Marketing Research

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Marketing Research

• Aaker, Kumar, Day
• Ninth Edition
• Instructors 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
• 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
• Get the product right
• Use low-tech targeting and creative thinking
• Use other peoples 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)
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
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 firms 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
  customer-specific marketing strategies for
• Customer selection
• Customer segmentation
• Optimal resource allocation
• Purchase sequence analysis
• Targeting profitable prospects based on CLV