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MKT700_Week_1.docx

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Department
Marketing
Course
MKT 700
Professor
Richard Michon
Semester
Winter

Description
WEEK ONE OVERVIEW OF BUSINESS INTELLIGENCE AND DATABASE MARKETING CHAPTER ONE – How Database Marketing Has Changed − Today, we use direct mail, catalogs, phone calls, e-mails, web sites, cell phone text, voice msgs and social media. − These new developments make communication much less expensive and more frequent but they are also much more complex. − E-mail has become the primary way for companies to cummicate with their custmers. − Direct mail is still alive and well, but email is gaining on it – third communication method = mobile use, exploding in all directions. − Subscriber inboxes are overflowing. − BIG problem: the msgs can be and sometimes are personalized, but they are seldom filled with dynamic conent based on what we know about each customers. − We have rich databases but we do not use the rich data that they hold – it requiresmany creative staff memebers who dream up dynamic content. − The problem boils down to one simple fact: the lift we get from dynamic content does not seem to be as great as the lift we get from frequent communications. o Can’t afford to do both, chose the most profitable. − Customers have become dominant – cant fool them no more. What Customers Want − Companies are discovering what their customers want and selling them that – its customer- based marketing. − What do customers want? o Recognition o Service o Convenience o Helpfulness o Information o Identification Whom Do They Listen To? − Customers listen to other customers. − Young people particiapte in Facebook and Tiwtter, exchanging information that suppliers of products and services cannot control. − Databases retain: email adressess, complete purchase history, CS calls, complaints, returns, inquiries, promotions, results of surveys, household demographics (age, income, # of children), the profitability RFM ( Recency, Frequency, Monetary Analysis) code, and lifetime value. Two Kinds of Databases − Two diff kinds of databases in any company engaged in direct marketing of products and services. WEEK ONE OVERVIEW OF BUSINESS INTELLIGENCE AND DATABASE MARKETING − An operational database is used to process transactions and get out the monthly statements: o For a cataloger: is used to process the orders (charge credit cards, shipments, returns etc). o For a bank: is used to process checks and deposits, maintain balances, and monthly statements. o For a telephone company: is used to keep track of telephone calls made and arranges the billing for them. − An marketing database gets its data from the operational database, it consits of a summary of monthly transactons. − Gets its data from: o Preferences and profiles. o Promotion and repsonse history. o Appended data from external sources. o Lifetime value and RFM analysis. o Churn and next-best product. Relationship Buyers and Transaction Buyers − Transaction buyers rep a major segment of any market – try to engage in comparison shopping for every transcation. − The past has no meaning, have absolutely no loyalty – question is what is the price today, they will shift suppliers for a few pennies difference. − Database marketing may be ineffective here – only discounting will work. − Relationship buyers are the customers for whom database marketing was invented for, they are loooking for a dependable supplier who will: o Care about their needs. o emember what they bought in the past. o Takes an interest in their business. − They recognize that if they do switch suppliers they would lose something that they value very highly – the relationship they have built up with a dependable supplier. E-mail Marketing Needs to Catch Up − E-mails are so inexpensive that most marketers send millions of identical messages on a daily basis to subscribers who are overwhelmed and annoyed by their own overflowing inboxes. CHAPTER TWO - The “Vision Thing” The Central Role of Marketing − Honestly a bunch of boring shit about the Industrial Revolution, people started producing shit and technology or some shit who knows, I geeve. − Industrial Revolution was possible: the expansion of the market system and trace. − Adam Smith: “The division of labour is limited by the extent of the market.” − Where the market is small, the gains from the division of labour are correspondingly small. WEEK ONE OVERVIEW OF BUSINESS INTELLIGENCE AND DATABASE MARKETING − The larger the market, the more efficiencies are possible, the greater productivity, the greater profits and the greater affluence. − Marketing is key: it is not soething that happens after the goods are produced. − Marketing is the reason the goods are produced in the first place. TheAmerican Market − The 1900 to the present time, the US has had the largest single market on earth. − The US has spent the last 200 years breaking down barriers, building waterways, railroads, telegraph, telephone and electronic communications systems, highways, delivery shit omg this is so boring anyways all this shit links all the parts of our market together in a freely competitive way. − The result has been the greatest outpouring of production, affluence, and personal freedom ever known. − The driving force has been free competative market activity – each entrepreneur trying to satisfy the competitive market. The Growth of Mass Marketing − From 1950 to 1980 mass marketing predominated, the growth of television built on the solid foundation of national print ads and radio to create mass audiences for national advertsiing. − Mass marketing makes mass production possible. − One result of this productive system is that the middle class has grown from 15% to 86% of the population in 2011. − We have all gained, our basic needs are met, we want something more. What the Market Consists of Today − Our market is still expanding. o Customers became owners of the economy. o New products were created at an accelerating rate. Why the US Economy Is So Successful − The US has been going thru an unprecedented boom that never seems to stop. o Freedom to Produce. o Freedon to Market: american stores are run for the customers, we keep the stores open at all hours and all days to make customers happy. o Low Inflation Resulting from Our Tarde Deficit with the Rest of the World: American bought more every year from abroad than foreigners bough from us (them this fucker is american). Low inflation is central to our success. o High Investment: dollars owned by foreigners in NY banks, dollars invested in American business: stocks, bonds, mutal funds etc. WEEK ONE OVERVIEW OF BUSINESS INTELLIGENCE AND DATABASE MARKETING o Customers Buy Products to Reduce Uneasiness: people purchase products because they think that their life will be better with the products than without them. o The Value of Products Is Subjective: The market value of products and services is determined primarily by the customers. o In Free Market Exchanges, Both Parties Make a Profit: Each party to a trade gives up less than he or she gets. o Pu
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