Databases and Marketing
Customer databases
Data Warehouses
Database Mining
Customer experience management (CEM) is the collection of processes a company
uses to track, oversee and organize every interaction between a customer and the
organization throughout the customer lifecycle.
The goal of CEM is to optimize interactions from the customer's perspective and, as a
result, foster customer loyalty.
Why Customer Experience Management Is Important
Strengthen brand preference.
•Boost revenue.
•Improve customer loyalty.
•Lower costs by reducing customer churn.
Challenges
•Creating consistent brand experiences across channels.
•Consolidating data into a single view of the customer
•Create and maintain complete customer profiles.
•Personalize all customer interactions.
•Get the right information to the right place at the right time – every
time
Data Marts and Data
Warehouse
Data Mining
What is data mining?
– Methods for finding interesting structure in
large databases
• E.g. patterns, prediction rules, unusual cases
– Focus on efficient, scalable algorithms
• Contrasts with emphasis on correct inference in
statistics
– Related to data warehousing, machine
learning
DM Process Model
Where Does Data Mining Fit In?
Hindsight
Analysis and
Reporting (OLAP)
Foresight
Statistical
Modeling
Insight
Data
Mining
9
Common Data Mining Techniques
• Predictive modeling
– Classification
• Derive classification rules
• Decision trees
– Numeric prediction
• Regression trees, model trees
• Association rules
• Meta-learning methods
– Cross-validation, bagging, boosting
• Other data mining methods include:
– artificial neural networks, genetic algorithms, density estimation,
clustering, abstraction, discretisation, visualisation, detecting
changes in data or models
Overview of Database
Marketing
What is Database Marketing?
• An information driven marketing process
made possible by database technology
that enables marketers to
develop, test, implement, measure and
modify
customized marketing programs and
strategies
Premise of Database Marketing
• Not all customers are alike (20-80-30 rule)
• Gathering, maintaining, and analyzing
customer and prospect info allows marketers
to
- identify key mkt segments
- optimize planning, pricing and promoting
- close deals satisfying both buyers and
sellers
What is required for Database
Marketing?
• Relevant data about customers and prospect
• Database tech to transform raw data into powerful
and accessible mkt info
• Statistical techniques to rank customers in terms
of their likeliness to
- respond to mkt communication
- buy products
- return products
- pay for products
- stay or leave
Uses of Database Marketing?
Strategic Marketing Planning
& Marketing Process
What is Strategic Planning?
• It is the managerial process that helps to
develop a strategic and viable fit between
the firm’s objectives, skills, resources with
the market opportunities available. It helps
the firm deliver its targeted profits and
growth through its businesses and
products.
Organizational Levels
The Corporate Level is the
highest level in any organization.
The Functional Level includes all the
various functional areas within a business unit.
The Business Level consists of units within the
overall organization that are generally managed
as self-contained businesses.
Corporate Mission
• This seeks to embody the entire goals of
the organization and the objective of its
existence.
• It seeks to provide a sense of purpose,
direction and opportunity
Types of Strategic Plans
Business-Unit Composition
• Companies often organize around
competency-based SBUs to
establish Sustained Competitive
Advantage.
Business Strategy Decisions
• Dimensions of
Strategy:
– Market scope.
– How broadly the
business views its
target market.
– Competitive
advantage.
• Competitive
Advantage:
– The way a business
tries to get consumers
to purchase its
products over those
offered by
competitors.
Marketing Strategy Decisions
A Marketing
Strategy Addresses:
• Selection of a
target market.
• Development of a
marketing mix.
Functional strategies
are at the
business-unit level.
Operating strategies
are at the product level.
Levels of a Marketing Plan
• Strategic
– Target marketing
decisions
– Value proposition
– Analysis of
marketing
opportunities
• Tactical
–
–
–
–
–
–
Product features
Promotion
Merchandising
Pricing
Sales channels
Service
The Strategic Planning, Implementation,
and Control Processes
Porter’s Generic Strategies
Overall Cost Leadership
Differentiation
Focus
Categories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
Product/Market Opportunity Matrix
Market
Present
Present
Product
New
Market
Penetration
Strategy
Product
Development
Strategy
New
Market
Development
Strategy
Diversification
Strategy
How to Achieve a
Differentiation-Based Advantage
Approach 1
Incorporate product features/attributes that lower
buyer’s overall costs of using product
Approach 2
Incorporate features/attributes that raise the
performance a buyer gets out of the product
Approach 3
Incorporate features/attributes that enhance buyer satisfaction
in non-economic or intangible ways
Approach 4
Compete on the basis of superior capabilities
Competitive Advantage Cycle
Integrated Marketing Communications
Challenges today:
Customer is changing.
Marketing strategies are changing.
Communication Technologies are changing.
