DATABASE MARKETING SCOPE & EFFICACY

DATABASE MARKETING: SCOPE & EFFICACY

DATABASE MARKETING

a) A Database marketing system is a system of integrated information files, as

just defined, about a company's customers, prospects, suspects, products, sales,

and more, that is conveniently accessible for model building, updating,

analyzing, and conducting marketing activities.

b) An automated system to be used to identify people - both customers and

prospects by name, and to use quantifiable information about these people to

define the best possible purchasers and prospects for a given offer at a given

point in time.

-Some direct marketing media, such as direct mail outbound telephone

marketing, require a database of customers and/or prospects to receive mail or

phone calls.

-Other media such as magazines, newspapers, radio, television, and the World

Wide Web, rely on prospects to identify themselves when they see ads that

appeal to them.

-Once these prospects respond by inquiring or making a purchase, their names,

addresses, and other vital information are added to the database.

Govt. R C College of Commerce and Management 1


TYPES OF DATABASE

THE CUSTOMER DATABASE

Database may be little more than a collection of customer information. It can be

used to identify the company’s most valuable customers. This database can be

categorized into.

Active Customers:

What actions have customers taken in the past?

How recently have they purchased?

How frequently have they purchased?

How much did they spend?

What are their product or service preferences?

From what promotion source were they acquired?

Inactive Customers:

How long have prior customers been in-active?

How long had they been active?

What was their buying pattern while active?

How they were initially acquired?

What offers have they received since?



THE PROSPECT DATABASE:

The database of existing customers can enable to identify new prospects

who are most likely to become customers.

Profile customers in existing database first; then seek prospects like

them.

View such profiles in terms of lists of readers, viewers, listeners in order

to effectively utilize all advertising media and not just direct mail.

THE ENHANCEMENT DATABASE

Highly sophisticated computer matching technology now permits

overlaying one or multiple database in order to transfer relevant

information.

Past transactions; demographic and psychographic data; credit

experience, if pertinent; people on the move, evidenced by an address

change; significant characteristics of a business; and a multitude of

customer behavior and transaction data.

By overlaying multiple databases we can eliminate duplications.

Negative screening, such as a credit check, can be used to remove a

record.



LIFE TIME VALUE OF A CUSTOMER

Lifetime Value is that if a customer keeps buying the same product over his

entire lifetime, it adds to a big sum.

A company should not see just the total sales but should track the lost sales due

to deserted customers. Therefore, key performance figure is not just current

market share, but share of lifetime value. Companies lose roughly 15% of their

customers every year. That means that in three years, the company will be left

with half the customers it started with. However, these customers get replaced

over a period of time, but as competition increases, it becomes very expensive

to do that.

Life time value of a customer forces company to harp upon the idea of retaining

customers and this is what, has given birth to the idea of Relationship

Marketing. Relationship Marketers average their database to convert potential

buyers into customers and than build a long term alliance with them through a

range of insightful, targeted programs.

Lifetime value of customers can be increased through database marketing by

i) Retaining him

ii) Getting the referrals

iii) Making him purchase more or wider product line of the company.

iv) Decreasing direct marketing cost.



HOW TO USE A DATABASE

Database can be used to-

Use frequent buyer programs.

Send timely reminders of needed services.

Provide contests and sweep stakes opportunities.

Send a card or letter on the anniversary of a purchase.

Send customer’s kids birthday cards if we can get them on the database.

Using careful segmentation, send notification of price, product, and

policy changes as well as new product announcements.

Invite customers / prospects to a product demonstration or to educational

seminar.

TYPES OF INFORMATION ABOUT CUSTOMERS

Prefix, name, and address

Titles (business) and family relationships (consumer)

Phone (day or evening), fax, E-mail if applicable

Original source of customer or prospect (through what mailing, ad etc)

Purchase history, continually updated (what, how much, and when)

Yearly or seasonal purchase volume

Credit risk history

Customer service history (how often is merchandise returned; how often

have we been unable to meet this customer’s needs)

Consumer's lifestyle information

For business database: Company sales volume, number of employees,

home, office location and other indicators of the customer’s overall

potential and needs.



USE OF DATABASE TO SEGMENT THE MARKET AND SERVE THE

CUSTOMERS

Develop logical product offerings to obtain more “share of customer”.

