Marketing Models- Kyle McGrath

What it’s all about…

Marketing is all about changing customer behavior

Taking on Different Personas

Start-up company Focus is on lead generation

Established company Focus is on customer engagement and product support Marketing brands is more successful than marketing

products

The Marketing Planning Process

Market Research Process

How the Internet has Changed Market Research

Search data may even be more honest than survey data, since people are searching for what they actually want, not telling a surveyor what they think they should want

Search acquisition strategy is customer acquisition strategy and at its core, its product strategy

BetterCamera example

BetterCamera

41 million searches for digital camera in July ’09

AdWords features: SLR, lenses, pixels, underwater, waterproof

Top waterproof brands: Olympus, Canon, Fuji, Nixon

Top locations: Florida, Hawaii, Alaska

Further research: people looking for disposable, waterproof housing & inexpensive

Team builds waterproof housing and markets to both waterproof housing (40,000 searchers) and waterproof digital camera (600,000 searchers)

The Goal of Research

Now What?

Marketers need to further understand how their customers behave Choice sets Hierarchy of Needs

Advertise effectively Hierarchy of Effects

Customer Lifetime Value

Choice Sets

Identifies the attributes customers value

Hierarchy of Needs

Defined by Abraham Maslow in 1943

Theory taught as a basis for understanding consumers’ motive for action

If marketers can understand consumer needs, then they can define products to fulfill those needs

Hierarchy of Needs

The Buying Process

Consumers go through some version of this process for every brand choice

Steps can be skipped

Goal is to identify where marketing can increase choice in brand’s favor

Advertising Spending

Magazines - $11 billion

Newspapers - $35.5 billion

Radio - $15.8 billion

“Search Intercepts Demand”

Hierarchy of Effects

The long-term goal of advertising is to move a consumer up the steps in order to purchase a product or service.

Customer Lifetime Value

Describes the net present value of the stream of profits expected over the customer’s lifetime purchases

CLV calculations provide a formal quantitative framework for planning customer investment and help marketers adopt a long-term perspective

Questions?