Accepted Manuscript

Demystifying big data analytics for business intelligence through

the lens of marketing mix

Shaokun Fan, Raymond Lau, J. Leon Zhao

PII: S2214-5796(15)00015-5
DOI: http://dx.doi.org/10.1016/j.bdr.2015.02.006
Reference: BDR 21

To appear in: Big Data Research

Received date: 8 November 2014

Revised date: 12 February 2015
Accepted date: 12 February 2015

Please cite this article in press as: S. Fan et al., Demystifying big data analytics for business intelligence
through the lens of marketing mix, Big Data Research (2015), http://dx.doi.org/10.1016/j.bdr.2015.02.006

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 Demystifying Big Data Analytics for Business
Intelligence through the Lens of Marketing Mix

Shaokun Fan, sfan@wtamu.edu

College of Business, West Texas A&M University, Canyon, USA,

Raymond Lau, raylau@cityu.edu.hk

Department of Information Systems, City University of Hong Kong

J. Leon Zhao, jlzhao@cityu.edu.hk

Department of Information Systems, City University of Hong Kong

 Abstract

Big data analytics have been embraced as a disruptive technology that will

reshape business intelligence, which is a domain that relies on data analytics

to gain business insights for better decision-making. Rooted in the recent

literature, we investigate the landscape of big data analytics through the lens

of a marketing mix framework in this paper. We identify the data sources,

methods, and applications related to five important marketing perspectives,

namely people, product, place, price, and promotion, that lay the foundation

for marketing intelligence. We then discuss several challenging research

issues and future directions of research in big data analytics and marketing

related business intelligence in general.

Keywords: Big data analytics, Business intelligence, Marketing intelligence,

Marketing mix, Survey versus Log data

1. Introduction

Recent technological revolutions such as social media enable us to generate data

much faster than ever before (McAfee et al. 2012). The notion of big data and its

application in business intelligence have attracted enormous attention in recent years

because of its great potential in generating business impacts (Chen et al. 2012). “Big

1
Data” is defined as “the amount of data just beyond technology’s capability to store,

manage and process efficiently” (Kaisler et al. 2013). Big data can be characterized

along three important dimensions, namely volume, velocity, and variety (Zikopoulos

et al. 2011).

In marketing intelligence, which emphasizes the marketing-related aspects of business

intelligence, data relevant to a company’s markets is collected and processed into

insights that support decision-making (Hedin et al. 2014). Marketing intelligence has

traditionally relied on market surveys to understand consumer behavior and improve

product design. For example, companies use consumer satisfaction surveys to study

customer attitudes. With big data analytic technologies, key factors for strategic

marketing decisions, such as customer opinions toward a product, service, or

company, can be automatically monitored by mining social media data (Tan et al.

2013).

However, while accessibility to big data creates unprecedented opportunities for

marketing intelligence, it also brings challenges to practitioners and researchers. Big

data analytics is mainly concerned with three types of challenges: storage,

management, and processing (Kaisler et al. 2013). For typical marketing intelligence

tasks such as customer opinion mining, companies nowadays have many different

ways (social media data, transactional data, survey data, sensor network data, etc.) to

collect data from a variety of information sources. Based on the characteristics of

collected data, different methods can be applied to discover marketing intelligence.

2
Analysis models developed based on a single data source may only provide limited

insights, leading to potentially biased business decisions. On the other hand,

integrating heterogeneous information from different sources provides a holistic view

of the domain and generates more accurate marketing intelligence. Unfortunately,

integrating big data from multiple sources to generate marketing intelligence is not a

trivial task. This prompts exploration of new methods, applications, and frameworks

for effective big data management in the context of marketing intelligence.

We investigate different perspectives of marketing intelligence and propose a

framework to manage big data in this context. We first identify popular data sources

for marketing intelligence perspectives. Then, we summarize the methods that are

suitable for different data sources and marketing perspectives. Finally, we give

examples of applications in different perspectives. The proposed framework provides

guidelines for companies to select appropriate data sources and methods for managing

vital marketing intelligence to meet their strategic goals.

2. A Big Data Management Framework

The marketing mix framework is a well-known framework that identifies the principal

components of marketing decisions, and it has dominated marketing thought,

research, and practice (Brassington et al. 2005). Borden (1964) has been recognized

as the first to use the term “marketing mix” and he proposed a set of 12 elements.

