1a. Marketing Science - Course Introduction

Master of Science
in Management
Marketing Science
course introduction
Fall Semester 2023 - Prof. Markus Christen

from marketing
to marketing science
Marketing Science teaches a systematic approach to build models

based on theories and methods from economics, psychology and statistics to
help you develop a winning marketing strategy and implement it through
effective and efficient marketing actions
Marketing Science introduces you to marketing as an academic discipline and

research process that seeks to understand phenomena of customer and firm
behavior to help managers and policy makers as well as those who advice
them make better decisions and to better prepare you for your thesis.
Marketing Science – Fall Semester 2023 page

©Prof. M. Christen 06
marketing: managing exchanges
is more than advertising & selling
seller STP buyer
Objectives Objectives
value Data value

capture creation

CAUSALITY
marketing science
course framework reaction competition Goal: acquire, develop,
retain target customers
environment by creating superior value
for customers and
partners; develop
competitive advantage.
Fuel: understand
customer and market
behavior to predict the
effect of marketing exchange insight revenues
actions and anticipate
opportunities for the
organization.
Purpose: contribute to the

Marketing: manage
survival of the
exchanges with target
organization and the
customers through
developing, advertising,
selling, pricing, delivering
$ realization of its
objective; this is not
limited to achieving
products and services.
actions performance financial objectives.
costs
CORRELATION
results -> correlation with the results ? ©Prof. M. Christen 018
why do i have these results ?
causal links goes to customers = action - reaction
Fundamental purpose is to achieve the firms goals (need the customers to do that)
need to understand the customers behaviour ? how there are going to reacts -> linked the actions to the
customers behaviour
start with identify the future trend
L’Oréal Ombré
source of the data for the trends : observing customers (on line )
-> but not quantitative ressource
what are the key differences? to conform this we have to go bak on quantitative infos
Tie dye
1. Problem: What is the business challenge at
L’Oréal? Why? What is the evidence? What is
the research approach?
2. Action: Does the implemented action (new

product) address L’Oréal’s challenge? Why?
What is the evidence? How was the decision
reached?
3. Reaction: Why was L’Oréal Ombré a success:

good research, good strategy, good actions,
Ombré or good luck?
Splat
research problem :
from a board managerial problem …
Growth:
1. How do we grow in this existing market?
2. How do we enter a new market?
3. How do we turn this technology into new business?
Performance Gap:
1. Why are we losing money?
2. Why do we have lower returns than our competitors?
3. Why do we have lower returns than last year?
… to specific research problem :

I) problem definition :
1. What is the managerial problem?
2. What decisions need to be made?
3. Who is responsible for solving this problem?
4. What parts of the problem can be addressed through research/data analysis?
5. Who is paying for the research?
II) project design :

1. What are the research questions?
2. What type of study could address those research questions?
3. How much is already known?
III) data collection :

1. What kind of data is needed?
2. Can existing data be used?
3. What is the source of data and how should data be collected? Is it feasible?
4. How should different sources of data be merged and cleaned?
5. How should data be stored and made available for later use?
-> Scopes + Types
IV) analysis and interpretation :

1. What method will be used to analyze the results?
2. What kind of visualizations will be used to explore the data and communicate the results?
3. What are the links between the empirical inferences and the actions?
-> overview of the methods
V) reporting :
1. Who will read and use the report?
2. What is the technical level of the audience?
3. Which initial questions can now be answered?
4. What kind of managerial recommendations will be given?
-> potential source of error
better decisions
from deeper understanding
Long-Term Short-Term
Marketing Marketing Decisions

Strategy Actions
Objectives
Predictive Performance Analysis

Analysis Analysis

two parts
marketing science
marketing science
tools & models to help you/a manager develop a
winning marketing strategy and implement it
through effective and efficient marketing actions.
01 02
behavior of markets impact of marketing
segmentation-targeting-positioning: action-reaction-return: tools & models
tools & models to identify to predict behavior, allocate resources
opportunities to invest and achieve to marketing actions, produce desired
the business objective results, and control outcomes

marketing science
understand marketing phenomena
predicting
$
insight action reaction return
evaluating
Marketing: manage
Fuel: understand interactions with customers Goal: generate desired Purpose: contribute to the
customer and market through developing, market reactions – survival of the
behavior to anticipate advertising, selling, pricing, acquire, develop, retain organization and the
opportunities delivering products target customers realization of its objective.

