"Managing well is managing your future, and managing your future is managing information." Half a century ago, two very different futurists, each trying to predict the effects of the Information Revolution, predicted very different societies.
In 1949 George Orwell conceived, in his novel "1984" (later brought to the screen) an oppressive and ominous world, in which the development of bilateral communications and information management would inexorably push us towards slavery in the hands of a almighty bureaucratic government. The state would know everything about our people and at the same time limit the information we could receive to what the government would let us see on giant television screens.
Vannevar Bush, a top scientific adviser to US President Roosevelt, predicted a very different future. Bush, unlike Orwell, focused on the importance of information technology. He predicted a personal computer that he called “Memex”, in addition to predicting that information technology would free us from physical labor. I imagine, with what was then impossible, that people, armed with overwhelming information technology, could collect, analyze and transmit data from wherever they wanted and unleash their creativity.
When the year 1984 finally arrived, we realized that reality is more similar to how Bush saw it than to Orwell's approach.
Now, what implications does this have for those who handle the information about what happens in the market? How does all this information technology and its many tentacles affect your decisions about what strategies to take and what actions to take?
That is what we intend to elucidate in this work.
CHAPTER 1
INFORMATION SYSTEMS IN MARKETING
BACKGROUND
“Who controls the past, controls the future. Who controls the present controls the past". George Orwell "1984" Page 7.
The handling of information has been of interest to man from the moment he invented writing. For centuries (and even millennia) man has been given the task of collecting the information that will allow him through the past to improve the decisions of the future. For this he has designed various systems. When Guttenberg invented the printing press, he did it through books. Then the libraries, until it was insufficient and he was forced to develop new technologies that would allow him to handle and store more information.
In the Marketing field, tools for information management have been developed and perfected: the SIM Marketing Information Systems.
DEFINITION
It is the structure for gathering and managing information from internal and external sources to an organization. It provides a continuous flow of information, on prices, advertising expenses, sales, competition, consumer behavior, market trends, distribution expenses, etc.
When we speak of internal sources we have: contacts with Clients, accounting records, and other financial and operational data. In the case of external sources: government data (census of the Central Office of Statistics and Informatics), studies of trade associations, trade magazines, and reports supplied by external data collection companies. In Venezuela we have Data Analysis, also Data. The latter, apart from specific studies developed especially for Clients, publishes every year, a book with general statistical data of the country, as well as projections of various economic areas called "Economic Index":
Marketing Information Systems have an orientation towards the future of people, equipment and procedures, whose purpose is to store and process a set of information capable of helping in the correct decision-making of marketing management, based on their respective marketing program.
Example: In the United States, the Information Resources company (parent company represented in Venezuela by the company Datos), has installed “ video cars” in supermarkets to obtain information on purchasing patterns. Information on traffic flow and time that buyers spend in each session can be used to measure the success of exhibitions and promotions.
In Venezuela (the first country in Latin America to have this system), the AGB company has installed electronic devices in a sample of the population's televisions that make it possible to measure behavior patterns in front of the television. Statistics used by television channels to measure the Rating in the various programs, as well as to generate more exhaustive statistics regarding patterns by sex and age.
IMPORTANCE OF INFORMATION SYSTEMS
The importance of Information Systems lies in the fact that they allow a methodical orientation and adequate coordination of available resources, faster identification of problems and quantitative evaluation of results. They naturally have certain application problems that are fundamentally related to the psychological nature of marketing executives.
The success of a marketing executive will depend largely on factors such as: ability to respond to external factors of a marketing system, which is in a permanent process of change and the correct use of resources controllable by the company to properly adapt to the external environment.
The implementation of a marketing information system is a very useful work tool for a marketing executive of a major company in a highly competitive market. Let's see why:
- Because it is frequent that the life cycles of the products are shorter and shorter, which means that fundamental market-technical decisions have to be made in shorter and shorter periods of time. Consumers increase their demands in relation to the quality of the products and the levels of information they receive about them, which forces us to be constantly aware of whether or not our product or service meets market expectations The volume of information available grows so explosively that it is necessary to handle and process it in an automated way to obtain the appropriate benefits from it Marketing activities become more and more complex due to their physical scope due to the increasing internationalization of markets,by the need to know more deeply the needs and desires of the consumer, and by the need to know which products and customers are profitable and which are not.
