databases and marketing
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Databases and Marketing
Customer databasesData WarehousesDatabase Mining
Customer experience management (CEM) is the collection of processes a company uses to track, oversee and organize every interaction between a customer and the organization throughout the customer lifecycle. The goal of CEM is to optimize interactions from the customer's perspective and, as a result, foster customer loyalty.
Why Customer Experience Management Is ImportantStrengthen brand preference.
• Boost revenue.• Improve customer loyalty.• Lower costs by reducing customer churn.
Challenges• Creating consistent brand experiences across channels. • Consolidating data into a single view of the customer• Create and maintain complete customer profiles.• Personalize all customer interactions. • Get the right information to the right place at the right time – every
time
Data Marts and Data Warehouse
Data Mining
What is data mining?– Methods for finding interesting structure in
large databases• E.g. patterns, prediction rules, unusual cases
– Focus on efficient, scalable algorithms• Contrasts with emphasis on correct inference in
statistics– Related to data warehousing, machine
learning
DM Process Model
9
Where Does Data Mining Fit In?
Hindsight
Foresight
Insight
Analysis andReporting (OLAP)
StatisticalModeling
DataMining
Common Data Mining Techniques
• Predictive modeling– Classification
• Derive classification rules• Decision trees
– Numeric prediction• Regression trees, model trees
• Association rules• Meta-learning methods
– Cross-validation, bagging, boosting• Other data mining methods include:
– artificial neural networks, genetic algorithms, density estimation, clustering, abstraction, discretisation, visualisation, detecting changes in data or models
Overview of Database Marketing
What is Database Marketing?
• An information driven marketing process made possible by database technology that enables marketers to
develop, test, implement, measure and modifycustomized marketing programs and strategies
Premise of Database Marketing
• Not all customers are alike (20-80-30 rule)• Gathering, maintaining, and analyzing
customer and prospect info allows marketers to- identify key mkt segments- optimize planning, pricing and promoting- close deals satisfying both buyers and sellers
What is required for Database Marketing?
• Relevant data about customers and prospect• Database tech to transform raw data into powerful
and accessible mkt info• Statistical techniques to rank customers in terms
of their likeliness to- respond to mkt communication- buy products- return products- pay for products- stay or leave
Uses of Database Marketing?
Strategic Marketing Planning & Marketing Process
What is Strategic Planning?
• It is the managerial process that helps to develop a strategic and viable fit between the firm’s objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products.
Organizational Levels
The Corporate Level is the highest level in any organization.
The Functional Level includes all the various functional areas within a business unit.
The Business Level consists of units within the overall organization that are generally managed
as self-contained businesses.
Corporate Mission
• This seeks to embody the entire goals of the organization and the objective of its existence.
• It seeks to provide a sense of purpose, direction and opportunity
Types of Strategic Plans
Business-Unit Composition
• Companies often organize around competency-based SBUs to establish Sustained Competitive Advantage.
Business Strategy Decisions
• Dimensions of Strategy:– Market scope.
– How broadly the business views its target market.
– Competitive advantage.
• Competitive Advantage:– The way a business
tries to get consumers to purchase its products over those offered by competitors.
Marketing Strategy Decisions
A Marketing Strategy Addresses:
• Selection of a target market.
• Development of a marketing mix.
Functional strategiesare at the
business-unit level.
Operating strategies are at the product level.
Levels of a Marketing Plan
• Strategic– Target marketing
decisions– Value proposition– Analysis of
marketing opportunities
• Tactical– Product features– Promotion– Merchandising– Pricing– Sales channels– Service
The Strategic Planning, Implementation, and Control Processes
Porter’s Generic Strategies
Overall Cost Leadership
Differentiation
Focus
Categories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
Product/Market Opportunity Matrix
Market
ProductNew
Present
Present New
MarketPenetration Strategy
MarketDevelopment Strategy
ProductDevelopment Strategy
Diversification Strategy
How to Achieve aDifferentiation-Based Advantage
Incorporate product features/attributes that lower buyer’s overall costs of using product
Approach 1
Incorporate features/attributes that raise the performance a buyer gets out of the product
Approach 2
Incorporate features/attributes that enhance buyer satisfaction in non-economic or intangible ways
Approach 3
Compete on the basis of superior capabilitiesApproach 4
Competitive Advantage Cycle
Integrated Marketing Communications
Challenges today: Customer is changing. Marketing strategies are changing. Communication Technologies are changing.
