Transcript Designing the Marketspace Matrix

Internet Marketing, 2nd Ed
Mohammed, Fisher, Jaworski, Paddison
Chapter 13 Lecture Slides
Designing the Marketspace Matrix
Exhibits and Tables
Copyright © 2003 by Marketspace LLC
The Marketspace Matrix — Today’s Objectives
Objectives will be to:

Introduce the Marketspace Matrix

Examine the role of the 2Is across all categories of marketing levers

Review how the marketing levers are used to establish and maintain
customer relationships

Examine the principles and guidelines firms can use when designing the
Marketspace Matrix
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–1: The Marketspace Matrix
Relationship Stages
Awareness
Exploration
Commitment
Dissolution
Categories of Levers
Product
Price
Communication
Community
Distribution
Branding
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–2: The 2Is
Individual
Product
Pricing
Interactivity
Communication
Community
Distribution
Branding
Result
Greater possibilities to create and sustain relationships
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–3: Moving Through the Relationship Stages
Awareness
Exploration /
Expansion
Commitment
Dissolution
Profitable,
Uncommitted
Customer
Customers can advance through the stages in several different ways.
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–4: The Marketspace Matrix
Relationship Stages

Awareness

Exploration / Expansion

Commitment

Dissolution

Packaging

Attributes and features

Customer-specific attributes and features

Customer care

Fulfillment

Post-sales support

Individualization

Incremental allocated benefits

Breadth of inventory

Experience

Upgrades

Customer enabling community

Functionality

Customer relationship management

Availability of complements

Customer care

Communication

Community
Distributio
n

Categories of Levers
Price

Product


Click-through promotions

Targeted promotions

Tiered loyalty programs

Discontinue pricing promotions

Web referral promotions

Future price promotions

Wide variety of pricing plans

Reconfigure loyalty programs

Bricks-and-clicks promotion

Justify prices

Become evangelists (affiliate)

Decrease profit programs

Web price discounts

Loyalty programs

Profit-enhancing programs

Bundle

Volume discount promotions

Frenzy pricing

Targeted promotions

Prestige

Future price promotions

Price as a sign of quality

Fairness

Hi-lo

Subscription

EDLP

Dynamic pricing (group buying, C2C)

Terminate direct marketing

Dynamic pricing (as a novel
approach — group buying, C2C)

EDLP

Television

Television

Permission marketing with targeted offers

Magazines

Radio

Loyalty programs

Radio

Newspapers

Customer service

Yellow pages

Packaging

Loyalty programs

Telemarketing

Loyalty programs

Customer service

Billboards / outdoor advertising

Customer service

Permission e-mail

Online billboards (banners / buttons)

Loyalty programs

Personalized pages

Search engines

Customer service

E-mail

Interactive online billboards leading to website

Viral marketing

Links from search lead to website

E-mail with information and link to website

Viral marketing leading to website and / or
download

Website

Serial Marketing

Outline community benefits clearly
and early on in the process

Makes community exploration easy through
efficient site structure


Anticipate and readily answer
questions and concerns, quickly
establishing a sense of trust

Show everyone individual attention (e.g.,
welcoming e-mails, guides for Novices, chat
conversations for new members, use of CRM
marketing to tailor site functionality)


Establish a call for action and further
exploration


Increase equity building (e.g., through tiered loyalty programs,
increased rewards)
Recognize individuals’ contribution and participation
Develop members (e.g., through leadership opportunities, community
roles — guides or watch-persons)
Begin the process of equity creation (e.g.,
member points and loyalty programs)


Spot Departing Friends early and find
solutions to prevent dissolution
Make the “leaving process” fair and
efficient

Seeks and listen closely to feedback

Allow the option of returning

Number of intermediaries

Degree of integration

Degree of interest

Elimination of types

Number of channels

Number of channels

Intermediary type

Reduction of intermediaries

Number of channels

Reduce integration

Internal function
Branding
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Supporting Slide 13–A: Coca-Cola Website
Targeting one segment often leads to the alienation of customers in other segment. Firms
that market to multiple segment (for example, Coca-Cola) face this problem on a daily basis
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–5: Lever Selection Process
While segmenting, targeting and positioning provide a framework that helps managers
identify the optimal mix of marketing levers, there will never be one right answer
Objective
Positioning
Current
Relationship
Phase
Lever
Segment
Targeting
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–6: Principles for Marketspace Matrix Design
Which levers are
least likely to
generate a
competitive
response?
Which levers are
customers most
responsive to?

Principle 1: Base the levers
on consumer behavior.

Principle 2: Choose levers
to effect change.

Principle 3: Measure the
impact of each lever.

Principle 4: Overcome
barriers to advancement.

Principle 5: Anticipate
your competitors likely
responses.

Principle 6: Build on
your firm’s skills and
resources.
Which levers
work best
together?
Which levers are
consistent with
strategy?

Principle 7: Look for
interaction effects.

Principle 9: Levers create
the position.

Principle 8 : Integrate
across levers.

