DATABASE MARKETING SCOPE & EFFICACY
Transcript of DATABASE MARKETING SCOPE & EFFICACY
DATABASE MARKETING: SCOPE & EFFICACY
DATABASE MARKETING
a) A Database marketing system is a system of integrated information files, as
just defined, about a company's customers, prospects, suspects, products, sales,
and more, that is conveniently accessible for model building, updating,
analyzing, and conducting marketing activities.
b) An automated system to be used to identify people - both customers and
prospects by name, and to use quantifiable information about these people to
define the best possible purchasers and prospects for a given offer at a given
point in time.
-Some direct marketing media, such as direct mail outbound telephone
marketing, require a database of customers and/or prospects to receive mail or
phone calls.
-Other media such as magazines, newspapers, radio, television, and the World
Wide Web, rely on prospects to identify themselves when they see ads that
appeal to them.
-Once these prospects respond by inquiring or making a purchase, their names,
addresses, and other vital information are added to the database.
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TYPES OF DATABASE
THE CUSTOMER DATABASE
Database may be little more than a collection of customer information. It can be
used to identify the company’s most valuable customers. This database can be
categorized into.
Active Customers:
What actions have customers taken in the past?
How recently have they purchased?
How frequently have they purchased?
How much did they spend?
What are their product or service preferences?
From what promotion source were they acquired?
Inactive Customers:
How long have prior customers been in-active?
How long had they been active?
What was their buying pattern while active?
How they were initially acquired?
What offers have they received since?
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THE PROSPECT DATABASE:
The database of existing customers can enable to identify new prospects
who are most likely to become customers.
Profile customers in existing database first; then seek prospects like
them.
View such profiles in terms of lists of readers, viewers, listeners in order
to effectively utilize all advertising media and not just direct mail.
THE ENHANCEMENT DATABASE
Highly sophisticated computer matching technology now permits
overlaying one or multiple database in order to transfer relevant
information.
Past transactions; demographic and psychographic data; credit
experience, if pertinent; people on the move, evidenced by an address
change; significant characteristics of a business; and a multitude of
customer behavior and transaction data.
By overlaying multiple databases we can eliminate duplications.
Negative screening, such as a credit check, can be used to remove a
record.
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LIFE TIME VALUE OF A CUSTOMER
Lifetime Value is that if a customer keeps buying the same product over his
entire lifetime, it adds to a big sum.
A company should not see just the total sales but should track the lost sales due
to deserted customers. Therefore, key performance figure is not just current
market share, but share of lifetime value. Companies lose roughly 15% of their
customers every year. That means that in three years, the company will be left
with half the customers it started with. However, these customers get replaced
over a period of time, but as competition increases, it becomes very expensive
to do that.
Life time value of a customer forces company to harp upon the idea of retaining
customers and this is what, has given birth to the idea of Relationship
Marketing. Relationship Marketers average their database to convert potential
buyers into customers and than build a long term alliance with them through a
range of insightful, targeted programs.
Lifetime value of customers can be increased through database marketing by
i) Retaining him
ii) Getting the referrals
iii) Making him purchase more or wider product line of the company.
iv) Decreasing direct marketing cost.
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HOW TO USE A DATABASE
Database can be used to-
Use frequent buyer programs.
Send timely reminders of needed services.
Provide contests and sweep stakes opportunities.
Send a card or letter on the anniversary of a purchase.
Send customer’s kids birthday cards if we can get them on the database.
Using careful segmentation, send notification of price, product, and
policy changes as well as new product announcements.
Invite customers / prospects to a product demonstration or to educational
seminar.
TYPES OF INFORMATION ABOUT CUSTOMERS
Prefix, name, and address
Titles (business) and family relationships (consumer)
Phone (day or evening), fax, E-mail if applicable
Original source of customer or prospect (through what mailing, ad etc)
Purchase history, continually updated (what, how much, and when)
Yearly or seasonal purchase volume
Credit risk history
Customer service history (how often is merchandise returned; how often
have we been unable to meet this customer’s needs)
Consumer's lifestyle information
For business database: Company sales volume, number of employees,
home, office location and other indicators of the customer’s overall
potential and needs.
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USE OF DATABASE TO SEGMENT THE MARKET AND SERVE THE
CUSTOMERS
Develop logical product offerings to obtain more “share of customer”.