Example: Kraft General Foods, Inc. owns one of the largest Information Systems in the food industry. The company has built a system to maintain, use and share information with different information users in a way that increases the value of the company that it offers to consumers. Kraft seeks to develop a dialogue with consumers by making 800 lines available for free calls. Annually it receives hundreds of calls from consumers, who ask questions and express their concerns about the product.
ADVANTAGES OF THE MARKETING INFORMATION SYSTEM (SIM)
The proper use by marketing management of Information Systems will result in a series of tangible benefits in the commercial operation of the company:
- Drastic reduction in operating costs Immediate availability of information Instant exchange of results Quick decision making Constant updating of the Database Greater efficiency More and better services to customers Increased efficiency of the sales force Retain market dominance by the leader Retain casual or occasional customers Increase the potential value of each customer over time Win customers over the competition.
DIFFERENCES BETWEEN INFORMATION SYSTEMS IN MARKETING AND MARKET RESEARCH.
Some people tend to confuse Marketing Information Systems with Market Research, since both are oriented to the search, capture and analysis of information by the market, for which we have considered it appropriate to dedicate a space in this research in order to to determine both their differences and their interrelation. Until now we have not analyzed the characteristics of Marketing Information Systems, but the table that we will see below will allow us, when comparing them with Market Research, to understand their true scope.
Table Nº1: Differences between information systems in marketing and market research
| INFORMATION SYSTEMS | MARKET RESEARCH |
| Operate continuously | It operates intermittently |
| Has orientation towards the future | Has orientation towards the past |
| Collects and manages internal and external information | Collect external information |
| Try to avoid problems | Deals with solving problems that have already arisen |
| Requires a computerized operation | It is not necessarily based on computing |
| It includes, in addition to marketing research, other subsystems. | It is a source of entry to Information Systems. |
Source: the authors.
The main difference between Market Research and Marketing Information Systems (SIM) is that the former is a process of gathering information for specific situations, while SIM provides continuous data entry for an organization.
Non-recurring decisions that address dynamics in the marketing environment often require a structured data search based on the problem and decision. Market research is characterized by an in-depth analysis of the main problems or issues. The information that is needed can only be obtained from sources outside the formal information channels available to an organization.
Example: A company may have a need to know something about its competitors or to achieve an unbiased understanding of its own customers, these information needs may require an independent information investigation through marketing research.
TYPES OF INFORMATION SYSTEMS
We can classify information systems into three types:
- SIM of the company towards the environment. SIM within the company. SIM from the market to the company. An information system emanates from the company towards the environment (market) consisting of data itself and in the promotion of the product and the company. This is where Advertising, Brand Image, sales promotions, public relations campaigns, etc. come in.
Table Nº2. SIM of the company towards the environment.
SIM of the company towards the environment.
Source: "Commercial Advertising" by Dorothy Cohen. Page 538.
- Other information, internal, flows between different points of connection of the company.
Table Nº3. SIM within the company.
SIM within the company.
Source: "Commercial Advertising" by Dorothy Cohen. Page 538.
- Other commercial information, ranging from the environment to the company. This type includes the data provided by Clients and competitors, government actions related to trade, prices, publication efficiency, etc.
Table Nº4. SIM within the company.
SIM within the company.
Source: "Commercial Advertising" by Dorothy Cohen. Page 538.
ELEMENTS THAT CONSTITUTE THE INFORMATION SYSTEM
Marketing Information Systems are based on a Marketing Database.
A. The Marketing Database
A.1. The Database Software
A.2. The data
B. Data Collection Systems.
A. The Marketing Database.
The Marketing Database (BDM) is the backbone of any Information System and even more so in One-to-One marketing programs. The BDM is made up of two fundamental components: the database software and the data.
A.1. The database software.
There are various types of database software designed for different purposes. Marketing database software should not be an adaptation of another type of software. The basic features of a marketing database software are as follows:
- It must be relational software It must allow the storage of historical data It must allow the storage of monitoring activities It must have interfaces that are "friendly" to users It must contain rigorous security elements It must allow interconnection with other databases It must allow the generation of communications (letters, faxes and email) It must allow dialing of telephone numbers directly from the screens It must have interfaces with the telephone exchange to perform predictive dialing It must allow interconnectivity with the telephone exchange to carry out the functions of CTI (Computer Telephone Integration) It must be capable to contain Telemarketing script modules with online aids.It must contain tables with various information to help telemarketers and their respective search engines It must allow the generation of multiple types of reports and statistics It must allow the storage of large amounts of records without affecting its performance It must have great flexibility to introduce modifications
Table Nº5. Marketing Database Features
Marketing Database Features
Source: Orlando Lokpez. Power Marketing. Presentation to Clients 1999.