Offer different gifts and incentives by segment.

Identify new product, market, and business opportunities.

Use both retail and direct mail database in segmentation.

TENETS FOR DATABASE MARKETERS

1. Database marketing is incremental. Database marketing can help to retain

customers or increase sales. Evaluate the costs and benefits of database

marketing on the incremental costs and incremental profits.

2. Outsourcing the construction of marketing database will always save

both money and time. A provider with experience in building many

databases can get us up and running faster at lower cost than any

in- house operation that lacks experience in this specialized field.

3. All new-customer data base should be functional or can be implemental.

We can make money from a database only when it is functional. What if

our database is so large that it takes more than six months? Begin with the

top 20 percent of the customers. Expand to the other 80 percent when we

have learned what works and what doesn't.



4. Know the two kinds of customers: 1) transaction buyers who first

consider only price and have no loyalty; (2) relationship buyers who are

looking for a reliable supplier who will give them super service.

Relationship buyers are the ones we want. We can train our customers to

be one or the other. Once you have acquired a customer, stop talking

about price and start talking up your service. You can train customers to

be relationship buyers.

5. Make customers work hard to achieve Gold Card status: then reward

them with super service. Focus the attention on those customers just

below the qualification level. Encourage them to spend a little more to

achieve gold. When they do, we will have them for a lifetime. This is the

main payoff from a gold program.

6. Keep in the database only that data which we can profitably use for

marketing during the next few years. Too many people keep data that is

"nice to have" but cannot be used to increase profits. Such data costs

money and reduces profits.

DIRECT MARKETING



The Direct Marketing Association (DMA) defines direct marketing as follows:

Direct marketing is an interactive marketing system that uses one or more

advertising media to affect a measurable response and / or transaction at any

location.

This definition emphasizes a measurable response typically a customer order.

Thus direct marketing is sometimes called direct- order marketing.

DEFINITION:

Direct marketing is an interactive system of marketing, which uses one or more

advertising media to effect a measurable response and/or transaction at any

location, with this activity stored on database (With continuing growth and

development in the field, standard definition is no longer applicable).

Direct marketing (also called database marketing) uses a variety of

communications media to build a database of consumer information so that a

company can enhance its' relationship with the customer. The term direct

marketing is used when seller and customer deal directly with each other rather

than through a retailer or medium. It may also be to provide support to sales

people and dealer. The term direct marketing is supplanting the term mail order

because today so much of the business uses means other than mail. Main

purpose of direct marketing is to serve the individual customer in the multi-

brand and multi-product scenario when the advertising cost are spiraling up the

Direct Marketing technique decreases the cost incurred on individual customer

by increasing the possibility of response from the targeted customers by the

way of addressing individual customer needs.

Evolution of Direct Marketing:



1880, Father of "Lead generation" was John Patterson founder of National

Cash Register Co.

1900, Richard Sears a young Railroad stationmaster purchased a shipment of

Gold watches. He asked a logical question of himself. Who has to know the

correct time at all times? “Other Railroad station agents” was the reply. He

got a list, mailed and sold out. Thus Direct Marketing was born.

1910, Sears introduced Sears credit card for his prime prospect Farmer.

1940, Annual subscription method was born which keeps selling costs down.

Ex: Magazines, tapes and CDs.

1950, Diners Card, American Express. Bind-in cards were also introduced.

1966, Toll free phone service was introduced, spawning a new industry of

telemarketing.

1972, Upscale catalogue was started in 1972 by Roger Horchow with his

Horchow collection catalogue.

1980, New Direct response media came - Videocassettes, Cable TV, Fax,

Home shopping, Internet.

Yesterday



Mass

Consumer is passive

One off short term

Limited use of technology

Serve customers well

Success measured by current market-share

Success measured by current profits

Today

Personal

Consumer is participative

Lifetime, long term

Widespread use of technology

Serve customers differently

Success measured by lifetime market-share

Success measured by lifetime profits

REASONS FOR EMERGENCE OF DIRECT MARKETING

1) Fragmented Market: - Consumer's needs are becoming specialized. New and

smaller markets are emerging up, where mass marketing is not effective. Ex.

Tutorials, fitness equipment, BPL Home Theater.