Offer different gifts and incentives by segment.
Identify new product, market, and business opportunities.
Use both retail and direct mail database in segmentation.
TENETS FOR DATABASE MARKETERS
1. Database marketing is incremental. Database marketing can help to retain
customers or increase sales. Evaluate the costs and benefits of database
marketing on the incremental costs and incremental profits.
2. Outsourcing the construction of marketing database will always save
both money and time. A provider with experience in building many
databases can get us up and running faster at lower cost than any
in- house operation that lacks experience in this specialized field.
3. All new-customer data base should be functional or can be implemental.
We can make money from a database only when it is functional. What if
our database is so large that it takes more than six months? Begin with the
top 20 percent of the customers. Expand to the other 80 percent when we
have learned what works and what doesn't.
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4. Know the two kinds of customers: 1) transaction buyers who first
consider only price and have no loyalty; (2) relationship buyers who are
looking for a reliable supplier who will give them super service.
Relationship buyers are the ones we want. We can train our customers to
be one or the other. Once you have acquired a customer, stop talking
about price and start talking up your service. You can train customers to
be relationship buyers.
5. Make customers work hard to achieve Gold Card status: then reward
them with super service. Focus the attention on those customers just
below the qualification level. Encourage them to spend a little more to
achieve gold. When they do, we will have them for a lifetime. This is the
main payoff from a gold program.
6. Keep in the database only that data which we can profitably use for
marketing during the next few years. Too many people keep data that is
"nice to have" but cannot be used to increase profits. Such data costs
money and reduces profits.
DIRECT MARKETING
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The Direct Marketing Association (DMA) defines direct marketing as follows:
Direct marketing is an interactive marketing system that uses one or more
advertising media to affect a measurable response and / or transaction at any
location.
This definition emphasizes a measurable response typically a customer order.
Thus direct marketing is sometimes called direct- order marketing.
DEFINITION:
Direct marketing is an interactive system of marketing, which uses one or more
advertising media to effect a measurable response and/or transaction at any
location, with this activity stored on database (With continuing growth and
development in the field, standard definition is no longer applicable).
Direct marketing (also called database marketing) uses a variety of
communications media to build a database of consumer information so that a
company can enhance its' relationship with the customer. The term direct
marketing is used when seller and customer deal directly with each other rather
than through a retailer or medium. It may also be to provide support to sales
people and dealer. The term direct marketing is supplanting the term mail order
because today so much of the business uses means other than mail. Main
purpose of direct marketing is to serve the individual customer in the multi-
brand and multi-product scenario when the advertising cost are spiraling up the
Direct Marketing technique decreases the cost incurred on individual customer
by increasing the possibility of response from the targeted customers by the
way of addressing individual customer needs.
Evolution of Direct Marketing:
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1880, Father of "Lead generation" was John Patterson founder of National
Cash Register Co.
1900, Richard Sears a young Railroad stationmaster purchased a shipment of
Gold watches. He asked a logical question of himself. Who has to know the
correct time at all times? “Other Railroad station agents” was the reply. He
got a list, mailed and sold out. Thus Direct Marketing was born.
1910, Sears introduced Sears credit card for his prime prospect Farmer.
1940, Annual subscription method was born which keeps selling costs down.
Ex: Magazines, tapes and CDs.
1950, Diners Card, American Express. Bind-in cards were also introduced.
1966, Toll free phone service was introduced, spawning a new industry of
telemarketing.
1972, Upscale catalogue was started in 1972 by Roger Horchow with his
Horchow collection catalogue.
1980, New Direct response media came - Videocassettes, Cable TV, Fax,
Home shopping, Internet.
Yesterday
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Mass
Consumer is passive
One off short term
Limited use of technology
Serve customers well
Success measured by current market-share
Success measured by current profits
Today
Personal
Consumer is participative
Lifetime, long term
Widespread use of technology
Serve customers differently
Success measured by lifetime market-share
Success measured by lifetime profits
REASONS FOR EMERGENCE OF DIRECT MARKETING
1) Fragmented Market: - Consumer's needs are becoming specialized. New and
smaller markets are emerging up, where mass marketing is not effective. Ex.
Tutorials, fitness equipment, BPL Home Theater.
