Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-1 Chapter Nineteen Database Development and Marketing Research

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-2 Learning Objectives  Illustrate and define a marketing research database.  Explain the interactive nature of marketing research and data enhancement.  Describe the dynamics of database development.  List the general rules of thumb in database development.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-3 Learning Objectives  Demonstrate understanding of technology in a database context.  Illustrate the development and purpose of the data warehouse.  Explain the process of data mining as it relates to the data warehouse.  Understand the role of modelling in database analysis.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-4 Introduction  The ability to detect and respond to the individual needs of customers is a major marketing objective.  Database marketing, the process of systematically categorising customer data is a critical marketing research function.  Marketers can develop the ability to identify customers on an individual basis.  Marketers can rank a customer’s transactions over time.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-5 What is a Database?  A database is a collection of information indicating what customers are purchasing, how often they purchase and the amount they purchase.  Incorporates data from diverse sources.  Purchase behaviour.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-6 Structure of a Data Base  Typically around transactional data.  Plus other factors related to the purchase decision.  The network provides the data on all products in the company.  Eg. Airlines and travel agencies.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-7 Purposes of a Customer Database  Develop meaningful, personal communication with customers.  Can improve the efficiency of constructing market segments.  Can increase the probability of repeat purchase behaviour.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-8 Four fundamental areas in which the database benefits the firm: 1.Exchange information with customers. 2.Determine heavy users. 3.Determine life time customer value. 4.Building segment profiles.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex 19-9 Data Enhancement The overlay or partitioning of data about new or existing customers for the purpose of better determining their responsiveness to marketing programs.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Data enhancement allows a business enterprise to:  Obtain more knowledge of customers.  Greater targeting effectiveness:  Geodemographic  Attributes  Target market dimensions  Predict responsiveness to changing marketing programs.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex The Dimensions of a Typical Database

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex A Closer Look: GIS Allow the marketer to integrate customer and sales data bases with geographic, demographic, socio- demographic and location databases.  Where should the next store be located?  Where are sales surging?  Which locations to dispatch staff?  Where are the best customers?  Where should assets be placed?  Where are the vulnerable markets to competition?

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex The Dynamics of Database Development The information generated for a database should possess the following four characteristics: 1)Affinity 2)Frequency 3)Recency 4)Amount

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex The database development process

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex A marketing data interaction matrix

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Evaluating Internal Data Sources  Is the data timely?  Accurate?  Up to date?

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Key current customer profile attributes

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Evaluating External Data Sources  What is available?  Competitive sales?  Data industry surveys?  Government reports? Etc  Plus…  Purchase behaviour  Demographics and lifestyles  Financial data  Promotional and sales data

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex General Rules of Thumb  What data has the greatest amount of predictive power?  What is the width and depth of the data base?  A marketing research data base is a constant and ongoing process.  The company needs a commitment to long-term data acquisition and enhancement.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Technology: Turning Data into Information  Data Field  A basic characteristic about a customer.  Data Base Technology  The tools that marketing practitioners use to transform data into information.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Database Systems Two types of database systems exist:  Sequential Systems  Organises data in a simple pattern.  Relational Systems  Structures database into tables with rows and columns.  Tables are linked depending on the output desired.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex An Example of a Sequential Database

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Data Warehousing A central repository from all significant parts of information that an organisation collects.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Data Warehousing Storing information in a data warehouse is an ongoing and iterative process, comprised of the following kinds of data:  Operational data  Informational data  Real time transactional data  Customer-volunteered data

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex The Data Mining Procedure  The process of finding hidden patterns and relationships among variables/ characteristics contained in information stored in the data warehouse.  Recognises significant patterns of data as they pertain to particular customers or customer groups.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex The Data Mining Framework for Marketing Decisions

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Database Analysis and Modelling  Summarise what companies already know about their best customers and indicate what they need to learn about these individuals.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Database Modelling - Scoring Models  Used to predict consumption behaviour.  Researchers assign each individual in the database a score on their propensity to respond to a marketing variable or make a purchase.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex Database Modelling - Lifetime Value Models  Are database models developed on historical data.  Using actual purchase behaviour, not probability estimates, to predict future actions.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Lukas, Hair, Bush and Ortinau Slides prepared by Judy Rex The New Millennium and Marketing Research Databases  The future lies in the ability to provide information based on events as they actually occur.  New techniques are emerging that can transform marketing research form a data collection task into an information resource laboratory.