Chapter 8 Marketing Investment and Return on Investment

Question 1

What is a significant challenge in tracking marketing expenditures for institutions?

Answer 1

Different institutions include different items in their marketing budgets

Question 2

What is the essential premise of the discussed book regarding marketing?

Answer 2

Effective marketing builds value

Question 3

What are the expected outcomes of effective marketing according to the text?

Answer 3

• Yield revenue
• Build reputational equity
• Motivate student enrollment and retention
• Encourage alumni philanthropy and advocacy
• Engage partners
• Retain employees

Question 4

What has led leaders to view marketing as an essential strategic function?

Answer 4

The competitive climate and demographic headwinds facing institutions

Question 5

What did Nathan Grawe’s enrollment projections indicate for institutions?

Answer 5

The time had come for institutions to build their marketing strategy and invest resources

Question 6

What is the impact of the global pandemic on marketing investment for institutions?

Answer 6

It may have shortened the time to prepare for demographic challenges

Question 7

What does the chapter review regarding marketing investment?

Answer 7

• Trends in marketing investment
• Guidance on current investment by institutional type
• Sources of funds
• Measuring return on investment (ROI)

Question 8

What percentage of the total annual budget did Neil Kerwin invest in marketing at American University?

Answer 8

1.5 percent

Question 9

What were the average dollar expenditures for marketing at different types of institutions in 2014?

Answer 9

Ranged from $1.3 million to $3.6 million annually

Question 10

What were the average dollar expenditures for marketing at different types of institutions in 2019?

Answer 10

Ranged from $1.1 million to $3.4 million annually

Question 11

What is the average marketing expenditure as a percentage of annual budget for doctoral institutions?

Answer 11

1.39 percent

Question 12

What is the average marketing expenditure as a percentage of annual budget for master’s institutions?

Answer 12

2.00 percent

Question 13

What is the average marketing expenditure as a percentage of annual budget for baccalaureate institutions?

Answer 13

2.93 percent

Question 14

True or False: Most CMOs agree that they have sufficient resources to meet the expectations of their leadership.

Answer 14

False

Question 15

What was the average percentage of total marketing spend in the education sector according to the American Marketing Association?

Answer 15

11 percent

Question 16

In 2019, what percentage of tuition revenue was documented for digital marketing and recruitment for online programs?

Answer 16

As high as 19 percent

Question 17

Fill in the blank: The corporate sector was dedicating ______ percent of the annual budget to marketing in the late nineties.

Answer 17

3–5

Question 18

What is the range of marketing expenditures for start-ups and small businesses?

Answer 18

1–3 percent

Question 19

What was the investment range for the first year of brand development and implementation for enrollment marketing for small colleges?

Answer 19

$800,000 to $1.2 million

Question 20

What percentage of total annual budget did one small, private liberal arts college invest in marketing in 2019?

Answer 20

4 percent

Question 21

How does the investment in marketing typically change over time for institutions with established brands?

Answer 21

Total annual investment may decrease, but maintenance costs should remain constant

Question 22

What did the 2019 survey ask CMOs to rate regarding their institutions?

Answer 22

The effectiveness of their overall marketing efforts

Question 23

What did CMOs who rated their institution an A report regarding enrollment and fundraising?

Answer 23

Markedly better results compared to those who rated a C or D

Question 24

What was the average marketing budget per student for institutions rated an A?

Answer 24

$623

Question 25

What was the average marketing budget per student for institutions rated a B?

Answer 25

$429

Question 26

What percentage of CMOs gave their institutions a C or D for marketing effectiveness?

Answer 26

29 percent

Question 27

What percentage of CMOs awarded their institutions an A for marketing effectiveness?

Answer 27

21% ## Footnote This group reported better results in enrollment, fundraising, and reputation.

Question 28

What was the average marketing budget per student for institutions rated A by CMOs?

Answer 28

$623 ## Footnote Institutions rated lower had varying budgets, with B at $429 and C/D at $463.

Question 29

What did the 2019 Inside Higher Ed report focus on regarding Southern New Hampshire University?

Answer 29

Its marketing practices and budget ## Footnote SNHU's marketing expenditures were significant, at $139 million.