2) Traffic Congestion: - Higher cost of driving, vehicular population, traffic

congestion, lack of time has made shopping a tedious activity.



3) Slower moving items: - Many types of specialized product whose market is

small, finds its turnover to be very slow in the retailer's shelf, therefore D.M.

becomes an obvious choice.

4) Increasing cost of Media: - With the media cost and competition increasing

general marketing becomes ineffective.

5) Brand clutter: - No of brands within a product category is increasing.

Positioning and image of the Brand is losing its identity in the over

communicated society of developed economics. Direct Marketing gives the way

to talk to consumers differently.

BENEFITS OF DIRECT MARKETING

Comparative shopping possible with on line services.

Price changes takes place as a function of demand and supply.

Cost per response/customer is less.

Power to close sale.

Aids marketing research and test marketing.

Strategies do not get open up to competitors.

Relationship building

CHARACTERISTICS OF DIRECT MARKETING:

The essential character of direct marketing lies in its action orientation. General

advertising may inform, persuade, or remind prospects about products or

services, but it does not sell. To sell, or to invite a step toward a sale, direct



marketers include a call to immediate action and an easy-to-use response

device. Direct marketers make specific offers: they tell prospects what they’re

going to get and what they have to do to get it, be it a product in exchange for a

price, free information in exchange for a phone call.

(a) Direct Marketing Is Targeted:

Successful direct marketers develop products and services that will appeal to

specific groups of consumers-groups that are measurable, reachable, and sizable

enough to ensure meaningful sales volume.

(b) Direct Marketing Is Personal:

Because direct marketers can record so much about their customer’s and

Prospects buying habits and preferences as well as lifestyle information, they

are able to address these people in very specific terms. as Cricket

(c) Direct Marketing Is Measurable:

Because each direct marketing message carries a call to action, the advertiser is

able to measure the effectiveness of mailings, calls, and ads by tracking the

sales, leads, or other responses received.

(d) Direct Marketing Is Testable:

Because direct marketers can generate firm numbers that measure the

effectiveness of their efforts, it is possible for them to devise accurate head-to-

head tests of offers, formats, price, payment terms, and creative approach.



(e) Direct Marketing Is Flexible:

Direct marketing’ flexibility is especially apparent in direct mail, where few

constraints limit size, color, timing, and format. A direct mail marketer can sell

with formats ranging from a postcard to a 9” X 12” envelope to a three

dimensional package. The marketer sets the mailing date not by a publication.

HOW DIRECT MARKETING WORKS

Direct Marketing, as practiced by professionally managed firms is a four - step

process:

Identifying Prospects

Establishing Contact

Booking the Order

Maintaining contacts to develop a mutually beneficial, long term business

relationship.

Identify in Prospects and segmenting them into various categories based on

certain specific criteria is critical to the success of direct marketing. This is

done in different phases. In the first phase, a preliminary list of potential or may

be customers is made through random mailing, house calls, or mass, media

advertisements using coupons or some other contact device. In marketing

jargon it is termed cold listing.

This cold list is thoroughly scrutinized and attempts are made to identify those

who are not likely to use the proposed product or service due to incompatibility

of need, income, age, sex, occupation or any other reason.



All such people who don’t qualify as prospects are dropped from the list. The

residual list is then known as hot list Firms may sometimes seek to gather

additional information about those included in the initial list by contacting them

on telephone or through other convenient media.

The next is to draw the detailed profile of the prospect. This may include

information on consumption habit, purchase behavior, personality and life style,

social class, exposure to media, and demographic particulars such as age,

income, education, profession, family size, domicile and complete postal

address. Technically this step is known as profiling the respondent or response

graphic.

The list is further split in to separate clusters of identical groups, using some

demographic, psychographic or behavioral parameters. This exercise is termed

as segmentation. Firms now adopt many innovative ways of clustering, using

novel parameters such s traveling habits, food preferences, ownership of

automobiles, possession of assets and durables, and taste for music and art.

Finally, each cluster is researched using some predetermined criteria, to identify

the specific segment or segments to be targeted for marketing the product. This

exercise is known as targeting .If the product is a high – value item such as

jeweler, or an expensive gadget, direct marketing goes in to further details and

makes an elaborate study of each individual included in the target segment. This

is known as individualization. Now the firm may focus on the specific needs of

the individual customer.



