Data Driven Marketing

Unit 1 – Introduction to Data-Driven Decisions

Unit 1

Data and Technology trends

Data Challenges for businesses

Understanding how companies create

value through data

Building a data-driven strategy

Danone Activity

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In-class exercise

Mixed-up Sentences
(1) Which statements are not true? (2) Anything missing?
Discussion in class

1. Nowadays, the big data challenges that companies are facing relate to the intrinsic characteristics of
the data itself.
2. Diagnostic (or inquisitive) analytics answer or explore the “what” of a specific managerial issue.
3. Predictive analytics are forward-looking analytics to analyze what will be happening in the future
considering the available historical data.
4. With the arrival of big data and big data analytics, managers are neglecting the use of traditional
analytics to make business decisions.
5. In defining big data, most common framework is the Vs framework that consider the following as the
key characteristists of Big data: volume, veracity, velocity and valence.

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Let’s talk about technology and data trends

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In-class discussion

Kicking-off the discussion: strategy and data

After Watching the video “Top Strategic Technology trends for 2021”
Discussion in class

• Looking at the trends described in the video, identify examples of those trends in
specific industries:
– How are they using data (What types of data?)
– How do they create value (To what extent?)
– What are the key challenges they may face?
• Which industries have been more disrupted by data in your opinion?

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 Examples

Talking about data is talking about…

BUT also talking about…

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 Examples

Data and the entertainment industry

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 Examples

Data and the entertainment industry

To know more: is big data killing creativity?

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 Examples

Data and the sport industry

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 Examples

Data and the sport industry: WYSCOUT

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 Examples

Data and the sport industry: WYSCOUT

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 Examples

Data in music and arts

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Unit 1

Data and technology trends

Data Challenges for businesses:

understanding the different types of
analytics

Understanding how companies create

value through data

Building a data-driven strategy

Danone Activity

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 Types of Data
A framework to understand
data and marketing analytics

CRM
Marketing-mix Privacy and security

Analytics and
analytical
methods

Personalization

Implementing data and

analytics in companies
Source: adapted from Wedel and Kannan (2016) 14
Defining analytics

Data analytics is the process of

examining datasets in order to draw
conclusions about the information they
contain, increasingly with the aid of
specialized systems and software.

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Evolution of analytics

Source: Davenport, 2013

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Identifying data and analytics needs

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Types of analytics

DESCRIPTIVE DIAGNOSTIC PREDICTIVE PRESCRIPTIVE

Analytics Analytics Analytics Analytics

Source: adapted from Sivarajah et al. 2017

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Types of analytics
Information

DESCRIPTIVE
Analytics

What
happened in the
Business?

Source: adapted from Sivarajah et al. 2017 19

1/Descriptive Analytics

Links the market to the firm

through information

Aid the manager to make

actionable decisions

Principles for systematically collect

and interpret data that can aid
decision-makers

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Types of analytics
Information Insights

DESCRIPTIVE DIAGNOSTIC
Analytics Analytics

What Why
happened in is something
the Business? happening in the
Business?

Source: adapted from Sivarajah et al. 2017

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2/ Diagnostic (inquisitive) analytics

Diagnostic analytics get into the root

cause

Determining the factors and events that

contributed to the outcome

Data discovery, data mining and

correlational analysis

E.g. Attribute importance, sensitivity

analysis, principal component analysis
and conjoint analysis
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Types of analytics
Information Insights

DESCRIPTIVE DIAGNOSTIC PREDICTIVE

Analytics Analytics Analytics

What Why What is likely

happened in is something To happen in the
the Business? happening in future?
the Business?

Source: adapted from Sivarajah et al. 2017

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3/ Predictive analytics

Using
customer data
to predict what
they will do in
the future

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Types of analytics
Information Insights Decision/Action

DESCRIPTIVE DIAGNOSTIC PREDICTIVE PRESCRIPTIVE

Analytics Analytics Analytics Analytics

What Why What is likely So what? And

happened in is something To happen in the Now what?
the Business? happening in future? What is required
the Business? to do more?

