Ebay’s application of the Marketspace Matrix Change Over time
• Ebay began to utilize more levers, and the additions were focused in two places: the commitment column in the matrix became heavily utilized, as did the community row.
• Ebay did also seek to drive awareness and exploration among new users, but the firm designed the bulk of the new levers added to the matrix to advance users to the commitment stage and keep them there.
Key principles for lever selection within the Marketspace Matrix
Choose Levers to Effect a Change
· Firms must understand the behavioral change they are trying to create.
· After establishing the desired outcome, the optimal levers will be easier to pick.
· E.g. Amazon.com 1-click ordering capability
Determine Which Levers Have the Most Leverage
· Firms must understand which levers are decisive in moving customers from one stage to another.
· While one lever may help generate awareness or exploration, another may prove to be the tipping point from one stage to another.
· E.g.: Offline sale of cosmetics
o Magazine ads generate awareness, but decisive point is at the cosmetic counter. Firms thus need to move customers to the counter since that is the commitment or dissolution point.
Consider Barriers to Advancement
· Need to understand what prevents people from moving from one stage to another.
· The obstacle that stands in the way of advancement should be the target of a lever.
· E.g.Handspring adopted Palm operating system for its devices so that Handspring users could use existing Palm applications (product lever) and was able to compete and build awareness using the price lever.
Consider the Medium’s Effect on Desired Behavior
· To advance from one stage to another, the medium used for the awareness stage may be quite different from the one for the commitment stage.
· E.g.MSN CarPoint – To enable commitment behavior, CarPoint refers customers to local dealers who have the customer’s car of choice, a unique distribution lever.
Level of Involvement Matters
· High-involvement purchases will have different marketing levers than low-involvement purchases.
· To know which lever to use, firms need to understand where the product falls on the involvement spectrum.
· E.g. High-involvement decision is a consumer’s choice of bank.
Understand Consumer Learning Trends
· Firms need to understand how consumers learn about products.
· Often different segments learn in different ways. Elderly customers usually do so through offline channels whereas younger consumers usually do so through the Internet.
· For firms to effectively reach their target customers, they must use marketing levers that are consistent with the preferred learning processes of that particular segment, especially during the awareness and exploration stages.
Credibility of the Channel Matters
· The credibility of the channel matters more than the literal message.
· A message can be ignored when delivered via one medium, but completely absorbed when delivered by another.
· E.g. The Blair Witch Project
o By choosing to initially promote the movie almost exclusively via the Internet, promoters were able to create a hype and anticipation around the movie and its release that would not have been possible through conventional channels.
The Choice of Levers Must be Consistent with Positioning Choice
· The firm’s marketing levers must support the choice of position the firm takes in a certain segment of the market.
· This would mean that certain levers would be ruled out and others will be more attractive.
· E.g. American Express Platinum Card
o Personal invitations are sent to potential members which is consistent with the positioning of prestige, exclusivity and unique services for the frequent spender.
The Medium can be the Message – or the Product
· By choosing the channel, the firm is already making a choice about what it is saying.
· E.g. By advertising in Town and Country, the firm is perceived as targeting an affluent audience with fairly conservative values, even if it sells eggs.
Matrix Design Must be Adaptive
· A firm must be able to adapt its matrix to respond to evaluation of the campaign and changes in the market.
· As levers prove ineffective or extremely effective, resources must be allocated in response to these discoveries.