Why does the need for an IMC arise???
Effective marketing
• Target Audience
• Communication Objective
• Message Design- Content , Format and
Structure
• Choosing Media - Personal and Non-Personal
• Selecting Message Source
• Collecting Feedback
Promotion strategies
Promotion mix
Advertising
Sales Promotion
Personal Selling
Public Relations
Direct Marketing
Communication Process
Sender
Encodi
ng
Messag
e
Decodi
ng
Receiv
er
Respon Feedba
se
ck
Media
SETTING TOTAL PROMOTION BUDGET AND MIX
4 METHODS OF SETTING UP PROMOTION
MIX
 AFFORDABLE METHOD- Promotion budget at the level
company can afford.
 PERCENTAGE OF SALES METHOD-Promotion budget
at the certain percentage of current or forecasted sales.
 COMPETITIVE PARITY METHOD-Promotion budget to
match competitors outlay.
 OBJECTIVE AND TASK METHOD-Promotion budget
based on what it wants to accomplish with promotion.
PROMOTION MIX STRATEGY
 PUSH STRATEGY-Strategy that calls for
using sales force and trade promotion to
push product through channels.
 PULL STRATEGY-Strategy that calls for
spending a lot on advertising and consumer
promotion to induce final consumers to buy
product like creating demand vacuum.
ADVERTISEMENT
Any paid form of non personal
presentation and promotion of ideas,
goods or services by an identified
sponsor.
MAJOR ADVERTISMENT DECISIONS
•
•
•
•
SETTING ADVERTISEMENT OBJECTIVES
communication objectives
sales objectives
BUDGET DECISION
affordable approach
percent of sales
competitive parity
objective & task
ADVERTISMENT STRATEGY
MESSAGE DECISION
message strategy
message evaluation
MESSAGE DECISION
reach, frequency, impact
major media types
media timing
ADVERTISMENT EVALUATION
communication impact
sales & profit impact
return on advertisement
PUBLIC RELATIONS
Building good relations with the company’s
various publics by obtaining favorable
publicity, building up a good corporate
image and handling or heading off
unfavorable rumors, stories and events.
PR DEPARTMENT FUNCTIONS
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•
•
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•
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Press relations or press agency
Product publicity
Public affairs
Lobbying
Investor relations
Development
ADVERTISING
APPEALS
ADVERTISING APPEAL
• Indispensable part of every advertisement.
• Central idea of an ad that elicits the much
desired response.
• 2 techniques that can be identified in advertising
response: ADVERTISING APPEAL &
ADVERTISING EXECUTIONS.
• Every advertisement is an appeal to buy & use
the product or the service supported by reasons
to buy & use.
ESSENTIALS OF GOOD APPEAL
•
•
•
•
•
It should be thematic.
It should be communicative.
It should be interesting.
It should be believable.
It should be complete.
ADVERTISING APPEALS & BUYING
MOTIVES
• Advertising appeals are made to consumer motives.
• Buying motives are the consumer expectations or
the buyer specifications. They tell us what each
consumer wants to satisfy his needs.
• If the buying motives specify what consumer expect,
the appeal speaks the degree to which such
specifications are met.
APPEALS & SELLING POINTS
• An advertising appeal is the basic use of service or
satisfaction which the product or the service can render
and which the advertisement represents.
• What we call as the TALKING POINTS for the salesman,
are the SELLING POINTS for an advertiser.
• An appeal is convincing on the basis of product
characteristics, merits, satisfaction which we call as
selling points.
CLASSIFICATION OF
APPEALS
• Advertising appeals are broadly classified
into 3 categories:
Product or Service related appeals
Consumer related appeals
Non-Consumer & Non-product Related
appeal.
I.PRODUCT OR SERVICE RELATED
APPEALS
This type of appeal focuses on the product or service
features, where some of the aspects of product
classification are described. Such appeals do not state
openly the consumer benefits as they are implied.




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Product feature appeal
Product Competitive advantage appeal
Product price appeal
Product News appeal
Product popularity appeal
Product generic appeal
II. CONSUMER RELATED
APPEALS
• These ads harp on the direct consumer benefits.
• Emphasis is on what the product or service does for the
consumer, i.e. consumer satisfaction.
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Consumer service appeal
Consumer savings appeal
Consumer self-enhancement appeal
Consumer fear appeal
Consumer subsidized product trial appeal
Measurement & Evaluation
Reasons for Measuring Campaign
Effectiveness
• To help all brand stakeholders understand the
link between marketing investment and return on
investment
• To evaluate alternative strategies
• To increase the efficiency and effectiveness of
the IMC campaign
– In the immediate short term or in the future
Communication Evaluation
Considerations
Questions that could be asked:
• Is the advertising working?
