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Case Analysis

Case Analysis

-Need it by Thursday at 2 pm in Pacific Time Zone.

Read the attached Case on Big Skinny and submit a word document containing the following:

Section one:  Summary of the Case

Write a synopsis of the case highlighting key elements of the case (Minimum 200 Words)

Section two: Case Questions

~What should Kiril focus on next? What should be his lowest priority? Why? (Minimum 150 words)

~Evaluate Big Skinny’s sponsored search strategy. Are their search keywords for which you would encourage Big Skinny to increase its bid? To Lower its bid? (Minimum 200 words)

~How effectively is Big Skinny using social media to sell its wallets? (Minimum 150 words

~Should Big Skinny expand its partnerships with online distributors? Why or Why not? (Minimum 100 words)

Section three: Takeaways

Professor Benjamin Edelman and doctoral student Scott Duke Kominers prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2011, 2012 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545- 7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

B E N J A M I N E D E L M A N

S C O T T D U K E K O M I N E R S

Online Marketing at Big Skinny

As Big Skinny CEO Kiril Alexandrov bicycled to work one sunny afternoon in August 2010, his mobile phone began to ring incessantly. His marketing director and wife, Catherine Alexandrov, was on the line with big news: “4,000 people just ordered wallets through our online store!” But there was a problem: because of a glitch in an online promotion, most of those wallets were being given away for free. Kiril took a deep breath and began to rethink his online marketing plans.

Just a few weeks ago, Kiril had been at the top of his game, selling Big Skinny wallets at a Harvard Square street fair. Fairgoers passing the Big Skinny booth carried packed wallets, which Kiril could cut down to size. “Here’s a regular wallet, just out of the box,” he would say, “and here’s a Big Skinny. It’s the same thickness, but it’s already stuffed with 16 pieces of hard plastic—the national average.” Kiril had mastered this pitch, and he could easily sell over 100 wallets in a full-day fair.

Street fair sales pitches had launched Big Skinny, and retail distribution and print advertising had fueled further expansion. But Kiril had bigger aspirations, and online marketing seemed the key to achieving maximal growth. The overwhelming response to Big Skinny’s promotion glitch confirmed that consumers were ready to buy wallets online. But reaching consumers over the Internet was challenging. Scores of online ad services offered to help, but they imposed high costs or other constraints. Returning to his office, Kiril planned Big Skinny’s next online marketing campaigns.

A Product That Sells Itself?

Wallets are small, lightweight, and often in need of replacement; hence, wallets are natural impulse purchases, often bought as gifts. Thinner wallets are healthier, since carrying a thick, heavy

wallet can lead to back pain and sciatica.1

Kiril started Big Skinny to offer the world’s thinnest wallets and to solve five key problems men and women have with their wallets. (See Exhibit 1.) Beginning with the slimmest and most durable microfiber materials he could find, Kiril eventually developed a proprietary material tough enough to be machine-washable. The Big Skinny material was .21mm thick—thinner than a normal business card and about one-eighth as thick as regular leather. The smallest wallets in the product line had no folds and only a few pockets, while the largest bi-fold held up to 40 thick plastic cards along with cash, business cards, and receipts. Fully packed, a 40-card Big Skinny wallet remained less than an inch thick.

For the exclusive use of J. Hall, 2017.

This document is authorized for use only by Jarvez Hall in 2017.

911-033 Online Marketing at Big Skinny

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Because the original Big Skinny “sport” wallets were made entirely from nylon microfiber, they were durable, water-resistant, and significantly thinner and lighter than typical wallets. Other Big Skinny models offered leather exteriors with nylon microfiber interiors; this design made even the company’s leather wallets visibly thinner than typical leather wallets.

Because potential customers could easily see the difference in thickness, Big Skinny found in- person sales straightforward. Kiril’s standard approach was to encourage customers to move their wallets’ contents into a Big Skinny. “For $20, your wallet will be that thin forever,” Kiril would then explain.

Big Skinny’s customers were often its biggest fans. At street fairs, Kiril kept a camera handy, recording video testimonials from satisfied customers who had purchased Big Skinny wallets previously. Other happy customers sought to work for Big Skinny as distributors selling Big Skinny products at future events.

Beyond fairs and festivals, Big Skinny also sold wallets through retail stores and wholesale tradeshows. In its initial expansion beyond in-person sales, Big Skinny began advertising—billboard- style ads in the Boston subway; postcards at restaurants in Boston, New York, and Chicago; half-page print ads in motorcycle, car, and style magazines. But Kiril sensed that online marketing would propel the company still further.

Taking Big Skinny Online

Big Skinny had an Internet presence from the outset. Kiril designed Big Skinny’s website, www.bigskinny.net, in collaboration with Catherine. (See Exhibit 2.) Kiril hoped the site would define the Big Skinny brand and propel online direct sales. But even with an online outlet, marketing Big Skinny over the Internet presented a puzzle: Big Skinny wallets were typically sold on a combination of impulse and value—straightforward at street fairs and stores, but more difficult over the Internet. Online, it was also unclear how to find suitable consumers—people who might not even know that they needed a new, thinner wallet. Kiril wondered: How should Big Skinny attract visitors to its site? And how should Big Skinny convince those site visitors to buy wallets?

Display Ads

In some respects, display advertising seemed like the Internet’s closest equivalent to a booth at a street fair. Just as a street fair featured rows of booths hoping to intrigue fairgoers, display ads perched at websites’ peripheries in hopes of catching—and distracting—site users.

Big Skinny’s favored in-person sales technique, comparing its product’s thinness to standard wallets, carried over to the world of display advertising. With a two-frame animation, a Big Skinny ad could showcase stuffed wallets before and after the switch, much as Big Skinny staff presented wallets in-person and in print ads (See Exhibit 3.)

Although the rich graphics of display ads offered intriguing possibilities for showing Big Skinny’s benefits, display ads also presented important complications. Internet users had largely become conditioned to ignore display ads—a result of often-irrelevant ads that users found distracting. (Google’s DoubleClick reported that overall click-through rate on display ads in 2009 was just 0.1%—

one ad clicked for 1,000 showed.2) If few users clicked the ads, Big Skinny would struggle to attract users to its site, not to mention to make sales. Yet display ads were typically sold on a per-impression basis, requiring advertisers to pay whether or not a user was interested in an ad, and whether or not a

For the exclusive use of J. Hall, 2017.

This document is authorized for use only by Jarvez Hall in 2017.

Online Marketing at Big Skinny 911-033

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user clicked an ad to reach the advertiser’s site.a Combining low click-through rates with pay-per- impression pricing, display advertising could be a risky choice.

What are your takeaways from this case? How can you use the takeaways from this case as you prepare to move forward in your career? (Minimum 100 Words)

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