2) Traffic Congestion: - Higher cost of driving, vehicular population, traffic
congestion, lack of time has made shopping a tedious activity.
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3) Slower moving items: - Many types of specialized product whose market is
small, finds its turnover to be very slow in the retailer's shelf, therefore D.M.
becomes an obvious choice.
4) Increasing cost of Media: - With the media cost and competition increasing
general marketing becomes ineffective.
5) Brand clutter: - No of brands within a product category is increasing.
Positioning and image of the Brand is losing its identity in the over
communicated society of developed economics. Direct Marketing gives the way
to talk to consumers differently.
BENEFITS OF DIRECT MARKETING
Comparative shopping possible with on line services.
Price changes takes place as a function of demand and supply.
Cost per response/customer is less.
Power to close sale.
Aids marketing research and test marketing.
Strategies do not get open up to competitors.
Relationship building
CHARACTERISTICS OF DIRECT MARKETING:
The essential character of direct marketing lies in its action orientation. General
advertising may inform, persuade, or remind prospects about products or
services, but it does not sell. To sell, or to invite a step toward a sale, direct
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marketers include a call to immediate action and an easy-to-use response
device. Direct marketers make specific offers: they tell prospects what they’re
going to get and what they have to do to get it, be it a product in exchange for a
price, free information in exchange for a phone call.
(a) Direct Marketing Is Targeted:
Successful direct marketers develop products and services that will appeal to
specific groups of consumers-groups that are measurable, reachable, and sizable
enough to ensure meaningful sales volume.
(b) Direct Marketing Is Personal:
Because direct marketers can record so much about their customer’s and
Prospects buying habits and preferences as well as lifestyle information, they
are able to address these people in very specific terms. as Cricket
(c) Direct Marketing Is Measurable:
Because each direct marketing message carries a call to action, the advertiser is
able to measure the effectiveness of mailings, calls, and ads by tracking the
sales, leads, or other responses received.
(d) Direct Marketing Is Testable:
Because direct marketers can generate firm numbers that measure the
effectiveness of their efforts, it is possible for them to devise accurate head-to-
head tests of offers, formats, price, payment terms, and creative approach.
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(e) Direct Marketing Is Flexible:
Direct marketing’ flexibility is especially apparent in direct mail, where few
constraints limit size, color, timing, and format. A direct mail marketer can sell
with formats ranging from a postcard to a 9” X 12” envelope to a three
dimensional package. The marketer sets the mailing date not by a publication.
HOW DIRECT MARKETING WORKS
Direct Marketing, as practiced by professionally managed firms is a four - step
process:
Identifying Prospects
Establishing Contact
Booking the Order
Maintaining contacts to develop a mutually beneficial, long term business
relationship.
Identify in Prospects and segmenting them into various categories based on
certain specific criteria is critical to the success of direct marketing. This is
done in different phases. In the first phase, a preliminary list of potential or may
be customers is made through random mailing, house calls, or mass, media
advertisements using coupons or some other contact device. In marketing
jargon it is termed cold listing.
This cold list is thoroughly scrutinized and attempts are made to identify those
who are not likely to use the proposed product or service due to incompatibility
of need, income, age, sex, occupation or any other reason.
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All such people who don’t qualify as prospects are dropped from the list. The
residual list is then known as hot list Firms may sometimes seek to gather
additional information about those included in the initial list by contacting them
on telephone or through other convenient media.
The next is to draw the detailed profile of the prospect. This may include
information on consumption habit, purchase behavior, personality and life style,
social class, exposure to media, and demographic particulars such as age,
income, education, profession, family size, domicile and complete postal
address. Technically this step is known as profiling the respondent or response
graphic.
The list is further split in to separate clusters of identical groups, using some
demographic, psychographic or behavioral parameters. This exercise is termed
as segmentation. Firms now adopt many innovative ways of clustering, using
novel parameters such s traveling habits, food preferences, ownership of
automobiles, possession of assets and durables, and taste for music and art.
Finally, each cluster is researched using some predetermined criteria, to identify
the specific segment or segments to be targeted for marketing the product. This
exercise is known as targeting .If the product is a high – value item such as
jeweler, or an expensive gadget, direct marketing goes in to further details and
makes an elaborate study of each individual included in the target segment. This
is known as individualization. Now the firm may focus on the specific needs of
the individual customer.
