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1995 7888 4320 000 000001 00023
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
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Marketing Research and
Database Development
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
The Value of Database Information
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 Categorizing customer data in a systematic, timely
manner has become a critical function of marketing
research.
 Marketers can develop the ability to identify
customers on an individual basis.
 Marketers can rank a customer’s transactions over
time.
 Marketers can begin to access a “portal” where
they can know what customers might or will
purchase!
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
CRM and the Database Process
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 The foundation of a sound CRM process is an
ability to provide shared information across an
organization.
 Marketing Research and Information
Technology must “blend” together to build
profiles of individual customers and react to
their desires in a proactive way.
 Databases, data warehouses, and data mining
work in tandem using real-time data captured
from customers to nurture and retain happy
customers!
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
What is a Database?
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A database is a collection of
information indicating what customers
are buying, how often they buy, and the
amount they’ve bought.
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
The Purpose of a Customer Database
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 Develop meaningful communication
with customers.
 Improve the efficiency of constructing
market segments.
 Increase the probability of repeat
purchase behavior.
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing Research & Data Enhancement
Data enhancement allows a business enterprise to:
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 Obtain more knowledge of customers.
 Increase the effectiveness of marketing
programs.
 Predict responsiveness to changing
marketing programs.
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
The Dimensions of a Typical Database
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Source Data
Geodemographic
• Geographic Market
• Residential Area
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Attribute
• Attitudinal
• Motivational
Target Market
• Demographics
• Volume Usage
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
The Dynamics of Database Development
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The information generated for a database should possess the
following four characteristics:
1) Affinity
2) Frequency
3) Recency
4) Amount
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Developing a Database: A Process
Determine Value of Information
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Identify Research Needs
Internal Data on
Current Customer
Profile
External Data on
Behavior and
Motivations
Current Customer
Status
Target Market
Characteristics
New Customer
Status
Database Processing System
General Predictive Model
Implement Marketing Action
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Rules of Thumb in Database Development
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 Database development is a protracted process
which requires commitment to a long-term
vision for data acquisition.
 Collect the data which will have the greatest
impact for the future at the outset of the process.
 View the database in terms of “depth” – the
overall number of data fields and variables.
 View the database in terms of “width” – the
overall number of records.
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Database Systems
Two types of database systems exist:
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 Sequential Systems
 Relational Systems
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Data Warehousing
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Storing information in a data warehouse is an ongoing and iterative
process, comprised of the following kinds of data:
 Subject-Oriented Information
 Integrated Information
 Time-Variant Information
 Nonvolatile Information
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Data Mining
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The Marketing
Research Question
The Data Mining
Approach
The Data Mining
Technique
The Mining
Implementation Process
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The Visual
Mining Product
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Database Modeling
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Scoring Models rank customer
segments based on the profit potential
they have for the business enterprise.
Lifetime Value Models use actual
purchase behavior to predict future
buying patterns.
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Summary of Learning Objectives
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 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.
 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 modeling in database analysis.
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.