Why does the need for an IMC arise???
Effective marketing
• Target Audience• Communication Objective• Message Design- Content , Format and
Structure• Choosing Media - Personal and Non-Personal• Selecting Message Source• Collecting Feedback
Promotion strategies
Promotion mix
Advertising
Sales Promotion
Personal Selling
Public Relations
Direct Marketing
Communication Process
Sender
Feedback
Response
Receiver
Decoding
Encoding
Message Media
SETTING TOTAL PROMOTION BUDGET AND MIX
4 METHODS OF SETTING UP PROMOTION MIX
AFFORDABLE METHOD- Promotion budget at the level company can afford.
PERCENTAGE OF SALES METHOD-Promotion budget at the certain percentage of current or forecasted sales.
COMPETITIVE PARITY METHOD-Promotion budget to match competitors outlay.
OBJECTIVE AND TASK METHOD-Promotion budget based on what it wants to accomplish with promotion.
PROMOTION MIX STRATEGY
PUSH STRATEGY-Strategy that calls for using sales force and trade promotion to push product through channels.
PULL STRATEGY-Strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy product like creating demand vacuum.
ADVERTISEMENT
Any paid form of non personal presentation and promotion of ideas, goods or services by an identified sponsor.
MAJOR ADVERTISMENT DECISIONS
• SETTING ADVERTISEMENT OBJECTIVES communication objectives sales objectives• BUDGET DECISION affordable approach percent of sales competitive parity objective & task• ADVERTISMENT STRATEGY MESSAGE DECISION message strategy message evaluation MESSAGE DECISION reach, frequency, impact major media types media timing• ADVERTISMENT EVALUATION communication impact sales & profit impact return on advertisement
PUBLIC RELATIONS
Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image and handling or heading off unfavorable rumors, stories and events.
PR DEPARTMENT FUNCTIONS
• Press relations or press agency• Product publicity• Public affairs• Lobbying• Investor relations• Development
ADVERTISING APPEALS
ADVERTISING APPEAL• Indispensable part of every advertisement.• Central idea of an ad that elicits the much
desired response.• 2 techniques that can be identified in advertising
response: ADVERTISING APPEAL & ADVERTISING EXECUTIONS.
• Every advertisement is an appeal to buy & use the product or the service supported by reasons to buy & use.
ESSENTIALS OF GOOD APPEAL
• It should be thematic.• It should be communicative.• It should be interesting.• It should be believable.• It should be complete.
ADVERTISING APPEALS & BUYING MOTIVES
• Advertising appeals are made to consumer motives.
• Buying motives are the consumer expectations or the buyer specifications. They tell us what each consumer wants to satisfy his needs.
• If the buying motives specify what consumer expect, the appeal speaks the degree to which such specifications are met.
APPEALS & SELLING POINTS• An advertising appeal is the basic use of service or
satisfaction which the product or the service can render and which the advertisement represents.
• What we call as the TALKING POINTS for the salesman, are the SELLING POINTS for an advertiser.
• An appeal is convincing on the basis of product characteristics, merits, satisfaction which we call as selling points.
CLASSIFICATION OF APPEALS
• Advertising appeals are broadly classified into 3 categories:
Product or Service related appealsConsumer related appealsNon-Consumer & Non-product Related
appeal.
I.PRODUCT OR SERVICE RELATED APPEALS
This type of appeal focuses on the product or service features, where some of the aspects of product classification are described. Such appeals do not state openly the consumer benefits as they are implied.
Product feature appeal Product Competitive advantage appeal Product price appeal Product News appeal Product popularity appeal Product generic appeal
II. CONSUMER RELATED APPEALS
• These ads harp on the direct consumer benefits.
• Emphasis is on what the product or service does for the consumer, i.e. consumer satisfaction.
Consumer service appeal Consumer savings appeal Consumer self-enhancement appeal Consumer fear appeal Consumer subsidized product trial appeal
Measurement & Evaluation
Reasons for Measuring Campaign Effectiveness
• To help all brand stakeholders understand the link between marketing investment and return on investment
• To evaluate alternative strategies
• To increase the efficiency and effectiveness of the IMC campaign– In the immediate short term or in the future
Communication Evaluation Considerations
Questions that could be asked:
• Is the advertising working?• Is the message compelling given the
target audience we’re trying to reach?• Is the creative effective?• Is the media strategy effective?