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THE GROWTH OF DIRECT MARKETING:
(a) Advances in Computer Technology:
Recording and manipulating a database became feasible when fast and
affordable computers penetrated the American business market. The new
technology also has allowed for useful innovations in printing and production,
such as laser and ink-jet personalization techniques and computerized graphic
design and production. The Internet, originally a tool for the military and
universities, found a booming business and consumer market in the 1990s
fueled by user-friendly navigation software, powerful search engines, and high-
quality graphics on the World Wide Web. On-line services, which had served a
small, cut-like audience for years, caught fire in the 1990s.
(b) Targeted Media Opportunities:
Just the Sears general catalog has given way to myriad smaller and more
specialized catalogs from Sears, Shop-at-Home, the old mass magazines such as
India Today, Illustrated Weekly have been supplanted by periodicals that define
their audiences: Design, A&M, Chip, just to name a few among hundreds of
targeted magazines. At the same time, marketers have learned to use radio
stations geared toward news, talks, classical music, and other defined audiences
for direct response offers. Network TV i.e. DD, has given way to better targeted
channels such as Star Sports, National Geographic. Punjabi Channel, Music
Asia and others.
(c) Growth of Consumer Credit
American Express, Master Card, Visa, and other widely distributed credit cards
offer consumers the opportunity to make impulse buying decisions. Consumer
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credit works hand-in-hand with telemarketing to streamline the buying process:
customers can call a toll-free telephone number, provide their card numbers,
and order products from the comfort of home. Credit cards also increase the
opportunity for trust on both sides of the buying transaction. The marketer is
protected against much of the risk of bad credit, and the buyer can call on the
credit-card firm to help if there is a customer service problem. As consumers
grow to trust the privacy safeguards now in place on the World Wide Web and
on-line services, more direct purchases will be made there by credit card as
well.
(d) Decline in Personal Service:
Vast improvements in direct marketers, inbound telemarketing systems,
customer-service capabilities, and inventory and shipping controls have made
shopping from home a viable alternative even for those who need merchandise
delivered quickly.
(e) Changing Lifestyles
There are more dual career families than ever before. In fact women as
professionals are increasing. Today's working woman often has more money
than time to invest in shopping. Direct marketers offer ways to do this: catalog
shopping, TV home shopping, or Internet shopping at any hour of the day or
night; toll-free 24 hour phone lines for ordering; home or office delivery
including affordable overnight or two-day delivery; liberal guarantees; free-trial
privileges; and much more. Shopping at home also allows customers to remain
safe and anonymous in their own "comfort zones": attributes that are growing in
importance to many busy consumers and senior citizens today. Home shoppers
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need not get dressed up, carry mace spray units on their key chains, or walk
through deserted parking lots or garages with their purchases in hand.
(f) A Diverse and Affluent Marketplace
Market fragmentation has started taking place in India. Niche markets potential
is increasing. Trendy youths, debonair executives, professional women, health
conscious adult are transforming into mature and consuming class, Specialty
services or products to premium segment are going to increase. Economist
magazine of U.K. can target corporate managers of India, thus increasing its
subscription and geographical base.
(g) Higher Education allows for a Longer Story
Although illiteracy is a major problem in India today, the upscale target
prospects of most direct marketers are better educated than ever before. Thus
they are ready and able to read the long, meaty "reasons-why" copy that helps
direct marketers sell thoroughly and effectively in print media and through the
World Wide Web and on line services.
TECHNIQUES OF CREATING DIRECT MAIL PACKAGES
Direct mail is an expensive advertising medium. It costs 15 to 20 times as
much to reach a person with a direct mail package as it does to reach him
with a 30 second TV commercial or a full page ad in a newspaper.
Customers acquired by direct mail are usually better customers in terms of
repeat business than those acquired by space or broadcast advertising.
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ADVANTAGES OF DIRECT MAIL:
1. Selectivity: Through careful list selection and segmentation, direct
mail can give you pinpoint selectivity unmatched by any other
advertising medium.
2. Virtually Unlimited Choice of Formats: You can use large, lavishly
illustrated brochures. You can have any number of inserts. You can use pop-
ups, fold-outs, swatches. What you can do is limited only by your
imagination and budget.
