How to Implement Marketing Strategies Using Database Approaches Received (In Revised Form): 22Nd September, 2003

How to implement marketing strategies using database approaches Received (in revised form): 22nd September, 2003

Hoda McClymont is an associate lecturer at the University of Southern Queensland teaching in the ﬁelds of marketing research and consumer behaviour. She has worked in the private sector and for government agencies at local, state and federal levels. Her research interests include database marketing, health marketing and tourism.

Graham Jocumsen is a senior lecturer in marketing at the University of Southern Queensland with extensive teaching, consulting and research experience in marketing strategy, marketing research, marketing management and small enterprise marketing. He held senior faculty management positions prior to 1990 before returning to mainstream academic pursuits.

Abstract Available technology has been primarily responsible for the rapid expansion of use of database marketing by firms in Australia. This paper, using the literature and qualitative empirical data, has built and evaluated (using case study methodology) a conceptual framework for formally identifying and assessing the opportunities for using databases in implementing marketing strategies. It was found that databases could be used to implement marketing strategies associated with customer retention, customer reactivation, product/service-related and promotion-related marketing strategies. The way the database was used to implement these strategies and the extent of this usage depended, however, on factors such as the product type, channel intermediaries, firms’ operations, firm size and the sophistication of the firms’ marketing activities.

INTRODUCTION 50 per cent of respondents planned to The use of customer databases to pursue increase investment in database segmentation and targeting strategies has development and management in 2002.7 provided opportunities to significantly The rapid expansion of service offerings improve marketing effectiveness and to demanding close customer interaction has reduce marketing costs.1 Consequently, further stimulated adoption of database the adoption of database marketing by marketing approaches.8 Furthermore, firms has increased rapidly in many many firms are now integrating database industries2,3 for a number of reasons.4 For marketing with web-based tools and example, over 87 per cent of Australian techniques,9 thus providing marketers Hoda McClymont Associate Lecturer, firms now make varying uses of databases with expanding opportunities to exploit University of Southern in implementing their marketing both interactivity and personalisation Queensland, Department of 5 Marketing & Tourism, strategies. Direct marketing advertising associated with their marketing efforts. Toowoomba, Queensland expenditure (of which use of database Researchers have been challenged to 4350, Australia. approaches are a part) exceeded keep pace with the widespread and rapid Tel: ϩ61 7 4631 1453; 6 Fax: ϩ61 7 4631 5597; Aus$16.46bn in 2001. A business survey adoption of database marketing in e-mail: [email protected] conducted in 2001 showed that close to practice, resulting in a relative paucity of

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guidance material published in scholarly expert interviewees (three database marketing journals. Specifically, the marketing practitioners and two literature lacks a conceptual framework marketing consultants) to name Australian which links marketing strategies to firms (in Brisbane, Sydney and potential uses of database approaches. Melbourne) known to engage in database Hence, the aims of this paper are first to marketing. Sufficient firms were then develop a conceptual framework which approached to obtain a total of 11 firms shows how marketing strategies may be willing to participate in the research, a implemented using database marketing number deemed adequate for research of approaches and secondly to explore the this nature.16–20 extent and reasons for such usage, using A total of 13 interviews were the literature and exploratory case study conducted with members of the 11 research. selected firms drawn from a range of Definitions of database marketing vary industry types, channel types and head widely.10–14 For the purpose of this office locations (two interviews were research, database marketing is defined as conducted in three of the case firms). asystemthatreliesonavarietyof The cases were named after the industry information technology tools and large in which they operated. The case list volumes of historical and/or real-time, comprised consumer goods, fast food, up-to-date, comprehensive data about publishing 1, publishing 2, automobile, customers, inquiries, prospects and financial 1, financial 2, suspects to assist in developing and telecommunication, charity, photography implementing marketing strategies, with and art. In summary, the cases spanned a theultimateaimofdeveloping total of nine industries, comprising up to longstanding relationships of repeat four types of channel intermediaries, business with customers (National Centre offering goods or services as their for Database Marketing’sdefinition).15 primary product type and having head offices which were based either in Australia, the USA or Sweden. METHODOLOGY Appropriate steps to maintain validity The methodology chosen for this and reliability of this qualitative research research was exploratory and involved were used.21 For example, triangulation two stages. First, a comprehensive of sources22 was achieved by collecting literature search embracing both database documents from the firms interviewed marketing and mainstream marketing was (to verify their assertions), conducting conducted to identify feasible marketing field observations and asking respondents strategies which could utilise database to review an early draft of the interview marketing. The second stage involved transcripts in order to correct any case research which sought to investigate inaccuracies and misconceptions. Content the extent of usage and reasons for such analysis of the interview transcripts usage of database approaches in permitted exploration of reasons for Australian businesses in relation to the database marketing strategies. Further, identified marketing strategies from the reliability was achieved by using a case literature. The target population included study interview protocol which provided all firms in Australia which practised a standard set of questions that was asked database marketing. Absence of a list of at each interview. The interview protocol such firms led the authors to develop a opened with a broad question which ‘convenience’ target list by asking several asked respondents to provide the ‘story

