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Mass Marketing Vs One To One Marketing Mass marketing Mass Marketing is a type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience. Background Mass marketing or indifferent marketing has its origins in the 1920s with the inception of mass radio use. This gave corporations an opportunity to appeal to a wide variety of potential customers. Due to this, variety marketing had to be changed in order to persuade a wide audience with different needs into buying the same thing. It has developed over the years into a world-wide multi-billion

Mass Marketing vs One to One Marketing

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Page 1: Mass Marketing vs One to One Marketing

Mass Marketing Vs One To One Marketing

Mass marketing

Mass Marketing is a type of marketing (or attempting to sell through

persuasion) of a product to a wide audience. The idea is to broadcast a

message that will reach the largest number of people possible. Traditionally

mass marketing has focused on radio, television and newspapers as the

medium used to reach this broad audience.

Background

Mass marketing or indifferent marketing has its origins in the 1920s with the

inception of mass radio use. This gave corporations an opportunity to appeal

to a wide variety of potential customers. Due to this, variety marketing had

to be changed in order to persuade a wide audience with different needs into

buying the same thing. It has developed over the years into a world-wide

multi-billion dollar industry. Although sagging in the Great Depression it

regained popularity and continued to expand through the 40s and 50s. It

slowed during the anti-capitalist movements of the 60's and 70's before

coming back stronger than before in the 80's, 90's and today. These trends

are due to corresponding upswings in mass media, the parent of mass

marketing. For most of the twentieth century, major consumer-products

companies held fast to mass marketing- mass producing, mass distributing

and mass promoting about the same product in about the same way to all

consumers. Mass marketing creates the largest potential market, which leads

to the lowest costs.

Page 2: Mass Marketing vs One to One Marketing

The Evolution Into Mass Marketing

Mass marketing first emerged as a workable strategy in the 1880s. Prior to

that time, local markets in the United States were geographically isolated,

few products had brand recognition beyond their local area, and continuous

process technology had not yet come into its own. Profits in the fragmented

markets were based on a low volume/high price strategy.

Between 1880 and 1890, several things occurred that eliminated the barriers

and enhanced the appeal of mass marketing. Both the railroad and telegraph

systems were completed, thus providing the potential for nationwide

distribution and communication. Mass-production techniques and equipment

were refined and adapted to a variety of products. Additionally, the

population was growing rapidly, the country was recovering from the Civil

War, and the largest depression in U.S. history until that time was ending.

These favorable circumstances by themselves did not create mass marketing.

Entrepreneurial vision, drive, organization, and resources had to be added to

implement the strategy. From 1880 to 1920, early innovators in many

different industries stepped forward to seize the opportunity. Although the

total number was relatively small—one or a few per industry—the impact on

the U.S. economy was enormous. Many of these pioneering marketers built

national reputations for their brands and companies that continue today.

Two of the most widely recognized examples are Ford and Coca-Cola.

Henry Ford applied the concept in the automobile industry. His Model T

was conceived and marketed as a "universal" car—one that would meet the

needs of all buyers. By adopting mass-production techniques and

Page 3: Mass Marketing vs One to One Marketing

eliminating optional features, he was able to reduce costs and sell his

product at an affordable price. The combination catapulted the Model T to

the top of the market. As a Candler was equally successful at using mass

marketing in the softdrink industry. Like Ford, he also viewed his product as

being the only one that consumers needed. His initial mass-marketing efforts

focused on an extensive national advertising campaign. As product

recognition grew, he established a network of bottling operations throughout

the county to facilitate sales and distribution. No product in history has

matched Coca-Cola's total sales.

Other mass marketers of this era achieved success by focusing on one aspect

of the approach. Manufacturers such as Quaker Oats, Proctor and Gamble,

and Eastman Kodak used refined mass-production techniques to establish

consistent product quality. Still other manufacturers, such as Singer Sewing

Machine, developed integrated distribution systems to ensure reliable

delivery to the market. In general merchandise retailing, Sears and

Montgomery Ward developed a mass-marketing niche through mail order.

Grocery retailer A&P, on the other hand, established its mass market

through private branding and systematic operation of multiple stores.

Mass marketers continued their domination in major industries well into the

1960s. Many of them maintained essentially the same mix, while others

expanded their use of the strategy. Sears and Montgomery Ward, for

example, added store retailing in the 1920s. In the 1930s, supermarkets

appeared with a different emphasis than previous grocery retailers—national

brands. Over the next several decades, large discount stores came into

prominence with a format similar to the supermarkets.