3. Personal Character: Even through you mail in the millions, you are
still mailing individual pieces to individually addressed human beings. You
can sell much better when you are talking to an individual rather than to
people en-masse.
4. No Competition: In direct mail, advertising arrives all by itself to
be opened and read at the recipient’s leisure. When it is read, there is nothing
to compete with it for your prospect’s attention.
5. Most Testable Medium: With direct mail you can virtually
simulate laboratory conditions for testing. You control exactly when the
mail is dropped and exactly who gets which test package.
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6. Unique Capability to Involve the Recipient: Direct mail offers wide
choice of devices that involve the recipient, such as tokens, stamps,
questionnaires, and quizzes. You can literally get the recipients to talk back to
you.
7. Selecting the Format: Because direct mail offers an unlimited choice of
format, a good place to start is deciding which basic format to use. Three
basic formats:
The classic format utilizes a separate outer of mailing envelope. The
size the material the number of colors can vary widely. What
goes inside that envelope can vary even more widely. It is
the most personal of the direct mail formats. It almost always
includes a separate letter either preprinted or personalized.
The self mailer does not have an outer envelope. These mailers vary
from a single sheet of paper folded once for maili8ng to wonderfully
complex pieces with multiple sheets and preformed reply envelops a
self mailer comes off the press complete, ready to address and mail.
Self mailers are less expensive than classic mailing packages no
inserting is needed.
The catalog is literally a magazine with up to many hundreds of pages
require a highly specialized format their use is subject to many
important guidelines.
DIRECT - MAIL ADVERTISING
Direct-mail advertising is only one of direct - response techniques. However,
because of its widespread use and the special opportunities it offers advertisers,
we consider it in a separate section. Direct mail is sometimes used by a
company as its primary promotional tool, and on rare occasions, its only
advertising vehicle. However, it is much more common to employ direct mail
as a part of a diversified marketing communication program. In this role, it must
complement traditional media advertising as well as overall marketing
objectives.
Companies contemplating using direct mail should be clear about their goals
and objectives, as with any other advertising or promotion. There are numerous
uses of direct mail:
Lead Generation: Personal salesperson can be made much more
efficient by following up on leads generated by direct mail rather than
making cold calls.
Mail order: As discussed earlier in this chapter, direct mail is a primary
method of selling goods directly to consumers. Figure shows that over 70
percent of businesses buy products through direct mail, with an average
of five purchases annually.
Loyalty programs: To most companies, keeping present customers is a
major goal. Direct mail can build relationships, reward loyalty, and
generate referrals.
THE CHANGES IN DIRECT MAIL:
Only a few years ago, direct mail was a set medium with it is own rules that
you broke at your risk. A direct mail package had at the minimum –
an outer envelope a reply envelope, a letter a brochure, and an order form.
The changes are focused on one objective: faster, stronger, more
telegraphic communication with the prospect.
Why? Two reasons, First mailbox clutter! is becoming real,. Only a direct
mailing that grabs has a chance of working. Second we are now talking to
the TV generation, which grew3 up with visual symbols. Unlike us
older folks who grew up reading books, the TV generation is less inclined to
stay with you if you don’t get your message across very quickly. The
specific changes are in two areas:
1. Shorter copy and better copy: Direct mail historically has been
overwritten does not impose the discip0line for tight concise writing
that space or broadcast does. Now the direct mail writer must edit and
polish copy making every would justify its existence. A four page letter may
still be the best way to go.
2. Quicker communication through graphics: The designer is becoming
an equal partner in the direct mail creative process. Graphics
communicate more quickly and more quickly than words.
An added benefit of the designer’s involvement is that we are improving the
appearance of direct mail, as well as the level of taste.
MANAGING A LEAD-GENERATION PROGRAM
Many products and services cannot be sold cost effectively through a one-step
sales effort. A two-step, or multi step, program is usually necessary when a
significant customer investment is required, or when personal interaction is
necessary to complete a transaction. The two major uses of a lead-generation
program are:
1. Identifying prospect or customer interest or potential prior to committing to
the cost of a face-to-face sales visit.
2. Generating interest and stimulating traffic into a local retail outlet. The first
instance is lead qualification and the second is lead (or traffic) generation. If our
needs can be met by either of these activities we need a lead generation
program.
