Designing the Marketspace Matrix

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Designing the Marketspace Matrix

• Annie Zhang
• Jinyi Shao
• Rohit Thimaiah
• 10th May, 2005

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Agenda

• A Consumer Perspective
• The Marketspace Relational Matrix
• The 2Is
• Using the Marketing Levers to Establish and
  Maintain Customer Relationships
• Designing the Marketspace Matrix

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A Consumer Perspective The Marketspace
Relational Matrix
Relationship Stages
Categories of Levers
Branding
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The 2Is
Interactivity
Individual
Branding
Result
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Using the Marketing Levers to Establish and
Maintain Customer Relationships
Commitment
Dissolution
Exploration / Expansion
Awareness
Profitable, Uncommitted Customer
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Using the Marketing Levers to Establish and
Maintain Customer Relationships, cont.

• Awareness
• Direct leverscommunication-based and controlled
  by the firm
• E.g. advertising sales promotions
• Indirect leversstimulate third-party
  communications to create awareness
• E.g. publicity WOM
• Exploration/Expansion
• Encourage an initial website visit and subsequent
  investigation of the site

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Using the Marketing Levers to Establish and
Maintain Customer Relationships, cont.

• Commitment
• Encourage contribution to the relationship by
  offering products/services with superior value.
• Dissolution
• Levers are used to reduce customer value in order
  to reduce costs and encourage undesirable
  customers switching

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Relationship Stages
Categories of Levers
Branding
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Relationship Stages
Categories of Levers
Branding
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Designing the Marketspace Matrix

• Market Analysis

Positioning
Targeting
Segment
Lever
Current Relationship Phase
Objective
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Principles of Matrix Design

• Matrix design is a four-step process that helps
  marketing managers select and implement
  appropriate levers

Which levers work best together?
Which levers are consistent with strategy?
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 firms skills and
  resources.

• Principle 7 Look for interaction effects.
• Principle 8 Integrate across levers.

• Principle 9 Levers create the position.
• Principle 10 Focus on superior customer value.

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Step 1. Which levers are Customers Most
Responsive to

• Base the levers on consumer behaviour
• Understand your consumers
• Choose levers to affect change
• E.g. Amozons 1-click ordering process

Barrier
Has to enter name, address, credit card
Commitment
User in exploration / expansion stage
Places book in shopping cart
1-click ordering bypasses barrier
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Step 1. Cont.,Which levers are Customers Most
Responsive to

• Measure the impact of each lever
• Consider affecting factors
• Multiple metrics to measure levers for each stage
• Invest in levers with greatest impact
• Overcome barriers to advancement
• E.g. Handspring
• Barrier of product functionality
• Pricing lever
• E.g. Lands End
• Barrier of product triability

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Step 2. Which levers are Least Likely to
Generate a Competitive Response

• Anticipate your competitors likely responses
• E.g. PG
• Lose market share because of competitive response
• Build on your firms skills and resources
• Differentiation based on the unique and superior
  skills and resources
• Use levers consistent with the superiorities to
  create sustainable competitive advantages

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Step 3. Which levers work best together

• Look for interaction effects
• Advertising lever interactions
• Price promotion advertising
• Produce design channel improvement/promotional
  campaign
• Branding interactions
• Brand every other marketing lever
• Communication channel interactions
• Advertising vehicle marketing message
• Product interactions
• Product type advertising appeals
• Integrate across levers
• To create consistency and generate the desired
  effect

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Integration of Levers
Targeted Segment
OnlineLevers
IntegratedLevers
OfflineLevers
Positioning
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Step 4. Which levers work best together

• Levers create the position
• Support the choice of positioning in a certain
  target segment
• E.g. American Express a personal invitation to
  potential customers are consistent with its
  positioning
• Focus on Superior Customer Value
• Functional benefits
• Symbolic benefits
• Hedonic benefits

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Functional, symbolic, and Hedonic Benefits
Products ability to provide utility
Functional
Benefits that relate to the anticipated reaction
of other individuals
Symbolic
Sensual (taste, sound, sight, touch) benefits
derived from the product
Hedonic