Transcript Marketing Research

Marketing Research
Aaker, Kumar, Day
Ninth Edition
Instructor’s Presentation Slides
1
Chapter Twenty-six
Emerging Applications of Marketing
Intelligence: Database Marketing
and Relationship Marketing
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The Need for Databases
To test a program prior to rolling it out:
 Define your target group
 Go into your database
 Create a matched set
 Expose the test variable
 Minimize other marketing efforts while the test is going on
 Allow test program enough time to work
 Measure results by comparing the two groups’ sales
 Take action. If test results warrant going ahead, then
 Implement it
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Elements of a Database
 A unique identifier such as an ID or match code
 Name and title of individual and/or organization
 Mailing address, including ZIP Code
 Telephone number
 Source of order, inquiry, or referral
 Date and Purchase details of first transaction
 Recency/frequency/monetary transaction history
 Credit history and rating
 Relevant demographic data for consumer buyers
 Relevant organizational data for industrial buyers
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Types of Databases
 Active customers
 Inactive customers
 Inquiries
Modeling customers serves to:
 Identify most typical customers and so become more effective in
prospecting.
 Identify best customers to prospect
 Identify niche markets to add to the marketing universe.
 Develop more effective marketing tools (materials and media).
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Ways to Gather Consumer Data
 Rebate Cards
 Suggestion Cards
 Warranty Registration Cards
 Free Subscription Offer Cards
 Directly Ask Consumers
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Ways to Gather Consumer Data (Cont.)
Guerilla Tactics
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Get the product right
Use low-tech targeting and creative thinking
Use other people’s data (OPD) first
Buy new media
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Benefits of Database Marketing

Customers are easier to retain than acquire

Determine their “lifetime value” to decide whether or not to
encourage greater lifetime duration

Develop relationships with customers across a family of
related products and services
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E-Commerce
 E-commerce influence
 The impact of the net on purchases made entirely off-line
 E-commerce ordering
 Captures the orders that are placed on-line but paid for later via
telephone or in-store
 E-commerce buying
 Combines ordering and paying on-line
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E-Commerce (contd.)
 Retailer responses to e-commerce are:
 Selective price discounts
 Concentrating attention on late adopters of technology
 Creating and staging experiences
 Partially adapting the Internet into a hybrid system
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Shopping on the Internet
Online Sales ($ billions)
Quarter
2004
2003
% Change
Q1
$15.99
$12.61
26.9%
Q2
$16.76
$13.50
24.2%
Q3
$17.63
$14.42
22.2%
Q4
$18.61
$15.01
24.0%
Holiday*
$17.29
$11.24
53.8%
Full Year
$68.99
$55.54
24.2%
* Excludes Online auction and travel sales
Source: Quarterly Retail E-Commerce Sales, 1st Quarter 2005, U.S. Census Bureau, May 2005
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E-Commerce Survey
Reasons for shopping online
Percent
Saves time
78%
Better prices
51%
More selection
43%
Easier shipping
40%
Ability to find a more personalized gift
28%
More information available about the products
20%
Other
8%
Source: clickz.com
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Real-time Marketing
 The marketing process of personally customizing goods
or services that continuously update themselves to track
changing customer needs, without intervention by
corporate personnel, and often without conscious or
overt input from the customer
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Relationship Marketing
Keys to Relationship Marketing:
 Identify and build marketing databases of present and potential
purchasers.
 Deliver differentiated messages to targeted households.
 Track the relationship to make media expenditures more
effective and more measurable.
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Customer Analysis
 Customer acquisition
 Customer cross-sell
 Customer up-sell
 Customer retention
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Customer DNA Model
Reporting & KPIs
Customer Contact Management
Customer DNA
Modeling & Analysis Capability
Single Customer View
Legacy Systems & External Data
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Developments in Relationship
Marketing
 Customer lifetime value (CLV)
 Calculated as the sum of cumulated cash flows —discounted
using the Weighted Average Cost of Capital (WACC) or
discount rate — of a customer over his or her entire lifetime
with the company
 Customer equity (CE)
 The total of the discounted lifetime values summed over all of
firm’s current and potential customers
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Developments in Relationship
Marketing (contd.)
 Aggregate-level approach
 CE framework can be used to:
 Formulate firm/segment level strategies concerning
investments in acquisition, retention, and add-on selling.
 As a surrogate measure of the market worth of most firms
and for comparing competing firms.
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Developments in Relationship
Marketing (contd.)
 Disaggregate-level approach
 CLVs of each customer can help to formulate customerspecific marketing strategies for:
 Customer selection
 Customer segmentation
 Optimal resource allocation
 Purchase sequence analysis
 Targeting profitable prospects based on CLV
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