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Chapter 3 The Impact of Databases

Chapter 3 The Impact of Databases. What is a database?. Flat file Access is slow Most older legacy systems Relational Files are linked by a duplicate variable in each table (customer or ID #). Types of Data. Internal Purchases Customer Transactions Amount Spent Transaction dates

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Chapter 3 The Impact of Databases

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  1. Chapter 3The Impact of Databases

  2. What is a database? • Flat file • Access is slow • Most older legacy systems • Relational • Files are linked by a duplicate variable in each table (customer or ID #)

  3. Types of Data • Internal • Purchases • Customer Transactions • Amount Spent • Transaction dates • Promotion history • Customer services • Profitability • Lifetime value • Expternal • Address • Houshold • Demographics • Socioeconomic data • Lifestyle psychographics • Firmographics • Geo-demographics

  4. Database Marketing and Customer Relationships • CRM • The processes a company uses to track and organize its contacts with its current and prospective customers. It can be analyzed in order to plan target-marketing campaigns, conceive business strategies etc.

  5. Lifetime Value (LTV) • Loyal Customers • Repeat purchasers • One-time-only triers • Well-defined market segments

  6. Data Warehouse • Good storage and reporting system • Decision Support Systems and Executive Information Systems EIS • Can Feed a Data Mart

  7. Data Mining • Process of discovering patterns or trends • Cluster Analysis • Market Basket Analysis • Neural Networks

  8. Cluster Analysis • Cluster analysis is a data reduction technique that group variables based on similar data characteristics • Segmenting customers

  9. Market Basket Analysis • Lets us look at what customers typically buy together • Product placement • Product suggestions • Online • McDonalds

  10. Neural Networks • Discover and predict relationships in data • Black box • Complex formulas

  11. International Databases • Postal address coding • Name characteristics - fields • Requires flexibility

  12. Privacy • HIPPA • Financial • Security • US and EU rules

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