Page 4: Mass Marketing vs One to One Marketing

The Evolution from Mass Marketing

The successes of mass marketers led to the appearance of an alternate

approach to marketing. Potential competitors wanting a share of the large

market had two options. One was to replicate the organization, promotion,

and distribution systems of the company that had created the mass market.

The other was to go after a part of the market that had unique needs by

developing products specifically for them. For nearly all of the challengers,

building an operation to parallel that of an entrenched industry giant was not

profitable or realistic. As a result, most of them gravitated to the more

attractive market-segmentation approach. (Figure 1 shows the different

demand curves for mass marketing and market segmentation.)

General Motors used market segmentation as early as the 1920s when it

produced different models for different groups of customers to compete with

Ford. Pepsi made a series of attempts, beginning in the 1930s, to crack into

Coca-Cola's market share through changes in product and targeted

promotion strategy. In the 1940s, television provided a powerful tool for

both new and old companies to reach segmented markets. By the 1960s,

market segmentation had surpassed mass marketing as the primary

approach.

Mass Marketing Now and in the Future

In spite of the shift to market segmentation, mass marketing

continues to be used in many situations and has potential for

others. Products with broad appeal and few distinguishing

characteristics—such as household cleaners, potato chips, and pain

Page 5: Mass Marketing vs One to One Marketing

relievers—lend themselves to mass marketing just as they always

have. At the same time, businesses that use mass marketing for

their goods and services continue to look for ways to enlarge their

markets by designing different appeals for noncustomers. Chewing

gum, for example, is presented as an alternative to smoking.

Utilities and credit cards offer special rates to entice potential high-

volume customers. And discount retailers, such as Wal-Mart,

match their mix of mass-marketed products to local customer

bases.

Any current or future product that has mass-marketable attributes

will likely be marketed by some form of the approach. In addition,

the Internet provides a new medium for mass-marketing initiatives,

and newly opened international markets offer a possible arena for

mass-marketing opportunities.

Page 6: Mass Marketing vs One to One Marketing

One-to-one marketing

One-to-one marketing (sometimes expressed as 1:1 marketing) is a customer

relationship management (CRM) strategy emphasizing personalized

interactions with customers. The one-to-one marketing of interactions is

thought to foster greater customer loyalty and better return on marketing

investment. The concept of one-to-one marketing as a CRM approach was

advanced by Don Peppers Only the term is new; the approach is almost as

old as commerce itself. In the past, for example, proprietors of a general

store would naturally take a one-to-one approach, remembering details about

each customer's preferences and characteristics and using that knowledge to

provide better service. One-to-one marketing seeks to reinvest marketing

with the personal touch absent from many modern business interactions.

There are two main definitional characteristics which distinguish it from

other types of marketing or advertising. The first is that it attempts to send

its messages directly to consumers, without the use of intervening media.

This involves commercial communication (direct mail, e-mail, and

telemarketing) with consumers or businesses, usually unsolicited. The

second characteristic is that it is focused on driving purchases that can be

attributed to a specific "call-to-action." This aspect of direct marketing

involves an emphasis on traceable, measurable positive (but not negative)

responses from consumers (known simply as "response" in the industry)

regardless of medium.

Page 7: Mass Marketing vs One to One Marketing

If the advertisement asks the prospect to take a specific action, for instance

call a free phone number or visit a website, then the effort is considered to

be direct response advertising.

One-to-one marketing is treating different customers in different

ways. This focus demands meticulous knowledge of the customer,

based on his or her value and potential lifespan in the heart of the

company.

One-to-one marketing is a very fashionable term in the marketing

world, but to apply it is a complex thing, since it demands a previous

capacity for segmentation and very refined profiling.

One-to-one marketing strategies are directly related to Marketing

One-to-One theories, which entail an entire organizational shift

towards the customer, instead of the product.

The four basic pillars on which One-to-One Marketing rests are:

identify high-value customers, differentiate proposals for different

customers, interact with the customer, and customize the business

culture.

Not all one-to-one marketing strategies are profitable: every company

must predict the return on investment in this type of strategy, before

they go into it.

We should not offer excessively personalized products and services.

“A la carte” Marketing must satisfy the customer’s need to be

individualized; in no case should that be confused with an excess of

proposals.