The purpose of the BDM is to be able to manage the information and segment our consumers according to our needs.
Table Nº 6. Information Managed by the Marketing Database
Information Managed by the Marketing Database
Source: Orlando Lokpez. Power Marketing. Presentation to Clients 1999.
The most recommended platforms for this type of software are SQL Server and Access 97, both from Microsoft. Most of the marketing databases in Venezuela are developed in MS Access 97 (when handling up to 100,000 records) and SQL Server 7 (when handling 100,000 to several million records).
There are other platforms to manage databases that are used when the simultaneous management of different databases of millions of records is required (Oracle, Sybase and Informix, among others), both the platform and the application developments on these platforms are considerably more expensive than those mentioned in the previous paragraph.
What is most used in our country, due to its compatibility, is to develop the Marketing Database software in MSAccess97 or MS SQL Server 7 with graphical interfaces developed in Visual Basic. These alternatives allow a great interconnectivity with all Microsoft programs that will serve as support for the generation of the communications that are sent to the members of the BDM.
The most important step in the development of a BDM software is in the design of the same. All the marketing elements that experience indicates as necessary for this type of tool must be incorporated. This is the only way to have a robust instrument that will require few changes in the near future.
The computers used in Marketing Information Systems range from personal computers to expensive high-power mainframes. The size of the computer, the physical components known as hardware are a central processing unit and input / output units. The following terms are important to understand the management of Marketing Information Management Software:
<.- Central Processing Unit.
<.- Peripheral Devices.
<.- Computer network.
<.- Central Processing Unit (better known as CPU Central Processing Unit). It is the memory and processing component of the computer, which stores data and programs, processes instructions, and performs calculations.
<.- Peripheral Devices. They are used to input data (input) and transmit processed data (output). Peripheral devices include a modem so the computer can communicate over telephone lines and a CD-ROM (compact disc read-only memory) drive to store large amounts of optical memory that can present text and sound images. The keyboard, monitor, mouse and printer are considered peripherals.
<.- Computer network. It is a system that allows the intercommunication of different computers. Network users have access to information from the rest of the network, through a modem or other device
A.2. THE DATA.
The data is made up of all the relevant information that can be included in the SIM. Data from our Clients, competitors, distributors, transactions, sales, etc. A data bank is necessary to collect and store (manage) the internal information of the company for later consultation. They allow to retrieve a variety of information useful in making decisions about marketing; include newspaper articles, company news publications, government reports, economic data, and bibliographies.
The quality of the data is the fundamental element for any activity or decision supported on the SIM, for which it must have three fundamental characteristics: that it is reliable, (which depends on the source), that it be homogeneous (which depends on maintenance newspaper) and that it is current.
By quality of the data it is understood that they are duly updated, that the genres correspond to that of the recipients of the information, that the spelling is correct, that the record actually belongs to the Target to be reached, that they contain all the data necessary to contact people, etc.
This implies that precise criteria must be met, which must be established, to incorporate data into the BDM. More than the quantity of data, what is really important is its quality. We will detail those criteria below:
Data Sources
Maintenance of BDM Data
Data Sources
The BDM can have several data sources:
- Customer information captured through different sales activities
The data in these lists must be diagnosed, refined and homogenized according to the same format before being incorporated into the BDM. This implies establishing the criteria that the data of each record must meet before being transcribed or imported into the BDM.
- Customer and prospect information captured through programs specially designed for this purpose Prospect information from external sources
These data must be subjected to a previous diagnosis, and then proceed to its normalization according to the standards that have been agreed. You must be very careful when purchasing these lists as their quality varies considerably in the Venezuelan market.
Maintenance of BDM Data
The data compose a dynamic set that becomes obsolete very quickly. All records must contain a field with the date on which the record was added to the BDM and a field where the last date on which the record was updated is recorded.
In the same way, procedures must be established in the software that alert when a record has more time than is set as adequate for updating. The criteria to activate these procedures vary according to the type of registration (more time for the information corresponding to a company than for a natural person). The procedures indicated can be automatic in the form of “flags” or manual in the form of periodic reports.
Criteria must also be established to remove records from the BDM. Not all the records that are included will be valuable in time and a significant number of useless records affect the performance of the BDM.