TYPES OF LEAD-GENERATION PROGRAMS
There are two general types of lead generation programs.
BUSINESS-TO-BUSINESS
The primary objective in business-to-business lead generation is to get qualified
leads from prospects that, in effect, raise their hands and say, I’d like more
information about your proposition.. The thrust of the promotion can be as
simple as encouraging prospects to request literature with an inducement to
order by mail. Telephone follow-ups of those who request literature is often an
integral part of the lead generation program. For more complex propositions,
those requiring interactions with a live salesperson, the objective is to get a
request for a salesperson to call.
BUSINESS-TO-CONSUMER
Price point and available channels of distribution almost always dictate the
feasibility of lead-generation programs for consumer products. However, lead-
generation programs do make eminent sense for electronic equipment like
refrigerators, or air-conditioning, or freezers, or insulation each a considered
purchase of magnitude for the consumer. Manufacturers sell major equipment
directly to the consumer. The objective is to get qualified leads and to complete
the transaction by mail and/or telephone follow-up.
LEAD QUALIFICATION
It is no secret that in any lead-generation program lead quality varies a great
deal. In fact, generally speaking, about 20 percent of total lead results in about
80 percent of total sales revenue. It makes sense, therefore, to optimize time and
effort with a good lead-qualification system. There are two good reasons for
optimizing time and effort:
1. Time is money: Given the cost of an industrial sales call it costs much to
have a salesperson call on unqualified prospects.
2. Good leads get cold: While salespeople are pursuing low-quality leads, high
quality leads get cold. Each day that a lead is not acted upon lessens the
likelihood of sales conversion.
LEAD FLOW MONITORING
More quickly a lead is acted upon, the higher the likelihood of conversion. The
theory behind this is that the interest is highest when a prospect has first
responded to an offer. The longer that lead sits, the .colder" the prospect
becomes (Although it differs by offer a rule of thumb is that a lead should be
acted upon within ten days maximum. sooner, if possible) But as anyone who
has worked with a lead .generation program will tell that sometimes leads come
in at a greater rate than anticipated no matter how carefully planned or,
sometimes less than anticipated.
Whether too high or too low, it pays to have contingency systems in place.
ON LINE MARKETING
An online marketing channel is one that a person can reach via computer and
modem. A modem connects the computer to a telephone line so that the
computer user can reach various online information services. There are two
types of online channels.
Commercial online channels: Various companies have set up online
information and marketing services that can be accessed by those who have
signed up for the service and pay a monthly fee. The best known online
services are CompuServe, America Online, and Prodigy, with more than
3,200,000, 3,000,000 and 1,600,000 subscribers respectively. These online
channels provide subscribers with five main services: information (news,
libraries, education, travel, sports, reference), entertainment (fun and
games), shopping services, dialogue opportunities (bulletin boards, forums,
chat boxes), and e-mail.
The Internet: The Internet is a global web of some 45,000 computer
networks that has made instantaneous and decentralized global
communication possible. Originally established to facilitate research and
scholarly exchanges, the Internet is now available to a much broader
audience, some 25 million people. Users can send e-mail, exchange views,
shop for products, and access news, food recipes, art, and business
information. The Internet itself is free, though individual users may need to
pay a commercial service to be hooked up to it.
THE BENEFITS OF ONLINE MARKETING
Why have online services become so popular?
Convenience: Customers can order products 24 hours a day whenever they
are. They don’t have to sit in traffic, find a parking space, and walk through
countless aisles to find and examine goods. And they don’t have to drive all
the way to a store, only to find out that the desired product is out of stock.
Information: Customers can find reams of comparative information about
companies, products, and competitors without leaving their office or home.
They can focus on objectives criteria such as prices, quality is out of stock.
Fewer Baseless: With online services, customers don’t have to salespeople
or open themselves up to persuasion and emotional factors. Second, online
services also provide a number of benefits to marketers:
Quick adjustments to market conditions: Companies can quickly add
products to their offering and change prices and descriptions.
Lower Costs: Online marketers avoid the expense of maintaining a store
and the accompanying costs of rent, insurance, and utilities. They can
produce digital catalogs for much less than the cost of printing and mailing
paper catalogs.
