chapter

13

Designing the Marketspace Matrix

McGraw-Hill/Irwin

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

Designing the Marketspace Matrix Todays 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

Chapter 13: 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

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

Exhibit 13.1: The Marketspace Matrix

Relationship Stages
Awareness Product Exploration Commitment Dissolution

Categories of Levers

Price

Communication

Community

Distribution

Branding

Chapter 13: 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

Exhibit 13.2: The 2Is

Individual Interactivity

Product

Pricing

Communication

Community

Distribution

Branding
Result 1. More efficient advancing of customers through the relationship stages 2. More possibilities to sustain commitment

Chapter 13: 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

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

Exhibit 13.4: The Marketspace Matrix

Relationship Stages
Awareness Product
Packaging Attributes Mass

Exploration / Expansion and features Fulfillment customized product of inventory

Breadth

Commitment
Customer-specific Post-sales

Dissolution
Customer

attributes and features

care

support allocated benefits

Incremental Experience Customer Customer Customer Tiered

Upgrades Functionality Availability

enabling community relationship management care

Discontinue Reconfigure Decrease

of complementary products

Price

Click-through

promotions Web referral promotions

Bricks-and-clicks Web

Targeted Justify Loyalty

promotions Future price promotions prices programs

loyalty programs Wide variety of pricing plans

Become Profit

pricing promotions loyalty programs

promotions

evangelists (affiliate) discount promotions promotions

profit programs

price discounts pricing

enhancing programs

Bundle Frenzy Price Hi-lo

Volume

Targeted Future

Prestige

Categories of Levers

as a sign of quality

price promotions Fairness

Subscription EDLP Dynamic Television Radio Newspapers Packaging Loyalty

pricing (as a novel approach group buying, C2C) EDLP

Dynamic

pricing (group buying, C2C) marketing with targeted offers

Terminate

Communication

Television Magazines Radio Yellow pages Telemarketing Billboards Online

Permission Loyalty Loyalty

direct marketing

programs service programs service e-mail pages

Customer Customer

programs service online billboards lending to website programs

/ outdoor advertising

Customer Loyalty

Permission

billboards (banners / buttons) engines

Personalized

Search E-mail Viral

Interactive Links Viral E-mail

marketing

from search lead to website with information and link to website

marketing leading to website and / or download Website

Serial

marketing
Increase

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)
Degree Number

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 watchpersons)
Degree

Spot

departing friends early and find solutions to prevent dissolution Make the leaving process fair and efficient
Seek

and listen closely to feedback option of returning

Allow the

Distribution

Number Number

of intermediaries of channels

of integration of channels

of interest type of channels function

Elimination Reduction Reduction

of types

Intermediary Number Internal

of intermediaries of integration

Branding

Exhibit 13.6: Lever Selection Process

Objective Positioning Current Relationship Phase

Lever

Segment

Targeting

Chapter 13: 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

Exhibit 13.7: Principles for Marketspace Matrix Design

Which levers are customers most responsive to?
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.

Which levers are least likely to generate a competitive response?

Principle 5: Anticipate your competitors likely responses. Principle 6: Build on your firms skills and resources.

Which levers work best together?

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

Which levers are consistent with strategy?

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

Exhibit 13.8: Amazons 1-Click Ordering Process

Barrier
User in Exploration/ Expansion Stage Places Book in Shopping Cart Has to Enter Name, Address, Credit Card

Commitment

1-click ordering bypasses barrier

Exhibit 13.10: Integration of Levers

Targeted Segment Online Levers

Integrated Levers

Positioning and Message

Offline Levers

Exhibit 13.11: Functional, Symbolic, and Hedonic Explained

Functional Products 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

Exhibit 13.12: Marketspace Matrix for EBay, 1995

Relationship Stages
Awareness Exploration Features: Search, security, ease of use Price Dynamic pricing Commitment Facilitate P2P community Dissolution

Categories of Levers

Product

Communication

Trade Viral

shows

Website

marketing Community Communicate benefits Establish call to action Distribution Easy to explore Build user equity

Branding

Exhibit 13.13: Marketspace Matrix for EBay, 19981999

Relationship Stages
Awareness Product Exploration Features: search, security, ease of use Products: Escrow, Insurance Price Communication Dynamic Trade Trade Radio AOL Viral Community Pricing Website User Notifications Commitment Enable Community Dissolution Customer Care Customer Care Customer-Specified Attributes Upgrades Tiered Loyalty Programs Pages

Categories of Levers

Complementary

Shows Publication Ads Advertisements

Personalized

Banners Marketing benefits Make Community Exploration Easy Everyone Individual Attention the Process of Equity Creation of Channels Increase Building Recognize Develop Individuals Contributions Members Equity Make Leaving Process Fair and Efficient

Publicity / Promotion Communicate early Establish Action Call to

Show

Begin Distribution

Number

Branding

Exhibit 13.14: Marketspace Matrix for EBay, 2000Present

Relationship Stages
Awareness Product Exploration
Features: New search, security, ease of use Auction categories Products: Escrow, Insurance, Billpoint

Commitment
Facilitate P2P Community Care

Dissolution

Customer Attributes Upgrades Tiered

Categories of Levers

Customer-specified

Complementary

Price

Dynamic

Pricing

Buy

It Now!

Loyalty Programs

Promotions

to Encourage New Product Adoption Shows Publication Ads Advertisements

Promotions

to encourage trial Personalized Ads Pages

Communication

Trade Trade Radio AOL

Website User Notifications Television

Banners / Promotion Ads Make Community Exploration Easy Everyone Individual Attention the Process of Equity Creation of Channels Increase Equity Building Make Recognize Develop Individuals Contributions Members Leaving Process Fair and Efficient

Viral Marketing Publicity Television

Community

Outline

Benefits Early Call to Action

Establish

Show

Begin

Distribution

Number

Branding

Chapter 13: 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

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? Which levers are least likely to generate a competitive response? Which levers work best together? Which levers are consistent with strategy?