B. Data Collection Systems. A communication device that forms a link in both directions between the user and the system.
Example: In July 1998, a new wireless telecommunications system was launched worldwide: Iridium satellite phones. The second global launch (after Windows '95) in history, that is, on July 13, the same campaign was launched in all countries of the world. The strategy consisted in capturing Leads (prospects) through press, magazine and television commercials that were interested in seeking more information. They should call a toll-free 800 number where they would request a brochure that would be mailed to them, but first they would have to answer a series of questions that would allow them to determine if they were qualified prospects for an Iridium phone.
For this launch, a Database Software was designed, which had to store the data of all the prospects as well as all the information that was collected about it throughout the call.
The Software, specially designed for managing the information of this campaign, also allows generating a series of reports, compatible with the reports of all countries around the world. These reports allow marketing managers to make decisions: determine qualified prospects, modify the advertising pattern, modify marketing strategies, etc. (Please see Annex 1, Iridium Database Software Manual).
DATA COLLECTION SYSTEMS
The data collection systems can be divided into four subgroups which we will describe below:
ΠInternal data subsystem.
Marketing Intelligence Subsystem.
Ž Market Research Subsystem.
Marketing decision support subsystem.
ΠInternal data subsystem. The mission of this subsystem is to collect and manage information that is generated within the organization. It is basically data on types of customers by consumption, by geographic area, by seniority, by distributors, by sales agents, by sales volumes, etc.
It is the daily information on the development of the marketing environment that helps managers prepare and adapt their plans; This information can be obtained from different sources, much of it can be provided by company staff. You should sell the idea that your employees are important in gathering information, train them to detect new developments, and encourage them to pass on the information.
Marketing information has no value until managers use it to make better decisions.Most companies have centralized Marketing Information Systems to provide periodic performance reports, updates and reports of study results to those managers. they need these routine reports for planning, executing and controlling day-to-day decisions. For example, a sales manager struggling with a major customer might need a summary of the sales and profit statement for the year. Recent developments in information management have revolutionized its distribution.
Many companies are decentralizing their Marketing Information Systems using the latest advances in microcomputers, software and communications, thereby providing managers with direct access to the information stored in the system. In certain companies, marketing managers can use a microcomputer to link to the company's information network. From any location, they can obtain data from internal records or external information services, analyze them using statistical packages and models, prepare reports with a word processor, and communicate with other network users through telecommunications.
This must also be obtained from suppliers, resellers and customers, you can get data on competitors, what they say about themselves in their annual reports, speeches and press releases and announcements, what they say about them in publications and trade shows or observe what they buy and analyze their products, controlling their sales and their new patents.
Information can be purchased from third-party providers, this information can be used to evaluate your own advertising strategies and styles and the competition, advertising space, media used and advertising budgets; the DONNLLY DEMOGRAPHICS database provides census information, plus your own demographic projections by state, city, or zip code; online databases are at your fingertips to locate almost any type of marketing information you need. It can work in two ways, companies take steps to protect themselves from competitive spies, some companies have an office that collects and circulates marketing information. They analyze the main publications,summarizes important news and sends newsletters to marketing managers, archives information, and assists managers in evaluating new data. These services greatly improve the quality of the information available to them.
Example: SEARS. It uses your internal records as a powerful marketing tool. Managers use computerized information about their 40 million customers to promote special products and services to target segments as diverse as gardeners, buyers of household electrical appliances and expectant mothers. It registers all the electrical appliances a customer purchases and promotes special service packages for those who have multiple appliances but do not have a maintenance policy. Soon managers of other subsidiaries will be able to develop sales leadership using the same information.
Kellogg's, on the other hand, had offered the public a tour of its Battle Creek plant since 1906, but recently barred strangers from the newly modernized factory to prevent its competitors from gaining information about its high-tech equipment.
Marketing Intelligence Subsystem. One of the missions of this subsystem is the use of external secondary information already prepared: from books, magazines, newspapers, censuses, reports to collect information, information related to the organization and the like. In this second part, information is also obtained on relevant issues of the competition, and of the company itself, such as promotions they carry out, prices at which they launch their products on the market, new products, price changes, and how customers react to competitor offers.
Market Research Subsystem. This refers to studies on specific situations, which tend to materialize in individual project requirements. It is about conducting an Ad - Hoc study to carry out a formal Market research that provides relevant information for decision making.
It is the function that links consumers, clients and the public with the marketer through information, which is used to identify and define market opportunities and problems; to generate, define and evaluate marketing measures and to improve understanding of the marketing process. Market research specifies the information needed to solve market problems, designs the method of gathering the information, manages and carries out the data collection process, analyzes the results, and communicates the findings and their implications.
