Dh

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Dh

  1. 1. BLOCKBUSTER VIDEO – A CASE STUDY
  2. 2. AGENDA <ul><li>Customer Understanding </li></ul><ul><li>Marketing strategy </li></ul><ul><li>What Else is in it(data) for me </li></ul><ul><li>Market Analysis </li></ul>
  3. 3. THE CUSTOMER <ul><li>Calculate life time value of the customers. </li></ul><ul><li>CLV = Historic value + Potential Future value </li></ul><ul><ul><li>Historical Value =  N j=1 (Revenue j - Cost j ) </li></ul></ul><ul><ul><ul><li>j: individual DVDs, snacks that the customer has purchased </li></ul></ul></ul><ul><ul><li>Potential Future Value =  N j=1 (Probability j X Profitability j ) </li></ul></ul><ul><ul><ul><li>j: individual DVDs, snacks or drinks that the customer could potentially purchase </li></ul></ul></ul><ul><ul><ul><li>Probability can be a function of Age, Sex, Income ,Occupation or other relevant Characteristic about the customer </li></ul></ul></ul>
  4. 4. CUSTOMER LIFETIME VALUE (CLV) <ul><li>Using customer’s Lifetime Value (CLV) we can classify customers in 4 segments </li></ul>Table 1: Customer Segments         Historic Value High Low Future Value High I - Invest II -Re-engineer Low III - Engage IV - Eliminate
  5. 5. MARKETING STRATEGY (SEGMENT WISE) Table 2: Corresponding Segment Strategies
  6. 6. MARKETING STRATEGY – TRENDS Analysis Type Description/ Marketing Strategy Analysis from the data Campaign Analysis Design Campaigns for different segments of customers Segmentation based on Age from customer data Cross Selling Analysis / Market Basket Analysis Identify additional types of products that customers could purchase which they are currently not purchasing Frequency from transaction data of each item to create Baskets or DVD combos/ DVD + snacks combo at a lower combined price Customer profitability Determine profitability of each customer to target personal Marketing campaigns to high profitability customers like phone calls/ E-Mails Revenue from each customer based on the total Value of goods purchase or rentals Demographic analysis Demographic analysis to better understand the customer requirements From the customer data based on age ,Sex, Income group, Profession, Location Product Profitability Determine profitability of each product Revenue calculation from transaction data for different DVDs, games CD, Snacks or drinks House holding Identify customers from the same family to up sell or sell discounted products House holding is done based on the address from the customer data
  7. 7. WHAT ELSE - CLUSTER ANALYSIS <ul><li>Cluster analysis can help identify setting up new stores, the size of these stores and the number of possible resources required for these stores </li></ul>A new store
  8. 8. WHAT MORE <ul><li>Analysis of each store based on the total revenue </li></ul><ul><li>Life time Value of a DVD, game or the average shelf life of different types and categories of DVDs games </li></ul><ul><li>Product line expansion – Romance Movies could be more popular than action in the cities hence a better collection of Romance CDs would increase the revenue </li></ul><ul><li>Advertising 3 rd party products on the rentals </li></ul><ul><ul><li>Advertising coke to customers who but a lot of cold drinks as well </li></ul></ul><ul><li>Unique customers year on year to determine growth </li></ul>
  9. 9. MARKET ANALYSIS <ul><li>Market Information : Need to understand the supply and demand in the market </li></ul><ul><ul><li>Secondary data </li></ul></ul><ul><li>Market Segmentation : based on geographic, gender, demographic and others. </li></ul><ul><ul><li>If it matches our type I current customers, we are lucky </li></ul></ul><ul><li>Market Trends </li></ul><ul><ul><li>Introduction of Blue Ray Disc </li></ul></ul><ul><ul><li>Low cost DVD drives </li></ul></ul><ul><ul><li>High graphics and configuration computers for games </li></ul></ul><ul><ul><li>High bandwidth networks , DTH Satellite television </li></ul></ul><ul><li>Marketing Effectiveness </li></ul><ul><ul><li>Choice modelling </li></ul></ul><ul><ul><li>Competitor analysis </li></ul></ul><ul><ul><li>Risk analysis </li></ul></ul>
  10. 10. <ul><li>Thank You </li></ul><ul><li>Questions ? </li></ul>

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