marketing science
how to analyze ‘it’ objective
insight action reaction return
knowledge driver process $

results
what is value strategic decisions: predict reactions predict financial results

to customers? targeting – positioning measure results
èwho/what/how/why èperceptual mapping
why?
how are customers ‘visible’ marketing actions:
different/similar? what: offer – how: connection è response functions
è segmentation è conjoint analysis èregression: elasticities
form then profile èresource allocation èfunnel analysis
èbrand equity
01 purpose: business return
1. return: company value
A. profit equation
Marketing
πt = Volumet × Margint — Expensest
Market Market Retail 1–Retail Gross Marketing &

πt = Sizet × Sharet × Pricet × Margint × —Margint — Sales Costt
Retail Margin = (Retail Price – Mfr Price)/Retail Price

Retail Markup = (Retail Price – Mfr Price)/Mfr Price
Gross Margin = (Mfr Price – COGS)/Mfr Price
Market Size = Number of Customers (N) x Frequency of Purchase (F) x Volume (V)
Market Share = %Penetration x %Share of Wallet x Usage Index

B. PLC

C. new product diffusion
Bass Model
Purpose: Predictive Model – predict not only the market

potential, but also adoption and diffusion rates of a new product
(durable good)
Approach: predicting before the introduction of new product by

using information about adoption and diffusion of similar
established products
Source: Bass, Frank (1969), “A new product growth model for consumer durables,” Management Science, 15 (4), 215-227.

D. marketing ROI
Sales Marketing
Revenues ROS
€29.4M Gross 38%
Profit
€17.76M
Percent
Gross Margin
60.5%
π
€11.18M
Marketing & Sales

Expenses Operating Income
€6.58M Marketing €7.04M
ROI
170%
Other Operating
Expenses
€4.14M

02 goal: customer reactions
Frameworks
Marketing: Analysis, Strategy and Actions
What to analyze?
How to analyze?
Why to analyze?
Unit of Analysis
Demand: Sales Analysis
what drives sales?

2. customer reactions
basic ideas
customer analysis:
framework
business:
improved performance
consumer:
increased happiness

A. customer value ≠ price
reservation price
Value-in-Use absolute utility or
satisfaction of a product
customer
surplus
Value-in-Exchange relative value of a
product; depends on alternatives, what
we can obtain in exchange for it price
company
(reservation price) margin
cost of supplies
Perceived Value value of a product as supplier
the customer sees and understands it; margin
depends on customer experience and factor input costs
knowledge as well as valuation of risk

A. customer value drivers
lower risk : your costs and revenues are more predictable
higher revenues : your customers like it more
lower costs : you save money
Lower
Risks
Emotions
Higher Lower
Revenues Costs

How to measure it?
Quantifying Customer Preferences
What is it? It is difficult – more to come
How to measure it? • Economics: Am I better off financially?

Ø Easier to quantify
How to use it? • Psychology: Do I feel better?

Ø Harder to quantify
• Uncertainty: Will I get the promised value?
Ø How does customer learn?
π = Revenues – Costs
Ø Lower costs (greater productivity)
Ø Higher revenues (advantage)
Ø Lower business risk (predictability)
lower costs
total cost of ownership (TCO)
Sources of cost savings
Lidl offers lower prices for many
Price Paid
household and food products
Acquisition Zalando reduces ordering costs

costs for clothes
Usage Apple reduces usage costs
costs through ease-of-use
Maintenance LED bulbs reduce replacement
costs costs with longer lifetime
Ownership banks works with customers to
costs create affordable ownership
Disposal SodaStream cuts disposal cost
costs of packaging material

