Big data-> large volume and variety
Data new source of value, data today enables growth, data can be extracted, processed and
transferred.
Metaphor of oil-> data are like a commodity (how can I extract value from data?)
How companies can exploit BIG DATA?
Data analytics: the use of data and related business insights developed through applied analytical
disciplines (for example, statistical, contextual, quantitative, predictive, cognitive, and other
models) to drive fact-based planning, decisions, execution, management, measurement, and
learning.
3 main benefits from data analytics:
1. Cost reduction -> identification of more efficient way of making business
2. Improved decision-making processes
3. New products and services
Analysis on data-> more precise analysis of the context and the individual
How can we apply data to segmentation? -> loyalty programs (you have data on what each person
will purchase in relation to its fidelity card)
RFM (recency, frequency and monetary value)
Recency: last time I performed a specific purchase action
Frequency: how frequent I purchase some products/brand
Monetary value: I purchase in box (amount that would be paid in cash)
Data allow you to make decisions based on these 3 dimensions-> I can segment users based on
these dimensions
We can use data to better refined customer journey-> set of interactions that a user has with the
company
Companies don’t have a unified vision of the customer, they have different set of data and often
they don’t communicate
If I introduce a new product with a specific price and I observe how this product could affect sales
of other products (cannibalization)
Data has enabler of decision related to shelf-placement (what product should I place near another)
We can use data to support our managerial decision, to make better context analysis, using for
segmentation and positioning
Example: Walmart
Walmart performs analysis of real- time data. These analyses enable Walmart to deliver information
to business partners fast, so they can take action proactively and cut down the turnaround time.
In Walmart data analysis system has led to a reduction in the time it takes from a problem being
spotted in data to a solution being proposed, from an average of 2-3 weeks down to around 20
minutes.
Data analytics and value creation
Descriptive analytics: analyzing a
phenomenon that it’s occurred -> only
describing
The value is in terms of potential
knowledge of what happened
Diagnostic analytics: why a specific
phenomenon occurred?
I make a sensitivity analysis, what if I
would increase the price?
Predictive analytics: what will happen in
the future (forecast)-> best/worst case
scenarios
Prescriptive analytics: Managerial actions (how can I make it happen?)-> the value and the
complexity increases
It’s vital to extract managerial implications from data
Data analytics and competitive advantage
Data -> ability to design and control digital network
An advantage is in terms of knowledge (example: car sharing has the knowledge of movement of
users in specific area)
We are moving from an era of core competences to and era in which the data and analytics will
constitute the key success of a Company
Data is related to network effect-> the more individuals interact with my platform, the more value I
ca extract
In digital operating models, the learning effect and
the network effect amplify the impact of number of
users on value creation, providing the opportunity to
overwhelm traditional organizations.
Network effects->potential amplification of the value
I provide to my users as the number of the latest
increases (example TripAdvisor)
Data will enable another lever to use for competitive
advantage
BIOMETRIC DATA
BI INTELLIGENCE FORECAST (31 Dec 2013): Google Glass Will Become A Mainstream
Product and Sell Millions By 2016
In 15 January 2015-> google ended sales of google glass
Also, 3D televisions failed
Zalando seemed to not be successful at the beginning-> instead it wasn’t like that
We assume that consumers are able to verbalise their needs and marketers are able to ask the right
questions to customers
The validity of self-reports can be severely compromised by a number of shortcomings:
- Respondents have imperfect memory
- The mere act of asking a question is known to change respondents’ behaviour
- Highly sensitive questions are subject to misinterpretation or outright deception.
We try to solve all these issues by issuing a set of tools that related to neuromarketing
Neuromarketing refers to the application of tools and theories from neuroscience to better
understand consumer decision-making and related processes
We have a neuron physiological phase related to a psychological phase
The umbrella term of ‘neuromarketing’ additionally encompasses other psychophysiological
techniques concerned with data other than brain activity: biometrics (thus, bio marketing)
Biometrics: they study also peripheral neuro system
Impulse purchases are related to emotional stages
What can biosciences do for marketing?
You measure how your brain responds to certain questions
Neuromarketing and bio marketing are growing rapidly as they provide researchers with a chance to
observe consumer responses toward a certain product or service without interfering.
You have measurement in real time and overtime
These techniques can be used to:
1. Detect consumers’ visceral reactions to marketing stimuli -> Neuroscience techniques can
provide information about implicit processes that are typically difficult to verbalize and
devoid of self- reports biases.
Examples includes situations in which the decision maker is unaware of or unable to
articulate why he or she exhibits a specific behavior.
2. Improving predictions of consumer behavior -> Incorporating neural measures into
decision-making models can improve predictions of marketing-relevant behavior
Example: Predicting impulse buying (individual is highly involved)
3. Consumer insight generation and validation
BIOMARKETING
Toolbox->neuroscientist can use:
1. Physiological layer
Cortical and subcortical neural activity
Sympathetic and parasympathetic system (cardiac, respiratory, muscular, skin temperature,
hormonal, pupil dilatation, genetics, electrodermal activity)
2. Behavioural layer (observable behavioural)
Ocular activity, facial expressions, body gestures, vocal spectrum, interface interactions
3. Cognitive layer (self-reports and interviews)-> rationalization of a behaviour
Biomarketing is used to complete other researched methods
1.Detect physiological responses in the cortical system-> FMRI (works on the metabolic and blood
oxygenation) – functional magnetic resonance imagining (high precision, not affordable – too
expensive)
EEG (works on the electrical responses from the cortical system)-electroencephalogram
It only works on the external part of the brain
We can detect where attention, memorisation, engagement and pleasure occur in real time
Mobility of the individual is quite limited in MEG, NIRS and CT
2.Eye tracker
Key points in using biomarketing techniques:
- Integrating tools lead to a deeper understanding of consumer experience
- Traditional marketing methods (survey, focus group, interview) should be still used as they
provide complementary information on consumer evaluations and intentions
- Neuromarketing and biomarketing studies require a expert in different fields (marketing,
medicine, design...) with different background to be conducted and to interpret results to extract
actionable managerial insights
Application fields
Evaluation of new products in terms of usability, effectiveness and required cognitive effort with
the purpose of increasing probabilities of success and fastening the process of adoption.
 Understanding the user experience
 Testing the usability
 Effectiveness of labels
 Emotional impact of packaging
Segment the audience also taking into consideration biometrics data
Work also on the packaging
Support price definition for new products and price promotions for established products
 Testing price modulation
 Understanding reactions to price promotion
 Understanding reactions to promotion display
Evaluate both physical and virtual stores, in terms of retail experience, touchpoints, interactive tools
experience, layout
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Effectiveness of shelf display
Point-of-sale layout
Effectiveness of visual merchandising
Attractiveness of website display
Neuromarketing can help communication activities both in the ex-ante planning phase and in
the phase of ex-post evaluation of communication campaign effectiveness.
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Understanding the impact of an advertisement content in terms of aroused emotions,
memorability, ability to gain attention.
Appraising the level of sensibility of different targets towards the content and the causes of
its effectiveness or ineffectiveness.
Product placement: understanding if it is perceived by the target and in which measure it
causes an answer towards the brand.
Understanding the right context in which place the advertising campaign