Developments in marketing information systems technology: databases - Marketing Management

Technological developments have had a major impact on marketing information systems. These developments are underpinned by relatively cheap yet sophisticated computing power which is facilitating improvements in data collection storage, manipulation and retrieval. A technology that speeds up results from a market research survey uses computer assisted telephone interviewing that provides instant data feedback to the control centre as interviews are conducted and questionnaires completed through a hand-held computer in a wireless Internet location.

Strategic application of an MkIS

Strategic application of an MkIS

Databases Developments in information collection, storage and analysis are making information an important competitive asset. The key to this information revolution is the use of databases in marketing. Essentially, a database represents a pool of information on markets and customers which can be interrogated and analysed to facilitate improved marketing decision making. Databases are not new, as even a system of manual sales records kept on customers in a filing cabinet is a database. A database can be built from a variety of sources. Examples include customer orders, loyalty cards, customer enquiries, subscription lists and ad hoc market research studies. There is a wealth of information available to the point of it being overwhelming. Not only do modern database techniques and technologies help to overcome this problem, but we now know much more about the key factors in developing and using successful databases. In developing a database attention needs to be paid to:

  • clear and specific objectives for the database, including types of information required and why;
  • effective systems and strategies for data capture;
  • effective systems for data storage, including database maintenance;
  • effective systems of analysis and interpretation of data to provide information for decision making.

Data capture involves systems for providing and collecting data for the database and includes many of the sources mentioned above. Marketers use sophisticated IT-based data collection techniques. In some countries there is legislation relating to the collection and use of data on customers which is designed to cover customers’ rights in several respects with regard to such data. Online sales enable the marketer to capture more information than shop-based transactions because the customer provides their address, email, telephone and mobile numbers, etc. as a matter of course, whereas many shops do not do this.

Data warehousing is a term used to describe collecting data on customers and markets from several possible sources in a company and storing it in one central database. This has developed because companies have different departments in the organization, each of which has a unique database that is not always made available to the rest of the organization.

Data mining enables the marketer to use database information in ways to improve the effectiveness of segmentation and targeting, promotion and direct marketing strategies as well as the development of relationship marketing strategies. Marketing managers can now use statistical analysis and modelling techniques to look for important patterns of cause and effect in the database through data mining.

Some companies, because of the nature of their business, have considerable information on their customers which can be used effectively through data mining. Banks and credit card companies are good examples. A company such as the logistics company, Federal Express, has a wealth of information encompassing not only their card holders’ personal details, but also what purchases they are making at what price, how often and from where. Imagine how information like this can be used by the marketer: for example, to develop direct marketing programmes, design new products to meet specific customer needs, target specific customer groups and adjust the marketing mix.

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