Subscription vs. Repertoire Markets
Posted by Jeffrey Henning on Tue, Sep 28, 2010
Lena Elias-Bluett, group manager of market analytics with Baxter Healthcare, presented at the AMA MRC on the different research approaches required for subscription vs. repertoire markets. Subscription marketing is about repeat purchasing behaviors and predictability, making it a critical part of most revenue forecasts, “spawning loyalty cards and CRM programs”. With repeat purchase behavior in a repertoire market, on the other hand, customers have a repertoire of products from which to choose. “You’re thirsty. Will it be a hot beverage, or cold? Carbonated, or not carbonated? Caffeinated, or not?”
In subscription markets, the purchasers appear loyal, purchasing with regularity or a pattern. Typical industries include insurance, telecom, banking, utilities, newspapers, magazines, and fitness clubs. The three types of subscription markets are free choice, renewal and tenure.
Here are the top ten signs that you’re competing in a subscription market:
- You’re able to identify customers by name, address or account number. Your customer base is definable.
- Some of your customers are “loyal’ but not by choice.
- As a topic of conversation, your product/service is boring.
- Your product/service is regarded as a commodity or a necessity.
- Your product/service is a “purchase it and forget it” type.
- Your products offer little to no differentiation.
- You can count on one hand your competitors.
- “2-fer” offers are not an option in your business.
- Brand recognition is sometimes a challenge in your industry.
- “You’re interested in this presentation!”
Subscription and repertoire markets differ in key ways:
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Subscription Market
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Repertoire Market
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Purchase Decision
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Covers multiple events
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Decision required at each event
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Decision Makers
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By committee/panel
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Individual users, gate keepers
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Purchase Pattern/Frequency
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Predictable, usually defined
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Less predictable, not defined
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Customer Base
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Static, finite
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Fluid, infinite
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Competitive Set
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Limited number of alternatives
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Robust number of alternatives
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Price
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Contracted, long-term; price insensitive
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Predetermined, set; price sensitive
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Differentiation
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Little differentiation
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Highly differentiated
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The traditional product marketing plan has idea generation, concept testing, market size, positioning, packaging, pricing, communication, awareness attitudes and usage, satisfaction, loyalty. These techniques all vary by the type of market.
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Subscription Market
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Repertoire Market
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Concept Testing
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Decision-makers
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Users
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Involvement
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Typically low involvement, complex concepts
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Relatable, simple concepts
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Purchase Pattern
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Usually required, necessary
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Often non-essential products that are “wanted”
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Market Sizing
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Intent-to-Buy, Conversion rates
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Preference Share
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Price
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Price tolerance, Value justification
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Price elasticity, price sensitivity
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Satisfaction
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Relationship satisfaction
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Product satisfaction
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Loyalty
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Contract renewal, customer retention
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Customer loyalty
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To sum up, subscription and repertoire markets are different markets, with different custonmer behaviors, and different needs, requiring different research techniques.