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One-to-One Marketing

One-to-One Marketing. 20. chapter. Prepared by Deborah Baker Texas Christian University. Learning Objectives. 1. Define one-to-one marketing and discuss its dependence on database technology. 2. Discuss the forces that have influenced the emergence of one-to-one marketing.

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One-to-One Marketing

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  1. One-to-One Marketing 20 chapter Prepared by Deborah Baker Texas Christian University Chapter 20 Version 6e

  2. Learning Objectives 1. Define one-to-one marketing and discuss its dependence on database technology. 2. Discuss the forces that have influenced the emergence of one-to-one marketing. 3. Compare the one-to-one marketing communications process with the traditional mass marketing communications process. 20 chapter Chapter 20 Version 6e

  3. Learning Objectives (continued) 4. List eight common one-to-one marketing applications. 5. Discuss the basics of one-to-one marketing database technology. 6. Describe one-to-one marketing using the Internet. 7. Discuss privacy issues related to one-to-one marketing. 20 chapter Chapter 20 Version 6e

  4. 1 Learning Objective Define one-to-one marketing and discuss its dependence on database technology. Chapter 20 Version 6e

  5. 1 One-to-One Marketing An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer. Chapter 20 Version 6e

  6. One-to-One Marketing is... Share of Customer With a Focuson... Customer-Based Information-Intensive Database Technology Long-Term Oriented Through Use of... Individualized 1 What is One-to-One Marketing? Chapter 20 Version 6e

  7. Focuses on Share of Customer Focuses on Share of Market One-to-One Marketing Mass Marketing Develops Customers Develops Products Finds Products for Customers Finds Customers for Products 1 One-to-One Marketing Chapter 20 Version 6e

  8. “One-to-One” Before Industrial Revolution Mass Production “One-to-One” Benefit of Technology 1 The Evolution of One-to-One Marketing Chapter 20 Version 6e

  9. 2 Learning Objective Discuss the forces that have influenced the emergence of one-to-one marketing. Chapter 20 Version 6e

  10. Increasing Diversity More Demanding, Time-Poor Consumers Decreasing Brand Loyalty Emergence of New Media Alternatives Demand for Accountability 2 Forces influencingOne-to-One Marketing Chapter 20 Version 6e

  11. Consumer recognition as unique individuals Marketing Impact of Trends More direct and personal marketing efforts Rewards for loyalty Increased importance of One-to-One Marketing 2 Marketing Impact of Trends Chapter 20 Version 6e

  12. 2 The New Commandment of Marketing’s Future Know thy customer and communicate with him or her based on what you know. Chapter 20 Version 6e

  13. 3 Learning Objective Compare the one-to-one marketing communications process with the traditional mass marketing communications process. Chapter 20 Version 6e

  14. Capture of response shapes futures message Sender Encoder One-to-One Message Channel Decoding Receiver Receiver Response 3 The One-to-One MarketingCommunications Process Chapter 20 Version 6e

  15. Message is Personalized Channel is Direct Noise is not present Individual Responseis captured 3 Communications Process Differences Chapter 20 Version 6e

  16. 4 Learning Objective List eight common one-to-one marketing applications. Chapter 20 Version 6e

  17. Identify the best customers • Retain loyal customers • Cross-sell other products or services • Design targeted marketing communications • Reinforce consumer purchase decisions • Induce product trial by new customers • Increase the effectiveness of distribution channel marketing • Improve customer service 4 One-to-One Marketing Applications Chapter 20 Version 6e

  18. The 80/20 Rule Applies 4 Identifying the Best Customers Chapter 20 Version 6e

  19. 4 Retaining Loyal Customers Retaining an additional 5% of customers each year increases profits by 25% Improving customer retention by 2% can decrease costs by 10% Chapter 20 Version 6e

  20. 4 Other Marketing Applications through Databases • Match profiles to cross-sell other products to customers • Modify marketing messages based on customer profiles • Reach out to customers to reinforce the purchase decision Chapter 20 Version 6e

  21. 4 Other Marketing Applications through Databases • Find new customers • Gain insight into who is purchasing products • Improve customer service Chapter 20 Version 6e

  22. 5 Learning Objective Discuss the basics of one-to-one marketing database technology. Chapter 20 Version 6e

  23. 5 Data-Driven Marketing The process of gathering, maintaining, and analyzing information about customers and prospects to implement more efficient and effective marketing communications. Chapter 20 Version 6e

  24. 5 Marketing Database The compilation of names, addresses, and other pieces of pertinent information about individual customers and prospects that affects what and how marketers sell to them. Chapter 20 Version 6e

  25. 5 Data Warehouse A large corporate-wide database in which the data are culled from a number of legacy systems that are already in place within the organization. Chapter 20 Version 6e

  26. Analyze information to find answers Enhance customer data Collect the right data 5 Building a Marketing Database Chapter 20 Version 6e

  27. Response Lists Compiled Lists Collect the right data 5 Building a Marketing Database Chapter 20 Version 6e

  28. Compiled Data Modeled Data Custom Data Enhance customer data 5 Building a Marketing Database Chapter 20 Version 6e

  29. Modeled Data Information has been sorted into distinct groups or clusters of consumers or businesses based on census, household, or business-level data. Custom Data Enhancement information acquired by the marketer, including customer surveys, customer participation programs, product registration, warranty cards, or loyalty marketing programs. 5 Enhance Customer Data Chapter 20 Version 6e

  30. Analyze information to find answers Customer Segmentation RFM Lifetime Value Analysis Predictive Modeling Data Mining 5 Building a Marketing Database Chapter 20 Version 6e

  31. Demographics Segmentation Bases Geographics Purchase Behavior Psychographics 5 Customer Segmentation Chapter 20 Version 6e

  32. 5 Recency-Frequency-MonetaryAnalysis A data manipulation technique that determines the firm’s best customers by identifying those customers who have purchased most recently, most frequently, and who have spent the most money. RFM Chapter 20 Version 6e

  33. 5 Lifetime Value Analysis A data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than to first-time buyers. LTV Chapter 20 Version 6e

  34. Show expense to acquire a new customer Provides level of spending to retain a customer Provides a basis for targeting new customers 5 Uses of Customer Lifetime Value Chapter 20 Version 6e

  35. 5 Predictive Modeling A data manipulation technique in which marketers try to determine, based on a past set of occurrences, what the odds are that a response or purchase will take place in the future. Chapter 20 Version 6e

  36. 5 Database Enhancement The overlay of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of customers or prospects. Chapter 20 Version 6e

  37. 5 Data Mining The process of using statistical analysis to detect relevant purchasing behavior patterns in a database. Chapter 20 Version 6e

  38. Create customer profiles Uses of Data Mining Determine the reason for customer loyalty Analyze the potential return for strategies Help forecast sales 5 Data Mining Chapter 20 Version 6e

  39. 6 Learning Objective Describe one-to-one marketing using the Internet. Chapter 20 Version 6e

  40. Create a Multimedia Marketing Initiative Deliver Personalized Messages Establish Enduring Customer Relationships .com 6 One-to-One Marketingand the Internet Chapter 20 Version 6e

  41. 7 Learning Objective Discuss privacy issues related to one-to-one marketing. Chapter 20 Version 6e

  42. Unawareness of information collected Invasion of Privacy Misunderstanding about privacy laws and regulations Popularity of Internet for data collection 7 Privacy Concerns withOne-to-One Marketing Chapter 20 Version 6e

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