Relationship Building: Online marketers can talk with consumers and learn
much from them. Marketers can also upload useful reports, or a free demo of
their software, or a free sample of their newsletter, onto the system.
Consumers can then download these items into their electronic mailboxes.
Audience Sizing: Marketers can learn how many people visited their online
site and how many stopped at particular places on the site. This information
can help the marketers improve their offers and ads.
Clearly, marketers will want to consider using online services to find, reach,
communicate, and sell. Online marketing has at least four great advantages.
First, both small and large firms can afford it Second, there is no real limit on
advertising space, in contrast to print and broadest media. Third, information
access and retrieval are fast, compared to overnight mail and even fax and
fourth, shopping can be done privately and swiftly. However, online marketing
is not for every company nor for every product; thought has to be given to it,
when, and how it should be done.
DATA ANALYSIS
&
INTERPRETATION
Database marketing helps you to retain customers.
Yes No Total
% 70 30 100
num 21 9 30
Graph 9.1: Analysis of Customer retention
Interpretation:
Among the 30 respondents 21 respondents said that direct
marketing with the help of database helps in customer retention and 9 of
them said no to it.
Analysis of Customer Rention
010
2030
4050
6070
80
Yes No
retention option
% o
f re
nte
nti
on
Database marketing helps you to keep a control over the Incremental cost
factor.
Yes No Total
num 17 13 30
% 56.67 43.33 100
Incremental cost factor
Graph 9. 2: Control over the Incremental cost factor.
Interpretation:
Among the 30 respondents about 17 (57%) of them said that direct
marketing is helping them to keep a control over the incremental cost
factors and 13 (43%) of them said no.
You make it functional first and then make it Implemental.
.
Graph 9..3: Functional then Implemental
Interpretation:
Among 30 respondents, 27 of them said that they make it functional first on a
prototype basis then they go for the implementation stage.
Yes No Total
% 90 10 100
num 27 3 30
Which kind of customer you like:
(a)Transaction buyers
(b)Relationship buyers
Yes No Total
num 25 5 30
% 83.33 16.67 100
Graph 9.4: Kind of customers
Interpretation:
Among 30 respondents, about 25 of them said they believe in relationship
buyers and the rest 5 of them in transactional buyers.
You make your customers to work hard to achieve a gold Status.
Graph 9.5: Gold Status
Interpretation:
Among 30 respondents, 18 of them help the customers in achieving a gold
status and rest 12 of them are in a process to build up a relation.
Yes No Total % 60 40 100num 18 12 30
You keep data in the database which are profitable keeping some years in
account?
Graph 9.6: Database of Profitable customers
Interpretation:
Among 30 respondents, 12 of them said that they keep a database of
profitable customers, other 18 are still to get into that frame.
Yes No Total
% 40 60 100
num 12 18 30
You are spending too much on media expenses in proportion to profit.
Expenses on media
Graph 9.7: Expenses on media
Interpretation:
Among 30 respondents, 20 of them said that they are spending too much on
media and the rest 10 of them do it as a routine activity
Yes No Total
num 20 10 30
% 66.67 33.33 100
Database or Direct marketing helps you in marketing research and analysis.
Graph 9.8: Market research and Analysis
Interpretation:
Among the 30 respondents, 29 of them said that they use the database for the
purpose of market research and analysis.
Yes No Total
num 29 1 30
% 96.67 3.33 100
You offer special prizes as promotional offers.
Graph 9.9: Promotional Offers
Interpretation:
Among 30 respondents, 23 0f them said that they offer promotional offers and
the rest 7 do not.
Yes No Total
num 23 7 30
% 76.67 23.33 100
Frequency of mailing to your customers
Graph 9.10: Mailing customers
Interpretation:
Among 30 respondents, 7 of them mail their customers once in a week, 15 of
them once in a month and the rest 8 in 2 months.
1 week 1 month 2 months Total
num 7 15 8 30
% 23.33 50 26.67 100
Direct marketing affects the Life Time Value of a Customer
Yes No Total
num 17 13 30
% 56.67 43.33 100
Graph 9.11: Life time Value
Interpretation:
Among 30 respondents, 17 of them said that direct marketing increases the
life time value of a customer.
Direct marketing is booming concept in India.
Graph 9.12: Booming Concept
Interpretation:
Among 30 respondents 27 of them feel that direct marketing is a booming
concept in India.
