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Marketing Engineering: A Look Ahead

Marketing Engineering: A Look Ahead. Information Technologies. Harnessing information technologies to improve the efficiency and effectiveness of marketing.

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Marketing Engineering: A Look Ahead

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  1. Marketing Engineering:A Look Ahead

  2. Information Technologies • Harnessing information technologies to improve the efficiency and effectiveness of marketing. • Today’s computer and communication technologies allow us to generate, capture, store, manipulate, replicate, distribute and receive digital signals representing data and information (organized data). Information technology is everywhere!

  3. Did You Know? • The U.S. accounts for more than 40% of the world's investments in information technology ($ 850 per person per year compared to a global average of $ 98) (Fortune, June 9, 1997). • MCI developed the “Friends and Family” product by analyzing its databases and determining that most households regularly call at most 12 other telephone numbers?

  4. Did You Know? • FedEx receives two-thirds of its orders via its point-of-sale hardware and software. Without it, the company would have to add 20,000 employees and generate an additional two billion pieces of paper per year (Fortune, June 9, 1997). • Sun Microsystems reduced customer service phone calls by 20% by providing online documents (PC Magazine). • Cost of telephone call ($2.00); Cost of a “web call” is $0.05.

  5. Did You Know? • Wal-Mart has a data warehouse with about 8 terabytes of data (6 billion pages) which are analyzed by 30 million lines of proprietary software code. • It can compute the profit associated with every one of 65 million transactions it has with consumers every week in 3,000+ stores in seven countries. • It can change prices of individual items in a store three times a day. • It achieves higher inventory turns than any other large retailer (profit = margin*inventory turns).

  6. Marketing Engineering:A Look Ahead • Data warehousing • Online analytic processing (OLAP) • Intelligent marketing systems • Simulations • Groupware • Improved user interfaces

  7. Share & Merchandising 1 2 40 1 0 30 8 Merchandising Index Volume Share 6 20 4 10 2 0 0 01-31-88 07-17-88 01-31-89 Volume Share Merchandising Index To: Sizzle Brand Manager From: CoverStory Date: 07/05/89 Subject: Sizzle Brand Summary for Twelve Weeks Ending May 21, 1989 Sizzle’s share of type in total United States was 8.3 in the C&B Juice/Drink category for the twelve weeks ending 5/21/98. This is an increase of 0.2 points from a year earlier, but down 0.3 from last period. This reflects volume sales of 8.2 million gallons. Category volume (currently 99.9 million gallons) declined 1.3% from a year earlier. Sizzle’s share of type is 8.3—up 0.2from the same period last year. Display activity and unsupported price cuts rose over the past year—unsupported price cuts from 38 points to 46. Featuring and price remained at about the same level as a year earlier. Components of Sizzle Share Among Sizzle’s major competitors, the principal gainers are: Shakey: up 2.5 points from last year to 32.6 Private Label: +0.5 to 19.9 (but down 0.3 since last period) and loser: Generic Seltzer: –0.7 to 3.5 Shakey’s share of type increase is . . . Components of Sizzle Share Among components of Sizzle, the principal gainer is: Sizzle 64oz: up 0.5 points from last year to 3.7 and losers: Sizzle 48 oz: down 0.2 to 1.9 Sizzle 32 oz: down 0.1 to 0.7 Sizzle 64 oz’s share of type increase is partly due to 11.3 points ride in % ACV with Display vs. year ago. MTMM Wrap Up–21

  8. Modelling Technology Intelligent/automated decision models Groupware plus decision models OLAP plus decision models MarketingEngineeringtomorrow Stand-alone marketing decision models General purpose analysis tools (eg, SPSS, LP packages) MarketingEngineeringtoday Model User Analyst Trainedmanager(in marketingengineering) Novicemanager Non-managerialemployee Forecasting Allocation and optimization Simulation An overview of the evolution of Marketing Engineering to support a wider range of users and decision tasks using emerging technologies Explanation Decision Tasks MTMM Wrap Up–22

  9. Our Future Plans forMarketing Engineering • Test effects of Marketing Engineering under controlled experimental conditions • Implement ideas/tools in companies • Development and testing of Network and Professional versions • Enhance existing models • Develop new models (e.g., generalized resource allocator, sales territory alignment, enhanced choice modeling) • Marketing Engineering on the Net

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