THE GROWTH OF DIRECT MARKETING:

(a) Advances in Computer Technology:

Recording and manipulating a database became feasible when fast and

affordable computers penetrated the American business market. The new

technology also has allowed for useful innovations in printing and production,

such as laser and ink-jet personalization techniques and computerized graphic

design and production. The Internet, originally a tool for the military and

universities, found a booming business and consumer market in the 1990s

fueled by user-friendly navigation software, powerful search engines, and high-

quality graphics on the World Wide Web. On-line services, which had served a

small, cut-like audience for years, caught fire in the 1990s.

(b) Targeted Media Opportunities:

Just the Sears general catalog has given way to myriad smaller and more

specialized catalogs from Sears, Shop-at-Home, the old mass magazines such as

India Today, Illustrated Weekly have been supplanted by periodicals that define

their audiences: Design, A&M, Chip, just to name a few among hundreds of

targeted magazines. At the same time, marketers have learned to use radio

stations geared toward news, talks, classical music, and other defined audiences

for direct response offers. Network TV i.e. DD, has given way to better targeted

channels such as Star Sports, National Geographic. Punjabi Channel, Music

Asia and others.

(c) Growth of Consumer Credit

American Express, Master Card, Visa, and other widely distributed credit cards

offer consumers the opportunity to make impulse buying decisions. Consumer



credit works hand-in-hand with telemarketing to streamline the buying process:

customers can call a toll-free telephone number, provide their card numbers,

and order products from the comfort of home. Credit cards also increase the

opportunity for trust on both sides of the buying transaction. The marketer is

protected against much of the risk of bad credit, and the buyer can call on the

credit-card firm to help if there is a customer service problem. As consumers

grow to trust the privacy safeguards now in place on the World Wide Web and

on-line services, more direct purchases will be made there by credit card as

well.

(d) Decline in Personal Service:

Vast improvements in direct marketers, inbound telemarketing systems,

customer-service capabilities, and inventory and shipping controls have made

shopping from home a viable alternative even for those who need merchandise

delivered quickly.

(e) Changing Lifestyles

There are more dual career families than ever before. In fact women as

professionals are increasing. Today's working woman often has more money

than time to invest in shopping. Direct marketers offer ways to do this: catalog

shopping, TV home shopping, or Internet shopping at any hour of the day or

night; toll-free 24 hour phone lines for ordering; home or office delivery

including affordable overnight or two-day delivery; liberal guarantees; free-trial

privileges; and much more. Shopping at home also allows customers to remain

safe and anonymous in their own "comfort zones": attributes that are growing in

importance to many busy consumers and senior citizens today. Home shoppers



need not get dressed up, carry mace spray units on their key chains, or walk

through deserted parking lots or garages with their purchases in hand.

(f) A Diverse and Affluent Marketplace

Market fragmentation has started taking place in India. Niche markets potential

is increasing. Trendy youths, debonair executives, professional women, health

conscious adult are transforming into mature and consuming class, Specialty

services or products to premium segment are going to increase. Economist

magazine of U.K. can target corporate managers of India, thus increasing its

subscription and geographical base.

(g) Higher Education allows for a Longer Story

Although illiteracy is a major problem in India today, the upscale target

prospects of most direct marketers are better educated than ever before. Thus

they are ready and able to read the long, meaty "reasons-why" copy that helps

direct marketers sell thoroughly and effectively in print media and through the

World Wide Web and on line services.

TECHNIQUES OF CREATING DIRECT MAIL PACKAGES

Direct mail is an expensive advertising medium. It costs 15 to 20 times as

much to reach a person with a direct mail package as it does to reach him

with a 30 second TV commercial or a full page ad in a newspaper.

Customers acquired by direct mail are usually better customers in terms of

repeat business than those acquired by space or broadcast advertising.



ADVANTAGES OF DIRECT MAIL:

1. Selectivity: Through careful list selection and segmentation, direct

mail can give you pinpoint selectivity unmatched by any other

advertising medium.

2. Virtually Unlimited Choice of Formats: You can use large, lavishly

illustrated brochures. You can have any number of inserts. You can use pop-

ups, fold-outs, swatches. What you can do is limited only by your

imagination and budget.

