1. 1 Marketing Research Aaker, Kumar, Day Ninth Edition Instructor’s Presentation Slides

2. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/2 Chapter Twenty-six Emerging Applications of Marketing Intelligence: Database Marketing and Relationship Marketing

3. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/3 To test a program prior to rolling it out: Define your target group Go into your database Create a matched set Expose the test variable Minimize other marketing efforts while the test is going on Allow test program enough time to work Measure results by comparing the two groups’ sales Take action. If test results warrant going ahead, then Implement it The Need for Databases

4. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/4 A unique identifier such as an ID or match code Name and title of individual and/or organization Mailing address, including ZIP Code Telephone number Source of order, inquiry, or referral Date and Purchase details of first transaction Recency/frequency/monetary transaction history Credit history and rating Relevant demographic data for consumer buyers Relevant organizational data for industrial buyers Elements of a Database

5. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/5 Types of Databases Active customers Inactive customers Inquiries Modeling customers serves to: Identify most typical customers and so become more effective in prospecting. Identify best customers to prospect Identify niche markets to add to the marketing universe. Develop more effective marketing tools (materials and media).

6. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/6 Ways to Gather Consumer Data Rebate Cards Suggestion Cards Warranty Registration Cards Free Subscription Offer Cards Directly Ask Consumers

7. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/7 Guerilla Tactics Get the product right Use low-tech targeting and creative thinking Use other people’s data (OPD) first Buy new media Ways to Gather Consumer Data (Cont.)

8. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/8 Customers are easier to retain than acquire Determine their “lifetime value” to decide whether or not to encourage greater lifetime duration Develop relationships with customers across a family of related products and services Benefits of Database Marketing

9. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/9 E-Commerce E-commerce influence The impact of the net on purchases made entirely off-line E-commerce ordering Captures the orders that are placed on-line but paid for later via telephone or in-store E-commerce buying Combines ordering and paying on-line

10. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/10 E-Commerce (contd.) Retailer responses to e-commerce are: Selective price discounts Concentrating attention on late adopters of technology Creating and staging experiences Partially adapting the Internet into a hybrid system

11. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/11 Shopping on the Internet Online Sales ($ billions) Quarter20042003% Change Q1$15.99$12.6126.9% Q2$16.76$13.5024.2% Q3$17.63$14.4222.2% Q4$18.61$15.0124.0% Holiday*$17.29$11.2453.8% Full Year$68.99$55.5424.2% * Excludes Online auction and travel sales Source: Quarterly Retail E-Commerce Sales, 1st Quarter 2005, U.S. Census Bureau, May 2005

12. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/12 E-Commerce Survey Reasons for shopping onlinePercent Saves time78% Better prices51% More selection43% Easier shipping40% Ability to find a more personalized gift28% More information available about the products20% Other8% Source: clickz.com

13. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/13 The marketing process of personally customizing goods or services that continuously update themselves to track changing customer needs, without intervention by corporate personnel, and often without conscious or overt input from the customer Real-time Marketing

14. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/14 Relationship Marketing Keys to Relationship Marketing: Identify and build marketing databases of present and potential purchasers. Deliver differentiated messages to targeted households. Track the relationship to make media expenditures more effective and more measurable.

15. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/15 Customer Analysis Customer acquisition Customer cross-sell Customer up-sell Customer retention

16. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/16 Customer DNA Model Legacy Systems & External Data Reporting & KPIs Single Customer View Modeling & Analysis Capability Customer Contact Management Customer DNA

17. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/17 Developments in Relationship Marketing Customer lifetime value (CLV) Calculated as the sum of cumulated cash flows —discounted using the Weighted Average Cost of Capital (WACC) or discount rate — of a customer over his or her entire lifetime with the company Customer equity (CE) The total of the discounted lifetime values summed over all of firm’s current and potential customers

18. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/18 Developments in Relationship Marketing (contd.) Aggregate-level approach CE framework can be used to: Formulate firm/segment level strategies concerning investments in acquisition, retention, and add-on selling. As a surrogate measure of the market worth of most firms and for comparing competing firms.

19. Marketing Research 9th Edition Aaker, Kumar, Day http://www.drvkumar.com/mr9/19 Developments in Relationship Marketing (contd.) Disaggregate-level approach CLVs of each customer can help to formulate customer- specific marketing strategies for: Customer selection Customer segmentation Optimal resource allocation Purchase sequence analysis Targeting profitable prospects based on CLV