Intelligent Marketing Dr Tim King 22 nd November 2006
My CV l Cambridge Computer Lab 1973 -1981 – Wrote a relational database for Ph. D. l l Lecturer, University of Bath 1981 -1983 R&D Director 1984 -1986 – Wrote Amiga. DOS l Founded Perihelion 1986 – Distributed OS, embedded systems, database systems l Founded UK Online 1994 – First UK ISP with content – Sold to Easy. Net 1996 l Independent consultant – Technical Due Diligence for VCs – Advice for Sainsbury’s, Sony, Home Office etc – Strategy for small companies and following M&As
Intelligent Marketing Using computers to make intelligent use of easily available data l Market drivers – – l Supply and demand One size does not fit all Cost curves Price sustainability Marketing techniques – – – Lock-in and Lock-out Brands Up sell Personalisation Customer support
Basic Economics Price p Demand Curve D(p) Supply Curve S(p) p* People pay more for something rare Mass production reduces cost Quantity
Market fit l l Different versions for different market subsections Many examples Price p – Travel • First class vs coach – Cars • Audi vs Skoda – Software • “lite” versions with hardware l Psychology – Brand awareness Quantity
Cost Curves Cost p Price p Quantity “General Motors” Quantity “Microsoft”
Price sustainability Price of i. Pod 60 G Time Period: 20 Dec 2004 to 31 Oct 2005 Red = Highest , Blue = Average, Green=Lowest
Lock-in l Buying something commits you to buying more – Services – Consumables – Complimentary products l Examples: – – – Operating systems Ink-jet printers Mobile phone subsidy Car services Frequent flyer
Lock-out l l l Incumbent tries to maximise switching cost Loyalty programs Technology control – Nintendo game cartridges – Sony Playstation DVD formats l l Crypto and tamper resistance Community – its where your friends are • BB, chat for registered users l Hassle – eg email address change
Brand awareness l l Single most important piece of data People buy from a known name – Sense of trust • Marks and Spencer – Perceived value • Cheap reliable airline => Cheap reliable mobile – Peer pressure • Nike, Rolex, Dolce and Gabanna, Ferrari l Brands can expand – Virgin • Active, Atlantic, Books, Brides, Broadband, Cosmetics, Credit card, Drinks, Galactic(!), Games, Holidays, Limobike, Megastore, Mobile, Trains, Wines – Apple • From computers to i. Pods
Expand the Brand (1) l You. Tube – TV adverts • Recycle TV adverts • People send copies of your advert to each other • Risqué adverts not acceptable on TV – TV shows • Trail shows • Repeat the best bits – Music • Shareable • Do-it-yourself MTV
Expand the Brand (2) l Google – Buy your brand name • Coke – – Careers Corporate Responsibility The Coca-Cola company Press Centre – Buy your supplier’s brand name • Nike – JDSports – Buy your competitors’ brand name • Ford – Adverts for Seat dealer – Buy your target • Nike (Boycott Nike), Coke (Killer. Coke)
Up Sell l Persuade people to buy more – Buy two get one free • When you only wanted one in the first place – Packs of three • When you only want two batteries l Persuade people to buy something else – Dell • Insist that you take extra warranty – Travel sites • Insist that you buy travel insurance
Personalisation (1) l Know your customer – Profile typical users when they visit a web site • Purchase history • Time to make purchase decision • Amount of research done – Profile users through loyalty cards • Nectar – They know everything you have ever bought – Keep in touch with customers • Email newsletters – Lastminute, Maplin • Cookies – Welcome back Tim
Personalisation (2) l Know your customer type – User database • Address/postcode -> socio economic indicator • Gender • Age -> Register with Data Protection Registrar • 60 “bins” 5 classes x 2 genders x 6 age groups – (kids, teens, dinky, married with kids, empty nesters, retired) – Disposable income – Disposable leisure time – Recommendation • People who bought this also bought that – Data from your own site – Amazon really can recommend music or books you might like • Data mining – People who buy this on cold winter Fridays in Slough also buy that
Customer support l Identify meaning of email – Auto-respond with the answer l Classify once human response given – So next time it will auto-respond l Expose database as FAQ – So they don’t send the email at all l Always give the option of human interaction
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