Market researchers undertake a wide range of activities ranging from sales and market share analysis to value analysis and social policy. The ten most common activities are:
- Measure market potential Analyze market share Determine market characteristics Analyze sales Study business trends Make short-term forecasts Analyze competitor products Make long-term forecasts Analyze studies Marketing Information Systems and research on prices.
Marketing decision support subsystem. They are a set of statistical models and techniques, which, with the help of the company's computerized equipment, allow improving marketing decisions. On the one hand, they have a statistical bank, in which there are different types of statistics, with appropriate software packages to carry out studies and analysis. On the other, they have a bank of deterministic models, optimization, simulation, programming, which help to make business decisions.
Database Software must include reports that allow the manager to evaluate the data or results of a particular action. These reports should be developed in accordance with the management requirements regarding statistical management indicators.
TYPES OF DATA COLLECTION SYSTEM
Each subsystem can rely on one or more information gathering systems according to its needs. Below we will mention some of the best known and most used systems, through which marketers can interact with their market and obtain valuable information that allows them to make decisions.
- FREE PHONE NUMBERS (800). FAX MARKETING DIRECT RESPONSE. INTERACTIVE TELEVISION. E-MAIL. INFOCOMERCIAL ELECTRONIC BOARDS OF ANNOUNCEMENTS. ONLINE INFORMATION SERVICES. INTERNET
- TOLL-FREE TELEPHONE NUMBERS (800): This type of marketing often depends a lot on the ease of having a toll-free access telephone number for consumers, where they ask questions and express their concerns about the product, the campaign or the company. The idea is to make it easier for consumers to communicate with the company through a dedicated line for this purpose and free of charge for the caller, regardless of origin. FAX: It is a means of communication increasingly used in the field of marketing, so frequent that it is being subject (in some countries) to legal restrictions, due to the reception of unwanted faxes by the recipient, which, in addition, from using uptime of your machine, you incur expenses, such as paper, ink, etc. According to information from the American Direct Marketing Association, about 30,000 million sheets are shipped annually by this means each year. As a result, in New York, it is a violation to send an unsolicited fax between 6 AM and 9 PM and in Illinois, the sender of a spam fax can be sued for up to $ 5,000. DIRECT RESPONSE MARKETING: Type of marketing that occurs when a retailer advertises a product and makes it available to consumers through mail order or telephone. We have, for example, food delivery orders such as * Vip-Vip or 800 Suchi and even 800 FLORES:
Example: A television commercial featuring an artist's music collection that is available through a toll-free number.
- INTERACTIVE TELEVISION: It allows the viewer an interaction with what happens on the screen, it consists of a remote control device that with the help of the FM radio band, facilitates participation, from home, in game shows, such as forecasting the result end of sporting events that are being broadcast live and the final development of a movie. E-MAIL: System to send messages, information and data between computers, through the Internet. INFOCOMERCIALS:These are commercials in the form of 30-minute shows through which consumers can learn why they need the product. These generate sales of more than 750 million dollars annually. Since its inception, they have been implanted especially in cable television, however, despite the proliferation of infomercials, doubts about them persist. In Venezuela we have as an example the company Procompra 2002. ELECTRONIC ADVERTISING BOARDS: Computer networks allow companies to interact with data sources and customers with almost instantaneous information on products and sales performance. Firms can exchange electronic mail (E-mail) between their employees, suppliers and clients.
Many companies are installing electronic bulletin boards in order to communicate with employees and customers, to develop information for the marketing information system, it constitutes an aid in the development of the strategy. Some companies use bulletin boards to help customers solve problems and answer questions.
There are firms that develop bulletin boards that allow customers to brainstorm creative problem solving related to the product. This way they learn that as they monitor the messages you get new ideas about the marketing of the product. Internal bulletin boards can help businesses stay customer-oriented.
Example: Texas Instruments Incorporated maintains a bulletin board in which employees can express their complaints anonymously. Your concerns can be directed to executives who coordinate and integrate efforts by developing the firm in positive relationships with customers.
