Lecture 1: Introduction
Skills in effective market assessment:
- Making decisions based on critical thinking and a structured decision process.
- Extracting, analyzing and interpreting information from text, graphs and data.
- Evaluating, choosing and calibrating market response models that enable better managerial
decisions.
- Making reasonable assumptions and judgements calls in the light of limited information.
- Communicating results and providing clear recommendations.
Intuition is powerful and problematic for managerial decisions, it can create false confidence in
decisions that results in poor solutions.
5C’s to approach markets:
- Company: Company products and company capabilities.
- Customers: Identify segments and segments’ key needs.
- Context: Political, economic, social, cultural and technological environment.
- Competitors: Competitor concentration, structure and behaviors.
- Collaborators: Key collaborators (suppliers, distributors, agencies) and their interests.
Market assessment: The systematic use of data and judgement about customer, companies,
competition and collaborators and industry context to inform strategic marketing decisions.
Goals:
- Develop marketing strategies for the firm.
- Analyze the structure of the markets in which the firm is competing or whishes to compete.
- Enable and simplify decision making.
- Create a structure to focus on key issues (bottom-line impact).
Market response models:
- Number of marketing variables: One vs many variables.
- Competition: Including vs not including actions and reactions of competitors.
- Nature of the relationship: Between input and output variables.
- Static and dynamic: snapshot vs flow of actions.
- Level of demand: brand sales vs brand share.
- Level of response: individual vs aggregate.
Calibration: Process of determining the appropriate values for the parameters.
- Objective calibration: Using statistical methods/estimating the model with data.
- Subjective calibration When no historical data is available.
Pareto Principle; 80/20rule: 80% of overall results are driven by 20% of inputs. Used to pinpoint the
most effective recommendations. 20% of social media posts generate 80% of the traffic.
Steps in the market response model:
1. Structure the problem: What is the company’s problem? Which business is the company in?
What is the company’s objective?
2. Understand the market: Profitability problem or business situation problem (5C’s)?
3. Gather and analyze the right data: Which data recourses to solve the problem? Which
appropriate tools to analyze the data?
4. Provide a clear recommendation: Conclusion, actionable recommendation, three supporting
reasons with data, conclusion again.
, Lecture 2: Segmentation and Targeting
Goal of segmentation: Grouping customers based on (dis)similarity.
Needs for segmentation:
- Customers within a segment are homogeneous, customers between segment are
heterogeneous.
- Customers within a market segment are looking for an offering that addresses the same type of
needs and/or respond similarly to marketing communications.
Three Step Approach:
1. Segmentation: Identify segments of customers with similar needs, wants and/or responses
2. Targeting: Select which segments a company should try to serve and how.
3. Positioning: Position the firms offerings in relation to the competition in the segment.
Phases in segmentation and targeting:
1. Segment the market using cluster analysis (based on needs).
2. Describe the market segments that are identified (profiling based on past behavior,
demographics, psychographics, geographics, media usage, et cetera).
3. Evaluate the attractiveness of each segment.
4. Select one or more target segments.
5. Find and reach customers with the target segment.
Characteristics of market segments:
- Measurable
- Accessible
- Substantial
- Differentiable
- Actionable
Cluster analysis: Homogeneous within the group, heterogeneous across groups.
Lecture 3: Case discussion Ontela PicDeck
Segmentation is based on needs, not on descriptors like age, gender, social media use, et cetera. If
you have segmented people based on their needs, you are looking at their descriptors.
Valuable of the segment:
- Size
- Willingness to pay
- Costs to identify, attract and serve/reach the customers of the segment
Skills in effective market assessment:
- Making decisions based on critical thinking and a structured decision process.
- Extracting, analyzing and interpreting information from text, graphs and data.
- Evaluating, choosing and calibrating market response models that enable better managerial
decisions.
- Making reasonable assumptions and judgements calls in the light of limited information.
- Communicating results and providing clear recommendations.
Intuition is powerful and problematic for managerial decisions, it can create false confidence in
decisions that results in poor solutions.
5C’s to approach markets:
- Company: Company products and company capabilities.
- Customers: Identify segments and segments’ key needs.
- Context: Political, economic, social, cultural and technological environment.
- Competitors: Competitor concentration, structure and behaviors.
- Collaborators: Key collaborators (suppliers, distributors, agencies) and their interests.
Market assessment: The systematic use of data and judgement about customer, companies,
competition and collaborators and industry context to inform strategic marketing decisions.
Goals:
- Develop marketing strategies for the firm.
- Analyze the structure of the markets in which the firm is competing or whishes to compete.
- Enable and simplify decision making.
- Create a structure to focus on key issues (bottom-line impact).
Market response models:
- Number of marketing variables: One vs many variables.
- Competition: Including vs not including actions and reactions of competitors.
- Nature of the relationship: Between input and output variables.
- Static and dynamic: snapshot vs flow of actions.
- Level of demand: brand sales vs brand share.
- Level of response: individual vs aggregate.
Calibration: Process of determining the appropriate values for the parameters.
- Objective calibration: Using statistical methods/estimating the model with data.
- Subjective calibration When no historical data is available.
Pareto Principle; 80/20rule: 80% of overall results are driven by 20% of inputs. Used to pinpoint the
most effective recommendations. 20% of social media posts generate 80% of the traffic.
Steps in the market response model:
1. Structure the problem: What is the company’s problem? Which business is the company in?
What is the company’s objective?
2. Understand the market: Profitability problem or business situation problem (5C’s)?
3. Gather and analyze the right data: Which data recourses to solve the problem? Which
appropriate tools to analyze the data?
4. Provide a clear recommendation: Conclusion, actionable recommendation, three supporting
reasons with data, conclusion again.
, Lecture 2: Segmentation and Targeting
Goal of segmentation: Grouping customers based on (dis)similarity.
Needs for segmentation:
- Customers within a segment are homogeneous, customers between segment are
heterogeneous.
- Customers within a market segment are looking for an offering that addresses the same type of
needs and/or respond similarly to marketing communications.
Three Step Approach:
1. Segmentation: Identify segments of customers with similar needs, wants and/or responses
2. Targeting: Select which segments a company should try to serve and how.
3. Positioning: Position the firms offerings in relation to the competition in the segment.
Phases in segmentation and targeting:
1. Segment the market using cluster analysis (based on needs).
2. Describe the market segments that are identified (profiling based on past behavior,
demographics, psychographics, geographics, media usage, et cetera).
3. Evaluate the attractiveness of each segment.
4. Select one or more target segments.
5. Find and reach customers with the target segment.
Characteristics of market segments:
- Measurable
- Accessible
- Substantial
- Differentiable
- Actionable
Cluster analysis: Homogeneous within the group, heterogeneous across groups.
Lecture 3: Case discussion Ontela PicDeck
Segmentation is based on needs, not on descriptors like age, gender, social media use, et cetera. If
you have segmented people based on their needs, you are looking at their descriptors.
Valuable of the segment:
- Size
- Willingness to pay
- Costs to identify, attract and serve/reach the customers of the segment
