants, Amusement Parks etc

How social networking sites have performed amid

COVID?
• TikTok crossed 1 billion mark(in five years) faster than Facebook(eight
years)(Forbes, 2021)

Are all generations the same with regards to usage of

social networking sites?
• Gen Y, Gen Z, Gen X.

What are the future growth prospects of influencer

marketing companies such as Viral Nation?
• More companies using digital tools to connect, and stay in touch, likely to
continue?
 Future growth prospects of influencer
marketing
What are the problems associated with influencer
marketing?
• CGI influencers
• Miquela CGI influencer with 2.6 million followers approx.
• “Maya” Southeast Asia Puma. (VogueBusiness, 2021)

Who would users trust more? Family/friends or

influencers?
• Many studies suggest that people trust their friends and family more.
• 70% of the teens trust influencers more than traditional
celebrities(DigitalMarketingInstitute)

What is Viral Nation’s competitive advantage?

• Influsoft is a source of competitive advantage. Bidders also have shown interest.

Source: https://www.voguebusiness.com/technology/what-influencer-marketing-looks-like-in-the-metaverse
Source: https://digitalmarketinginstitute.com/blog/20-influencer-marketing-statistics-that-will-surprise-you
Watch: https://www.youtube.com/watch?v=2SPqGalrG_k&ab_channel=PantheonLabLimited
Check : https://hourone.ai/
Check: https://www.youtube.com/watch?v=cQ54GDm1eL0&ab_channel=BuzzFeedVideo
 Future growth prospects of influencer
marketing
Based on the progress of the company, is viral nation
likely to stay successful?
• Success breeds success

What kind of leadership Viral Nation has?

• Competent and inspiring leadership team.

Why Viral Nation has been bootstrapping?

• The company has not taken money from outside.

Any other growth opportunities that you can think

of for Viral Nation?
• The company is yet to internationalize.
 Decision
Criteria for
Acquisition
 Gagliese and Micheli’s decision criteria for acquisition

Do you feel that Gagliese and Micheli are content

with what they have created?
• There is plenty of growth potential that is still uncovered

Possible ventures/opportunities are looked upon by

the founders?
• Both founders not motivated by the desire of creating new ventures.

Should they bring in a venture capitalist?

• International markets
 Gagliese and Micheli’s decision criteria for acquisition

How is Gagliese driven?

• Gagliese wants to become billionaire.

Can Viral nation become a unicorn company?

• Unicorn company is a private company with a valuation of over $1billion.

Can they get enough money from the sale? How

much they have been offered.
• During covid would it be the same?
• 80-120 million range.

Image credit: https://www.ceotodaymagazine.com/2018/08/are-unicorns-real-how-is-a-company-valued/

 Gagliese and Micheli’s decision criteria for acquisition

Are Gagliese and Micheli’s willing to give-up day-to-

day decision-making power to a corporate owner?
• Exercise full control

What looks more attractive in terms of sale?

• Either a clean break or continuation looks attractive.

The big question is: can the new idea be as promising

as this one?
To Sell or
Not to Sell
 Think through
Which company should Gagliese and Micheli sell to?
Any criteria that comes to your mind?

How these offers should be compared? What is the opportunity cost in here?
Cash; Control; Growth

Proposal#1 Proposal#2 (Highest Bid) Proposal#3

Bidder: a billion dollar Asian Marketing Bidder: a Los Angeles base public Bidder: NewYork based advertising
conglomerate relations firm agency, 600 own clients.

• Gagliese and Micheli remain in

place.
• Access to funds from the parent
company;
• Chance of becoming number one
media influencer company in the
world;
• Wait for approvals or speedy way
of doing things.
• Interested in proprietary data
analytics and technology tools,
Influsoft.
• Highest bid, granting some
operational autonomy.
• Gagliese and Micheli feel to be
richly rewarded for giving up
control.
• Cash in hand and promised rapid
growth
• Folds viral nation into the bigger
company
• Complete loss of control
• Disrupts the team
• Full cash out in uncertain future of
social media marketing
Conclusion
 Think through
Does the company have option value to waiting?
• Real options theory
• Downside and upside

What if there is an unforeseen change?

