Transcript Marketing Research

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Marketing Research
Aaker, Kumar, Day and Leone
Tenth Edition
Instructor’s Presentation Slides
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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:
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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
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• 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
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• Date and Purchase details of
first transaction
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• Recency/frequency/monetary
transaction history
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• Relevant demographic data for
consumer buyers
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• Credit history and rating
• 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
• 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 offline
• 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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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.
• Disaggregate-level approach
▫ CLVs of each customer can help to formulate customer-specific marketing strategies for:
 Customer selection
 Customer segmentation
 Optimal resource allocation
 Purchase sequence analysis
 Targeting profitable prospects based on CLV
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Marketing Research 10th Edition