**Definition and Importance of Marketing Analytics** **What is Marketing** Myth 1. Marketing is Advertising. "Marketing is to communicate with customers" Myth 2. Marketing is sales. "Marketing is to build relationship in the long-term" Myth 3. Marketing is cost. "Marketing is investment" "**Marketing** is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large" (AMA). "**Marketing** is satisfying needs and wants through an exchange process." (Philip Kotler) ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image1.png]] "**Marketing** is to know and understand the customer..." (Peter Drucker) **"Marketing is to create value through customer acquisition and retention"**. **What is Marketing Analytics?** ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image2.png]] **"Marketing Analytics"** is a technology-enabled and model-supported approach to harness customer and market data to **enhance marketing decision making**. - Lilien, Gary L. (2011), Journal of Marketing. **Marketing analytics** is defined as the **methods for measuring, analyzing, predicting, and managing marketing performance** with the purpose of maximizing effectiveness and return on investment (ROI)" - Wedel and Kannan 2016). ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image3.png]] **Background of Marketing Analytics** ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image4.png]] It is **interdisciplinary**: The nexus of marketing and other areas of business, mathematics, statistics, economics, econometrics, psychology, psychometrics, and computer science. **Why Marketing Analytics?** Because we need to understand consumers better: - Consumer preference changes faster than ever. - Consumers get more sophisticated. - Consumers are often skeptical about marketing. Because we need to understand competitors too: - There is not only a firm in markets. - Competitors react. - How do a firm respond to this? - How do customer respond to this? - **Marketing Accountability** - "It's a noisy laboratory in which a marketing leader is going to try to make the connection between an action and an outcome". - "Marketers do face challenges including proving the effectiveness of their work, which is complicated because customers, competitors, and large forces continually change." Because we can: - Data Explosion - Volume - Velocity - Variety - Enhanced computing power - New and improved techniques - For gathering data - For analyzing data **Marketing Analytics Provides...** ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image5.png]] **Timeline of Marketing Data and Analytics** ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image6.png]] **Current trends in traditional offline retail** - Sensors capture all activities in front of a shelf. - The following actions are registered: - Touch - Pick-Up - Return ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image8.png]] **Types of Marketing Metrics** ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image9.png]] |![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image10.png]] | ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image11.png]] | |---|---| **Types of Data and Data Collection** |![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image13.png]] | ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image12.png]] | |---|---| The difference between **Primary** and **Secondary data** is whether the researchers have clear research objectives for that data or not, which means having collected the data explicitly for that purpose. **Process for Marketing Analytics** **The Research Process** | ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image15.png]] | ![[Bocconi/Bocconi - Marketing Analytics/Images - Bocconi Marketing Analytics/image14.png]] | |---|---| **Ethical Issues in Marketing Analytics** - 50% of consumers believe online advertisers (e.g., websites) do not comply with privacy laws. More than 75% of consumers think: firms have more information about them than they are comfortable with. - What would be the consequence? How does the ethical concern affect marketing analytics? There will be increased emphasis on **data minimization** and **anonymization**. - **Data minimization** is the process of limiting the type and amount of data firms collect. - Less individual data may be available for marketing analytics. - We need methods and models to **protect data security and privacy** and **maximize personalized marketing opportunities**.