- ONLINE INFORMATION SERVICES: obtained by connecting to a computer network system. It's as simple as making a call, pressing the return key, and entering a password. This communication with customers, suppliers and employees providing a high speed link to coordinate the development of a marketing information system. It has achieved significant importance in recent years is the Internet, a network made up of computer networks of corporations, universities, government and others. INTERNET:With access to the Internet, companies allow their employees to exchange via email, upload or download files from other computer systems or for users to download files from their own system, join discussion groups on any topic and connect to other networks to access the databases. For those who do not have access to online databases, the libraries through the CD-ROM optical disk are read by means of lasers in special units attached to computers. Business databases are developed by providing useful data for decision-makers. These databases are obtained through a telephone connection, in print or on floppy disks. The user searches the base with a keyword,subject or company to extract an article or report then this information is printed. Information provided by a single firm on family demographics, purchases, viewer behavior, and response to promotions such as coupons and free samples is data from a single source. Companies can develop their own databases or sell their databases.
Example: CENDATA from the US census bureau, is a compuserve online database that allows merchants access to data from the 1990 census, the information is available in tabular and report form. You will find the names, addresses, and phone numbers of local, regional, and national census offices. CENDATA, has characteristics on population and housing at the state level for variables such as income, education, language spoken and others.
ASSESSMENT OF INFORMATION NEEDS
The company begins by interviewing managers to find out what kind of data they would like to have, but they don't always need everything they ask for and may not ask for what they really need. The Marketing Information System cannot always provide all the data they request. With today's information technology, companies can provide much more data that managers can actually use and when too much information can be just as damaging as a lack of it. The SIM must monitor the marketing environment and provide decision makers with the information they must have to do so properly.
For example, a P&G manager who manages Ariel wants to know each month the retail sales of all detergent brands by geographic region. That same executive may want to receive quarterly reports on competitors' prices and how much advertising they do. Less often, once a year, you should be aware of market factors, including demographic changes, that can affect Ariel in the long run.
In addition to these periodic reports and probably others, the manager will periodically request special reports that can be compiled from existing data, for example, you may want to know, what share (Share) of the total market tube each detergent, during the last 5 years (compared to particular economic aspects that have affected the country's economy in the same period of time) and have a projection of what its likely performance will be in the next 3 years.
The business must decide whether the benefits of having certain data are worth what it will cost to get them, and it is often difficult to assess the cost and value. The information itself has no value, it derives from its use. Systems have been developed to estimate the value of information, decision makers often rely on subjective judgments, and if the company can add the cost of the Marketing Information System or market research projects, it is hard to imagine the cost. cost of certain specific data. The costs of obtaining, processing, storing and distributing information can increase rapidly. The additional data has little impact on improving or changing the manager's decision, or the cost of the decision will exceed the benefits of the resulting decision.
Example: A company estimates that without more information, a new product launch will produce a profit of $ 500,000. The manager assumes that the additional information improves the marketing mix and will allow the company to earn $ 525,000. It would be foolish to pay $ 30,000 for the additional information.
EPISODE 2
ONE TO ONE MARKETING
For a Marketing Information System to be successful, it must be implemented through medium and long-term programs that allow the company to develop lasting relationships with prospects and clients.
There are many ideas of Marketing Information Systems that can be created: for data collection, to generate sales, to obtain responses in promotions, to attract customers, to satisfy them or to retain them. The point, however, is to what extent these ideas are actually contributing to the success of an organization. In other words, to what extent do these programs, on time or not, respond to a general strategy aimed at achieving long-term marketing and sales objectives?
Before starting the development of Marketing Information Systems, it is of primary importance to establish a Strategic Marketing Plan where the objectives are set and the guidelines to be followed are established.
In a market as competitive as that of today, the trend is to carry out activities aimed at increasingly segmented groups, both in terms of products and customers, the development of a general strategy is even more necessary if you want to visualize how to achieve the preference of different targets.
All programs that are designed must be confronted with the Strategic Plan to ensure that they contribute to the achievement of long-term objectives, while being framed within the previously established guidelines.
We believe that the best-developed strategic marketing foundations that can provide concrete guidelines that have proven to be successful in multiple companies are those that encompass the Marketing One to One or One to One Marketing methodology that we will explain below.
Below we present the fundamentals of the indicated methodology, created by Don Peppers and Martha Rogers and developed over the last five years by the management team of Marketing One to One, Inc. and has included the contributions of the companies that are found implemented around the world (Hewlett Packard, Oracle, Pitney Bowes, Wells Fargo, American Express and British Airways, among others).
The knowledge of the fundamental concepts that are expressed in this section can be deepened in the books of Don Peppers or in the penultimate number of The Harvard Business Review where an analysis of the most recent book by these authors is made.