3. Personal Character: Even through you mail in the millions, you are

still mailing individual pieces to individually addressed human beings. You

can sell much better when you are talking to an individual rather than to

people en-masse.

4. No Competition: In direct mail, advertising arrives all by itself to

be opened and read at the recipient’s leisure. When it is read, there is nothing

to compete with it for your prospect’s attention.

5. Most Testable Medium: With direct mail you can virtually

simulate laboratory conditions for testing. You control exactly when the

mail is dropped and exactly who gets which test package.


6. Unique Capability to Involve the Recipient: Direct mail offers wide

choice of devices that involve the recipient, such as tokens, stamps,

questionnaires, and quizzes. You can literally get the recipients to talk back to

you.

7. Selecting the Format: Because direct mail offers an unlimited choice of

format, a good place to start is deciding which basic format to use. Three

basic formats:

The classic format utilizes a separate outer of mailing envelope. The

size the material the number of colors can vary widely. What

goes inside that envelope can vary even more widely. It is

the most personal of the direct mail formats. It almost always

includes a separate letter either preprinted or personalized.

The self mailer does not have an outer envelope. These mailers vary

from a single sheet of paper folded once for maili8ng to wonderfully

complex pieces with multiple sheets and preformed reply envelops a

self mailer comes off the press complete, ready to address and mail.

Self mailers are less expensive than classic mailing packages no

inserting is needed.

The catalog is literally a magazine with up to many hundreds of pages

require a highly specialized format their use is subject to many

important guidelines.

DIRECT - MAIL ADVERTISING

Direct-mail advertising is only one of direct - response techniques. However,

because of its widespread use and the special opportunities it offers advertisers,

we consider it in a separate section. Direct mail is sometimes used by a

company as its primary promotional tool, and on rare occasions, its only

advertising vehicle. However, it is much more common to employ direct mail

as a part of a diversified marketing communication program. In this role, it must

complement traditional media advertising as well as overall marketing

objectives.

Companies contemplating using direct mail should be clear about their goals

and objectives, as with any other advertising or promotion. There are numerous

uses of direct mail:

Lead Generation: Personal salesperson can be made much more

efficient by following up on leads generated by direct mail rather than

making cold calls.

Mail order: As discussed earlier in this chapter, direct mail is a primary

method of selling goods directly to consumers. Figure shows that over 70

percent of businesses buy products through direct mail, with an average

of five purchases annually.

Loyalty programs: To most companies, keeping present customers is a

major goal. Direct mail can build relationships, reward loyalty, and

generate referrals.

THE CHANGES IN DIRECT MAIL:

Only a few years ago, direct mail was a set medium with it is own rules that

you broke at your risk. A direct mail package had at the minimum –

an outer envelope a reply envelope, a letter a brochure, and an order form.

The changes are focused on one objective: faster, stronger, more

telegraphic communication with the prospect.

Why? Two reasons, First mailbox clutter! is becoming real,. Only a direct

mailing that grabs has a chance of working. Second we are now talking to

the TV generation, which grew3 up with visual symbols. Unlike us

older folks who grew up reading books, the TV generation is less inclined to

stay with you if you don’t get your message across very quickly. The

specific changes are in two areas:

1. Shorter copy and better copy: Direct mail historically has been

overwritten does not impose the discip0line for tight concise writing

that space or broadcast does. Now the direct mail writer must edit and

polish copy making every would justify its existence. A four page letter may

still be the best way to go.

2. Quicker communication through graphics: The designer is becoming

an equal partner in the direct mail creative process. Graphics

communicate more quickly and more quickly than words.

An added benefit of the designer’s involvement is that we are improving the

appearance of direct mail, as well as the level of taste.

MANAGING A LEAD-GENERATION PROGRAM

Many products and services cannot be sold cost effectively through a one-step

sales effort. A two-step, or multi step, program is usually necessary when a

significant customer investment is required, or when personal interaction is

necessary to complete a transaction. The two major uses of a lead-generation

program are:

1. Identifying prospect or customer interest or potential prior to committing to

the cost of a face-to-face sales visit.

2. Generating interest and stimulating traffic into a local retail outlet. The first

instance is lead qualification and the second is lead (or traffic) generation. If our

needs can be met by either of these activities we need a lead generation

program.

