Hi everyone!
This is a quick crash course video where we’ll
talk about customers analytics, data science,
and how the two work together!
The topic we’ll be discussing here is the
marketing mix.
Leading companies are always on the lookout
for savvy data scientists to join their fast-growing
Customers Analytics teams.
In that sense, considering a career as a data
scientist in customer analytics is a super
smart choice.
But here’s why exactly:
First, companies need people who know how
to use data to understand their customers'
needs.
Once they understand their needs, they can
provide the products customers want to buy.
Second – and that’s a bit more technical
– companies need people who have the skills
to build the analytics capabilities that will
help them provide these innovative customer
experiences.
In these videos, we’ll be focusing on the
customer part of customers analytics.
Why?
Because even if you know how to do the technical
analyses well, unless you understand the customer,
you won’t be able to meaningfully help your
company.
So let’s build those foundations, shall
we?
Just one more thing before we get started!
We’d like to mention something else we’ve
put together – a very comprehensive data
science training.
The 365 Data Science program contains the
full set of data science courses you need
to develop the entire skillset for the job.
It’s completely beginner-friendly.
For example, if you don’t have any maths
or statistics knowledge, we’ll teach you
that first.
And if you’d like to build a more specialized
skillset, you can do that with courses on
Time Series Analysis, Credit Risk Modeling
and more.
If you’d like to explore this further or
enroll using a 20% discount, there’s a link
in the description you can check out.
Perfect!
Now, let’s get into customers analytics,
and more specifically, the marketing mix.
The concept of the Marketing Mix is to develop
the best product or service and offer it at
the right price through the right channels.
In this course, we’ll cover customer analytics
that answers three fundamental questions about
positioning and the marketing mix:
(1) Will a customer buy a product from a particular
product category when they enter the shop?
(2) Which brand is the customer going to choose?
(3) How many units is the customer going to
purchase?
These three questions outline three main components
of the purchase process and examine how each
of them is influenced by the marketing mix
tools.
These components are:
(1) The customer visits a store and decides
whether or not to buy a product;
(2) Provided that the customer had decided
to buy a product from the product category
of interest, the customer chooses which of
the available brands to buy.
(3) Lastly, the customer buys a particular
quantity or number of items of the product
from the selected brand.
Okay.
When talking about the Marketing Mix, there
are four groups of variables:
• related to the characteristics of the
product;
• related to the price of the offering;
• related to promotions;
• and related to the place or channel of
the offering.
Commonly they are referred to as Product,
Price, Promotion, Place and are known as the
4 Ps of marketing.
Let’s look at each of the 4 Ps.
Let’s start with ‘product’.
Product refers to the core attributes of the
offering.
The most important aspect here is the product
features.
For example, smartphones have features like
display size, color, battery life, and so
on.
Let’s take an iPhone for instance.
It has different display sizes and comes in
several colors.
Product design is another feature that falls
under the ‘Product’ category of marketing
tools.
The iPhone has always been extremely sleek,
easy on the eye , and pleasant to touch.
It may not be the most productive smartphone
on the market, but it definitely has one of
the best designs – an integral part of Apple’s
strategy.
Okay.
Another important tool here is branding.
It deals with the creation of names, logos,
slogans, symbols, and designs.
These are features which help a product be
distinguished from others in the same category.
For example, the iPhone is nothing more than
a smartphone, but it’s branded as ‘an
iPhone’ not as an Apple Smartphone.
This particular device has a name of its own
and is one of the most distinguishable products
out there.
Last but not least, decisions about packaging
also belong here.
Again, an iPhone comes in an immaculate box
which opens up smoothly and easily to reveal
a sight of the product and product only highlighting
its design.
To enhance that effect, all cables and instruction
manuals are in a compartment below the product.
Okay.
The second ‘P’ is Price.
Price has to do with everything related to
the pricing of the offering.
That is, first and foremost, how much the
product costs.
In addition, decisions about long-term price
changes also belong here.
Discounts are another important pricing tool.
And, of course, any existing credit terms
or other payment terms are considered a pricing
tool, as well.
Either way, ‘Price’ is the most intuitive
‘P’, so we don’t need to spend too much
time on it.
Instead, let’s get to the third ‘P’:
Promotion.
When you think of a promotion, you probably
imagine some discount.
In fact, ‘promotion’ is a much broader
term.
It refers to how the product is being communicated
or advertised.
For instance, a commercial on TV even without
a price reduction is called a promotion.
Handing out flyers on the street is also promotion.
Sending a Tesla into outer space is also promotion.
In general, a promotion has 2 components:
how the product offering is being communicated
and the activities related to its actual sale
and communication.
The two components of a TV commercial consist
of: the exact words that are going to be used
in it to communicate the product, and the
actual process of contacting the TV channel,
setting up the commercial, paying for it and
then generating sales through it.
Some important decisions to be made here are
what the messages should be and how often
they should be communicated.
Okay.
Now, most of the promotions are actually sales
promotions, known as merchandising.
There are three types of merchandising: price
reduction; display; and feature.
Price reduction is the simplest to grasp because
we notice it every day.
A given product that used to cost $5 is now
being sold for $2.
Price reductions could also be more complex.
They could be conditional on buying more units.
For example, a promotion could consist of
buying 2 chocolate candy bars and getting
a third one for free, essentially providing
a 33% discount.
Alright.
What about display promotions?
Display promotions happen when the product
is situated in another selling location, different
from the usual one where consumers can pick
it up.
For example, a particular brand of potato
chips can be displayed at the front of the
store or at the cashier.
Or maybe you have seen a brand-new car displayed
in a shopping mall.
Both of these are instances of a promotion,
but with no price reduction.
Finally, feature promotions happen when specific
opportunities for product purchase are being
distributed and presented to customers.
For example, printed ads and newspaper inserts
are feature promotions.
Nowadays those are more subtle though.
For instance, there are action-packed movies
in which all cool cars are exclusively one
brand, like the James Bond movies where the
007 agent always drives an Aston Martin.
Fantastic!
So, we’ve come to the last category: Place.
In essence, it refers to the exact locations
where the product will be offered or distributed.
Distribution strategies can be grouped into
three broad approaches: intensive distribution;
selective distribution; and exclusive distribution.
Let’s use the chocolate bar example to elaborate
on them.
If we spread our chocolate bar brand across
many different stores, then this is called
intensive distribution.
Coca-Cola is a great example of that – it’s
everywhere unless some specific restrictions
apply.
But what if the chocolate bars are only available
at a few select stores?
Usually, this can happen if our marketing
team feels that these are the places where
we’ve got the best chance of selling the
product.
In that case we have selective distribution.
A good example is an iPhone.
You can find it in the Apple store, tech stores
or other similar locations, but never in the
grocery store.
And finally, if only one selected brand is
sold in the store, we have exclusive distribution.
Basically, brands use it for luxury items
and products to achieve a higher-status image.
For example, you can buy a new Tesla Model
3 only at…
Tesla.
And, if you truly want to convey a superstar
status – you can purchase a new Rolex only
at a Rolex store.
Overall, all decisions about the exact locations
where the product will be offered are the
main part of the Place marketing tools.
And this is what the Marketing Mix tools are
all about.
We hope you found this video helpful.
And if you enjoyed it, please take a second
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Thanks for watching!
