MARKETING ANALYTICS

MARKETING ANALYTICS

Introduction
Prof. Li, Xinlong
Email: xinlong.li@ntu.edu.sg
Office: ABS-06-078 (NBS)

BM2515/2507 • Week 1 Session 1

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About Me

• Quantitative Marketing Researcher

• Data Analysis, Machine Learning
• Consumer Behavior, Firm Decisions.
• R
• RA Opportunities
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Learning Objectives

By the end of
this course,
you should be
able to:
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Learning Objectives

Assess usage
of analytics in
marketing contexts

By the end of
this course,
you should be
able to:
MARKETING ANALYTICS

Learning Objectives

Assess usage Marketing

Marketing mix
of analytics in Segmentation investment
effectiveness
marketing contexts decisions

By the end of
this course,
you should be
able to:
MARKETING ANALYTICS

Learning Objectives

Assess usage Marketing

Marketing mix
of analytics in Segmentation investment
effectiveness
marketing contexts decisions

By the end of
this course, Apply analytics
you should be tools using R
able to:
MARKETING ANALYTICS

Learning Objectives

Assess usage Marketing

Marketing mix
of analytics in Segmentation investment
effectiveness
marketing contexts decisions

By the end of Regression,

this course, Apply analytics K-means Customer
you should be
Conjoint
tools using R clustering lifetime value
able to: analysis
MARKETING ANALYTICS

Learning Objectives

Assess usage Marketing

Marketing mix
of analytics in Segmentation investment
effectiveness
marketing contexts decisions

By the end of Regression,

this course, Apply analytics K-means Customer
you should be
Conjoint
tools using R clustering lifetime value
able to: analysis

Learn to work in
4 to 5 students
a team to solve
per group
marketing problems
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Where can we use

marketing analytics?
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Marketing Analytics – Areas of Application

Segmentation
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Marketing Analytics – Areas of Application

Segmentation
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Marketing Analytics – Areas of Application

Segmentation
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Marketing Analytics – Areas of Application

Segmentation: real-world examples

P&G uses customer segmentation extensively. For instance, in their

marketing for laundry detergents, they segment customers based on
their laundry habits, preferences for scent, sensitivity to ingredients,
and price sensitivity.
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Marketing Analytics – Areas of Application

Segmentation: real-world examples

e.g if you are a trump supporter, u watch his videos and your
recommended videos would be about Trump Videos ->affect
your beliefs of info

Algorithm and
Recommender
System
eg Netflix watches the algorithm of the consumers history
User specific analyzing your course
Analyse user behavior and predict the future of consumers
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Marketing Analytics – Areas of Application

Product Positioning

Segmentation Positioning
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Marketing Analytics – Areas of Application

Positioning
help us to analyse customer behavior regarding their perception of the product

Heavy Popular
Full Bodied
with men

Special
Blue Collar Occasions
Dining Out
Good Value
Premium
Perceptual Map direct competitors,
indirect competitors

Popular
with women

On a Pale
budget Color

Light Less Filling

budget, product attributes,

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Marketing Analytics – Areas of Application

Positioning: real-world example

Original UK version of the show.

Movies starring Kevin Spacey.

Firms directed by David Fincher.

This data-driven insight convinced Netflix

that investing in "House of Cards" would
be successful.
3 indicators that suggest that this show would be very
successful
House of Cards
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Marketing Analytics – Areas of Application

Marketing Mix
Segmentation Positioning
Analysis
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Marketing Analytics – Areas of Application

Marketing Mix Analysis

4Ps

Product Price Promotion Place

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Marketing Analytics – Areas of Application

Marketing Mix Analysis

price discrimination: eg NTU students Current Price Price Adjustment

entitled to educational discount for
Apple Products
$3 ?
optimal price could be different for
different customer segments

if you increase the price, marginal profit would increase, then

demand would decrease

total profit = marginal profit x demand

*strike a balance between marginal profit & demand*

price elasticity of demand -> OPTIMAL PRICE price decrease, demand increase
diff consumers have diff price sensitivity, demand price increase, demand decrease
will increase/decrease by x or y *optimal price that would maximise price and demand (what is the optimal price?)
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Marketing Analytics – Areas of Application

Marketing Mix
Segmentation Positioning
Analysis

Communication
and Targeting
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Marketing Analytics – Areas of Application

e.g if a company seeks to target young customers, its

Communication and Targeting marketing strategy would include tik tok influencers etc

100%

Probability of Purchase
94%

57%

22%

0%
Characteristic
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Marketing Analytics – Areas of Application wants to understand customers,

where their customers go.
"apple would ask, do you allow the app to access your location/data?" e.g gym related products if you
spend alot of time at the gym.
Communication and Targeting: Location data to target customers eg if you are coffee lover,
reccomend you those

hiking
easy to figure
home address,
working address.
many privacy
information for
location to airport
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Marketing Analytics – Areas of Application

Marketing Mix
Segmentation Positioning
Analysis

Communication Component
and Targeting Pricing
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Marketing Analytics – Areas of Application

Component Pricing

What is the
memory?
Battery?
What is the
screen size?