TYPES OF LEAD-GENERATION PROGRAMS

There are two general types of lead generation programs.

BUSINESS-TO-BUSINESS

The primary objective in business-to-business lead generation is to get qualified

leads from prospects that, in effect, raise their hands and say, I’d like more

information about your proposition.. The thrust of the promotion can be as

simple as encouraging prospects to request literature with an inducement to

order by mail. Telephone follow-ups of those who request literature is often an

integral part of the lead generation program. For more complex propositions,

those requiring interactions with a live salesperson, the objective is to get a

request for a salesperson to call.

BUSINESS-TO-CONSUMER

Price point and available channels of distribution almost always dictate the

feasibility of lead-generation programs for consumer products. However, lead-

generation programs do make eminent sense for electronic equipment like

refrigerators, or air-conditioning, or freezers, or insulation each a considered

purchase of magnitude for the consumer. Manufacturers sell major equipment

directly to the consumer. The objective is to get qualified leads and to complete

the transaction by mail and/or telephone follow-up.

LEAD QUALIFICATION

It is no secret that in any lead-generation program lead quality varies a great

deal. In fact, generally speaking, about 20 percent of total lead results in about

80 percent of total sales revenue. It makes sense, therefore, to optimize time and

effort with a good lead-qualification system. There are two good reasons for

optimizing time and effort:

1. Time is money: Given the cost of an industrial sales call it costs much to

have a salesperson call on unqualified prospects.

2. Good leads get cold: While salespeople are pursuing low-quality leads, high

quality leads get cold. Each day that a lead is not acted upon lessens the

likelihood of sales conversion.

LEAD FLOW MONITORING

More quickly a lead is acted upon, the higher the likelihood of conversion. The

theory behind this is that the interest is highest when a prospect has first

responded to an offer. The longer that lead sits, the .colder" the prospect

becomes (Although it differs by offer a rule of thumb is that a lead should be

acted upon within ten days maximum. sooner, if possible) But as anyone who

has worked with a lead .generation program will tell that sometimes leads come

in at a greater rate than anticipated no matter how carefully planned or,

sometimes less than anticipated.

Whether too high or too low, it pays to have contingency systems in place.

ON LINE MARKETING

An online marketing channel is one that a person can reach via computer and

modem. A modem connects the computer to a telephone line so that the

computer user can reach various online information services. There are two

types of online channels.

Commercial online channels: Various companies have set up online

information and marketing services that can be accessed by those who have

signed up for the service and pay a monthly fee. The best known online

services are CompuServe, America Online, and Prodigy, with more than

3,200,000, 3,000,000 and 1,600,000 subscribers respectively. These online

channels provide subscribers with five main services: information (news,

libraries, education, travel, sports, reference), entertainment (fun and

games), shopping services, dialogue opportunities (bulletin boards, forums,

chat boxes), and e-mail.

The Internet: The Internet is a global web of some 45,000 computer

networks that has made instantaneous and decentralized global

communication possible. Originally established to facilitate research and

scholarly exchanges, the Internet is now available to a much broader

audience, some 25 million people. Users can send e-mail, exchange views,

shop for products, and access news, food recipes, art, and business

information. The Internet itself is free, though individual users may need to

pay a commercial service to be hooked up to it.

THE BENEFITS OF ONLINE MARKETING

Why have online services become so popular?

Convenience: Customers can order products 24 hours a day whenever they

are. They don’t have to sit in traffic, find a parking space, and walk through

countless aisles to find and examine goods. And they don’t have to drive all

the way to a store, only to find out that the desired product is out of stock.

Information: Customers can find reams of comparative information about

companies, products, and competitors without leaving their office or home.

They can focus on objectives criteria such as prices, quality is out of stock.

Fewer Baseless: With online services, customers don’t have to salespeople

or open themselves up to persuasion and emotional factors. Second, online

services also provide a number of benefits to marketers:

Quick adjustments to market conditions: Companies can quickly add

products to their offering and change prices and descriptions.

Lower Costs: Online marketers avoid the expense of maintaining a store

and the accompanying costs of rent, insurance, and utilities. They can

produce digital catalogs for much less than the cost of printing and mailing

paper catalogs.

Relationship Building: Online marketers can talk with consumers and learn

much from them. Marketers can also upload useful reports, or a free demo of

their software, or a free sample of their newsletter, onto the system.

