Transcript mgt05handout

Marketing Management
5.
Marketing, Market Research,
and Profits
GEN Y: Do We Know Our Customers?
Generational Marketing: targeting age cohorts
Formative Experiences in a generation
Linking Marketing with Profits
Questions about Customers & Competitors
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How profitable are our customer relationships and what
can we do to improve those relationships?
How profitable is our competitive strategy and what our
options to improve our strategic position?
First, to know our customers better, we focus on currently
targeted segments or customer groups, or, if data
permits, on individual customers
Segments and Individual Customers:
Accessing External Customer Data
External sources of information are always an option
Their price is typically the key decision making factor
Ex:
Syndicated services (ex: AC Nielsen, Maxxcom in Toronto)
Strategis by Industry Canada: http://strategis.ic.gc.ca/
Canadian Institute of Marketing: http://www.cinstmarketing.ca/
Youthography, Toronto: www.youthography.com
Internal Market Research
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The best features: current and problem-specific
How much money can we spend?
Often predetermined by fixed budgets
However, when is it worthwhile to conduct market research?
When it measurably contributes to the bottom line:
Value of a decision
with research
minus
Value of a decision
without research
>
Cost of
research
Jim Novo: Drilling-Down
http://www.drilling-down.com
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Motto: Turning Customer Data Into Profits with a
Spreadsheet
Jim Novo is a customer retention / defection expert
Home Shopping Network: VP of Marketing
Managed customer communications and marketing
across all the distribution channels
Linked TV to Internet and to Catalog, extending
customer lifetime value (CLV)
Focus on behavioral segmentation
Past and current customer behavior is the best predictor of
future customer behavior
Analyze action-oriented customer activities
Ex: making purchases, visiting web sites
Retain Your Customers, 1
Active customers are happy and will be retained
In general, Customers like to play and they like to "win"
Customers like to feel that:
Retain Your Customers, 2
Marketing is a conversation: Listen to what the customers say
Latency: the number of days between two customer events.
Ex:
Check every customer who made at least 2 purchases, and
calculate the average # of days between the 1st & 2nd
purchases
E.g., the average latency is 30 days
When a customer has not made a 2nd purchase in 30 days after the
1st purchase, that customer is not an "average" multi-purchaser.
Something is wrong there, and you should react (maybe with a
promotion?)
The RFM Model
The RFM Model
Steps:
Jim Novo: Drilling-Down