Designing a Marketspace Matrix
1. What is a buyer-seller relationship? How can it vary?
• A relationship is a bond or connection between the firm and its customers.
• This may be strong, weak or nonexistent.
• It can be based on logic or emotion
• Buyer-seller relationships are based on exchange, where each party expects, or perhaps even demands value for what is given (i.e. money for products).
• Customers who have a relationship with the firm tend to feel good about remaining loyal, are not as likely to seek out competitive offerings, actively promote the firm to others and are willing to pay higher prices.
• Over time, some customers will cease to be profitable and firms should take steps to dissolve the unprofitable relationships.
2. Why is integrated lever selection important in a marketing plan?
o The 2Is allow firms to choose levers that can move customers through the relationship phases faster and more effectively than ever possible.
o The 2Is affect each category of levers differently, but the end results remain consistent across all levers.
o Product, Pricing, Communications, Community and Distribution.
• The potential of the 2Is demands that firms leverage the 2Is across the matrix design as much as possible in order to advance customers to the commitment stage.
• Product – Individualization of user pages (Yahoo!) sustains commitment and increases switching costs. Individualization also spurs users to move from awareness to exploration.
• Pricing – Targeted price promotions, which can be both individualize and interactive in the form of a permission email, can advance users from exploration/ expansion to commitment by giving them a price incentive to make the purchase.
• Communications – Interactive targeted banner ads are a classic example of the 2Is influence on communications levers. Banner ads can be targeted at particular segments, and the interactivity of a banner ad allows a user to move from awareness to exploration just by clicking on it.
• Community – In the case of eBay, the strong vibrant community sustains buyers’ commitment by ensuring a constant supply of a wide range of goods. In turn, the large number of shoppers benefits sellers by driving up auction prices.
• Distribution – Interactivity allows for tight linkages between suppliers and buyers, which can facilitate a collaborative relationship that results in benefits in logistics, inventory planning and responsiveness, especially just-in-time production.