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Marketing Research
Aaker, Kumar, Leone and Day
Twelfth Edition
Instructor’s Presentation Slides
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Chapter Twenty-five
New Age Strategies
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Marketing Research 12th Edition
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The Need for Databases
To test a program prior to rolling it out:
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Define your target group
Go into your database
Create a matched set
Expose the test variable
Minimize other marketing efforts while the test is going on
Allow test program enough time to work
Measure results by comparing the two groups’ sales
Take action. If test results warrant going ahead, then
Implement it
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Elements of a Database
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• A unique identifier such as
an ID or match code
• Name and title of individual
and/or organization
• Mailing address, including
ZIP Code
• Telephone number
• Source of order, inquiry, or
referral
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• Date and Purchase details of
first transaction
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• Recency/frequency/monetary
transaction history
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• Relevant demographic data for
consumer buyers
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• Credit history and rating
• Relevant organizational data
for industrial buyers
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Ways to Gather Consumer Data
• Rebate Cards
• Suggestion Cards
• Warranty Registration Cards
• Free Subscription Offer Cards
• Directly Ask Consumers
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Ways to Gather Consumer Data (Cont.)
Guerilla Tactics
• Get the product right
• Use low-tech targeting and creative thinking
• Use other people’s data (OPD) first
• Buy new media
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Types of Databases
• Active customers
• Inactive customers
• Inquiries
Modeling customers serves to:
▫ Identify most typical customers and so become more effective in
prospecting.
▫ Identify best customers to prospect
▫ Identify niche markets to add to the marketing universe.
▫ Develop more effective marketing tools (materials and media).
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Benefits of Database Marketing
▫ Customers are easier to retain than acquire
▫ Determine their “lifetime value” to decide whether or not to encourage
greater lifetime duration
▫ Develop relationships with customers across a family of related
products and services
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E-Commerce
• E-commerce influence
▫ The impact of the ‘Net on purchases made entirely offline’
• E-commerce ordering
▫ Captures the orders that are placed on-line but paid for
later via telephone or in-store
• E-commerce buying
▫ Combines ordering and paying on-line
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E-Commerce (Contd.)
2011 Holiday Season to Date vs. Corresponding Days* in 2010
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E-Commerce (Contd.)
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E-Commerce (Contd.)
• Retailer responses to e-commerce are:
▫ Selective price discounts
▫ Concentrating attention on late adopters of technology
▫ Creating and staging experiences
▫ Partially adapting the Internet into a hybrid system
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Future of E-Commerce
• E-commerce will represent 8 percent of total U.S. retail sales in
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2014.
Travel will remain the largest online retail category, growing from
$98 billion in 2009 to $144.7 billion in 2015.
General merchandise (all retail categories excluding auto, food
and beverage, and travel) will top $250 billion by 2014.
An increase in the number of women shoppers will contribute to
14 percent of jewelry sales moving online by 2010. Online sales of
health and beauty products will grow at an annual rate of 22
percent.
Twenty-nine percent of small appliance sales will migrate online
by the end of the decade as a generation that grew up with
Internet access begins to get married and attend weddings.
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Mobile Marketing
• Mobile marketing is an important application that is
poised to emerge as a medium that offers a quantifiable
reach, rich experience as well as targeted marketing
opportunities
Advantages of Mobile Marketing
Wide presence
Interaction
Impact
Communication features
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Mobile Marketing (Contd.)
• Mobile marketing is being implemented as an
innovative way to extract maximum revenue
from each customer
• Direct and Indirect values are measured by the
following indicators:
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Customer Lifetime Value (CLV)
Customer Referral Value (CRV)
Customer Influence Value (CIV)
Customer Knowledge Value (CKV)
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Mobile Marketing (Contd.)
Potential development areas of mobile marketing research are:
Enhancing Customer Knowledge Value (CKV).
Enhancing Customer Referral Value (CRV) and Customer
Influence Value (CIV).
Enhancing Customer Engagement Value (CEV).
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Social Marketing
• The numbers of online social networks and
blogs are expanding at a feverish pace,
attracting consumers from a wide range of
demographic segments
• Some of the popular social media channels:
1. Blogs
2. Social networks: such as Facebook, Myspace,
LinkedIn.
3. Content Communities: such as Youtube, Google
Video (video sharing), or Flickr (photo sharing).
4. Social Coupons: such as Groupon and Living Social
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Social Marketing (Contd.)
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Experiential Marketing
• Experiential marketing connects customers and
brands in encounters designed to turn
consumers into advocates.
• While experiential marketing may sound
synonymous with word-of-mouth and event
marketing, in reality it is narrowly defined and
aimed at niche audiences, generating a higher
return on the investment.
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Relationship Marketing
Keys to Relationship Marketing:
• Identify and build marketing databases of
present and potential purchasers.
• Deliver differentiated messages to
targeted households.
• Track the relationship to make media
expenditures more effective and more
measurable.
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Metrics to Manage Customer Loyalty
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Developments in Relationship Marketing
• Customer lifetime value (CLV)
▫ Calculated as the sum of cumulated cash flows —
discounted using the Weighted Average Cost of
Capital (WACC) or discount rate — of a customer
over his or her entire lifetime with the company
• Customer equity (CE)
▫ The total of the discounted lifetime values summed
over all of firm’s current and potential customers
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Customer Lifetime Value
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Developments in Relationship Marketing
(Contd.)
• Aggregate-level approach
▫ CE framework can be used to:
 Formulate firm/segment level strategies concerning
investments in acquisition, retention, and add-on
selling.
 As a surrogate measure of the market worth of most
firms and for comparing competing firms.
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Developments in Relationship Marketing
(Contd.)
• Disaggregate-level approach
▫ CLVs of each customer can help to formulate customerspecific marketing strategies for:
 Customer selection
 Customer segmentation
 Optimal resource allocation
 Purchase sequence analysis
 Targeting profitable prospects based on CLV
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Word‐of‐Mouth Marketing
The art and science of building active, mutually beneficial consumer‐to‐consumer
and consumer-to‐marketer communications
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Customer intelligence framework
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Customer DNA Model
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Customer DNA model.
SOURCE: http://www.gfk.com/
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Customer Analysis
• Customer acquisition
• Customer cross-sell
• Customer up-sell
• Customer retention
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End of Chapter Twenty Five
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Marketing Research 12th Edition