2. Mental
Model-
Airbnb
• To get an intuitive sense of
what is happening in
market
• To outline the factors that
influence the target metric
• As a hypothesis to test with
data
• As a basis of predictive
model
3. Mental Model - Airbnb
Star rating
Review
Property
Attributes
# of Rentals
Price
Minimum Stay
Profit Per Property
Gross Margin (%)
4. Analysing – two different locations
Mayami
Review sentiment
Cleaning Fees
On running regression on this data, it is found that review
sentiment and cleaning fees is important in Mayami while
in Paris – Price, security deposit and cleaning fees is
important for deciding number of rentals. Therefore, it is
important to use predictive models in planning strategic
objectives of a company (Airbnb).
Paris
Price
Security Deposit
Cleaning fees
5. Descriptive analytics example
A text analysis of many reviews on social media is considered descriptive analysis
An increase in sales due to an ad campaign.
Summary:
Marketing planning process
How analytics affect marketing planning process
Use analytics to address the way of addressing marketing challenges.
7. Brand mergers- resulted loss
• Not understanding what a brand means to a consumer and
treating all brands equal and merging them can cause the
brand to loose its value.
• Sales are affected by the creating and destroying value of
brand.
8. Brands have 5 dimensions
SINCERITY EXCITEMENT COMPETENCE SOPHISTICATION RUGGEDNESS
9. Defining brand architecture
• Marketers analyze data around marketing campaigns and their impact on all the components of brand architectures.
• Marketers use data to tweak features and benefits to create a stronger connection between customers and the brand.
• Brand core/essence
• Brand personality
• Emotional benefits
• Product Benefits
• Product Attributes
Wings/adventure
17-25/free spirit/skateboard ganes
Awake/do things/endure/fun
Energy/variety/explore
Sleek/tall&narrow can/taste diff
12. Revenue premium
as a measure of
brand equity
• Equity={[Revenue
Premium-Additional
Variable
cost]*[1+d]}/[1+d-r]
• r = proportion of
equity retained from
period to period
13. Annual Brand Equity
• The difference in the annual revenue premium and the variable cost
for multiplied by all the households in the market
Annual Gross Revenue Equity/HH =
• [(.251*.75)-(.099*.24) ](4.6) = $0.76
Annual Equity Net of Extra Variable Costs =
• (assume 20% margin for PVT Label)
• .76 – [.251-.099](.8)(.24)]]4.6 = .76-.13=$.63
Assuming 100M HHs in US, Brand Equity = $63 million
Brand share Price/pound Pounds/HH
1994 Private Label 9.9 .24 4.6
1994 snapple 25.1 .75 4.6
14. Nike vs Adidas
Brand Core/Essence: Innovation and Inspiration
Brand Personality: Exciting, Cool, Achiever, Aggressive, Athlete
Emotional Benefits: cool factor, high status, high performance
Product benefits: large options to choose from
Product attributes: flexible, variety, expensive, custom design, light weight
15. Adidas
Brand Core/Essence:
Innovation & creative
Brand personality: sports, 20-
40, cool, stylish
Emotional benefits: high
satisfaction, high status
Product benefits:
comfortable, value for money,
Product Attributes: Colorful,
Variety, designer, robust
16. comparison
• Both Nike & Adidas are brands for footware. Nike’s Market share is at 27.4% of the global market. Adidas, who is the
biggest competitor for Nike is having its net sales of 23.6 billion Euro worldwide.
• Brand Value of Adidas is 16,481 million U.S dollars.
• Nike’s Brand value is approximately 34.8 billion U.S dollar.
17. Customer lifetime value
CLV can yield surprising insights into how to allocate spending to boost revenue.
CLV is a forward looking metric.
CLV is a dollar value of an individual customer relationship.
• It can be used to compute the value of past customers.
• It can also be used to project the future customer value.
• CLV can be used to estimate how much to spend to acquire and retain a customer.
Companies spend large amounts on acquiring and retaining customers, the
retention rate of the firm should increase and acquisition rate of the firm should
decrease with time.
Knowledge of CLV, allows firms to decide where they should spend money where it
matters (technology, retention) most to enhance customer value.
18. Future value of customer ex:HBOmax
• Expected customer lifetime in months: 20
• Average gross margin per month per customer: $50
• Average marketing costs per month per customer: $0
• Average net margin per month per customer : $50
• Customer lifetime value: 50*20 = $1000
Therefore, Netflix should not spend more than 1000$ to
acquire a new customer, as that would cost them more than
the revenue generated by that customer.
19. What is the CLV
• Margin(M): $50 per customer
• Retention spending : 2$ per customer
• Average length of customer enrollment: 22 months
• CLV= (50-2)*22= 48*22= 1056
• CLV= [$M - $R] * [(1+d)/(1+d-r)],
• R= retention spending per period per customer
• r = retention rate
• d = discount rate per period, it is the rate used to calculate the present value of
future cash flows.
• CLV increases if Discount rate decreases and Margin per customer increases.
20. • Contractual and Non contractual business Models have difference in CLV
• Companies that gets paid for their service after the customer has used the service, have their net margin one less compared to the service companies that are paid before
the customer use the service like Netflix.
• CLV changes to
• CLV = [M-R]*[(1+d)/(1+d-r)]-M
• CLV=[M-R]*[r/(1+d-r)]
• Retention Rate increases with time and flattens up further with time.
• Therefore, CLV is calculated for a cohert (month, quarter, year) for better
accuracy.
• So in non-contractual settings, calculation of CLV and retention rate varies with
time, such cases use regression to predict the retention rate using historical data