TO A A MOVIE PUSHING THE BOUNDARIES OF MARKETING ROI Ram - - PowerPoint PPT Presentation
FROM A SNAPSHOT TO A A MOVIE PUSHING THE BOUNDARIES OF MARKETING ROI Ram Krishnamurthy, Vittorio Raimondi, Patricio Pagani Classified - Internal use AS A BUSINESS WE HA VE TO SET CLEAR FINANCIAL T ARGETS 20 September 2011 Classified -
Ram Krishnamurthy, Vittorio Raimondi, Patricio Pagani
Classified - Internal use
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AS A BUSINESS WE HA VE TO SET CLEAR FINANCIAL T ARGETS
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AND, WE NEED TO TRANSLA TE OUR BUSINESS GOALS INTO MARKETING PLANS
We expect market research studies to support marketing strategy
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HOWEVER, MARKET RESEARCH STUDIES PROVIDE SNAPSHOTS. A T BEST THEY ARE A SERIES OF SNAPSHOTS LOOKING A T THE P AST , SIMILAR TO THE WA Y WE LOOK A T PHOTOS IN F AMIL Y ALBUMS.
And when they look at the future they tend to be qualitative and unable to support decision making.
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WE OFTEN RESEARCH CONSUMERS’ A TTITUDES AND BEHA VIOURS TO DEVELOP FORWARD LOOKING SEGMENT A TIONS
Merging attitudes and behaviors allows us to provide a view on how current preferences may evolve
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AL THOUGH INSIGHTFUL, SEGMENT A TIONS ALONE CANNOT ALLOW US TO DEVELOP QUANTIFIED VIEWS OF FUTURE SCENARIOS THEY ARE STILL A PICTURE – NOT A MOVIE
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OUR APPROACH ENABLES US TO TRANSLA TE A SERIES OF FRAMES INTO A MOVIE, AND TO PLA Y THE MOVIE FORWARD
MARKETERS CAN TEST AND REHEARSE AL TERNA TIVE MO VIES, OR GROWTH P A THWA Y S, TO ACHIEVE THEIR BUSINESS GOALS
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TO BUILD Y OUR BRAND, Y OU NEED TO RECRUIT AND RET AIN CONSUMERS. TO ACHIEVE THIS, ALL Y OU NEED TO DO IS FOCUS ON THE FLOWS (IN & OUT)
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Y OUR CONSUMER BASE IS LIKE A SYSTEM OF INTER- CONNECTED T ANKS
The pipes represent conversion
consumers. Brand Loyalists Occasional Brand Users Non Brand Users Non Category Users
Managers can influence the ‘pipes’, not the reservoirs
1
Each ‘pipe’ may have a different impact on the system
2
Your growth strategy depends on what pipes you focus on
3
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MARKET RESEARCH CAN QUANTIFY THE SIZE OF THE PIPES
Brand Loyalists Occasional Brand Users Non Brand Users Non Category Users
1 2 2 1 ...
DYNAMIC MODELING WILL IDENTIFY THE HIGH LEVERAGE PIPES TO GROW THE BRAND
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THIS WILL REVEAL GROWTH P A THWA YS, E.G.:
Brand Loyalists Occasional Brand Users Non Brand Users Non Category Users Recruit from competitors Recruit from other categories Win transactions
By demographics, by regions, etc.
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THE FUNDAMENT AL CONCEPT APPLIES ACROSS INDUSTRIES
IT IS ABOUT HOW Y OU DEFINE THE T ANKS
ALLOWING TO REVEAL Y OUR GROWTH P A THWA YS
people
volume
Of the non-alcoholic beverage world volume
WE HA VE APPLIED THE APPROACH TO COCA-COLA ’S CONSUMER TRACKING SURVEY
The Coca-Cola’s Beverage Brand Barometer (B3) reaches 21% of the world’s population and covers 92% of the total volume of non-alcoholic beverages sold worldwide
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36%
24% 16%
12% 12%
Potency of flow rates
(the ‘pipes’)
Product Package
Marketing plans
Product Package Equipment Event Product Campaign Product Equipment Campaign Package Product
100%
Key consumer targets #1 #3 #2
E.g., recruit consumers into the category
ALIGNING Y OUR MARKETING PLANS AGAINST KEY LEVERS & SEGMENTS
Case study; illustrative and disguised
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HIGH POTENTIAL CHURN HIGH RISK OF POTENTIAL OR CONTINUED DECLINE HIGH OPPORTUNITY TO REVERSE DECLINE OR SUSTAIN GROWTH OPPORTUNITY TO STIMULATE GROWTH
LOW Risk HIGH Risk LOW Opportunity HIGH Opportunity
FROM A GLOBAL PERSPECTIVE, THIS HAS LED TO NEW WA YS TO CLUSTER MARKETS
Quantified brand risk and
enables the identification of regional clusters
MASSIVE IMPROVEMENT IN ROI FROM SCALING INITIA TIVES ACROSS REGIONS
0% 10% 20% 30% 40% 50% 60% 70% 80%
0%
Frequency risk (% of current volumes)
Size of bubble = Current Volume
Frequency opportunity (% of current volumes)
High Churn Low Churn
Unfavorable Favorable
Market type 1 Market type 2 Market type 3
Case study; illustrative and disguised
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Match Programs with Goals ? Static / Trends Research , Snapshots / Rearview data Need Strategic Planning tools, not just predictive models
CHALLENGE
Market Clusters, Scalable Global Initiatives Marketing Plans accountable to clear volume targets Ambition vs Reality Check to drive investment decisions
APPLICA TIONS
Behavior (Current Reality) x Attitude (Future Possibility) Segmentation System Dynamics Model + Scenario Planning Tool for Marketers
SOLUTION
Stocks (Goals) and Flows (change through marketing) Framework
Resource-based segmentation System Dynamic modeling
Connection points Components
Global consumer tracker Scenarios - movies
BACK-UP: SUMMARY OF THE APPROACH
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As marketers, we have the task to translate future business goals into marketing strategy We turn to market research for help, but studies are by nature grounded
can only deliver snapshots, or a series of frames The approach turns these frames into possible movies, enabling us to test alternative growth pathways to meet goals Relative to your brand, consumers can be viewed as a series of tanks connected by pipes Marketers need to change the level
can only influence the pipes Consumers’ attitudinal and behavioral data, powered by dynamic models, allows the quantification of the high leverage pipes Coca-Cola has applied this to its global tracker, revealing new regional clusters for scalable initiatives At the local level, this has allowed the alignment of marketing plans and quantified
This is not a forecasting or marketing mix tool, but a strategic approach to foresee and influence the future
RECAP – BACK UP