The network effect causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service. Metcalfe's law states that the total value of a good or service that possesses a network effect is roughly proportional to the square of the … Continue reading Network Effects
Decision-trees are an excellent tool to structure, and deal with uncertainty. Decision trees provide a simple and convenient model to compare alternative decision paths, by quantifying the impact of the uncertainties involved. Decision-trees are typically plotted with a horizontal time-scale moving from left to right. Small squares represent decision-nodes, while small circles denote uncertainty-nodes. Connecting … Continue reading Decision Tree
Towards the end of the interview, i.e. after the experiential and case potions, the interviewer will ask if you have any questions for him/ her. This is a great opportunity to demonstrate your knowledge and a keen interest in consulting in general, and the firm in particular. However, before you ask your question, if there … Continue reading How to close the deal
Pricing is an important strategic issue because it is related to product positioning and affects other marketing mix elements. According to McKinsey, companies habitually charge less than they could for new products, especially with revolutionary offers. Underestimating a product©s value can be a costly mistake since the introductory price often fixes its worth in the … Continue reading What is Pricing?
S-T-P refers to the fundamental strategy of Segmentation-Targeting-Positioning. The deadliest sin of marketing is trying to mean all things to all people. Marketers must understand the composition of the market, and exactly who their target customer is. Thereafter, they must position their product, lest (as Sergio Zyman says) the competition does it for them by … Continue reading What is STP?
Being the same as everyone else is useless. But being different is not the same as being better. We can promote a brand's tangible attributes, such as low prices or assorted flavors, or its intangible attributes, such as the image. The interplay is complex, but statistical techniques can help us home in on the appeal … Continue reading McKinsey’s Brand-building Matrix