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18. chapter. ONE-TO-ONE MARKETING. Prepared by Angela Zigras, Seneca College Deborah Baker, Texas Christian University. You Will Learn To. 1. Define one-to-one marketing and discuss its relationship to database technology.

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Prepared by

Angela Zigras, Seneca College

Deborah Baker, Texas Christian University

Chapter 18

you will learn to
You Will Learn To ...

1. Define one-to-one marketing and discuss its relationship to database technology.

2. Discuss the forces that have influenced the emergence of one-to-one marketing.

3. Describe the one-to-one marketing communications process.

Chapter 18

you will learn to1
You Will Learn To ...

4. List the advantages and disadvantages of one-to-one marketing.

5. List eight common one-to-one marketing applications.

6. Discuss the basics of one-to-one marketing database technology.

7. Discuss privacy issues related to one-to-one marketing.

Chapter 18

one to one marketing
One-to-One Marketing

A customer-based, information-intensive, long-term-oriented, and individualized marketing method that focuses on share of customer rather than share of market.

Chapter 18

what is one to one marketing

With a


What is One-to-One Marketing?


Marketing is...

Share of Customer





Long-Term Oriented


Use of...


Chapter 18

one to one marketing1

Focuses on Share of Customer

Focuses on Share of Market

One-to-One Marketing

Mass Marketing

Develops Customers

Develops Products

Finds Products for Customers

Finds Customers for Products

One-to-One Marketing

Chapter 18

the evolution of one to one marketing


Before Industrial


Mass Production


Benefit of Technology

The Evolution of One-to-One Marketing

Chapter 18

forces influencing one to one marketing
Forces InfluencingOne-to-One Marketing

Increasing Diversity

More Demanding,

Time-Poor Consumers

Decreasing Brand Loyalty

Emergence of New

Media Alternatives

Demand for Accountability

Chapter 18

marketing impact of trends

Consumer recognition

as unique individuals


Impact of


More direct and personal

marketing efforts

Rewards for loyalty

Increased importance of

One-to-One Marketing

Marketing Impact of Trends

Chapter 18

the new commandment of marketing s future
The New Commandment of Marketing’s Future

Know thy customer and communicate with him or her based on what you know.

Chapter 18

the one to one marketing communications process








The One-to-One MarketingCommunications Process

Capture of response

shapes futures message

Receiver Response

Chapter 18

communications process differences

Message is


Channel is


Noise is

not present

Individual Responseis captured

Communications Process Differences

Chapter 18

advantages of one to one marketing
Advantages of One-to-one Marketing
  • The ability to identify the most profitable customer.
  • The ability to create long-term relationships with customers.
  • The ability to target marketing efforts only to those people most likely to be interested.
  • The ability to offer varied messages to different consumers.
  • Increased knowledge about the customer.

Chapter 18

disadvantages of one to one marketing
Disadvantages of One-to-one Marketing
  • Marketing databases can be costly and time consuming.
  • Databases need to be carefully planned.
  • Consumer privacy issues.

Chapter 18

eight common one to one marketing applications

1. Identify the best customers

2. Retain loyal customers

3. Cross-sell other products or services

4. Design targeted marketing communications

5. Reinforce consumer purchase decisions

6. Induce product trial by new customers

7. Increase the effectiveness of distribution

channel marketing

8. Improve customer service

Eight Common One-to-One Marketing Applications

Chapter 18

identifying the best customers
Identifying the Best Customers
  • 20% Of Customers
  • Account for 80% of Sales

80/20 RULE


Chapter 18

retaining loyal customers
Retaining Loyal Customers

Retaining an additional 5% of customers each year increases profits by 25%

Improving customer retention by 2% can decrease costs by 10%

Chapter 18

other marketing applications through databases
Other Marketing Applications through Databases
  • Match profiles to cross-sell other products to customers
  • Modify marketing messages based on customer profiles
  • Reach out to customers to reinforce the purchase decision

Chapter 18

other marketing applications through databases1
Other Marketing Applications through Databases
  • Find new customers
  • Gain insight into who is purchasing products
  • Improve customer service

Chapter 18

customer relationship marketing
Customer Relationship Marketing

The process of gathering, maintaining, and analyzing information about customers and prospects to implement more efficient and effective marketing communications.

Chapter 18

marketing database
Marketing Database

The compilation of names, addresses, and other pieces of pertinent information about individual customers and prospects that affects what and how marketers sell to them.

Chapter 18

building a marketing database

Analyze information to find answers

Enhance customer data

Collect the right data

Building a Marketing Database

Chapter 18

enhance customer data
Enhance Customer Data

Database Enhancement involves:

The collection of detailed information about the consumer.

  • Demographic
  • Lifestyle
  • Behavioural

Chapter 18

database enhancement
Database Enhancement

The overlay of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of customers or prospects.

Chapter 18

customer segmentation






Purchase Behaviour


Customer Segmentation

Chapter 18

recency frequency monetary analysis

A data manipulation technique that determines the firm’s best customers by identifying those customers who have purchased most recently, most frequently, and who have spent the most money.


Chapter 18

lifetime value analysis
Lifetime Value Analysis

A data manipulation technique that projects the future value of the customer over a period of years using the assumption that marketing to repeat customers is more profitable than to first-time buyers.


Chapter 18

uses of customer lifetime value

Show expense to acquire a

new customer

Provides level of spending

to retain a customer

Provides a basis for

targeting new customers

Uses of Customer Lifetime Value

Chapter 18

data mining
Data Mining

The process of using statistical analysis to detect relevant purchasing behaviour patterns in a database.

Chapter 18

data mining1

Create customer profiles

Uses of

Data Mining

Determine the reason

for customer loyalty

Analyze the potential return for strategies

Help forecast sales

Data Mining

Chapter 18

one to one marketing and the internet

Create a Multimedia Marketing Initiative

Deliver Personalized Messages

Establish Enduring Customer Relationships


One-to-One Marketingand the Internet

Chapter 18

privacy concerns with one to one marketing


of information collected

Invasion of


Misunderstanding about

privacy laws and


Popularity of Internet

for data collection

Privacy Concerns withOne-to-One Marketing

Chapter 18