DIRECT, MASS, and TARGETED MARKETING
Target marketing [Hughes 1996: 594]:
A marketing strategy [placement, product, pricing, and promotion] aimed
at a "suspects," a particular individual or group rather than to [an undifferentiated]
mass market, reached through mass media.
Database marketing [Hughes 1996: 578]:
Collecting data on customers and using it to provide recognition and
services to customers, resulting in increased customer loyalty and repeat
sales; one way to attempt to turn first-time
buyers into repeat buyers.
Why adapt the product? Why engage in specialized marketing strategies?Target marketing, niche marketing, database marketing, or any other form of specialized marketing allows the seller to charge the highest price that each segment of the market will bear. This is called market segmentation, and it allows the producer to appropriate more of the consumer’s surplus.
Examples: General Motors; American Express
|
|
|
|
|
|
| Promote the product generally to the general public | Direct the product to individual, potential purchasers | Direct the product to individual, potential purchasers with tailored (typically in-person) sales effort | Promote the product to individually identified, potential purchasers, (typically by mail) | Promote the product to individually identified, past purchasers or visitors |
| Inexpensive per contact; cost-effective when there are many potential buyers, even at low markup | “Cold calls” or “junk mail” may not be cost-effective. | Expensive per contact; cost-effective when each contact is likely to buy, with high markup | Moderately inexpensive per contact; cost-effective when the contacts are well-chosen | Moderately inexpensive per contact; cost-effective when the contacts are well-chosen |
| Requires identification of potential customers | Requires identification of potential customers | Requires identification of potential customers | Requires identification of potential customers | |
| More common for household or individual consumers | More common for business or industrial clients | |||
| Used for low-value, everyday items | Used for high-value, infrequently purchased items | Increasingly common for all products, given increased information availability and decreased computing costs | Increasingly common for all products, given increased information availability and decreased computing costs |
Goes a large step further: your target is your own customer base, and more specifically, your best customers (largest, repeating, and/or most profitable).
How do you identify your most profitable customers?
Maintain a database!Thus, it’s completely insufficient to note who bought what, without linking to volume, price, frequency, and recentness.
Who has bought what, in what volume, at what prices, how recently, how often, for what reasons? Where are they? How much does it cost to service them?
How can you better serve your customers?
Product quality may often be assumed, and price is an
aspect of competition you want to avoid as much as possible.
Thus, you want to compete by providing customers with:
Maintaining a database is a prerequisite to being
able to provide such quality service.
How do you get the information for the customer database?
Order forms (for mail order or even in-person sales)
Product registration forms
Mail-in coupons
Tracking telephone calls
Check payments
Lists of potential clients (from trade or professional associations)
Frequent-buyers clubs
How do you use the database?
Focus your efforts on the best customers.Geography, then, is a potentially powerful component of the marketing database.
Design targeted promotions for specific types of customers: by direct mail, telephone, or even by retail location (modify “sales” or product mix by location).
Provide individualized information for your sales people.
Provide individualized information for your customers.
COMBINING CUSTOMER DATABASES WITH
GEODEMOGRAPHIC AND GEOLIFESTYLES DATA
PRIZM (Claritas, Inc.)
|
|
|
|
|
|
|
|
|
|