What are
the camera
specifications?
Processor?
putting them together as a phone, what is the optimal price for
this phone? (bundle of components)
eg, can make it more complicated by including
chargers, phone casing etc
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Marketing Analytics – Areas of Application

Component Pricing: real-world example

Airbnb: how location, number of rooms, decoration,and

type of accommodation influence customer preferences
and booking decisions.
each car is a bundle of components:
BMW: engine power, fuel efficiency, interior design, and
technology features.
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Marketing Analytics – Areas of Application

Marketing Mix
Segmentation Positioning
Analysis

Communication Component Customer

Targeting Pricing Value

revenue generated by the customer

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Marketing Analytics – Areas of Application

Customer Value

$100

Expected Revenue by Year

$60

$40

$20

Year 1 Year 2 Year 3 Year 4

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Types of data
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Analytics – Data Types

UNSTRUCTURED VS STRUCTURED

Audio/Visual Text Review Research Data Surveys

CANNOT directly use these contents analyze these datas

Source: Wedel and Kannan, 2016, Journal of Marketing

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This Course

This course...

DESCRIPTIVE
Segmentation,
and Perceptual
map for
positioning
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This Course

This course...

DESCRIPTIVE DIAGNOSTIC
Segmentation, Linear
and Perceptual regression
map for model for
positioning elasticity
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This Course

This course...

DESCRIPTIVE DIAGNOSTIC PREDICTIVE

Segmentation, Linear Logistic
and Perceptual regression regression
map for model for models for
positioning elasticity probability
estimation
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This Course

This course...

DESCRIPTIVE DIAGNOSTIC PREDICTIVE PRESCRIPTIVE

Segmentation, Linear Logistic Conjoint
and Perceptual regression regression analysis for
map for model for models for pricing
positioning elasticity probability
estimation
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This Course

This course...

DESCRIPTIVE DIAGNOSTIC PREDICTIVE PRESCRIPTIVE HYBRID

Segmentation, Linear Logistic Conjoint Customer
and Perceptual
regression regression analysis for lifetime value
map for model for models for pricing
positioning
elasticity probability
estimation
investment is
worthy or not
price elasticity of demand
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Weekly Schedule

• Week 1:
– Introduction.
• Week 2:
– K-means clustering for segmentation
• Week 3:
– Perceptual map
• Week 4:
– Causal inference using experiment data and observational data
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Weekly Schedule

• Week 5:
– Diagnostic analytics – Linear Regression (home-based learning)

• Week 6:
– Problem solving exercise – group work (Cluster analysis, perceptual map and
regression)

• Week 7
– Diagnostic analytics – Linear Regression (cont’d)

• Week 8:
– Quiz I (materials from week 1 to 7)
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Weekly Schedule

• Week 9:
– Linear Regression (cont’d) and logistic regression.
• Week 10:
– Conjoint analysis
• Week 11:
– Customer lifetime value analysis
• Week 12:
– Q&A ANY QUESTIONS REGARDING QUIZ/FINAL PROJECTS

• Week 13
– Quiz II (regression, conjoint analysis and CLV)
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Course Outline

Component ILO Tested NBS Learning Goal Weighting Team/Individual

(Refer to Annex E
for list)
1. Class participation ILO 1-3 Class Participation 10% Individual
2. Quiz 1 ILO 1,2 Acquisition of 30% Individual
**MCQS & knowledge
3. Quiz 2 ILO 1,2
CALCULATION*** Acquisition of 30% Individual
knowledge
4. Problem solving exercise ILO 2,3 Teamwork & 10% Team
Interpersonal skills;
Problem solving and
decision making
5. Group Assignment ILO 2 Teamwork & 20% Team
Interpersonal skills;
Problem solving and
decision making
Total 100%
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Course Outline

Reading and References

Required: Instructor’s lecture notes. Students are not required to purchase any
textbook.

It is mandatory for the students to bring their laptops to class. All exercises will
be done in R. The students are required to ensure that they have installed R
and RStudio on their laptops.

Optional reading:

1. Analytics at Work: Smarter Decisions, Better Results, by Thomas Davenport

and Jeanne Harris.
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Course Outline

Absence from class without a valid reason will affect your

overall course grade.

COVID or sick: doctor note and ART test result.

Let me know by email before the class.

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Homework

https://www.youtube.com/watch?v=SWxoJqTqo08&li
st=PLjgj6kdf_snYBkIsWQYcYtUZiDpam7ygg&index=1&
ab_channel=DataCamp

Watch the first 4 videos (about 18 mins) and try it out

in RStudio.