One-to-One Marketing is a form of direct relationship marketing, although not every direct relationship program is One-to-One Marketing. To be a genuinely One-to-One marketer you must have the ability and willingness to change the behavior of the company. company towards individual clients, and the information that emerges from each of them, based on what we learn from that client and the needs they express to us.
The idea is really simple:
Treat different clients differently
To achieve that this simple idea can be transformed into lasting relationships and loyal customers, it is necessary to carry out activities based on the following 4 fundamental principles:
- Identify customers and prospects
This is a critical point. Get to know clients and prospects in as much detail as possible. Not just your name and address, but your habits, preferences, and needs. This is not accomplished by filling out a questionnaire once but through all the contact points. All the information collected must be stored and available. This is not an easy proposition to implement. You have to capture the information of each valuable customer for the company, throughout the entire duration of the relationships that are maintained with that customer. A company that does not really know its customers will not be able to create loyal relationships.
- Differentiate customers and prospects
Customers and prospects are different, mainly, on two levels:
- They have different value, some are very valuable to us and others are less so They have different needs that can be satisfied by our company
This requires that we differentiate our efforts to obtain the greatest advantages with the most valuable clients and that we adapt the conduct of the company according to the individual needs of each client. The degree of differentiation of the customer base will allow us to decide what type of strategy is more convenient
- Interact with clients and prospects
The next step in improving both the cost-efficiency and the effectiveness of customer interactions. To make them more cost-efficient, automated channels should be used: direct the actions of the Call Centers to Web pages and sales contacts to Call Centers. To make them more effective, only information relevant to the client's needs or the precise establishment of its value as a client for the company should be collected.
Each interaction must begin where the last one ended, for which one must have a "memory" of the interactions carried out. This is accomplished with an automated information system that "remembers" each interaction.
- Individualize some aspects of the conduct of the company based on the needs and value of each client. The products, services and added values must have sufficient flexibility to be adapted to the requirements and needs of each individual client that has the appropriate value for the company.
These four principles have areas where they overlap considerably. However, they constitute a guide that allows the development of programs sequentially to achieve customer satisfaction and loyalty.
Becoming a One-to-One business involves a gradual adaptation process unless you are starting the business under those principles (as Dell Computers and Amazon did, for example). Companies that already have a corporate culture require a strong commitment and constant monitoring to achieve this. 3M, British Airways and Hewlett Packard have started that process and already show measurable results on their balance sheets.
Most companies can make significant progress without drastically disrupting the way they do business if they manage to introduce gradual changes where the four principles outlined are implemented step by step.
Example: In January 1999, one of the pioneering One-to-One Marketing programs was launched in Venezuela, under the name Avon Connection.
This program, supported by advanced and detailed Database Software, allows to create an "intimate" business relationship between Clients and the company. The affiliates can make their purchases of Avon high technology products through a toll-free number (800 AVONC or 800 28662) and the system records all the information related to the Client: from their questions, doubts, complaints and comments about the system, up to everything related to the products. As time goes by, the software gets “smarter”, storing data such as skin type, favorite colors, product lines and other details of the buyer. All this allows each Client to be treated individually,from the moment the operator picks up the phone and a digital telephone exchange identifies and opens the file corresponding to the buyer so that the operator can say: "Good morning, Mrs. Marcano, how are you today?" Here are a series of screens of the software developed by Total Communications Agency Power Marketing for Avon's one-to-one marketing campaign: Avon Connection January 1999.
CHAPTER 3
LOYALTY PROGRAMS
Today's companies seek two main objectives through Marketing Information Systems: Determine the lifetime value of the Client and keep it faithful as long as possible.
First, it is important to determine what value that customer will have throughout their productive life as a consumer of our products, to determine their potential.
Then, it is important to develop, with the information that the SIM can provide us, loyalty programs that allow us not only to retain that customer for as long as possible, but to attract new customers from our competitors.
According to a study published by the Carlson Marketing Group company on May 13, 1999 on the Internet, the following general results were determined about loyalty programs and their effects on consumer behavior:
- 60% of the consumers interviewed acknowledged that they have increased their purchases in companies with loyalty programs. Their increase corresponds to 27%. In the case of credit cards, the increase in use is 46%. 80% of those interviewed concentrate their purchases in the company that offers the loyalty program that In the case of telecommunications companies, customers decide to include new services, as well as avoid changing companies, thanks to these programs It has been estimated that if the loyalty program were eliminated, there would be a decrease of up to one 30% in the concentration of purchases in the same company. (For credit cards, this decrease could be as much as 56%.) People participate in an average of three loyalty programs.Among the companies that most commonly apply these programs are: Airlines, Hotels, car rental, telecommunications companies, credit cards.