Yes No Total
num 27 3 30
% 90 10 100
Advanced technology helps further evolution of direct marketing.
Graph 9.13: Advancement of Technology
Interpretation:
Among 30 respondents, 26 of them feel that advancement in technology helps
direct marketing.
Yes No Total
num 26 4 30
% 86.67 13.33 100
FINDINGS AND RECOMMENDATIONS
Direct Marketing benefits customers in a number of ways. Customers report
that home shopping is fun convenient, and hassle - free. It saves time and
introduces them to a larger section of merchandise. They can do comparative
shopping by browsing through mail catalogs and online shopping services,
and can order goods for themselves or others. Industrial customers also cite a
number of advantages . They par t icu la r ly l ike learning abou t
available products and services without tying up time in meeting sales people,
Sellers also benefit. Direct marketers can buy a mailing list containing the
names of almost any group: left handed people overweight people,
millionaires, and so on. They can personalize and customize their messages.
Further more, direct marketers can build a continuous relationship with each
customer. The parents of the new- born baby will receive periodic mailings
describing new clothes, toys, and other goods as the child grows. Direct
Marketing can be timed to reach prospects at the right moment, and direct -
marketing material receives the higher readership because it is sent to more
interesting prospects. Direct Marketing permits the testing of alternative media
and messages in search of the most cost - effective approach. Direct
Marketing also makes the direct marketers offer and strategy less visible to
competitors. Finally, direct marketers can measure can measure responses to
their campaigns to decide which have been the most profitable.
CONCLUSION
This project has helped me understand the importance and significance
of DATABASE MARKETING: SCOPE & EFFICACY and its impact on
consumer buying behavior. It has given me exposure to the practical side of
direct marketing and at the same time enhanced my knowledge by
applying theory learnt in class to practice.
Direct Marketing when used effectively is no doubt, a powerful tool to
entice customers in making a purchase decision. Companies can attract more
customers and increase sales by proper use of visual direct marketing
techniques.
BIBLIOGRAPHY
BOOKS:
MARKETING MANAGEMENT – PHILIP KOTLER
RESEARCH METHODOLOGY – COOPER AND SCHINDLER
JOURNALS AND MAGAZINES
BUSINESS WORLD
BUSINESS TODAY
WEBSITES
www.google.com
www.teomaask.com
www.amway.com
www.oemji.com
www .P ure B u s i n e ss . c om
www.sribd.com
ANNEXURE
I am a student of Govt. R.C. College of Commerce and Management,
pursuing MBA Program. As a part of the MBA curriculum, I have taken
up a research project on DATABASE MARKETING: SCOPE &
EFFICACY.
In this connection, I need some information. Below is the questionnaire.
Kindly give your responses to the questions in the questionnaire. I sincerely
assure your responses will be kept strictly confidential and shall only
be used for academic purpose. I shall greatly appreciate your
cooperation in completing my research project.
PRADEEP.M.B
Reg. no. 06ATCM6034
QUESTIONNAIRE
DATABASE MARKETING: SCOPE & EFFICACY
1. Database marketing helps you to retain customers.
(a)Yes
(b) No
2. Database marketing helps you to keep a control over the Incremental cost
factor.
(a)Yes
(b) No
3. You are outsourcing the construction of marketing database.
(a)Yes
(b) No
4. You make it functional first and then make it Implemental.
(a)Yes
(b) No
5. Which kind of customer you like:
(a)Transaction buyers
(b)Relationship buyers
6. You make your customers to work hard to achieve a gold Status.
(a)Yes
(b) No
7. You keep data in the database which are profitable keeping some years in
account?
(a)Yes
(b) No
8. You are spending too much on media expenses in proportion to profit.
(a)Yes
(b) No
9. Direct marketing helps you in marketing research and analysis.
(a)Yes
(b) No
10. You offer special prizes as promotional offers.
(a)Yes
(b) No
11. Your frequency of mailing to your customers.
(a) 1 week
(b) 1 month
(c) 2 months
12. Direct marketing affects the Life Time Value of a Customer.
(a)Yes
(b) No
13. Direct marketing is booming concept in India.
(a)Yes
(b) No
14. Advanced technology going to help in further evolution of direct marketing.
(a)Yes
(b) No
]