CONSUMER SUBSIDISED PRODUCT TRIAL APPEAL
• Whenever the advertiser is believing in generating initial or extra sales, he does it through the product trial strategy.
• The advertiser offers a free sample, a price reduction or some other purchase incentive to encourage consumer trial or use.
III. NON CONSUMER & NON PRODUCT RELATED APPEALS
• They are founded on the fine works of the company- may be profit making or non profit making or on some sort of organized activity for which public support is desired & accepted.
Corporate citizenship appealsInvestor solicitation appeals
CORPORATE CITIZENSHIP APPEALS
• They attempt to portray the company’s achievements or the contribution to the mankind or the society.
• It presents all that is done by the corporate house in the public interest- social, economic, philanthropic.
• It is used to create a favorable attitude towards the company.
INVESTOR SOLICITATION APPEALS
• This kind of appeal is addressed to the investment community, soliciting the benefits of investment in the company in question.
• Solicitation appeals say that the company is well managed, the line of activity undertaken is really profitable or makes widest range of products well known in the national or international markets.
Sales Promotion
Why ? Types? How?
Whereas advertising gives a reason to buy, SP gives an incentive to buy
It is part of the Marketing spend of all companies and these days SP spends in many companies exceed that of the
adspends
SP is of two types
• Trade• Consumer
Forms of trade promotion
• Bulk discounts• Free materials• Display windows• Shelf hiring• Lucky draws• ‘Mystery’ customer• Redistribution incentives• Shop salesmen incentives
Forms of consumer promotion
• Free samples• Free gifts• Coupons• In-packs• Price packs• Price-offs• Sweepstakes• Bundling offers
Promotion at different stages of the PLC
• Introduction – wise to use heavy promotion to induce trials and promote brand franchise
• Growth – promotion should be limited ,if any• Maturity – Higher promotions required since the
brand is under attack from competitors or product quality or advertising effectiveness is tapering off
• Decline – Heavy promotions. Used only to retain a set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock clearance from the trade
Essential elements for an effective SP programme
• Significant value before promotion is effective• Promotions must be part of an overall plan• Every brand must have a promotion objective
and a strategy statement• A written tactical plan – time frame, costs,
evaluation yardsticks• Factual knowledge must be gathered to plan• Specialised professional skill and knowledge
must be applied to every promotion operations
Final considerations• Don’t promote if the
product is not good• Promotions rarely stop a
declining sales curve• Must be effective in
retaining new customers. So the product has to speak for itself.
• The objective of the promotion is to wean away users from competition and create new users.
• Excessive promotions lead to diminishing returns and may devalue the brand
• Promotions may be used in conjunction with advertising and other marketing communication tools
• It should be novel and attractive• Ensure supply lines are good
and adequate stock is available right through the promotion
• Cater for contingencies. Have escape routes built into the plan
• Trade has to be handled tactfully• Reimburse incentives/ rewards/
gifts promptly• Must be within the legal
boundaries
Advtg v/s WOM
• Word-of-mouth is actually the center of the marketing universe
• Much of marketing actually centers around illusion-creation. Word-of-mouth offers an authenticity effective tool; and best of all, it is absolutely free.
• Word-of-mouth can take on a life of its own.• The most important way by which sales can
increase is by increasing the speed Simplicity, ease, and fun with which decisions are made.
How to develop an effective WOM program
• Find some way to get the influencers to talk and get all fired up about your product.
• Create fun events to bring users together and invite non-users.
• Create a club with membership benefits.Pass out flyers. Tell friends. Offer special incentives and discounts for friends who tell their friends.
• Empower employees to go the extra mile.
Managing Campaigns
Advertising Planning Process
Advertising Objectives
Budget Decisions
Creative Strategy
Campaign Evaluation
Media StrategyBrand Positioning Target Market
A Campaign Management Outline
i. Where are we?ii. Why are we there?iii. Where could we be?iv. How could we get there?
v. Are we getting there?
i. Develop a situation analysis.ii. Identify Problems.iii. Identify Opportunities.iv. Develop message, media, and marketing
communications strategy and tactics.v. Develop a plan to measure (track) campaign effectiveness.
Campaign Tasks include• Identifying the problem• The budget• Target audience• Pretesting Message• The language• The visual and the copy• Media selection• Timing and duration• Post testing• Effect on sales
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