McCarthy (1964) regrouped Borden’s 12 elements to four elements or 4Ps, namely

product, price, promotion, and place. The 4P model has been considered to be most
3
relevant for consumer marketing. However, it has been criticized as being a

production-oriented definition of marketing, and researchers proposed a fifth P

(people)(Goi 2009). We adopt the 5P model of the marketing mix framework in this

paper because these perspectives play critical roles in developing successful

marketing strategies in the information age.

4
 People Product Promotion Price Place
• Demographics • Product • Promotional • Transactional • Location-based
• Social Networks Characteristics Data Data social networks
• Customer Review • Product Category • Survey Data • Survey Data • Survey Data
Data • Click Stream • Customer Review
• Survey Data • Survey Data

• Clustering • Association • Regression • Regression • Regression

• Classification • Clustering • Association • Association • Classification
Method •
• Topic Modeling • Collaborative
Filtering

• Customer • Product Ontology • Promotional • Pricing Strategy • Location-based

Application Segmentation • Product Marketing Analysis Advertising
• Customer Reputation Analysis • Competitor • Community
Profiling • Recommender Analysis Dynamic Analysis
•
Systems

Figure 1. A Marketing Mix Framework for Big Data Management

5
In this paper, we propose a marketing mix framework to manage big data for marketing

intelligence. This model classifies the research in marketing intelligence into five perspectives

according to the marketing mix framework. Further, we identify common data, methods, and

applications in each perspective and highlight the dominating big data characteristic with respect

to each perspective. This framework provides guidelines for marketing decision-making based

on big data analytics. Figure 1 is an overview of the proposed big data management framework

for marketing intelligence. First, data from various sources are retrieved and utilized to generate

vital marketing intelligence. Second, a variety of analytics methods are applied to convert raw

big data to actionable marketing knowledge (intelligence). Finally, both data and methods are

combined to support marketing applications with respect to each perspective of the marketing

mix model.

Data

Researchers use various methods to collect data, such as surveys, interviews, focus groups,

observations, and archives (Axinn et al. 2006). Note that data collection methods are different

from research methods. For example, experiments are a widely used research method in

marketing, but researchers rely on surveys, observations, or interviews to collect experimental

data (Luo et al. 2013). Surveys and logs are the two most common methods to acquire data for

business intelligence (Kaptein et al. 2013). A survey is defined as “collecting information in an

organized and methodical manner about characteristics of interest from some or all units of a

population using well-defined concepts, methods and procedures, and compiles such information

into a useful summary form”(Canada 2010). Firms use surveys to collect data for various

purposes, such as understanding customers’ preferences and behaviors. For example, Apple has

sent surveys tocustomers who recently purchased an iPhone to gain feedback about their
6
purchase and their experience with the product (Etherington 2014). Log data is generated by

information systems that capture transactional records and user behavior (Jacobs 2009). For

example, Walmart has started to explore analyzing social media data to gain customer opinions

about the company or a particular product(Brown 2012). Log data and survey data can be

different in terms of size, quality, frequency, objectives, contents, and processing techniques

(Zhao et al. 2014). The two data collection methods complement each other in various business

contexts. Surveys can be useful when we want to collect data on phenomena that cannot be

directly observed. Log data are preferred when real-time conclusions about users’ actual

behavior are required. The two methods can be combined when we want to study the relationship

between user intention and user behavior. There are advantages and disadvantages to both

methods, and we believe big data management should take both methods into consideration.

Methods

Marketing intelligence refers to developing insights from data for marketing decision-making.

Data mining techniques can help to accomplish such a goal by extracting ordetecting patterns or

forecasting customer behavior fromlarge databases. According to the data mining literature,

common data mining methods include association mining, classification, clustering, and

regression (Ngai et al. 2009). We need to select appropriate data mining methods based on the

datacharacteristics and business problems (Liao et al. 2012).

Applications

Customer segmentation and customer profiling: For effective marketing, it is essential to

identify a specific group of customers who share similar preferences and respond to a specific

marketing signal. Customer segmentation applications can help identify different communities

7
(segments) of customers who may share similar interests. Kim et al. (Kim et al. 2006) proposed

clustering customer groups with respect to lifecycle characteristics. Usually, various clustering

and classification techniques are applied to customer segmentation and user profiling. However,

customer segmentation is becoming increasingly challenging under a big data environment. For

instance, to differentiate among customer groupsfor telecommunication applications, it is

necessary to analyze their call data apart from their demographics (Abbaso÷lu et al. 2013). The

volume of call data is huge (e.g., the communication time between each pair of customers on

each day), and a variety of data should be taken into account (e.g., both qualitative demographic

data and quantitative call records). In fact, for the most fine-grained targeted marketing (e.g.,

one-to-one marketing), we are not talking about identifying groups of similar customers, but the

“profiling” of each individual customer such that the most suitable products/services are

marketed to the most appropriate individual given a steam of customer service consumption data

generated in real-time (Abbaso÷lu et al. 2013).