Source: adapted from Sivarajah et al. 2017

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How companies use analytics

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Source: Davenport and Harris, 2007
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Summarizing overview: Data and analytics for marketing decisions
Summary statistics
and test, metrics,
Descriptive
dashboards,
visualization

Analytics: decision value Statistical,

Data: information value

Diagnostic econometrics, and
psychometric models

Prediction models,
Predictive machine learning,
cognitive systems

Structural models or
optimization methods

Prescriptive

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Source: Wedel and Kannan, 2016
Insert: Research types (from descriptive to diagnostic)

Exploratory Descriptive Causal

Reseach Reseach Reseach
(Ambiguous problem) (Aware of problem) (Clearly defined problem)

Our sales are declining…why? What kind of people are buying Will buyers purchase more of
our products? Who buys our our product with a change of our
competitors products? website?

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Insert: Research types (from descriptive to diagnostic)

Exploratory Descriptive Causal

Reseach Reseach Reseach
(Ambiguous problem) (Aware of problem) (Clearly defined problem)

Our sales are declining…why? What kind of people are buying Will buyers purchase more of
our products? Who buys our our product with a change
competitors products? of our website?

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Insert: Research types (from descriptive to diagnostic)

Exploratory Descriptive Causal

Reseach Reseach Reseach
(Ambiguous problem) (Aware of problem) (Clearly defined problem)

Our sales are declining…why? What kind of people are buying Will buyers purchase more of
our products? Who buys our our product with a change
competitors products? of our website?

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Insert: Research types (from descriptive to diagnostic)

Exploratory Descriptive Causal

Reseach Reseach Reseach
(Ambiguous problem) (Aware of problem) (Clearly defined problem)

Our sales are declining…why? What kind of people are buying Will buyers purchase more of
our products? Who buys our our product with a change
competitors products? of our website?

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Insert: Research types (from descriptive to diagnostic) - overview

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 In-class
discussion APPLE is considering the possibility to display music in its
stores.
▪ Managers wonder if the music should have a high (low)
tempo and should be known (original) in order to increase
consumers’ satisfaction and sales.
▪ What is the methodological approach? What are the
techniques they might use?

L’Oréal is considering the possibility to launch a new product

line for men.
▪ Managers wonder if men are interested in “natural beauty
products” and what should be the characteristics of those
products?
▪ What is the methodological approach? What is the technique
they should use?
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Defining data

Information, especially facts or

numbers, collected to be examined
and considered and used to help
decision-making, or
Information in an electronic form that
can be stored and used by a computer

Source: The Cambridge Dictionary

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What is “Big Data”?

Source: 36
Big data is… DATA

Information, especially facts or num

bers, collected to
be examined and considered and
used to help decision-making, or
Information in
an electronic form that can
be stored and used by a computer

Source: The Cambridge Dictionary 37

Big data is… DATA

“Big Data refers to the explosion in the

quantity (and sometimes, quality) of
available and potentially relevant data,
largely the result of recent and
unprecedented advancements in data
recording and storage technology.”

Source: Diebold, 2000. 38

Big Data characteristics: THE 5 Vs

Velocity

Veracity

Variety

Value
Volume

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Source: Marr, 2014
Source: 40
Types of data
Structured data Unstructured data

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Unstructured data and sense-making

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Big Data Analytics vs. Traditional Analytics
Traditional Analytics Big Data Analytics
Focus on Descriptive analytics Predictive analytics
Diagnostic analytics Prescriptive analytics
Data Sets Limited Data sets Large scale data sets
Cleansed data More types of data
Simple models Raw data
Complex data models
Main analysis Causation: what Correlation: new
techniques happened and why? insights, finding data
patterns

Source: own elaboration based on various sources 43

Correlation is not causation!

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 Examples

Beware of Correlation!

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http://www.tylervigen.com/spurious-correlations
 Examples

Beware of Correlation!

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Big Data Challenges

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Source: Sivarajah et al. 2017
Unit 1

Data and technology trends

Data Challenges for businesses

Understanding how companies create

value through data

Building a data-driven strategy

Danone Activity

49
How companies create value through data
3 approaches to value creation

Data as a tool

Data as an industry

Data as a strategy

Source: Mazzei and Noble, 2017 50

How companies create value through data
1/ Data as a tool
• Active collection of data
• Internal development of analytical
capabilities
• Improvements of specific areas like
product development, marketing,
sales, distribution, customer service…

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How companies create value through data
1/ Data as a tool

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Examples

1/ Data as a tool

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How companies create value through data
2/ Data as an industry
Providers of big data products or
services to a broad range of companies.