A. economic value estimation
negative
1. Determine best competing differentiation –
alternative positive value
Price of existing best available alternative
differentiation – +
differential
(substitute) or current solution
value
value
2. Determine all elements of – +
positive differentiation value
Cost savings and revenue increases that arise
from the use of our product or service
+
compared to the best alternative
3. Determine all elements of

negative differentiation value
Cost savings and revenue increases that arise
from the use of the best alternative but are comparator cost revenue risk economic
absent in your product or service
price savings increases reductions value

A. value P.I.E.
Value Creation
Potential Industry Earnings (P.I.E.)
= Customer Value x Potential Demand
supplier customer
share surplus Value Capture
Differentiation
P.I.E.
Power
my
share channel More Customer Value
competitor
share More Potential Value
share for Everybody

customer value
who: different roles = different value
the decision making units (DMUs)
Beneficiary of offer
User benefits
Recognizes the need,
Initiator starts purchase process
shopper
Makes purchase effort,
Buyer conducts negotiations
Controls access,
Gatekeeper filters information
Bears economic costs,
Payer owner of budget
Makes purchase decision,
Decider resolves internal conflicts
Shapes decisions, experts,
Influencer otherwise interested parties

creating customer value
a superior offer is
A. More than good technology and attributes:

Customers buy benefits to satisfy their goals
B. More than functionality and attractive price:

B2B customers have psychological and social goals too
C. More than understanding product facts:

Perceptions drive decisions
D. More than awareness and availability:

Value = ‘What’ we offer X ‘How’ we offer it
E. Not the same for everybody:

Segmentation to identify best prospect(s)

B. perceived value
thinking is hard valuing is hard

processing information there is a sense of fairness that
requires attention and cognitive also guides our valuations
effort; if we can make decisions (consumption value +
with less effort by taking short- transaction value)
cuts we will do that
choosing is hard timing is hard

making a decision and we rather have rewards
choosing an option is taxing in immediately and postpone
itself and there can be too ‘payments’ to the future
much choice
Marketing Science – Fall Semester 2023

©Prof. M. Christen
CUSTOMER VALUE CREATION :
2. customer reactions CUSTOMER PROBLEM = WHAT & HOW

CUSTOMER VALUE = WHAT AND HOW
B. perceived value: implications
it is hard to understand and predict you can shape customer behavior with
customer behavior marketing actions
• past behavior is a better predictor of • customer value = what X how
future behavior than ‘words’ • segmentation/targeting to focus
• regression analysis with sales data marketing actions on best prospects
• experiments
• positioning to integrate marketing
• perceptual mapping tools to get actions to create superior value in
customers’ view of a market customer mind
• survey of attributes with factor
analysis • framing offer
• survey of brands with • simplifying choice
multidimensional scaling

6 characteristic of good segmentations :
IDENTIFIABLE - SUBSTANTIAL - ACCESSIBLE -
C. heterogeneity and homogeneity

STABLE - DIFFERENTIABLE - ACTIONABLE
1. form 2. profile 3. evaluate 4. select
similar reachable best sustainable

customers customers customers business
find variables to group describe customers in rank segments in terms decide where to focus
customers by similarity a segment with of attractiveness for your resources to achieve
of goals and behaviors observable variables your business your business objectives
cluster discriminant profit equation targeting

analysis analysis sizing: Bass model positioning
mapping: factor analysis
valuing: conjoint analysis

