Designing Market Space Matrix

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Designing the Marketspace Designing the Marketspace MatrixMatrix

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Designing 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

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion

Chapter 13: Designing the Marketspace Matrix






Conclusion

Exhibit 13.1: The Marketspace MatrixRelationship Stages

Awareness Exploration Commitment Dissolution

Product

Price

Communication

Community

Distribution

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Branding






Conclusion

Exhibit 13.2: The 2Is

Branding

Individual Individual Interactivity Interactivity

1. More efficient advancing of customers through the relationship stages2. More possibilities to sustain commitment

Result

PricingPricingProductProduct CommunityCommunityCommunicationCommunication DistributionDistribution






Conclusion

Exhibit 13.3: Moving Through the Relationship Stages

Profitable Uncommitted

Customer

Profitable Uncommitted

Customer

CommitmentCommitment DissolutionDissolutionExploration/ Expansion

Exploration/ Expansion

Customers can advance through the stages in several different ways

AwarenessAwareness

Awareness Exploration / Expansion Commitment Dissolution

Product Packaging Attributes and features Fulfillment Mass customized product Breadth of inventory Upgrades Functionality Availability of complementary products

Customer-specific attributes and features Post-sales support Incremental allocated benefits Experience Customer enabling community Customer relationship management Customer care

Customer care

Price Click-through promotions Web referral promotions Bricks-and-clicks promotions Web price discounts Bundle Frenzy pricing Prestige Price as a sign of quality Hi-lo Dynamic pricing (as a novel approach — group

buying, C2C) EDLP

Targeted promotions Future price promotions Justify prices Loyalty programs

Tiered loyalty programs Wide variety of pricing plans Become evangelists (affiliate) Profit enhancing programs Volume discount promotions Targeted promotions Future price promotions Fairness Subscription EDLP Dynamic pricing (group buying, C2C)

Discontinue pricing promotions Reconfigure loyalty programs Decrease profit programs

Communication Television Magazines Radio Yellow pages Telemarketing Billboards / outdoor advertising Online billboards (banners / buttons) Search engines E-mail Viral marketing

Television Radio Newspapers Packaging Loyalty programs Customer service Loyalty programs Interactive online billboards lending to website 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

Permission marketing with targeted offers Loyalty programs Customer service Loyalty programs Customer service Permission e-mail Personalized pages

Terminate direct marketing

Community Outline community benefits clearly and early on in the process

Anticipate and readily answer questions and concerns, quickly establishing a sense of trust

Establish a call for action and further exploration

Makes community exploration easy through efficient site structure

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)

Begin the process of equity creation (e.g., member points and loyalty programs)

Increase equity building (e.g., through tiered loyalty programs, increased rewards)

Recognize individuals’ contributions and participation

Develop members (e.g., through leadership opportunities, community roles — guides or watch-persons)

Spot departing friends early and find solutions to prevent dissolution

Make the “leaving process” fair and efficient Seek and listen closely to feedback Allow the option of returning

Distribution Number of intermediaries Number of channels

Degree of integration Number of channels

Degree of interest Intermediary type Number of channels Internal function

Elimination of types Reduction of intermediaries Reduction of integration

Exhibit 13.4: The Marketspace MatrixRelationship Stages

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of

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ve

rs

Branding

Exhibit 13.6: Lever Selection Process

LeverLever

TargetingTargetingSegmentSegment

Current Relationship

Phase

Current Relationship

PhaseObjectiveObjective PositioningPositioning






Conclusion

Exhibit 13.7: Principles for Marketspace Matrix Design

Which levers work best together?


Which levers are consistent with strategy?


Which levers are customers

most responsive to?

Which levers are customers

most responsive to?

Which levers are least likely to generate a competitive response?


• Principle 1: Base the levers on consumers 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.

• Principle 7: Look for interaction effects.

• Principle 8: Integrate across levers.

• Principle 9: Levers create the position.

• Principle 10: Focus on superior customer value.

Exhibit 13.8: Amazon’s 1-Click Ordering Process

Has to Enter Name,

Address, Credit Card

Has to Enter Name,

Address, Credit Card

CommitmentCommitment

User in Exploration/Expansion

Stage

User in Exploration/Expansion

Stage

Places Book in Shopping

Cart

Places Book in Shopping

Cart

1-click ordering bypasses barrier

Barrier

Exhibit 13.10: Integration of Levers

Targeted SegmentTargeted Segment

OnlineLeversOnlineLevers

Positioning and

Message

Positioning and

Message

OfflineLeversOfflineLevers

IntegratedLevers

IntegratedLevers

Exhibit 13.11: Functional, Symbolic, and Hedonic Explained

Product’s Ability to Provide Utility

Product’s Ability to Provide Utility

Benefits That Relate to the Anticipated Reaction of

Other Individuals

Benefits That Relate to the Anticipated Reaction of

Other Individuals

Sensual (Taste, Sound, Sight, Touch) Benefits

Derived From the Product

Sensual (Taste, Sound, Sight, Touch) Benefits

Derived From the Product

SymbolicSymbolic

HedonicHedonic

FunctionalFunctional

Exhibit 13.12: Marketspace Matrix for EBay, 1995

Relationship Stages

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of

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Product Features: Search, security, ease of use

Facilitate P2P community

Price Dynamic pricing

Communication Trade shows

Viral marketing

Website

Community Communicate benefits

Establish call to action

Easy to explore

Build user equity

Distribution

Branding

Exhibit 13.13: Marketspace Matrix for EBay, 1998–1999

Relationship Stages

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ori

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of

Lev

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Product Features: search, security, ease of use

Complementary Products: Escrow, Insurance

Enable Community

Customer Care

Customer-Specified Attributes

Upgrades

Customer Care

Price Dynamic Pricing Tiered Loyalty Programs

Communication Trade Shows

Trade Publication Ads

Radio Advertisements

AOL Banners

Viral Marketing

Publicity / Promotion

Website

User Notifications

Personalized Pages

Community Communicate benefits early

Establish Call to Action

Make Community Exploration Easy

Show Everyone Individual Attention

Begin the Process of Equity Creation

Increase Equity Building

Recognize Individual’s Contributions

Develop Members

Make Leaving Process Fair and Efficient

Distribution Number of Channels

Branding

Exhibit 13.14: Marketspace Matrix for EBay, 2000–Present

Relationship Stages

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ori

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of

Lev

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Product Features: search, security, ease of use

New Auction categories

Complementary Products: Escrow, Insurance, Billpoint

Facilitate P2P Community

Customer Care

Customer-specified Attributes

Upgrades

Price Dynamic Pricing

Promotions to Encourage New Product Adoption

Buy It Now!

Promotions to encourage trial

Tiered Loyalty Programs

Communication Trade Shows

Trade Publication Ads

Radio Advertisements

AOL Banners

Viral Marketing

Publicity / Promotion

Television Ads

Website

User Notifications

Television Ads

Personalized Pages

Community Outline Benefits Early

Establish Call to Action

Make Community Exploration Easy

Show Everyone Individual Attention

Begin the Process of Equity Creation

Increase Equity Building

Recognize Individual’s Contributions

Develop Members

Make Leaving Process Fair and Efficient

Distribution Number of Channels

Branding






Conclusion

Designing 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?




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Designing Market Space Matrix