Intensive in technical knowledge and

the ability to deal with massive
amounts of structured and unstructured
data.

Offer technology and data-as-a-service

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Examples

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How companies create value through data
3/ Data as a strategy
Big data as a driver of
competitive strategy and new
business models.

Ecosystems development
based on the data that they
are able to accumulate.

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 Examples

Data at the core of strategy

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Examples

Data as a strategy: Rolls Royce transformation

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Examples

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Examples

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Examples

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Examples

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How organizations use analytics to gain insights and guide
action?

Top performing organizations

are twice as likely to apply
analytics to different
activities.

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Source: Lavalle et al., 2011
How organizations use analytics to gain insights and guide
action?

The biggest challenges in

adopting analytics are
managerial and cultural.

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Source: Lavalle et al., 2011
How organizations use analytics to gain insights and guide
action?

Visualizing data differently

and creatively will become
increasingly valuable.

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Source: Lavalle et al., 2011
Unit 1

Data and technology trends

Data Challenges for businesses

Understanding how companies create

value through data

Building a data-driven strategy

Danone Activity

66
To sum-up: 3 key aspects to consider…

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1. Choose the right data

Source Data creatively: Getting IT support right

In analyzing the internal data that the Obsolete structures that hinder data
Company already has sourcing, storage and analysis

In addressing the potential of external and Integration of siloes of information

new sources of data (e.g. unstructured
data from Social Media; external,
Managing unstructured data
monitored processes, sensors…)

Need to identify and connect the most

important data
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2. Building models to predict and optimize business outcomes

Simple data mining is not enough Model complexity can be an issue

Huge data sets allows to run statistical test Very complex models might me not practical
to identify patterns, but sense-making of
those correlations is what drives value.
Higher accuracy vs actionable insights

More targeted strategies pay-off: hypothesis-

What’s the least complex model that would
led modeling (e.g. Identifying relevant
improve performance?
factors first)

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3. Transforming the organizational capabilities

Develop business-relevant analytics to put Embed analytics into simple tools

into use
That can be used for the front lines
If big data and analytics are not sync with
day-to-day activities, not useful
Enhance visualization capabilities

Analytics should aid decision-making

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To sum-up: Data to make decisions that matter

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Unit 1

Data and Business strategy

Data Challenges for businesses

Understanding how companies create

value through data

Building a data-driven strategy

Danone Activity

72
 In-class
discussion

Brief DANONE is asking your team to help Brand managers to choose

the relevant research technique to respond to each of the
following research problem.

1) The Brand manager of ACTIMEL wants to know their % of sales

according to the type of stores (supermarket, little stores, etc.) in
Spain.
2) The Brand manager of VITALINEA wants to know its brand’s
positioning towards competing brands according to consumers’
perception of quality and price.
3) The brand manager of KIDS’ YOGHURTS wants to know how the
children from 5 to 7 years old consume those yoghurts in order to
adapt the product to this target.
4) The trade manager dealing with CARREFOUR is wondering if it will
be interesting to spray the smell of yoghurt in the stores. He is
wondering what should be the impact of different flavors (natural,
strawberry or vanilla) on sales.
 In-class
discussion

Brief
You have to write down your proposals addressing the
following aspects:

• Methodological approach (exploratory, descriptive,

causal)?

• Technique to be used (focus group, in-depth interview,

observation, coolhunting, survey, panels, experiment,
neuromarketing)?

• Question to be asked (open / closed questions, projectives,

etc..) or aspects to observe: Propose precisely 3 main
questions/observations to be asked (if relevant).
Additional Sources and Readings

Barton, D., & Court, D. (2012). Making advanced analytics work for
you. Harvard business review, 90(10), 78-83.

Kiron, D., Shockley, R., Kruschwitz, N., Finch, G., & Haydock, M.
(2012). Analytics: The widening divide. MIT Sloan Management
Review, 53(2), 1.

LaValle, S., Lesser, E., Shockley, R., Hopkins, M. S., & Kruschwitz, N.
(2011). Big data, analytics and the path from insights to value. MIT
sloan management review, 52(2), 21.

Mazzei, M. J., & Noble, D. (2017). Big data dreams: A framework for
corporate strategy. Business Horizons, 60(3), 405-414.
Data Driven Marketing

Master in Management