Principle 10: Focus on
superior customer value.
Matrix design is a four-step process that helps marketing managers select and
implement appropriate levers
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Supporting Slide 13–B: Principles for Marketspace Matrix Design
Which levers
are customers most
responsive to?
Which levers
are least
likely to
generate a
competitive
response?
Which levers
work best
together?
Which levers
are consistent
with strategy?
The Principles:
1. Base the levers on consumer behavior
2. Choose levers to effect change (see Exhibit 13.7)
3. Measure the impact of each lever
4. Overcome barriers to advancement
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Supporting Slide 13–C: Principles for Marketspace Matrix Design
Which levers
are customers
most
responsive to?
Which levers are
likely to generate a
competitive
response?
Which levers
work best
together?
Which levers
are consistent
with strategy?
The Principles:
5. Anticipate your competitors’ likely responses
6. Build on your firm’s skills and resources (see Exhibit 13.8)
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Supporting Slide 13–D: Principles for Marketspace Matrix Design
Which levers
are customers
most
responsive to?
Which levers
are least
likely to
generate a
competitive
response?
Which levers work
best together?
Which levers
are consistent
with strategy?
The Principles:
7. Look for interaction effects
8. Integrate across levers (see Exhibit 13.9)
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Supporting Slide 13–E: Principles for Marketspace Matrix Design
Which levers
are customers
most
responsive to?
Which levers
are least
likely to
generate a
competitive
response?
Which levers
work best
together?
Which levers are
consistent with
strategy?
The Principles:
9. Levers create the position
10. Focus on superior customer value (see Exhibit 13.10)
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–7: Amazon’s 1-Click
Given Amazon.com’s need to stimulate impulse purchases, the focus is on levers that
encourage this behavior
Barrier
User in
exploration /
expansion
stage
Places book in
shopping cart
Has to enter
name, address,
credit card
Commitment
1-click ordering bypasses barrier
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–8: TiVo Website
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–9: Integration of Levers
Targeted
Segment
Online
Levers
Integrated
Levers
Positioning
Offline
Levers
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–10: Functional, Symbolic and Hedonic Explained
Functional
Product’s ability to
provide utility
Symbolic
Benefits that relate to the
anticipated reaction of
other individuals
Hedonic
Sensual (taste, sound,
sight, touch) benefits
derived from the product
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–11: Marketspace Matrix for EBay (1995)
Relationship Stages
Awareness
Categories of Levers
Product
Exploration

Features —
search,
security, ease
of use
Price

Dynamic
pricing
Communication

Trade shows
Viral
marketing

Website
Communicate
benefits
Establish call
to action

Easy to
explore
Build user
equity

Community



Commitment

Dissolution
Facilitate P2P
community
Distribution
Branding
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–12: Marketspace Matrix for EBay (1998–1999)
Relationship Stages
Awareness
Categories of Levers
Product
Exploration
Commitment

Features — Search,
security, ease of use

Facilitate P2P
community

Complementary
products: escrow,
insurance

Customer care

Customer-specified
attributes

Upgrades

Tiered loyalty
programs

Personalized pages
Price

Dynamic pricing
Communication

Trade shows

Website

Trade publication ads

User notifications

Radio advertisements

AOL banners

Viral marketing

Publicity / promotion

Communicate benefits
early

Make community
exploration easy

Increase equity
building

Establish call to action

Show everyone
individual attention

Recognize individuals'
contributions

Begin the process of
equity creation

Develop members

Number of channels
Community
Distribution
Dissolution

Make leaving process
fair and efficient
Branding
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Exhibit 13–13: Marketspace Matrix for EBay (2000–Present)
Relationship Stages
Awareness
Categories of Levers
Product
Price
Communication
Community
Distribution

Dynamic pricing
Exploration
Commitment

Features: Search,
security, ease of use

Facilitate P2P
community

New auction
categories

Customer care


Complementary
products: escrow,
insurance, Billpoint
Customer-specified
attributes

Upgrades

Tiered loyalty programs

Personalized pages

Increase equity building

Recognize individuals'
contributions

Develop members

Buy It Now

Promotions to
encourage trial

Trade shows

Website

Trade publication ads

User notifications

Radio advertisements

Television ads

AOL banners

Viral marketing

Publicity / promotion

Television ads

Communicate benefits
early

Make community
exploration easy

Establish call to action

Show everyone
individual attention

Begin the process of
equity creation

Number of channels
Dissolution

Make leaving process
fair and efficient
Branding
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
Chapter 13:
The Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer
Relationships

Designing the Marketspace Matrix

eBay Example

Conclusion
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC
The Marketspace Matrix — Conclusion

The Marketspace Matrix is intended to help firms build a marketing plan
within the context of moving customers through the relationship stages.

The 2Is allow firms to choose levers that can move customers through the
relationship stages faster and more effectively than ever. Also, the 2Is offer
firms new and improved possibilities to maintain commitment.

The 10 principles of matrix design can help marketing managers select and
implement appropriate levers. The principles span four categories:
– Which levers are customers most responsive to?
– Which levers are least likely to generate a competitive response?
– Which levers work best together?
– Which levers are consistent with strategy?
Last Updated: 07/21/03
Copyright  2003 by Marketspace LLC