segmentation
categorization of variables
WHO: B2C WHO: B2B
Demographics Firmographics
-Gender Surface Descriptors -Size Surface Descriptors
-Age (a quick peek at customers) -Sales volume (a quick peek at customers)
-Income
-Location
WHO: Attitudes -Industry
-Location
WHO: Culture
-Household size -Sophistication -Sophistication
-Financial situation
Just Below-the-Surface -Risk attitude Just Below-the-Surface -Growth orientation
Descriptors -Innovativeness Descriptors -Innovativeness
(a look inside a customer) (a look inside an organization)
-Political views -Competencies
WHAT: Actions -Aspirations WHAT: Actions -Leadership style
-Purchases -Values and lifestyle -Purchases -Performance
-Brand Choices -Supplier Choices
Action Descriptors Action Descriptors
-Time of purchase (what customers do) -Time of purchase (what customers do)
-Purchase volume -Purchase volume
-Purchase frequency HOW: Behavior -Purchase frequency HOW: Behavior
-Loyalty -DMU/DMP -Loyalty -DMU/DMP
-Applications -Applications
Behavior Descriptors Behavior Descriptors
(how customers decide) -Information Search (how customers decide) -Information Search
WHY: Goals -Influencers WHY: Goals -Internal Politics
-Decision Rules
-Decision Rules
-Functional/Emotional -Ease of use
-Satisfaction -Satisfaction
-Security Deep Dive Descriptors -Cost savings Deep Dive Descriptors
-Reassurance (what the customers really -Peace of mind (what the customers really
want, which is hard to infer want, which is hard to infer
-Ego gratification from other 3 types of factors) -Accuracy from other 3 types of factors)
-Sense of power -Professionalism
-Love Marketing Science – Fall-Risk
Semester 2023
reduction page
-Immortality ©Prof. M. Christen
-Innovation 012
FLIP
segmenting MBA students
0. formulate the problem – where to allocate resources to attract more students

1. select a similarity measure – why/how vs. who/what
2. select a clustering procedure – cluster analysis
3. decide on the number of clusters – statistics and judgment
4. interpret and profile the clusters – discriminant analysis
5. assess reliability and validity

C. heterogeneity and homogeneity
formulate select cluster decide discriminant assess

the problem similarity measure analysis number of clusters analysis validity
customer problems goals/needs (why) hierarchical smallest number observable factors iterative process
opportunities behaviors (how) non-hierarchical statistic (scree plot) demographics (who) coherent story
resource allocation business sense locations (where)
The segments must consist of customers who

Meaningful are similar within a segment, but different from Reachable You must be able to reach the customers in the
segment with means that are relevant for the
Differences those in other segments – both in a way that
matters for the business.
Customers strategy
Identifiable You must be able to identify the customers

that belong to a segment – in a way that is
Profitable You must be able to take actions to influence
and serve customers in the segment and profit
Customers relevant for the marketing strategy Persuasion from your effort

Ford Ka: segment profiling
demographic variables do not explain preference
NO RANATORY
èlogisitc regression:
which demographic POWER Of
variables describe
the segments MEMOGRAPHIC
(discriminate)? VARABLES

need-based segmentation
food: goal + behavior
niche sement
company decide on
6 segment
segment with consumption preference

segment with clear and unique goal
D. research approaches
uncontrolled experimentally controlled

environment environment
actual field or lab experiments incentive-

transaction data analysis compatible
behaviour (A-B testing)
economic value analysis
value maps
stated survey analysis biased
conjoint analysis
intentions KBF analysis
correlation causality

D. value mapping
customer value map

economic model: choice is made by
maximizing utility minus price;
regression analysis to determine value line
Ideal
attribute-based perceptual map
bottom-up model: choice is made by
maximizing benefits à attribute measures
factor analysis to determine map/dimensions
brand-based perceptual map

top-down model: choice is made by
comparing brands à similarity measure
multidimensional scaling to determine locations

illustration
customer value map
price Value Line KBF Analysis

A. Determine customer segments
inferior
value B. List relevant key buying factors (KBFs)
C. Segment-level importance ratings of KBFs
(value drivers or weights)
superior
D. Determine relevant competitors
value
E. Determine perceptions of competitor
strengths & weaknesses by KBF
performance

illustration
attribute-based perceptual map
Heavy Popular
Heavy with Men
Full Bodied •
Old Milwaukee Budweiser
• Beck’s
•
Blue Collar Special Heineken
•
• Miller Occasions
•
Good Value Meister Brau Dining Out Premium
•
• Coors
Budget Stroh’s Premium
• Michelob
• Coors Popular
Miller • Light with
Pale Lite
• Color Women
On a Old
Budget Light Less Filling
Milwaukee Light Light
D. value mapping: overview
Method Advantage Disadvantage When