Product ontology and product reputation management: To alleviate the shortcoming of

retrieving limited product reputation via survey data, Morinaga et al. (2002) developed an

automatic framework to monitor the reputation of a variety of products by mining Web contents.

Clustering and association mining techniques are among the most common methods employed to

support reputation management applications. More recently, Di et al.(2014) proposed a

reputation management method which not only mines text-based reputation data from the Web

but also considers the graphical images of products posted to the Web. Nevertheless, by the time

of this writing, twenty billion images have been uploaded to Instagram.1 Given such an

extraordinary size of images archived online, it is extremely challenging to analyze the sheer

1http://instagram.com/press/#

8
volume of images for product reputation management, not to mention the variety of formats of

source data (e.g., text versus images). To carry out an automatic analysis of the textual comments

posted to the Web for product reputation management, it is essential to develop a rich

computer-based representation of product information for subsequent product reputation analysis.

Recently, an automated product ontology mining method that is underpinned by latent topic

modeling has been explored to build product ontologies based on textual descriptions of products

extracted from online social media (Lau et al. 2014). The automatically constructed product

ontologies can be used as the basis to support product reputation management applications and

other marketing intelligence applications. However, given the computational complexities

involved in automated product ontology extraction from online social media, new computational

methods must be developed to cope with the volume, velocity, and variety issues of big social

media data.

Promotional marketing analysis and recommender systems: In the increasingly competitive

business environment, billions of dollars are spent on promotions each year (Srinivasan et al.

2004). Thus, promotional marketing analysis has attracted a lot of attention from practitioners

and researchers. Effective promotional strategies are one of the key success factors for

companies to increase their sales and revenue (Bell et al. 1999). Promotional data usually

includes information about promotion types (price cut or coupons), promotion time, and

purchase records during the promotional period. Early work related to promotional marketing

analysis mostly focused on analyzing how different types of customers respond to different

promotional strategies or how different categories of products affect the effectiveness of

promotional strategies(Pauwels et al. 2002). Most existing work uses regression methods to

study promotions in different contexts (Bell et al. 1999).

9
In the big data environment, more log data becomes/is available for promotion analysis. A recent

work studied WOM derived from both customer reviews and promotions (Lu et al. 2013). The

authors found a substitute relationship between the WOM volume and coupon offerings, but a

complementary relationship between WOM volume and keyword advertising. Promotional

marketing analysis can also include factors from other perspectives, such as price and place. For

example, enabled by mobile technologies and location-based services, companies can use

customers’ location information to improve their promotion strategy and select targeted

customers.

To improve product awareness and promote products to potential customers, recommender

systems have been widely used in the e-commerce context (Dias et al. 2008). User rating-based

collaborative filtering methods or content-based association mining methods are commonly

applied to develop recommender systems. However, existing methods may not scale up to big

data. For instance, given N user ratings, the general computational complexity of a collaborative

filtering method is N2(Cai et al. 2014). Therefore, it is quite challenging to scale up existing

recommender systems to cope with big data (e.g., N = tens of millions) and generate appropriate

recommendations to potential customers in real-time as expected in e-commerce settings. This is

the reason why “velocity” is one of the most challenging issues for the “promotion” perspective

in the context of marketing intelligence.

Pricing strategy and competitor analysis:There has been much research on what pricing

strategies managers should follow under various situations. Traditionally, empirical research on

pricing strategies uses survey data and regression methods. For example, researchers used a

national mail survey to study the determinants of pricing strategies (Noble et al. 1999). They

found different pricing strategies are preferred under different marketing situations. The growth
10
of e-commerce has made price information available on websites and researchers started using

log data to study pricing strategy in e-commerce websites. For example, a recent study uses a

method to estimate demand levels from sales rank and derive demand elasticity, variable costs,

and the optimality of pricing choicesdirectly from publicly available e-commerce data (Ghose et

al. 2006). Based on the data derived from various log data sources, they can study the

optimality of price discrimination. While regression methods are widely used for price prediction

applications, association mining methods are applied to competitor analysis applications. An

automated competitor analysis application does not simply identify the potential competitors of a

company; it also effectively discovers the potentially competitive products and the product

contexts (Bao et al. 2008). This type of application has proven useful to facilitate the “price”

aspect of the marketing mix model. However, the sheer volume of product pricing information

on the Web has also posed new challenges to scale up existing applications with big data.

