#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


  • 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].


  • 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.

#23/111: Grinding It Out

What is it about?

I have always believed that each man makes his own happiness and is responsible for his own problems. That’s the first sentence in this book and Ray Kroc meant it. He describes his pursuit of happiness from a piano player to the chairman of McDonald’s.

Key points?

You are responsible for your own life: In the early years a franchisee opened a McDonald’s restaurant nearly to some other burger restaurant. The other restaurant offered burgers for 10 cents each (15 cents at McDonald’s) but people got their fries and milk shakes at McDonald’s. After a while the other restaurant lowered all prices to 10 cents. The manager of McDonald’s called Ray Kroc and asked if he should inform the Center for Combating Unfair Competition. Ray Kroc said: “No, make burger which are worth 15 cents.”

Stay Green: Basically you should try to get not too conservative or too comfortable. “When you’re green, you’re growing. When you’re ripe, you rot.” Try new things, be open and don’t afraid of failure. At McDonald’s they introduce a lot of new meals, some fail, some prosper (e.g. the BigMac).

QSC and V: Quality, Service, Cleanness and Value these are the main values of McDonald’s. They are easily portable to other businesses.


What a great book! I love how Ray Kroc impersonates the American Dream. He worked hard, he took responsibility for himself and he helped other people to reach their dreams. Definitely a recommendation!

#12/111: Inbound Marketing

What is it about?

Do you want to boost your customer base? Brian Halligan and Dharmesh Shan show you how. Inbound Marketing focuses on building relationships and delivering remarkable content to your customers instead of interrupting them with TV or radio ads. Furthermore there are several steps for each chapter which shows you how to execute these ideas.

Key points?

Track your progress: Whether you test a new layout or a new form of online activity, track your progress. Test what works and what doesn’t and act on this!

Remarkable content: It is important that you create content which is valuable to others. It should be so valuable that your readers decide to share your content with their peers.


What I really like about this book is that it gives you actionable advice. This point was missed by The new Rules of Marketing & PR. Additionally, there is one really cool list with about 20 points on how to promote your startup on social media or tips on how to name your blog/company.

In conclusion, Inbound Marketing gives you a great view about a lot of important topics in social media (marketing) and provides a solid base to work on. 

#11/111: Go-Givers Sell More (including a Special)

What is it about?

Bob Burg and John David Mann describe how to change your way of selling. They focus on five laws which are based on giving value first and also to be able to receive value by others.

Key points?

There are five laws: Law of Value (i.e. give value to others), Law of Compensation (reach people and build relationships), Law of Influence (help people to reach their goals), Law of Authenticity (you are your most valuable product) and Law of Receptivity (be open to receive).


This book takes the selling out of sales. It is pretty intuitive: You can’t force an other person into selling your product. The best thing you can do is provide value (e.g. understand their problem, help them to get what they really want) and build a genuine relationship with them. It is not bad if they don’t buy your product. In building this relationship they may recommend you to their friends. Make your opponent feel good.

The other important thing is that doing good and making money aren’t opposites. Chris Guillebeau also emphasized it. And it is true. This is the Law of Receptivity, don’t be inhibited to make sales. Don’t be inhibited to get help from others. Give value, get value!


Hurray the first 10% are done! But I wouldn’t writing this now without you, the people who read this blog, thank you for your precious time. Especially Ahmad Taleb who is promoting this blog on twitter and Mike McGee who effortlessly reblogged a bunch of my posts. Thank you guys, you are awesome!