Marketing Case Study: Sparkplace

Decent Essays
1. SparkPlace is a two-year-old software company that manages and measures the effectiveness of marketing campaigns for social media. A software company debates about its strategic focus that should they go after small Sams, medium Marys, or both. The first one is small Sams. The owners them self run their own companies and have less than 20 employees. The sales cost for Sam was less than $1000 for each one and these businesses were eager for the services. The market size shows that a lot more Sams can be targeted as potential customer of about 1.3 million. Each Sams generates 10K profit for their lifetime as customers.
On the other hand, the other one is medium Marys. The purchaser at these places are senior manager, not the owner and have
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SparkPlace is a two-year-old business with a hot new product. This company manages and measures the effectiveness of permission based marketing campaigns. Mr. Dirk Middleson is the Founder and CEO of SparkPlace. He is from sales background. According to him, cold calling and spamming were destroying marketing. Under him, three more employees were working at SparkPlace. They were Josh, Jane Tamsen and Serge.
Josh was taking care of marketing department as he is the “Head of Marketing”. Jane Tamsen, Head of Sales, was taking care of sales department. Vikram and Andrew were working under Jane Tamsen as Sales Director and reporting him. Serge is directly reporting to Dirk and working as a Lead
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One is medium Marys and the other one is small Sams. The small Sams are small in business and have less than 20 employees but the size of potential market is 1.3 million. Sams are easier to bring on board as the sales cost is less than $1,000 and they are eager for the services. Small Sams generates profit of $10K. Sam produces $5 of ROI on each marketing dollar spent.
On the other hand, medium Marys has employees ranging from 20 to 100 and the size of potential market is less than half a million. Marys in contrast were more expensive to acquire as their cost of sales is $5,000 but have more valuable customers due to their stability. Each medium Marys generates profit of $50K. Marys produces $2 of ROI on each marketing dollar spent.

5. In my opinion, I would recommend Sparkplace to target medium Marys rather than small Sams. As mentioned in the article, the medium Marys has more long term value as compared to small Sams. Though Sams has larger volume and are easier and cheaper to acquire but many may churn as soon as they can and this results in a low lifetime value of small Sams. This may explain the reason for little or no competition in this area. Marketing medium Marys are much more profitable than small

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