value map valuation of different valuation based on price choice is based on clear
- technical specs, price attributes need to specify attributes attributes and price
- regression analysis results easy to interpret equal treatment of all vertical differentiation
actionable attributes technical products
attribute map attributes and benefits no indication of benefit perceptions are formed by
- attribute rating actionable importance, valuation attribute evaluation
- factor analysis vector or ideal point need to specify attributes horizontal differentiation
preferences brand hard to include knowledgeable buyers
brand map impose little structure: get
no direct measure of benefits perceptions are formed by
- brand similarity rating deep insights
not very actionable overall impressions of offers
- multidimensional scaling customer-based view
need many brands consumer brands
of competition

cluster analysis Intra-cluster distances
basic concepts are minimized
purpose: classify objects (cases) into

homogeneous groups called clusters and
reduce size of large datasets
goal: objects in each cluster should be similar Inter-cluster
to each other and dissimilar to objects in the distances
other clusters are maximized
note: both cluster and discriminant analysis

are concerned with classification
§ cluster analysis suggests groups from data
Variable 1
Variable 1
§ discriminant analysis requires prior groups
latent class: derives clusters using a
probabilistic model that describes the
distribution of data – model based method Variable 2 Variable 2
Marketing Science – Fall Semester 2023

©Prof. M. Christen
74
measuring
basic statistics
agglomeration schedule: gives information on the dendrogram: a graphical representation (tree

objects or cases being combined at each stage graph) for displaying clustering results
of a hierarchical clustering process. • vertical lines represent clusters that are joined
together.
cluster centroid: mean values of the variables for • the position of the line on the scale indicates
all the cases in a particular cluster. distances at which clusters were joined
cluster centers: initial starting points in non- distances between cluster centers: they indicate
hierarchical clustering. Clusters are built how separated the individual pairs of clusters
around these centers, or seeds. are; clusters that are widely separated are
distinct, and therefore desirable
cluster membership: indicates the cluster to
which each object or case belongs. icicle diagram: another type of graphical display
of clustering results

conducting it
b. select procedure
§ hierarchical and non-hierarchical methods should be used in tandem

§ hierarchical: use data to determine number of clusters; initial clustering typically using
Ward’s method
§ non-hierarchical: number of clusters and cluster centroids obtained with hierarchical method
are used as inputs to the optimizing partitioning method (k-means clustering)
§ choice of a clustering method and choice of a distance measure are interrelated
§ for example, squared Euclidean distances should be used with Ward’s and centroid methods
§ several nonhierarchical procedures also use squared Euclidean distances

conducting it
c. decide final number of clusters
§ based on theoretical, conceptual, or practical considerations

§ hierarchical: distances at which clusters are combined (from agglomeration schedule) can be
used; stop when similarity measure value makes sudden jumps between steps
§ non-hierarchical: ratio of total within-group variance to between-group variance can be
plotted against the number of clusters (scree plot)
§ relative sizes of the clusters should be meaningful

conducting it
d. interpret and profile clusters
§ involves examining the cluster centroids: he centroids enable us to describe each

cluster by assigning it a name or label
§ profile the clusters in terms of variables that were not used for clustering; these may
include demographic, psychographic, product usage, media usage, or other variables
è discriminant analysis

conducting it
e. assess reliability and validity
§ perform cluster analysis on the same data using different distance measures and
compare the results across measures to determine the stability of the solutions
§ use different methods of clustering and compare the results
§ split the data randomly into halves and perform cluster analysis separately on each
subset; compare cluster centroids across the two subsamples
§ delete variables randomly and repeat the cluster analysis based on the reduced set
of variables; compare the results with those obtained based on full set of variables
§ in non-hierarchical clustering, the solution may depend on the order of cases in the
data set; make multiple runs using different order of cases until the solution
stabilizes

limitations
of K-means clustering
differing sizes differing densities
non-globular shapes

segmentation
mistakes to avoid
success ≠ e2e
attractive ≠ size
segmentation ≠ static
similarity ≠ demographics
segments ≠ product categories
segmentation ≠ stationary process
segmentation = strategic & tactical decision
e2e: everything to everybody