• Is the message compelling given the
target audience we’re trying to reach?
• Is the creative effective?
• Is the media strategy effective?
CONSUMER SUBSIDISED PRODUCT
TRIAL APPEAL
• Whenever the advertiser is believing in
generating initial or extra sales, he does it
through the product trial strategy.
• The advertiser offers a free sample, a
price reduction or some other purchase
incentive to encourage consumer trial or
use.
III. NON CONSUMER & NON PRODUCT
RELATED APPEALS
• They are founded on the fine works of the
company- may be profit making or non
profit making or on some sort of organized
activity for which public support is desired
& accepted.
Corporate citizenship appeals
Investor solicitation appeals
CORPORATE CITIZENSHIP
APPEALS
• They attempt to portray the company’s
achievements or the contribution to the mankind
or the society.
• It presents all that is done by the corporate
house in the public interest- social, economic,
philanthropic.
• It is used to create a favorable attitude towards
the company.
INVESTOR SOLICITATION APPEALS
• This kind of appeal is addressed to the
investment community, soliciting the benefits of
investment in the company in question.
• Solicitation appeals say that the company is well
managed, the line of activity undertaken is really
profitable or makes widest range of products
well known in the national or international
markets.
Sales Promotion
Why ? Types? How?
Whereas advertising gives a reason
to buy, SP gives an incentive to buy
It is part of the Marketing spend of all
companies and these days SP spends
in many companies exceed that of the
adspends
SP is of two types
• Trade
• Consumer
Forms of trade promotion
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•
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Bulk discounts
Free materials
Display windows
Shelf hiring
Lucky draws
‘Mystery’ customer
Redistribution incentives
Shop salesmen incentives
Forms of consumer promotion
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Free samples
Free gifts
Coupons
In-packs
Price packs
Price-offs
Sweepstakes
Bundling offers
Promotion at different stages of the
PLC
• Introduction – wise to use heavy promotion to
induce trials and promote brand franchise
• Growth – promotion should be limited ,if any
• Maturity – Higher promotions required since the
brand is under attack from competitors or
product quality or advertising effectiveness is
tapering off
• Decline – Heavy promotions. Used only to retain
a set of loyal customers. Prior to withdrawal of
the product, it could be used as a one time stock
clearance from the trade
Essential elements for an effective SP
programme
• Significant value before promotion is effective
• Promotions must be part of an overall plan
• Every brand must have a promotion objective
and a strategy statement
• A written tactical plan – time frame, costs,
evaluation yardsticks
• Factual knowledge must be gathered to plan
• Specialised professional skill and knowledge
must be applied to every promotion operations
Final considerations
•
•
•
•
•
Don’t promote if the product is
not good
Promotions rarely stop a
declining sales curve
Must be effective in retaining
new customers. So the product
has to speak for itself.
The objective of the promotion is
to wean away users from
competition and create new
users.
Excessive promotions lead to
diminishing returns and may
devalue the brand
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•
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•
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Promotions may be used in
conjunction with advertising and
other marketing communication
tools
It should be novel and attractive
Ensure supply lines are good
and adequate stock is available
right through the promotion
Cater for contingencies. Have
escape routes built into the plan
Trade has to be handled tactfully
Reimburse incentives/ rewards/
gifts promptly
Must be within the legal
boundaries
Advtg v/s WOM
• Word-of-mouth is actually the center of the
marketing universe
• Much of marketing actually centers around
illusion-creation. Word-of-mouth offers an
authenticity effective tool; and best of all, it is
absolutely free.
• Word-of-mouth can take on a life of its own.
• The most important way by which sales can
increase is by increasing the speed Simplicity,
ease, and fun with which decisions are made.
How to develop an effective WOM
program
• Find some way to get
the influencers to talk
and get all fired up
about your product.
• Create fun events to
bring users together
and invite non-users.
• Create a club with
membership benefits.
Pass out flyers. Tell
friends. Offer special
incentives and
discounts for friends
who tell their friends.
• Empower employees
to go the extra mile.
Managing Campaigns
Advertising Planning Process
Target Market
Brand Positioning
Advertising Objectives
Budget Decisions
Creative Strategy
Media Strategy
Campaign Evaluation
A Campaign Management Outline
i.
ii.
iii.
iv.
Where are we?
Why are we there?
Where could we be?
How could we get
there?
v. Are we getting there?
i.
Develop a situation
analysis.
ii. Identify Problems.
iii. Identify Opportunities.
iv. Develop message, media,
and marketing
communications strategy
and tactics.
v. Develop a plan to
measure
(track) campaign
effectiveness.
Campaign Tasks include
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•
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Identifying the problem
The budget
Target audience
Pretesting Message
The language
The visual and the copy
Media selection
Timing and duration
Post testing
Effect on sales