data base marketing

8/7/2019 data base marketing

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Database Marketing

Discussion Topics

What is Database Marketing?

Why Database Marketing?

Basics of Database Marketing (DBM)

Applications of DBM


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What is Database Marketing?

Compare and Contrast

Traditional Data Analysis

Data Mining

Database Marketing


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Similarities and Differences

CriteriaTraditional Data

Analysis* Data Mining*DatabaseMarketing

Data analysis

objectives

generally clearly

stated

not clearly

stated

may or may not

be clearly

stated

Size of ty icaldatabase

small-moderate large ty ically large

Analytical tools relatively less

advanced

(traditional)

advanced

(newer)

advanced

CRM orientation not necessary high generally high

but not

necessary

*as viewed by marketers


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Some Definitions of Database Marketing

AMA definition:

An approach by which computer database technologies are harnessed

to design, create, and manage customer data lists containing information

about each customer's characteristics and history of interactions with

the company. The lists are used as needed for locating, selecting,

targeting, servicing, and establishing relationships with customers

in order to enhance the long-term value of these customers

to the company.

Another definition

Database marketing is a systematic approach to the gathering,

consolidation, and processing of consumer data (both for customers

and potential customers) that is maintained in a company's databases.

Although databases have been used for customer data in traditional

marketing for a long time, the database marketing approach is

differentiated by the fact that much more consumer data is maintained,

and that the data is processed and used in new and moresophisticated ways.


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Some Definitions of Database Marketing

Third definition:

Database marketing is a way of organi ing a companys customer and

prospect data so that it can be used more effectively in a direct marketing

effort. It is a way of organi ing the whole marketing process.Database marketing allows you to choose what to market to whom and

when based on the sum total of your knowledge and experience

with a customer or prospect.

Fourth definition

Database marketing is the technique of gathering all the informationavailable about your customer, leads, and prospects into a central

database and using that information to drive all your marketing efforts.

The information is stored in a marketing database and can be used

at both the strategic and tactical levels to drive targeted marketing efforts.


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Why Database Marketing?

Informational Reasons

Availability of abundance data

Permission to collect them

Technological Reasons

Technology to collect and warehouse data

Technology and computing power available to analy e them

Availability of commercial software, some of which are even

user friendly (e.g. XL miner, SAS enterprise miner)

Commercial Reason

Interest in generating intelligence to remain competitive main

market share

Drive to be efficient


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Database Marketing (DBM) and

Customer Relationship Management (CRM)

1. Notice what its customers are doing

2. Remember what it and its customers have done

over time

3. Learn from what it has remembered

4. Act On what it has learned to make customers

more profitable

In order to form a learning relationship with its

customers, an enterprise (firm) must be able to:


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Based on Transaction Data


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Customer Relationship Management (CRM)


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A More Inclusive Definition of Database Marketing

Database marketing is a systematic approach to the

gathering, consolidation, and processing of

marketing databases to learn more about customers

and competitors, select target markets, comparecustomers' value to the company, provide more

speciali ed offerings, as well as make other

marketing and strategic decisions.


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Database Marketing System

Memory Intelligence Output

Data Analytic

Tools/Software

Marketing

Decisions

Data

Transaction

Data

Customer

Data

Other

Data

DataWarehousing

Database


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Customer Activity Database

Data Techniques Output/Application

Frequency, Cross-Tab

Correlation

Logistic regression

Decision Tree

Survival/Churn Analysis

Demographics

SubscriptionData

Direct marketing

Prospecting

Customer retention

Customer loyalty

Exit Data

Promotions

Data

Activity Data


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Customer Activity Database


Frequency, Cross-Tab

Correlation

Algorithms for minimi ing

distance traveled /

maximi ing sales potential

Demographics

SubscriptionData

Segmentation

Store Location

Store PromotionLocation data

Distance Data

Activity Data


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Geodemographic Database


Segmentation

Targeting

Advertising/Promotion

Clusters

Demographics

Purchase

Reading habits

Vacationing

Zip codes

Cluster

Anal sis

Distinct

Clusters

used for


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Supermarket Database


Logistic regressionSimultaneous system

Cluster analysis

Market basket analysis

Querying

Stocking/Inventory

control

Advertising

Shelf placement

Pricing/couponsRetail

Environment

Panel

Purchase Data

Aggregate

Purchase Data

Demographics

data base marketing

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