03 marketing: actions
3. marketing actions
customer value creation & capture
Positioning Our Our Our Our 4 Ps

Product Promotion Price Place
Customer Economic Perceived Ability Experienced

Exchange
with Goal/Need Value Value To Buy Value
Targeting
Their Their Their Their
Product Promotion Price Place

no positioning
no identity, no advantage
identity differentiate
shape customer mind to create being different is not enough,
an identity that matches the be desirable and deliver it –
customer problem – don’t try to without a point of difference,
be everything to everybody you better have a lower price
define deepen
before you can stand out, you moving from functionality to
have to define where you stand benefits and emotions takes
– innovation is seeing the effort, focus and integration –
world in a new light relationships are not built in
one day

positioning
differentiation is not enough
Target
Customer
Desirable?
value
is relative to:
customer goals,
competition
Deliverable? Differentiating?
Company Competitor
competitive positions
measuring similarity
similarity is similarity is
what the product is/has what the customer says it is
collaborative filtering perceptions of attributes

data approach: similarity is defined by bottom-up approach: similarity is
the product attributes (or user types) defined by perceptions of attributes
-> recommendation engines
benchmarking perceptions of brands

engineering approach: similarity is top-down model: similarity is what the
defined by technical specifications customer says it is

perceptual mapping
factor analysis to reduce complexity
• it is difficult to get a clear picture of a market when dealing with many different
attributes and products
• all the data/dimensions might not be necessary to capture consumer perceptions
• highly correlated attributes: create linear combination of the measures to get a single new
dimension of the original attributes
• take out attributes on which all products are rated about the same
• factor analysis reduces attributes to the few key factors or dimensions that capture
most of the variance
• analysis done using commercial software SPSS or SAS (principal components)

REGRESSION a +
b ·
PERFORMANCE
p
=
a b VALUE OF 1 UNIT
:
customer value map Fair Value

ERFORMANCE
performance vs. price Line
Inferior
Value
Value
Frontier
Superior
Value BEST
AVAILABLE
OFFERS

attribute-based map
factor analysis
input: data matrix = p (products) X a (attributes) X n(respondents)

Consumers
data matrix P1 P2 P3 P4
A1
A2
factor analysis
A3
A4
perceptual map processing: factor analysis to identify underlying key dimensions (factors)
represented by the product attributes
output: map of brands and attributes with dimensions determined by factors

MANLY EXRAINED BY FACTOR2
perceptual map
↑
(y)
dimensions and attributes
Popular
⑦ SHORTER ARROW with Men
Full Bodied Heavy
MAINLY EXPLAKED
LORVECTOR) MEANS
x
X
BY FACTOR I
TE 2 FACTORS
DO
Blue Collar Special ↑ (x)
NOT EXRAIN Good Value
Occasions
Dining Out Premium
IT WELL
/Y
"
X
Y Popular
Pale with
Women
-- - -
Color
-
On a
Budget X Light Less Filling
A COMBINANON Marketing Science – Fall Semester 2023 page

OF X AND Y
perceptual mapping
comparing methods
Method Advantage Disadvantage When

value map valuation of different valuation based on price choice is based on
- technical specs, price attributes need to specify attributes attributes and price
- regression analysis results easy to interpret equal treatment of vertical differentiation
actionable attributes technical products
attribute map attributes and benefits no indication of benefit perceptions are formed
- attribute rating actionable importance, valuation by attribute evaluation
- factor analysis vector or ideal point need to specify attributes horizontal differentiation
preferences brand hard to include knowledgeable buyers
brand map impose little structure: no direct measure of perceptions are formed
- brand similarity rating get deep insights benefits by overall impressions of
- multidimensional scaling customer-based view not very actionable offers
of competition need many brands consumer brands

