Big Data, Consumer Analytics, and

the Transformation of Marketing

Saman Khajehzadeh (PhD)

Lecturer in Marketing

Griffith Business School

Introduction

“It's not what you look at that matters, it's what you see”
(Henry David Thoreau)

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The Emergence and Proliferation of Big Data
 For the past few decades, businesses generate more
data than they are able to use or know how to use.
 Big Data: The large volume, velocity, and variety of
primary data available from individual consumers.
 Consumer Analytics: The extraction of hidden insight
about consumer behavior from Big Data and the
exploitation of that insight through advantageous
interpretation in order to guide strategic decisions.
 Failure to benefit from Big Data often derives from its
unique resource requirements.

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Questions

1. When and how does Big Data enable firms to better

create value and gain a sustainable competitive
advantage?

2. What are the specific resource requirements for firms

to take advantage of Big Data to gain a sustainable
competitive advantage?

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Defining Big Data

Volume

Big
Data
Variety Velocity

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Volume
 The Magnitude of the data generated
 Measured in petabytes, exabytes, or zettabytes.
» One petabyte = 20 million traditional filing cabinets
of text
» Walmart create 2.5 petabytes of consumer data
every hour
» Global market for software, hardware, and services
for storing and analyzing Big Data estimated to
double in size every 2 years

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Velocity
 The relentless rapidity of data creation
 Rich, insightful, and current data
 Enables managers to make decisions based on
evidence at a given time.
 Large data sets: e.g., census data
Vs.
 Big Data: data collected by a leading women's clothing
retailer - at any given time:
» How many consumer transactions are occurring
» Which products of merchandise are moving off
store shelves or the retailer's website
» What consumers are posting on social networks
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Variety
 Shift from structured transactional data to unstructured
and semi-structured behavioral data
 Structured data:
» e.g., scanner or sensor data, records, files
 Unstructured data:
» Textual - e.g., blogs and text messages
» Non-textual - e.g., videos, images, and audio
 Semi-structured data: software that bring order to the
unstructured data
» e.g., SGML determines in YouTube videos showing
people using a product, how many could be happy
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Resource-Based Theory (RBT)
 To understand the impact of Big Data on business
activities, and enable firms to better exploit its benefits.

 A firm's resources, both tangible and intangible,

facilitate its performance and competitive advantage
when the resource is:
» Valuable
» Rare
» Imperfectly imitable
» Exploitable

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Competitively Sustainable Resources
 Valuable resource:
» A firm's bottom line is improved or the resource
generates something of value to customers.
 Rare resource:
» One that is not abundant.
 Imperfectly imitable resource:
» Cannot be easily copied.
 Exploitable resource:
» Enables a firm to take advantage of the resource in
a way that others cannot.

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A Resource-Based View of the Impact of Big
Data on Competitive Advantage

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Resources in the Context of Big Data
 Physical Capital:
» Software or a platform to collect, store, and analyze
Big Data in real time and from different sources.
 Human Capital:
» Data scientists and strategists who know how to
capture information from consumer activities, and
manage and extract insights from Big Data.
 Organizational Capital:
» Organizational structure and business processes
that enable the firm to transform insights into action.

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Dynamic Capability vs. Adaptive Capability
 Dynamic Capability: Skills and knowledge within the
organization to respond to changes in the environment
by altering existing resources and creating new value.
» e.g., Southwest Airlines records conversations
between service personnel and consumers to
extract insights using a speech-analytics tool.
 Adaptive Capability: Ability to capture consumer
activities and extract hidden insights to predict market
trend and consumer behaviour.
» Target utilises Big Data to estimate whether a
female shopper is pregnant and her due date,
capturing sales for baby items.
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Incremental vs. Radical Innovation through
Big Data
 Incremental innovation: To improve the
effectiveness of existing marketing activities
» e.g., Google combines a user's location information
and search history to determine whether an ad
displayed on a user's smartphone during a Google
search actually resulted in a store visit
 Radical innovation: To continuously redefine
marketing activities
 e.g., Amazon uses product search and purchase
history to predict when a customer will make a
purchase and ships the product to the nearest hub
before the customer submits the order online.
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Value Creation through Big Data
 Product:
» e.g., Ford captured data from ~4m of its vehicles’
voice recognition system through sensors, leading
to introducing an automatic noise-reduction
technology and repositioning of microphones.
 Pricing: flexible pricing strategy based on changing
consumer demand
» e.g., Major league baseball sets prices based on
integrating data on the rate and timing of ticket
sales, weather, construction around the ball park,
amount of chatter about a game in social media.

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Challenges of Using Big Data Projects
 More than half of Big Data projects are unable to
achieve their goals.
 Conventional database management tools are
inadequate to handle the huge sets of data generated
 Not all firms access all of the required capital
resource(s) - physical, human, organizational
 There may be resistance to change in organizational
culture
 Lack of commitment due to the amount of time
investment required
 A shortage of consumer data scientists
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References
 Erevelles , S., Nobuyuki ,F., Swayne, L. (2016). Big Data consumer analytics and the
transformation of marketing. Journal of Business Research, 69 (2), 897 – 904.
 Leventhal, B., Langdell, S. (2013). Adding value to business applications with embedded
advanced analytics. Journal of Marketing Analytics, 1 (2), 64-70.
 Weinberg, B. D., Davis, L. (2013), Berger, P. D. Perspectives on Big Data. Journal of
Marketing Analytics, 1 (4), 187-201.
 McAfee, A., Brynjolfsson, E. (2012). Big Data: The Management Revolution. Harvard
Business Review, October, 62-69.

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