Consumers can then download these items into their electronic mailboxes.

Audience Sizing: Marketers can learn how many people visited their online

site and how many stopped at particular places on the site. This information

can help the marketers improve their offers and ads.

Clearly, marketers will want to consider using online services to find, reach,

communicate, and sell. Online marketing has at least four great advantages.

First, both small and large firms can afford it Second, there is no real limit on

advertising space, in contrast to print and broadest media. Third, information

access and retrieval are fast, compared to overnight mail and even fax and

fourth, shopping can be done privately and swiftly. However, online marketing

is not for every company nor for every product; thought has to be given to it,

when, and how it should be done.

DATA ANALYSIS

&

INTERPRETATION

Database marketing helps you to retain customers.

Yes No Total

% 70 30 100

num 21 9 30

Graph 9.1: Analysis of Customer retention

Interpretation:

Among the 30 respondents 21 respondents said that direct

marketing with the help of database helps in customer retention and 9 of

them said no to it.

Analysis of Customer Rention

010

2030

4050

6070

80

Yes No

retention option

% o

f re

nte

nti

on

Database marketing helps you to keep a control over the Incremental cost

factor.

Yes No Total

num 17 13 30

% 56.67 43.33 100

Incremental cost factor

Graph 9. 2: Control over the Incremental cost factor.

Interpretation:

Among the 30 respondents about 17 (57%) of them said that direct

marketing is helping them to keep a control over the incremental cost

factors and 13 (43%) of them said no.

You make it functional first and then make it Implemental.

.

Graph 9..3: Functional then Implemental

Interpretation:

Among 30 respondents, 27 of them said that they make it functional first on a

prototype basis then they go for the implementation stage.

Yes No Total

% 90 10 100

num 27 3 30

Which kind of customer you like:

(a)Transaction buyers

(b)Relationship buyers

Yes No Total

num 25 5 30

% 83.33 16.67 100

Graph 9.4: Kind of customers

Interpretation:

Among 30 respondents, about 25 of them said they believe in relationship

buyers and the rest 5 of them in transactional buyers.

You make your customers to work hard to achieve a gold Status.

Graph 9.5: Gold Status

Interpretation:

Among 30 respondents, 18 of them help the customers in achieving a gold

status and rest 12 of them are in a process to build up a relation.

Yes No Total % 60 40 100num 18 12 30

You keep data in the database which are profitable keeping some years in

account?

Graph 9.6: Database of Profitable customers

Interpretation:

Among 30 respondents, 12 of them said that they keep a database of

profitable customers, other 18 are still to get into that frame.

Yes No Total

% 40 60 100

num 12 18 30

You are spending too much on media expenses in proportion to profit.

Expenses on media

Graph 9.7: Expenses on media

Interpretation:

Among 30 respondents, 20 of them said that they are spending too much on

media and the rest 10 of them do it as a routine activity

Yes No Total

num 20 10 30

% 66.67 33.33 100

Database or Direct marketing helps you in marketing research and analysis.

Graph 9.8: Market research and Analysis

Interpretation:

Among the 30 respondents, 29 of them said that they use the database for the

purpose of market research and analysis.

Yes No Total

num 29 1 30

% 96.67 3.33 100

You offer special prizes as promotional offers.

Graph 9.9: Promotional Offers

Interpretation:

Among 30 respondents, 23 0f them said that they offer promotional offers and

the rest 7 do not.

Yes No Total

num 23 7 30

% 76.67 23.33 100

Frequency of mailing to your customers

Graph 9.10: Mailing customers

Interpretation:

Among 30 respondents, 7 of them mail their customers once in a week, 15 of

them once in a month and the rest 8 in 2 months.

1 week 1 month 2 months Total

num 7 15 8 30

% 23.33 50 26.67 100

Direct marketing affects the Life Time Value of a Customer

Yes No Total

num 17 13 30

% 56.67 43.33 100

Graph 9.11: Life time Value

Interpretation:

Among 30 respondents, 17 of them said that direct marketing increases the

life time value of a customer.

Direct marketing is booming concept in India.

Graph 9.12: Booming Concept

Interpretation:

Among 30 respondents 27 of them feel that direct marketing is a booming

concept in India.