Page 8: Mass Marketing vs One to One Marketing

It’s not the customer who must define him or herself to the provider,

personalizing their demands. It is the obligation of the provider to

know these needs and anticipate them.

“Treating different customers in different ways”. This is the premise

underlying One-to-One Marketing, a new concept of sales and

marketing management, whose philosophy puts the customer at the

center of the company. Derived from One-to-One Marketing theories,

one-to-one marketing strategies and Individualized Marketing opt for

exhaustive knowledge of the customer and his or her needs, in order

to provide them with what they need, when they need it, and

differentiate them clearly from the rest of customers. However, One-

to-One Marketing techniques have limitations, which can only be

overcome by an accurate Customer Intelligence strategy.

1. Individualized Marketing: treating different

customers in different ways

Sales has traditionally been an assisted process... When someone goes to a

dealer to buy a car, the salesperson acts as an advisor, steering the customer

towards the product that most fits his or her tastes and needs. It is up to the

salesperson’s intuition to figure out what impulses move that potential

customer and play with those purchasing impulses and habits in order to

close the coveted deal. Intuition is an excellent sales tool, but it relies on

factors as arbitrary as they are subjective. The skills of the people

monitoring a sales process must be supported by empirical and provable

information, and that only exists if a Customer Intelligence strategy has been

implemented in the company.

Page 9: Mass Marketing vs One to One Marketing

“One-to-one marketing” has been a very fashionable term in the marketing

world recently. If we go back to the example we opened the chapter with, we

will see that the principle of “personalizing” the relationship with the

customer is not very far from the elements we mentioned: orienting, guiding,

collaborating with the customer not only in the purchase / sale process, but

also before and after.

However, for several years now, the term “one-to-one marketing” has

proliferated to the point of being applied to almost any marketing action,

from a mere letter to a customer with their name and surname, to setting up a

mobile phone or PC screen according to the consumer’s taste. Today, “One-

to-one marketing” is a word on the minds of the majority of marketing and

sales experts, but which translates into true results on only a few occasions.

. What is one-to-one marketing? Perhaps the simplest and most accurate

definition is “treating different customers in different ways”, in order to

increase their level of linking and loyalty to the company. It’s as simple and

as complicated as this. When there are a dozen customers, personalizing

treatment is relatively easy. But what happens when there are thousands or

millions? Every company with a large customer portfolio, especially those

that are aimed towards the final customer – although this includes

companies that work in B2B -, know that in a market as competitive as

today’s, in which the customer is well-informed and changes providers with

extreme ease, “personalizing” its relationship with the customer is one of the

keys to success.

Page 10: Mass Marketing vs One to One Marketing

“One-to-one marketing is not only being able to call the

customer by his or her first name. It involves creating very

refined profiles, based on the customer’s value and potential

lifespan”

Several years ago, Don Peppers and Martha Rogers revolutionized the world

of marketing when they coined the phrase “One-to-One”, which calls for

differentiated strategies for differentiated customers, within the framework

of an entire organizational shift towards the customer. Since then, “one-to-

one marketing”, “One-to-One” , and “Individualized Marketing” are

expressions that have invaded marketing plan presentations, obsessed

directors in this area, and appeared in thousands of articles; but in practice,

they are efficient in very few cases.

One-to-one marketing is not only being able to call someone by their first

and last names from a “contact center”. One-to-one marketing is not only

running a direct marketing campaign that identifies its target audience one

by one. One-to-one marketing is about refining segmentation strategies until

we obtain very specific individual or company profiles, with similar

characteristics, but also with a similar value and potential lifespan for the

company, and apply marketing and sales actions with them accordingly.

2. Accurate one-to-one marketing requires intelligent

segmentation

Page 11: Mass Marketing vs One to One Marketing

It is essential to understand that there can be no accurate one-to-one

marketing without first adopting accurate segmentation strategies. The

American banking entity First Union recently launched a complex strategy

to segment its customer portfolio, assigning them importance according to

their current value and potential lifespan in the heart of the bank. The bank’s

sales reps have a scorecard in which not only are customers rigorously

classified by these two factors, but which invites the reps to offer maximally

personalized treatment to those customers of greatest interest. At First

Union’s customer service center, operators have weather information for

each state in the United States at their disposal at all times, so that the first

thing they do is ask the most potentially “interesting” customers about the

weather in the place they’re calling from…It’s a curious and intelligent way

of making the customer feel that their financial entity is following their steps

very closely…

If we stop to examine the differences that separate traditional marketing’s

customer strategies from those of “One-to-One Marketing” or Individualized

Marketing, we find that:

While traditional marketing focuses on market share, Individualized

Marketing opts for the “share of customer”

Traditional marketing speaks of products that are differentiated for the

market as a whole, while Individualized Marketing entails strategies

for differentiated customers.

