Transcript Chapter 19

Chapter Nineteen
Database Development and
Marketing Research
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-1
Learning Objectives
Illustrate and define a marketing
research database.
Explain the interactive nature of
marketing research and data
enhancement.
Describe the dynamics of database
development.
List the general rules of thumb in
database development.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-2
Learning Objectives
 Demonstrate understanding of
technology in a database context.
 Illustrate the development and purpose
of the data warehouse.
 Explain the process of data mining as it
relates to the data warehouse.
 Understand the role of modelling in
database analysis.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-3
Introduction
 The ability to detect and respond to the
individual needs of customers is a
major marketing objective.
 Database marketing, the process of
systematically categorising customer
data is a critical marketing research
function.
 Marketers can develop the ability to
identify customers on an individual
basis.
 Marketers can rank a customer’s
transactions over time.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
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What is a Database?
 A database is a collection of
information indicating what
customers are purchasing, how
often they purchase and the
amount they purchase.
 Incorporates data from diverse
sources.
 Purchase behaviour.
Copyright  2007 McGraw-Hill Pty Ltd
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Slides prepared by Judy Rex
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Structure of a Data Base
Typically around transactional data.
Plus other factors related to the
purchase decision.
The network provides the data on
all products in the company.
Eg. Airlines and travel agencies.
Copyright  2007 McGraw-Hill Pty Ltd
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Slides prepared by Judy Rex
19-6
Purposes of a Customer
Database
 Develop meaningful, personal
communication with customers.
 Can improve the efficiency of
constructing market segments.
 Can increase the probability of
repeat purchase behaviour.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-7
Four fundamental areas in which
the database benefits the firm:
1. Exchange information with
customers.
2. Determine heavy users.
3. Determine life time customer
value.
4. Building segment profiles.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-8
Data Enhancement
The overlay or partitioning of
data about new or existing
customers for the purpose of
better determining their
responsiveness to marketing
programs.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
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Data enhancement allows a
business enterprise to:
 Obtain more knowledge of customers.
 Greater targeting effectiveness:
 Geodemographic
 Attributes
 Target market dimensions
 Predict responsiveness to changing
marketing programs.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-10
The Dimensions of a
Typical Database
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-11
A Closer Look: GIS
Allow the marketer to integrate
customer and sales data bases with
geographic, demographic, sociodemographic and location databases.
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Where should the next store be located?
Where are sales surging?
Which locations to dispatch staff?
Where are the best customers?
Where should assets be placed?
Where are the vulnerable markets to
competition?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-12
The Dynamics of Database
Development
The information generated for a
database should possess the
following four characteristics:
1)
2)
3)
4)
Affinity
Frequency
Recency
Amount
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-13
The database development
process
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-14
A marketing data interaction
matrix
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-15
Evaluating Internal Data Sources
Is the data timely?
Accurate?
Up to date?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-16
Key current customer profile
attributes
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Slides prepared by Judy Rex
19-17
Evaluating External Data Sources
What is available?
 Competitive sales?
 Data industry surveys?
 Government reports? Etc
Plus…
 Purchase behaviour
 Demographics and lifestyles
 Financial data
 Promotional and sales data
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-18
General Rules of Thumb
What data has the greatest amount
of predictive power?
What is the width and depth of the
data base?
A marketing research data base is a
constant and ongoing process.
 The company needs a commitment to
long-term data acquisition and
enhancement.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-19
Technology: Turning Data into
Information
Data Field
 A basic characteristic about a
customer.
Data Base Technology
 The tools that marketing practitioners
use to transform data into
information.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-20
Database Systems
Two types of database systems
exist:
 Sequential Systems
 Organises data in a simple pattern.
 Relational Systems
 Structures database into tables with
rows and columns.
 Tables are linked depending on the
output desired.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-21
An Example of a Sequential
Database
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PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-22
Data Warehousing
A central repository from all
significant parts of information
that an organisation collects.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-23
Data Warehousing
Storing information in a data
warehouse is an ongoing and
iterative process, comprised of
the following kinds of data:
 Operational data
 Informational data
 Real time transactional data
 Customer-volunteered data
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-24
The Data Mining Procedure
The process of finding hidden
patterns and relationships among
variables/ characteristics contained
in information stored in the data
warehouse.
Recognises significant patterns of
data as they pertain to particular
customers or customer groups.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-25
The Data Mining Framework for
Marketing Decisions
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PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-26
Database Analysis and Modelling
Summarise what companies
already know about their best
customers and indicate what
they need to learn about these
individuals.
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PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-27
Database Modelling - Scoring
Models
 Used to predict consumption
behaviour.
 Researchers assign each
individual in the database a score
on their propensity to respond to
a marketing variable or make a
purchase.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-28
Database Modelling - Lifetime
Value Models
 Are database models developed
on historical data.
 Using actual purchase behaviour,
not probability estimates, to
predict future actions.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-29
The New Millennium and
Marketing Research Databases
The future lies in the ability to
provide information based on
events as they actually occur.
New techniques are emerging that
can transform marketing research
form a data collection task into an
information resource laboratory.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau
Slides prepared by Judy Rex
19-30