Location-based advertising and community dynamic analysis: Place is also an important

dimension in marketing analysis. Research on place-based marketing focuses on the impact of

places on marketing strategies. For example, researchers used a survey to collect customer data

and study different levels of place-based marketing in the form of region of origin strategies used

by wineries in their branding efforts(Bruwer et al. 2010).

With the widespread use of mobile technology, location-based services (LBS) can provide users

personalized information in a specific location at a specific time. Location-based advertising has

been proposed as an efficient marketing strategy (Dhar et al. 2011; Luo et al. 2013). Location is

one of the most important solutions to meet consumers’ need and it is a valuable source for

personalized marketing information. In location-based advertising, customers can get timely

advertisements or product recommendations based on their current position or predicted future

11
position. Location-based advertising provides a new tool for companies to attract more

customers and enhance brand value. One challenge for location-based advertisingis how to

accurately predict customers’ locations. Both spatial and temporal data should be taken into

consideration (temporal moving pattern mining for location-based service). We need to process a

large volume of spatial and temporal data within a short time period before customers move to

new locations. Thus, the “velocity” issue of big data is also one of the most challenging aspects

for location-based advertising.

Researchers explored the log data in location-based social networks to uncover user profiles;

these automatically discovered user profiles have the potential to be subsequently applied to

location-based targeted marketing (Vasconcelos et al. 2012). Regression and classification

methods are often utilized for location-based marketing applications. In another study, Castro et

al. (2013) leverage the GPS traces of individuals to uncover the location-based dynamics of

different communities. Through analyzing the dynamics of local communities, it is possible to

predict their changing product/service preferences. As a result, effective marketing strategies can

be developed with respect to both the place and time dynamics of a group of customers.

Nevertheless, this type of application needs to deal with both the “variety” and “velocity” issues

of big data. For instance, both the relational data among users in location-based social networks

and GPS signals need to be analyzed to uncover the location-based dynamics of a local

community. In addition, since individuals may constantly move around different places,

location-based marketing applications must be able to respond quickly in order to maintain the

location sensitivity with respect to the constantly moving customers.

3. Future Research Directions

12
We propose to use a marketing mix framework for guiding research in big data management for

marketing intelligence. We identify the data sources, methods, and applications in different

marketing perspectives. We further discuss the challenging issues related to big data

management in the context of various marketing perspectives. Based on the framework, we

highlight future research directions in big data management.

1. How to select appropriate data sources for particular goals. The amount of available data

is increasing. Current techniques do not allow us to process all data available in a timely

manner. Thus, data selection is a critical decision for managing marketing intelligence.

How to select data that can provide the most value to business decision-making requires

future research on the alignment between data and marketing intelligence goals.

2. How to select appropriate data analysis methods. There are many types of methods that

can be used to process data. Given a particular data set, many methods may be applicable.

Regression and classification are usually used for prediction, while clustering and

association rule mining are used for description. Further, big data brings issues such as

imbalanced data distribution and large number of variables, which cannot be efficiently

handled by existing data mining methods. We need to improve existing methods to

increase the efficiency and accuracy.

3. How to integrate different data sources to study complicated marketing problems. Most

existing studies use data from one single data source. However, some complicated

business problems require combining data from different sources. For example, in order

to study the impact of social media behavior on purchase behavior, we may need to

combine social media data and transaction records.

13
 4. When using different data sources to study the same marketing problem, how to deal with

the heterogeneity among data sources. For example, both customer reviews and social

media data can be used to study customer opinions toward a company or a product.

However, data collection and analysis methods may be different due to different

structure, quality, granularity, and objectivity. Further, survey data and log data can also

be used to study the same marketing problem. How to conduct surveys in social media

and confirm the survey result with log data in social media will become an important

topic in e-commerce research and applications.

5. How to balance investments in marketing intelligence techniques. Big data-enabled

marketing intelligence will become a competitive source for consumer behavior and

product planning; therefore all companies must invest in big data infrastructure including

data scientists and big data platforms.

6. Data of a variety of formats and qualities will continue to grow and be digitized. Even

though peta-scale data (e.g., petabytes of customer records) may be considered big data

now, the same volume of data may not be considered big in a few years. It is important to

continuously refine the framework, methods, and techniques that we discuss in this paper

in order to meet the challenges for more advanced business intelligence in the next

generation of big data management.

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