Yes No Total

num 27 3 30

% 90 10 100

Advanced technology helps further evolution of direct marketing.

Graph 9.13: Advancement of Technology

Interpretation:

Among 30 respondents, 26 of them feel that advancement in technology helps

direct marketing.

Yes No Total

num 26 4 30

% 86.67 13.33 100

FINDINGS AND RECOMMENDATIONS

Direct Marketing benefits customers in a number of ways. Customers report

that home shopping is fun convenient, and hassle - free. It saves time and

introduces them to a larger section of merchandise. They can do comparative

shopping by browsing through mail catalogs and online shopping services,

and can order goods for themselves or others. Industrial customers also cite a

number of advantages . They par t icu la r ly l ike learning abou t

available products and services without tying up time in meeting sales people,

Sellers also benefit. Direct marketers can buy a mailing list containing the

names of almost any group: left handed people overweight people,

millionaires, and so on. They can personalize and customize their messages.

Further more, direct marketers can build a continuous relationship with each

customer. The parents of the new- born baby will receive periodic mailings

describing new clothes, toys, and other goods as the child grows. Direct

Marketing can be timed to reach prospects at the right moment, and direct -

marketing material receives the higher readership because it is sent to more

interesting prospects. Direct Marketing permits the testing of alternative media

and messages in search of the most cost - effective approach. Direct

Marketing also makes the direct marketers offer and strategy less visible to

competitors. Finally, direct marketers can measure can measure responses to

their campaigns to decide which have been the most profitable.

CONCLUSION

This project has helped me understand the importance and significance

of DATABASE MARKETING: SCOPE & EFFICACY and its impact on

consumer buying behavior. It has given me exposure to the practical side of

direct marketing and at the same time enhanced my knowledge by

applying theory learnt in class to practice.

Direct Marketing when used effectively is no doubt, a powerful tool to

entice customers in making a purchase decision. Companies can attract more

customers and increase sales by proper use of visual direct marketing

techniques.

BIBLIOGRAPHY

BOOKS:

MARKETING MANAGEMENT – PHILIP KOTLER

RESEARCH METHODOLOGY – COOPER AND SCHINDLER

JOURNALS AND MAGAZINES

BUSINESS WORLD

BUSINESS TODAY

WEBSITES

www.google.com

www.teomaask.com

www.amway.com

www.oemji.com

www .P ure B u s i n e ss . c om

www.sribd.com

http://www.PureBusiness.com/

ANNEXURE

I am a student of Govt. R.C. College of Commerce and Management,

pursuing MBA Program. As a part of the MBA curriculum, I have taken

up a research project on DATABASE MARKETING: SCOPE &

EFFICACY.

In this connection, I need some information. Below is the questionnaire.

Kindly give your responses to the questions in the questionnaire. I sincerely

assure your responses will be kept strictly confidential and shall only

be used for academic purpose. I shall greatly appreciate your

cooperation in completing my research project.

PRADEEP.M.B

Reg. no. 06ATCM6034

QUESTIONNAIRE


1. Database marketing helps you to retain customers.

(a)Yes

(b) No

2. Database marketing helps you to keep a control over the Incremental cost

factor.

(a)Yes

(b) No

3. You are outsourcing the construction of marketing database.

(a)Yes

(b) No

4. You make it functional first and then make it Implemental.

(a)Yes

(b) No

5. Which kind of customer you like:

(a)Transaction buyers

(b)Relationship buyers

6. You make your customers to work hard to achieve a gold Status.

(a)Yes

(b) No

7. You keep data in the database which are profitable keeping some years in

account?

(a)Yes

(b) No

8. You are spending too much on media expenses in proportion to profit.

(a)Yes

(b) No

9. Direct marketing helps you in marketing research and analysis.

(a)Yes

(b) No

10. You offer special prizes as promotional offers.

(a)Yes

(b) No

11. Your frequency of mailing to your customers.

(a) 1 week

(b) 1 month

(c) 2 months

12. Direct marketing affects the Life Time Value of a Customer.

(a)Yes

(b) No

13. Direct marketing is booming concept in India.

(a)Yes

(b) No

14. Advanced technology going to help in further evolution of direct marketing.

(a)Yes

(b) No

]

Documents

DATABASE MARKETING SCOPE & EFFICACY