example relevant attributes to choose a university :
location, work, level of responsibility, industry
in enginius -> different attributes with different levels = multiple combinaisons = conjoint
design
conjoint analysis
product profiles being rated -> obtain numerous profiles
product ratings (with a survey ? to test the preferences of the combinaisons of attributes and
forcing tradeoffs level of the attributes
-> push people to take decisions and rank the level of attribute
the research design adapt in function of the responses = conjoint analysis
Concept Advantages
• Avoiding the problem of inflation of aspirations
• Conjoint is a survey technique that forces ("everything is important")
respondents to make trade-off decisions that • Discovery of the true preference structures of
reveal their true preferences buyers (particularly of price)
• Products and services are a bundle of • Quantification of a significant driver of purchase
attributes (incl. price) and are viewed decisions: the benefit
holistically (CONsidered JOINTly)
• Can be used for simulation of:
• The result is a mathematical model that
– market shares
describes the rating system and the utility
– conquest rates
function of a respondent
– cannibalization rates
– profit consequences

3. marketing actions
A. offers: conjoint analysis
definition of design of estimation of analysis of

attributes data collection utility values results
tasks / • Identification of the • Selection of the • Selection of the utility • Calculation of the
relevant attributes querying method (full model attribute importance
decisions • Selection of attribute profile vs. trade-off • Selection of the values
levels matrices) estimation technique • Identification of the
• Generation of the • Aggregation of the optimal product design
experimental design utility values • Utility-oriented market
• Definition of the segmentation
dependent variable • Simulation of market
(rating, ranking, etc.) shares
• Presentation of the • Deriving of price-sales
stimuli functions
outcomes / • Overview of relevant • Data collection plan • Individual and • Dependent on study
attributes and their • Presentation materials aggregated utility objective
results characteristics for survey functions (part-worths)


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Master of Science

Fall Semester 2023 - Prof. Markus Christen

Marketing Science teaches a systematic approach to build models

Marketing Science introduces you to marketing as an academic discipline and

Marketing Science – Fall Semester 2023 page

seller STP buyer

value Data value

Marketing Science – Fall Semester 2023 page

Purpose: contribute to the

2. Action: Does the implemented action (new

3. Reaction: Why was L’Oréal Ombré a success:

… to specific research problem :

II) project design :

III) data collection :

IV) analysis and interpretation :

Marketing Marketing Decisions

Predictive Performance Analysis

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

knowledge driver process $

what is value strategic decisions: predict reactions predict financial results

èwho/what/how/why èperceptual mapping

Market Market Retail 1–Retail Gross Marketing &

Retail Margin = (Retail Price – Mfr Price)/Retail Price

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

Purpose: Predictive Model – predict not only the market

Approach: predicting before the introduction of new product by

Marketing Science – Fall Semester 2023 page

Marketing & Sales

Marketing Science – Fall Semester 2023 page

what drives sales?

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

What is it? It is difficult – more to come

How to measure it? • Economics: Am I better off financially?

How to use it? • Psychology: Do I feel better?

Acquisition Zalando reduces ordering costs

Marketing Science – Fall Semester 2023 page

3. Determine all elements of

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

Marketing Science – Fall Semester 2023 page

A. More than good technology and attributes:

B. More than functionality and attractive price:

C. More than understanding product facts:

D. More than awareness and availability:

E. Not the same for everybody:

Marketing Science – Fall Semester 2023 page

thinking is hard valuing is hard

choosing is hard timing is hard

Marketing Science – Fall Semester 2023

2. customer reactions CUSTOMER PROBLEM = WHAT & HOW

B. perceived value: implications

Marketing Science – Fall Semester 2023 page

C. heterogeneity and homogeneity

1. form 2. profile 3. evaluate 4. select

similar reachable best sustainable

cluster discriminant profit equation targeting

Marketing Science – Fall Semester 2023 page

0. formulate the problem – where to allocate resources to attract more students

Marketing Science – Fall Semester 2023 page