Traditional marketing focuses on product management, while

Individualized Marketing focuses its efforts on customer management.

Traditional marketing sees the customer as an “enemy to be

conquered”, while Individualized Marketing relies on the customer as

Page 12: Mass Marketing vs One to One Marketing

a collaborator in the growth and improvement of the company and its

products and services.

Traditional marketing struggles to find customers that adapt to new

product launches, while Individualized Marketing strives to find

products adapted to the customers.

Traditional marketing is based on mass marketing, while

Individualized Marketing is founded on personalized messages.

Traditional marketing uses standard promotions, while Individualized

Marketing employs incentives that adapt to each customer.

When a company is dealing with thousands or millions of customers, the key

is to identify in the greatest detail possible the groups and segments with

very similar characteristics, using profiling techniques and offering solutions

that are practically custom-made.

Based on these premises, a well-known American pharmaceutical company

has adopted an extremely interesting one-to-one marketing strategy for its

services on the Internet. It used this strategy to loyalize chronic patients,

who are potential consumers of their pharmaceuticals. It divided these

patients into four groups, each with very specific characteristics:

“individualists”, “connected”, “abdicators” and “newly arrived”. The first

group includes patients who are well-informed about their disease and who

want to make their own decisions about it, and the laboratory attends to them

with on-line medical support, a personalized newsletter, and tools for

carrying out routine checks over the Internet. The pharmaceutical company

has invited the “connected” patients, who like to be informed in order to

make the most appropriate decisions, to participate in forums and chats

about their disease.To the “abdicators”, patients who do not want to be

Page 13: Mass Marketing vs One to One Marketing

informed regularly and resign themselves to living with the disease without

fighting it, the laboratory offers resources for home care, nutritional

information, diets… resources that help them live with their disease. Finally,

the “newly arrived” patients are those that were recently diagnosed and

completely lack information and resources. Therefore, the company offers

them basic information about their disease, medical directories, etc...

3. The four pillars of One-to-One Marketing

The rules of One-to-One Marketing rely on four axes to focus customer

relations:

Identify customers individually (Identify)

Differentiate customers by value and needs (Differentiate)

Interact with customers, optimizing costs (Interact)

Customize the business culture (Customize)

Identifying our customer’s forces us to respond to the following questions:

Who are our highest-value customers?

Does our company have a customer strategy defined according to that

value?

Which customers do we still need to identify and how do we solve it?

What customer information do we have and where is it?

Do you have accurate customer information analysis?

Does that analysis translate into an appropriate customer strategy?

Differentiating our customers forces us to respond to the following

questions:

Page 14: Mass Marketing vs One to One Marketing

Do we know how to distinguish our customers according to their

potential

Do we know how to distinguish our customers by need segments?

What are the key questions we must ask ourselves in order to know

exactly what our customers’ value and needs are?

What information must we have in order to determine our customers’

value and needs?

Interacting with our customers forces us to respond to the following

questions:

Through what channel and in what way can we optimize our contact

with the customer?

What customer needs are we able to anticipate?

How can we measure this interaction with the customer?

Can we transform our monologues at the customer into dialogues with

the customer?

How does the customer knowledge we have benefit the customers?

Customizing our strategy forces us to responder to the following questions:

Is our organization aimed at the customer or is its structure still

marked by the product culture?

How can we improve our products, services, and messages in order to

adjust to the customer’s needs?

What must we offer our highest-value customers in order to increase

our share of customer?

Page 15: Mass Marketing vs One to One Marketing

How can we save the customer time, effort, and money, and at the

same time generate more income for the company?

Asking this barrage of questions is a duty and a necessity for any company

that wishes to bury the orientation towards the product once and for all, and

opt for sales growth based on dialogue with and exhaustive knowledge of

the customer.

4. From profile strategy to lifespan strategy

One-to-one marketing and Individualized Marketing strategies have relied in

the past on the study of customer behavior and spending habits in one

segment or profile, in order to offer similar proposals to similar customers.