Question 30

In 2016, how much did for-profit institutions spend on marketing compared to private non-profits?

Answer 30

For-profits spent $607.7 million; private non-profits spent $611 million ## Footnote This marked the first time private non-profit expenditures exceeded for-profits.

Question 31

What percentage of SNHU's annual marketing expenditures went to Google for digital marketing?

Answer 31

34% ## Footnote This indicates a significant investment in digital marketing.

Question 32

What is a key recommendation for institutions regarding marketing budget allocation?

Answer 32

Invest 3–5% of total budget ## Footnote This varies based on marketing goals and desired outcomes.

Question 33

What is the 'Cost of Acquisition' in marketing?

Answer 33

A measure of marketing expenditures per student ## Footnote It helps review overall return and effectiveness.

Question 34

What is 'Lifetime Value' in the context of student marketing?

Answer 34

An estimate of the total value a student or alumnus brings to the institution ## Footnote Used to refine enrollment and fundraising strategies.

Question 35

What is the formula for calculating ROI?

Answer 35

ROI = (Gain from Investment - Cost of Investment) / Cost of Investment ## Footnote This requires precise data collection and analysis.

Question 36

What does 'Incremental ROI' calculate?

Answer 36

Incremental benefits versus incremental costs ## Footnote It helps measure the effectiveness of new marketing strategies.

Question 37

What is the importance of having data analysts in marketing?

Answer 37

To track and measure ROI effectively ## Footnote Professional expertise may be required for thorough data analysis.

Question 38

What is 'Brand Equity' in marketing effectiveness?

Answer 38

A measure of the value of a brand ## Footnote It is established in other sectors but not yet effectively in higher education.

Question 39

True or False: Institutions with higher investments in marketing generally report better outcomes.

Answer 39

True ## Footnote Evidence suggests a correlation between investment and marketing effectiveness.

Question 40

Fill in the blank: The average investment for the education sector in marketing is _______.

Answer 40

11% ## Footnote This percentage is seen as politically unrealistic for many non-profit institutions.

Question 41

What role do board members play in marketing funding?

Answer 41

They can support marketing with private funds and encourage donations ## Footnote Their expertise and political support are vital for funding decisions.

Question 42

What is a challenge in calculating actual ROI?

Answer 42

Requires precise data on net revenue and marketing expenditures ## Footnote Partnerships across departments are essential for accurate data collection.

Question 43

What type of marketing expenditures did SNHU include in their budget?

Answer 43

Market research, website operations, social media, etc. ## Footnote These categories reflect a comprehensive marketing strategy.

Question 44

What is the role of data analysts and business intelligence specialists in marketing?

Answer 44

They are dedicated to tracking analysis in the marketing department.

Question 45

Define brand equity.

Answer 45

The commercial value that derives from consumer perception of the brand name of a particular product or service.

Question 46

What does brand equity measure?

Answer 46

The value of a brand over and above the value of the product or service.

Question 47

How does strong brand equity benefit customers?

Answer 47

Enhances their ability to process information and boosts confidence in purchase decisions.

Question 48

What is a challenge that higher education faces regarding brand equity?

Answer 48

Difficulties in establishing the cost of education and measuring the added value of the brand.

Question 49

What elements of brand equity are higher education institutions beginning to track?

Answer 49

* Brand awareness * Loyalty * Brand associations * Perceived quality

Question 50

Why is it hard to consider a major investment in marketing for institutions?

Answer 50

Historical investments have been small relative to other measures.

Question 51

What must be included in discussions about marketing investments?

Answer 51

Strategic goals to be influenced by marketing and measures to track effectiveness.

Question 52

What is the importance of tracking marketing investments?

Answer 52

To ensure effective strategies mature before demographic shifts occur.

Question 53

What percentage of the overall university operating budget does marketing and communication represent?

Answer 53

This should be assessed and determined.

Question 54

What should be the sources of funds for marketing investments?

Answer 54

This needs to be identified and planned.

Question 55

If we invest more in marketing and communication, what should we consider?

Answer 55

The expected results and the time frame for those results.