• Influencer marketing dries up.

What is your decision? To Sell

or Not to Sell? And Why?
Give Reasons.
 Nike and
Colin
Kaepernick:
Worth the
Risk?
 Spring 2018
• Marketing team at Nike was faced with decision
to be made

Colin Kaepernick
• Social Injustice and Police Brutality
• US political climate

Declining Sales
Introduction • North American revenues for FY 2018 were close
to FY2016 indicating flat sales.(Exhibit 1)
• Marketing Expenditure increase(Exhibit 2)
• Challenging to maintain growth as a leader

What are the most important

considerations for the company?
• Impact of Kaepernick’s on Nike’s sales and on
Nike’s brand image
• Differentiate itself and make its voice heard
 Potential
Benefits and
Risks of Signing
Colin
Kaepernick
 Any effective campaigns around social advocacy or
social welfare you can think of?

https://www.youtube.com/watch?v=XpaOjMXyJGk&ab_channel=DoveUS https://www.youtube.com/watch?v=oJUDasq-B5Y&ab_channel=Magmacademy

Watch: https://www.youtube.com/watch?v=0ruHOaHrGnQ&t=2s
 Other Example
• Full of Watch Gillette:
Stereotypes, https://www.youtube.com/watch?v=UYaY2Kb_PKI&ab_ch
Insulting annel=GuardianNews

• Men donot like

to be told how
to behave by a
profit oriented
Watch: Dollar Shave Club
company
https://www.youtube.com/watch?v=ZUG9qYTJMsI&ab_c
hannel=DollarShaveClub
• Insincerity,
differential
pricing

• Millenials; CSR
Appeals

• Gaining approval
and avoiding
disapproval

• Republicans buy
sneakers too
Read More: https://www.forbes.com/sites/charlesrtaylor/2019/01/15/why-gillettes-new-ad-campaign-is-toxic/#1f5ed9105bc9
 Potential Benefits and Potential Risks

What are the potential Benefits? What are the potential Risks?
• Kaepernick is well known and well liked by certain • Kapernick is not viewed as a top quarterback
segments
• Issues are very US centric
• Significant amount of publicity
• Likely reaction from Top officials
• Likeability with democrats
• Company might be seen as gaining ‘profit’
• Greater risk, greater chance for long-term reward
 What can be the most and least controversial
political stances a brand can take?

Source :https://morningconsult.com/wp-content/uploads/2018/08/Brand-Toolbox-CSR-Political-Activism.pdf
 Should corporations get involved in cultural
and political matters?

Source: https://morningconsult.com/wp-content/uploads/2018/08/Brand-Toolbox-CSR-Political-Activism.pdf
Decision
Making
 Decision making
If you were the marketing manager, what would
you recommend, and why? And as a consumer,
how would Nike’s decision to use Colin
Kaepernick affect your purchase intentions?

• The match between campaign’s spokesperson and Nike’s alignment with

this particular cause, is it motivating enough for purchase?

• Would Nike be able to maintain a positive consumer perception?

• Would there be any affect of the ad on Emerging market consumers?

• How would the affect be Generation wise or towards any particular

segment?

• How would this campaign be received by Democrats and Republicans?

• Was it wise decision to launch such type of ad?

Colin Kaepernick Nike Ad
Watch:
https://www.youtube.com/watch?v=jBn
seji3tBk&ab_channel=KPIXCBSSFBay
Area
Turing Controversies into Dollars(CNBC)
Watch:
https://www.youtube.com/watch?v=Y
vkf88eSTrI&ab_channel=CNBC
Examples

What is Marketing about?

Watch:
https://www.youtube.com/watch?v
=keCwRdbwNQY&ab_channel=R
eneBrokop
 Next session on
Date Topic Materials (Case, readings, etc.)

Jan 29.
Dough T.O. A Sweet Expansion
(Mon) and Marketing Strategy
Opportunity(9B20A082)
Feb. 1 (Thu)