In our last blog, we explained the core technology that drives the foresights that Middlegame provides: Competitive Interaction Analysis (CIA)®. During a recent conversation, one of our clients commented that CIA® was a clever way to uncover hidden “intelligence” for assortment, pricing, and merchandising issues. I didn’t want to spill the beans on all this great “spy versus spy” imagery for marketing analytics, but I came clean and told the real story.
The truth of the matter is a little geeky and stems from one of Middlegame heroes that we have highlighted before. In the early seventies, Lee Cooper, Professor Emeritus at UCLA Anderson School of Management, published an algorithmic approach for evaluating competitive marketing effectiveness with his colleague Masao Nakanishi. Their masterpiece was the Multiplicative Competitive Interaction or MCI model. As a tribute to our hero and as we were commercializing his research, Middlegame dropped the M and added an A to the end. The (M)CI model became the CI(A) platform.
The MCI model was revolutionary. Although tools for understanding shopper choice were available to researchers in the fifties and sixties, they were just that … choices. They explained the binary outcome of a yes/no decision to buy among alternatives. In turn, these models required very granular data by shopper and by shopping occasion. It was not always easy to gather data in a timely fashion. On the other hand, the MCI model allowed us to evaluate competitive interaction in any easily obtained sales data. We could quickly explain shopper response to the marketing among products in a given store, or for that store’s marketing, versus all of the competitor stores in the market.
Dr. Cooper’s research on competitive interaction carried on into the nineties, but is best documented in the 1988 book Market-Share Analysis available for free online. As the new millennium approached, his research interests turned to more commercial applications of data-mining for segments and targeting shoppers in e-commerce. The subsequent story he shares of the $310MM earn-out for the startup that he formed is completely fascinating. You can actually hear it firsthand. His commitment to further promoting the entrepreneurial spirit was demonstrated in Project Action and the Venture Development Project that helped the UCLA community research and bring radical innovations to market. He is now and forever a Middlegame hero.
Middlegame is the only ROMI consultancy of its kind that offers a holistic view of the implications of resource allocation and investment in the marketplace. Our approach to scenario-planning differs from other marketing analytics providers by addressing the anticipated outcome for every SKU (your portfolio and your competitors’) in every channel. Similar to the pieces in chess, each stakeholder can now evaluate the trade-offs of potential choices and collectively apply them to create win-win results.