in 25 Books in 2012

#11/25: Principles of Marketing Engineering

Marketing Engineering: A systematic approach to harness data and knowledge to drive effective marketing decision making and implementation through a technology-enabled and model-supported decision process.

Market response models

  • Inputs: actions that the marketer can control + environment
  • Response model
  • Objectives: monitor/measure, etc.

Value = Benefits – Price

  • Benefits
    • function (does the job)
    • psychological (status)
    • economic (saves money)
  • Price
    • Monetary
    • Perceived risk
    • Inconvenience

Customer Need

  • subject and importance of need
  • temporal aspects of need (urgency, frequency and duration)

Measuring Customer Value

  • Objective Customer Value
    • Internal engineering assessment (internal estimate)
    • Indirect survey questions (pay for better quality, etc.)
    • Field value-in-use assessment (economic benefit): Not only marginal costs but initial investment, etc.
  • Perceptual Customer Value
    • Focus groups
    • Direct survey
    • Importance ratings
    • Conjoint analysis
    • Benchmarking
  • Behavioral Customer Value
    • Choice Models
    • Statistical models / Data mining

Segmentation -> Targeting -> Positioning

  • Creating
    • how does the segmentation fit into the strategy
    • which variables can be used
    • exclusive segments?
    • how many segments?
  • Traditional segmentation
    • reduce data (PCA)
    • develop measure of association
    • identify and remove outliers
    • form segments (cluster analysis): are they clear and robust?
    • profile segments & interpret

Positioning

  • Attribute-based perceptual maps
    • identify other products & attributes
    • get data from questionnaires
    • reduce
    • plot
  • Preference Maps
    • weights for attributes
  • Joint-Space Maps

Translating Preference to Choice

  • first choice rule: infrequent, expensive
  • Share of preference rule: often, cheap, etc.

For [target segment], the [offering] is [positioning claim], because [single most important support].

Forecasting

  • Judgmental Methods
    • Sales force composite estimates: let the sales force forecast
    • Jury of executive opinion: different stakeholders
    • Delphi method: anonymous and iterative
    • Chain ratio method: split up in its factors

Conjoint study

  • select attributes of product
  • develop bundles
  • do survey
  • segment customers based o part-worth function
  • design market simulation
  • select choice rule
  • adj market shares

Top 10 Lessons

  • Marking Engineering is Marketing
  • ME is a means to an end
  • frames the opportunity costs for alt. actions
  • requires judgment
  • whole greater than the sum of its parts
  • data & info do not automatically result in value
  • rapid prototyping
  • every model has its downside
  • ME requires lifelong learning
  • be a coach rather than a teacher

Insights for better Implementation

  • Be opportunistic
  • Start Simple; Keep it Simple
  • Work backward
  • score inexpensive victories
  • develop a program, not just a project

I really liked Principles of Marketing Engineering. The book gives a great overview over the topic and different approaches. It’s written like a textbook, so it can be a bit lengthy in parts but otherwise, a nice book.

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