chapter
13
Designing the Marketspace
Matrix
McGraw-Hill/Irwin
© 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.
Designing the Marketspace Matrix —
Today’s Objectives

Objectives will be to:

Introduce the Marketspace Matrix

Examine the role of the 2Is across all categories of marketing
levers

Review how the marketing levers are used to establish and
maintain customer relationships

Examine the principles and guidelines firms can use when
designing the Marketspace Matrix
Chapter 13: Designing the
Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain
Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion
Chapter 13: Designing the
Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain
Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion
Exhibit 13.1: The Marketspace Matrix
Relationship Stages
Awareness
Exploration
Commitment
Categories of Levers
Product
Price
Communication
Community
Distribution
Branding
Dissolution
Chapter 13: Designing the
Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain
Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion
Exhibit 13.2: The 2Is
Interactivity
Individual
Product
Pricing
Communication
Community
Distribution
Branding
Result
1. More efficient advancing of customers through the relationship stages
2. More possibilities to sustain commitment
Chapter 13: Designing the
Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain
Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion
Exhibit 13.3: Moving Through the
Relationship Stages
Awareness
Exploration/
Expansion
Commitment
Dissolution
Profitable
Uncommitted
Customer
Customers can advance through the stages in several different ways
Exhibit 13.4: The Marketspace Matrix
Relationship Stages
Awareness
Product
Packaging
Exploration / Expansion
Attributes
Customer-specific
Mass
Incremental allocated
Click-through
Post-sales
customized product
Breadth
Price
Dissolution
Customer
care
support
benefits
Experience
of inventory
Upgrades
Customer
enabling community
Functionality
Customer
relationship management
Availability
Customer
care
of complementary products
Targeted
promotions
Future price promotions
Tiered
loyalty programs
Wide variety of pricing plans
Discontinue
Bricks-and-clicks
Justify
prices
Become
Decrease
profit programs
Loyalty
programs
Profit
Terminate
direct marketing
promotions
price discounts
Bundle
promotions
Future
price promotions
Fairness
as a sign of quality
Hi-lo
Subscription
pricing (as a novel approach — group
buying, C2C)
EDLP
EDLP
Dynamic
Dynamic
pricing (group buying, C2C)
Television
Television
Permission
Magazines
Radio
Loyalty
Radio
Newspapers
Customer
Yellow pages
Packaging
Loyalty
Telemarketing
Loyalty
Customer
Billboards
Customer
Online
/ outdoor advertising
billboards (banners / buttons)
Search
pricing promotions
loyalty programs
discount promotions
Targeted
pricing
Prestige
Price
evangelists (affiliate)
Reconfigure
enhancing programs
Volume
Frenzy
Categories of Levers
attributes and features
promotions
Web referral promotions
Web
Communication
Commitment
and features
Fulfillment
engines
Loyalty
programs
E-mail
Links
Viral marketing
E-mail
service
e-mail
Personalized
programs
Interactive
service
programs
Permission
service
marketing with targeted offers
programs
pages
online billboards lending to website
from search lead to website
with information and link to website
Viral marketing
leading to website and / or
download
Website
Serial marketing
Community
Distribution
Outline
community benefits clearly and early on in
the process
Anticipate and readily answer questions and
concerns, quickly establishing a sense of trust
Establish a call for action and further exploration
Makes
community exploration easy through
efficient site structure
Show everyone individual attention (e.g.,
welcoming e-mails, guides for novices, chat
conversations for new members, use of CRM
marketing to tailor site functionality)
Begin the process of equity creation (e.g., member
points and loyalty programs)
Increase
equity building (e.g., through tiered loyalty
programs, increased rewards)
Recognize individuals’ contributions and
participation
Develop members (e.g., through leadership
opportunities, community roles — guides or watchpersons)
Spot
Number
of intermediaries
Degree
of integration
Degree
Elimination
Number
of channels
Number
of channels
of interest
Intermediary
Number
type
of channels
Internal function
Branding
departing friends early and find solutions to
prevent dissolution
Make the “leaving process” fair and efficient
Seek
and listen closely to feedback
Allow the
option of returning
of types
Reduction
of intermediaries
Reduction
of integration
Exhibit 13.6: Lever Selection Process
Objective
Positioning
Current
Relationship
Phase
Lever