It should be noted that these programs based on rewards for global purchases, in turn allow to interact and learn from Customers: Information.
CHAPTER 4
GLOBAL INFORMATION SYSTEMS
As companies cross national borders, the need for information also increases. International organizations that have a centralized direction must be aware of what is happening in the world. However, in recent studies, two problems with the creation of Global Information Systems were discovered:
- The data that managers in one country use for operational decision-making in one country often differs from that needed by senior managers at headquarters in another country in order to assess their performance. applied are compatible or comparable.
To coordinate Global Information Systems, it is necessary to coordinate all the subsidiaries of the corporation, recognize the different management styles influenced by the cultures of each country (and respect them), make an effort to standardize and raise awareness of the importance of both information and of the quality of it.
The case that we mentioned above in relation to the global launch of Iridium, can serve as an explanation. In that case, a worldwide standardization of advertising communication was made. However, each country had the power, once the objectives had been defined, to design its own data management software, tropicalizing according to the cultural characteristics of each country. In our case, Venezuela took charge of Colombia and Peru, for which a software management manual was designed (see original annex) so that the capture of information and its management were the same. Subsequently, an Excel report was designed (because it is a very standardized program) called "Data Warehouse" in which all the information collected will be emptied,and it would be sent electronically to each parent company in Washington DC for integration into all reports in the world and subsequent analysis of global results. Regardless of the language, the data presented in that report, in each field, would be the same, regardless of the country of origin.
LIMITATIONS OF THE MARKETING INFORMATION SYSTEMS
SIMs can have several limitations:
- SIMs do not guarantee that the decisions that managers make are the right ones, since sometimes the use of "intuition" based on the manager's experience prevails. SIMs are very expensive to install and require constant maintenance of the data that they are stored. Deficiencies may arise because they are not installed at their full level or the information is not cleaned and updated regularly enough due to their costs Information systems tend to be rigid (statistical) so they are not flexible in situations variables and emergencies.
However, it is important to emphasize that despite their limitations, they constitute a tool that, when used well, will help to make correct decisions.
CONCLUSIONS
We live today in the society of the information age, where production is being oriented towards demassification.
Marketing oriented towards individualization (One-to-One marketing), where companies will be measured by their Share (participation) per Customer, rather than their Market Share. In other words, companies will measure what percentage of purchases from a specific customer corresponds to them.
Interactive media, an increasingly flat management, (and much less vertical) with more and more information produced and exchanged digitally in order to discover the different needs in companies and their clients.
How effective the marketing managers of companies will be will depend on how effective (and creative) they are in handling information and technology. And how fast and successful in making use of it for decision-making, which in today's fast and changing world, can mean life or death in the market.
In the information age, it seems that nothing is impossible. Is it possible for a mass consumer products company to manage a Database of its Customers and adapt its products to the particular needs and desires of each one? Is One-to-One marketing a utopia? The possibilities are endless, and if you don't believe it, just take a look at an E-Business (IBM) ad on the Universal pages:
"You. He is at a business dinner in a city far from home, but the cell phone turns on to let him know that his daughter has taken her car out of the parking lot and at that moment he is heading to the highway trying to accelerate to 80 km / h. But that micro chip that does not allow her to accelerate to that speed, is the same that has warned her in time, so that she apologizes for a moment of dinner and uses her cell phone to call her daughter and ask her to return the car right away to the parking lot… "
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For example the various Chambers of Industrialists. In the case of the Automotive Industry, the camera that groups them provides information about sales by vehicle, detailed in terms of geographic area, etc. The information concerning the competition being public.
See Loyalty Programs. Chapter 3 page 62
See One-to-One Marketing. Chapter 2 page 47
Some of these points will be developed in depth in the point “Data Collection Systems” Page 30.
Don Peppers & Martha Rogers "The One to One Future", Doubleday, 1993; "Enterprise One to One", Doubleday, 1997; "The One to One Fieldbook", Doubleday, 1999
"The Harvard Business Review", Harvard Business Press, February-March 1999
The content of this point is an adaptation of the first chapter of the book "The One to One Fieldbook" cited above.
Free adaptation of the original notice published in March 1999.
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