Transcript One-to-One Marketing

One-to-One Marketing
chapter
20
Chapter 20 Version 6e
Prepared by
Deborah Baker
Texas Christian University
©2002 South-Western
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Learning Objectives
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2. Discuss the forces that have influenced the
emergence of one-to-one marketing.
chapter
1. Define one-to-one marketing and discuss
its dependence on database technology.
3. Compare the one-to-one marketing
communications process with the
traditional mass marketing
communications process.
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Learning Objectives (continued)
4. List eight common one-to-one
marketing applications.
chapter
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5. Discuss the basics of one-to-one
marketing database technology.
6. Describe one-to-one marketing using the
Internet.
7. Discuss privacy issues related to
one-to-one marketing.
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Learning Objective
Define one-to-one marketing
and discuss its dependence
on database technology.
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One-to-One Marketing
An individualized marketing
method that utilizes
customer information to
build long-term,
personalized, and
profitable relationships
with each customer.
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What is One-to-One Marketing?
One-to-One
Marketing is...
With a
Focus
on...
Share of
Customer
Through
Use of...
Database
Technology
Customer-Based
Information-Intensive
Long-Term Oriented
Individualized
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One-to-One Marketing
Focuses on Share of Customer
One-to-One
Marketing
Develops Customers
Finds Products for Customers
Focuses on Share of Market
Mass
Marketing
Develops Products
Finds Customers for Products
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The Evolution of
One-to-One Marketing
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2
Learning Objective
Discuss the forces that have
influenced the emergence of
one-to-one marketing.
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Forces influencing
One-to-One Marketing
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Increasing Diversity
More Demanding,
Time-Poor Consumers
Decreasing Brand Loyalty
Emergence of New
Media Alternatives
Demand for Accountability
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Marketing Impact of Trends
Consumer recognition
as unique individuals
Marketing
Impact of
Trends
More direct and personal
marketing efforts
Rewards for loyalty
Increased importance of
One-to-One Marketing
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The New Commandment of
Marketing’s Future
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Know thy customer and
communicate with him or her
based on what you know.
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3
Learning Objective
Compare the one-to-one marketing
communications process with
the traditional mass marketing
communications process.
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The One-to-One Marketing
Communications Process
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Capture of response
shapes futures message
Sender
Encoder
One-to-One
Message
Channel
Decoding
Receiver
Receiver Response
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Communications
Process Differences
3
Message is
Personalized
Channel is
Direct
Noise is
not present
Individual Response
is captured
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4
Learning Objective
List eight common one-to-one
marketing applications.
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One-to-One
Marketing Applications
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 Identify the best customers
 Retain loyal customers
 Cross-sell other products or services
 Design targeted marketing communications
 Reinforce consumer purchase decisions
 Induce product trial by new customers
 Increase the effectiveness of distribution
channel marketing
Chapter
Improve
customer service
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Identifying the Best Customers
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Retaining Loyal Customers
Retaining an additional 5% of customers
each year increases profits by 25%
Improving customer retention by 2%
can decrease costs by 10%
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Other Marketing Applications
through Databases
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 Match profiles to cross-sell other
products to customers
 Modify marketing messages based on
customer profiles
 Reach out to customers to reinforce the
purchase decision
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Other Marketing Applications
through Databases
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 Find new customers
 Gain insight into who is purchasing
products
 Improve customer service
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Learning Objective
Discuss the basics of
one-to-one marketing
database technology.
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Data-Driven Marketing
The process of gathering,
maintaining, and analyzing
information about
customers and prospects
to implement more efficient
and effective marketing
communications.
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Marketing Database
The compilation of names,
addresses, and other pieces
of pertinent information
about individual customers
and prospects that affects
what and how marketers
sell to them.
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Data Warehouse
A large corporate-wide
database in which the data
are culled from a number
of legacy systems that are
already in place within the
organization.
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Building a Marketing Database
Analyze information
to find answers
Enhance customer data
Collect the right data
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Building a Marketing Database
Response Lists
Compiled Lists
Collect the right data
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Building a Marketing Database
Compiled
Data
Modeled
Data
Custom
Data
Enhance customer data
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Enhance Customer Data
Modeled
Data
Information has been sorted into
distinct groups or clusters of
consumers or businesses
based on census, household,
or business-level data.
Custom
Data
Enhancement information acquired by
the marketer, including customer
surveys, customer participation
programs, product registration, warranty
cards, or loyalty marketing programs.
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Building a Marketing Database
Analyze information
to find answers
Customer
Segmentation
Lifetime
Value Analysis
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RFM
Predictive
Modeling
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Data Mining
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Customer Segmentation
Demographics
Geographics
Segmentation
Bases
Purchase Behavior
Psychographics
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Recency-Frequency-Monetary
Analysis
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A data manipulation
technique that determines
the firm’s best customers
by identifying those
customers who have
purchased most recently,
most frequently, and
who have spent
the most money.
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Lifetime Value Analysis
A data manipulation
technique that projects
the future value of the
customer over a period of
years using the assumption
that marketing to repeat
customers is more
profitable than to
first-time buyers.
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Uses of Customer Lifetime Value
Show expense to acquire a
new customer
Provides level of spending
to retain a customer
Provides a basis for
targeting new customers
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Predictive Modeling
A data manipulation
technique in which
marketers try to determine,
based on a past set of
occurrences, what the odds
are that a response or
purchase will take place
in the future.
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Database Enhancement
The overlay of information
to customer or prospect
records for the purpose of
better describing or better
determining the
responsiveness of
customers or prospects.
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Data Mining
The process of using
statistical analysis to
detect relevant
purchasing behavior
patterns in a database.
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Data Mining
Create customer profiles
Uses of
Data Mining
Determine the reason
for customer loyalty
Analyze the potential
return for strategies
Help forecast sales
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Learning Objective
Describe one-to-one marketing
using the Internet.
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One-to-One Marketing
and the Internet
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Create a Multimedia Marketing Initiative
Deliver Personalized Messages
Establish Enduring Customer Relationships
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Learning Objective
Discuss privacy issues related
to one-to-one marketing.
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Privacy Concerns with
One-to-One Marketing
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Unawareness
of information collected
Invasion of
Privacy
Misunderstanding about
privacy laws and
regulations
Popularity of Internet
for data collection
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