The leading on-line bookstore, Amazon.com, usually proceeds in the same

way: if it observes a customer’s purchases, it sees that that customer fits one

of the company’s previously determined profiles, and it offers products

accordingly. There is one drawback: the on-line bookstore’s

recommendations are “automatic”, not truly personalized.

This strategy is valid, but it is beginning to reveal itself as incomplete.

Moreover, we must base our strategy on the customer’s lifespan in the

company, and not only on similar customers, in order carry out cross-sales

activities with that customer. The final customer evolves over time (they get

older, obtain higher incomes, have children, etc…), and their provider must

know how to anticipate those life changes in order to offer them appropriate

products and services. Therefore, one-to-one marketing demands not only

segmentation by behavior, but also by moments.

Page 16: Mass Marketing vs One to One Marketing

5. Is it profitable to personalize? The limits of

“marketing a la carte”

Although any company with the desire to grow must consider an

Individualized Marketing strategy in which each customer is attended to

according to their needs, an excessive zeal for market micro-segmentation

can have its risks. As we mentioned in previous chapters, an accurate

segmentation strategy is that which allows us not only to detect groups of

customers with similar characteristics, but also to generate profitable sales

and marketing actions in those segments.

                              Moving in the right direction

 Strategic levels of implementation

Identify the

Company’s

Situation

Identify Differentiate InteractOne-to-one

marketing

1-to-1

Company

The company

“possesses”

individual

preferences

The company

looks to

improve

each

customer’s

needs

Constant

feedback from

each customer

Massive

One-to-one

marketing

for each

individual

Focused on the

customer

The company

identifies the

customers

Customers

are

differentiated

by value and

needs

Two-way

Interactions,

increasingly

coordinated.

The segment

obtains

customized

options

Page 17: Mass Marketing vs One to One Marketing

Attentive to

customer

Product

lines

identify the

customers

Customers

are only

differentiated

by

their value

Unconnected

interactions,

many only

one-way

The segment

obtains the

same result

Oriented

towards the

product

Product

follow-up,

not customer

follow-up

Products, not

customers

Scarce

contact with

customers

The same size

for everyone

The risk of excessively segmenting the market in order to offer practically

customized products and services, is undertaking actions of dubious

economic benefits. Hence the need to have an accurate profiling strategy that

justifies the return on the investment foreseen, before it is made.

Behind an Individualized Marketing strategy, it is essential to have a

meticulous evaluation of costs, not only sales and marketing costs, but also

logistical and human resource costs. Several years ago, the automobile

company Renault decided to create an on-line system in order to

manufacture cars “a la carte”, with elements chosen by the customer. The

company had to face over 50 million euros of investments in production,

logistics, and training...

“One-to-one marketing strategies are not always profitable. A proper,

previous segmentation that justifies future sales and Individualized

Marketing actions is obligatory”

It makes sense that one-to-one marketing is costly and return on investments

is slow, if not unprofitable. That is why some are starting to speak of One-

to-One Marketing more as a business culture philosophy than a theory

Page 18: Mass Marketing vs One to One Marketing

capable of being applied without difficulties… The limits to excessive one-

to-one marketing are not just economic: the excessive diversification some

companies have turned to, especially consumer goods companies aimed at

the final customer, has ended up confusing the consumer, when what the

company wanted was to satisfy their most specific needs as much as

possible. In some eating establishments, just reading the menu is an

extremely laborious task... Whoever has ordered a pizza over the telephone

will know what it means to face several dozen combinations of toppings,

drinks, sized, and condiments. These end up overwhelming the customer,

when the idea was exactly the opposite, that is, to free the customer from

standardization and let them order according to their own taste.

This trend is expanding into other sectors as diverse as telecommunications,

where the customer often faces real headaches by trying to figure out which

telephone contract is best for their needs. It is essential to remember that

knowing “what type of customer the customer is”, is not the customer’s task,

but rather the provider’s. Hence, the previous portfolio segmentation,

potential market, and profiling strategies must be accurate and appropriate.

And this is only possible if the company’s strategy is based on true

Customer Intelligence, capable of practicing not only One-to-One

Marketing, but also a profitable, studied, and effective “One-to-Few”

Marketing…

Resource: http://www.bitpipe.com/tlist/Direct-Marketing.html

http://managementpedia.com/index.php?title=Marketing