Segment
Targeting
Chapter 13: Designing the
Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain
Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion
Exhibit 13.7: Principles for
Marketspace Matrix Design
Which levers
are customers
most
responsive to?
Which levers
are least likely
to generate a
competitive
response?
• Principle 1: Base
the levers on
consumers
behavior.
• Principle 5:
Anticipate your
competitors’
likely responses.
• Principle 2:
Choose levers to
effect change.
• Principle 6: Build
on your firm’s
skills and
resources.
• Principle 3:
Measure the
impact of each
lever.
• Principle 4:
Overcome
barriers to
advancement.
Which levers
work best
together?
Which levers
are consistent
with strategy?
• Principle 7: Look
for interaction
effects.
• Principle 9:
Levers create
the position.
• Principle 8:
Integrate across
levers.
• Principle 10:
Focus on
superior
customer value.
Exhibit 13.8: Amazon’s 1-Click
Ordering Process
Barrier
User in
Exploration/
Expansion
Stage
Places Book
in Shopping
Cart
Has to Enter
Name,
Address,
Credit Card
Commitment
1-click ordering bypasses barrier
Exhibit 13.10: Integration of Levers
Targeted
Segment
Online
Levers
Integrated
Levers
Positioning
and
Message
Offline
Levers
Exhibit 13.11: Functional, Symbolic,
and Hedonic Explained
Functional
Product’s Ability to
Provide Utility
Symbolic
Benefits That Relate to the
Anticipated Reaction of
Other Individuals
Hedonic
Sensual (Taste, Sound,
Sight, Touch) Benefits
Derived From the Product
Exhibit 13.12: Marketspace Matrix for
EBay, 1995
Relationship Stages
Categories of Levers
Awareness
Exploration
Features:
Product
Search,
security, ease
of use
Price
Dynamic
pricing
Communication
Trade
shows
Website
Viral
marketing
Community
Communicate
benefits
Establish call
to action
Easy
to
explore
Build user
equity
Distribution
Branding
Commitment
Facilitate
P2P
community
Dissolution
Exhibit 13.13: Marketspace Matrix for
EBay, 1998–1999
Relationship Stages
Awareness
Categories of Levers
Product
Exploration
Features:
search,
security, ease of use
Complementary
Products: Escrow,
Insurance
Price
Dynamic
Communication
Trade
Shows
Website
Trade
Publication Ads
User
Radio
Advertisements
Banners
Viral
Marketing
Enable
Community
Dissolution
Customer
Care
Customer Care
Customer-Specified
Attributes
Upgrades
Tiered
Loyalty
Programs
Pricing
AOL
Commitment
Personalized
Pages
Notifications
Publicity / Promotion
Community
Communicate
benefits
early
Establish
Action
Call to
Make
Community
Exploration Easy
Equity
Building
Show
Recognize
Begin
Develop
Everyone
Individual Attention
the Process of
Equity Creation
Distribution
Increase
Number
of Channels
Branding
Individual’s
Contributions
Members
Make
Leaving Process
Fair and Efficient
Exhibit 13.14: Marketspace Matrix for
EBay, 2000–Present
Relationship Stages
Awareness
search,
security, ease of use
Product
Categories of Levers
Exploration
Features:
Facilitate
New
Customer
Auction
categories
Complementary
Products: Escrow,
Insurance, Billpoint
Price
Dynamic
Pricing
to
Encourage New
Product Adoption
Communication
Buy
It Now!
Promotions
Promotions
Trade
Shows
Website
Trade
Publication Ads
User
Radio
Advertisements
Television
AOL
Commitment
Dissolution
P2P
Community
Care
Customer-specified
Attributes
Upgrades
Tiered
Loyalty Programs
to
encourage trial
Personalized
Pages
Notifications
Ads
Banners
Viral Marketing
Publicity
/ Promotion
Television
Community
Outline
Ads
Benefits Early
Establish
Call to Action
Make
Community
Exploration Easy
Show
Everyone
Individual Attention
Begin
the Process of
Equity Creation
Distribution
Number
of Channels
Branding
Increase
Equity Building
Recognize
Individual’s
Contributions
Develop
Members
Make
Leaving Process
Fair and Efficient
Chapter 13: Designing the
Marketspace Matrix

The Marketspace Matrix

Role of the 2Is Across All Categories of Marketing Levers

How Marketing Levers Are Used to Establish and Maintain
Customer Relationships

Principles and Guidelines for Matrix Design

Conclusion
Designing the Marketspace Matrix —
Conclusion

The Marketspace matrix is intended to help firms build a marketing plan within
the context of moving customers through the relationship stages.

The 2Is allow firms to choose levers that can move customers through the
relationship stages faster and more effectively than ever. Also, the 2Is offer
firms new and improved possibilities to maintain commitment.

The 10 principles of matrix design can help marketing managers select and
implement appropriate levers. The principles span four categories:

Which levers are customers most responsive to?

Which levers are least likely to generate a competitive response?

Which levers work best together?

Which levers are consistent with strategy?