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Table 1: Marketing strategies which utilised database marketing, as cited in the literature

Strategies

Customer Customer Product/ Promotion: Promotion: Author retention reactivation service Prospecting Cross-selling

Caroll29 Ί Mitchell and Boustani30 Ί Reichheld and Aspinall31 Ί Berman32 Ί McEwan33 Ί Morrall34 Ί Ί Keaveney35 Ί Ί Marvin36 Ί Ί Hughes37 Ί Ί Ί Finnegan38 Ί Reichheld39 Ί Campbell40 Ί Ί Ί Geller41 Ί Ί Hall, Press, Ganey and Hall42 Ί Hepworth43 Ί Ί Berry44 Ί Ί Howe45 Ί Ί Lynn46 Ί Oggenfuss47 Ί Oppermann48 Ί Ί O’Malley49 Ί Ί Crié50 Ί Kassing51 Ί Ί Total 11 10 4 6 6

of their experiences’ relating to Customer retention implementing marketing through their Customer retention utilising database databases. This question was followed by marketing is defined as building long-term more specific ones targeted at each business with customers through the marketing strategy to determine the gathering and storing of information on a extent of usage of database approaches database about customers’ characteristics, and underlying reasons for such usage. their purchasing patterns and satisfaction levels with purchases.52 Customer retention directly influences a firm’s RESULTS: LITERATURE profitability levels53 because it is more The literature revealed four major classes expensive to acquire a new customer than of marketing strategies that were pursued to retain an existing one.54 Furthermore, through the database: customer retention, the longer a customer remains with a customer reactivation, product/service firm, the more likely it is that the and promotion strategies23–28 as shown in organisation could increase its share of the Table 1. The frequencies with which customer’s expenditure and hence further each database marketing strategy was contribute to profitability.55 Nevertheless, cited are shown in Table 1. Customer many firms still spend a significant amount retention and reactivation were most of their marketing budgets on customer frequently cited. Each marketing strategy acquisition at the expense of customer which utilised database marketing retention.56 approaches as identified in the literature Current marketing literature will now be addressed in turn. emphasises that customer retention

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Table 2: Ansoff’s product/service-market matrix and marketing strategies which may utilise database approaches

Existing market New market

Promotional strategies utilising database marketing Existing product(s)/service(s) Market penetration Market development Cross-selling (selling on, selling across, Prospecting up-selling and down-selling)a

Product/service development strategies utilising database marketing New/modified product(s)/ Product/service development Diversification service(s)b New/modified product/service New/modified development—current customers product/service development—prospective customers

a Includes ‘repeat selling’ b Assumed here that ‘new’ includes signiﬁcant product/service modiﬁcation (innovations, new brands, improvements)

includes two processes: the identification identifying which customers have oftacticstobeusedtoretain defected, researching and analysing the customers57–59 and the identification of reasons why they left and finally using criteria for determining the ‘right’ this information to reactivate them where customers to be selected for retention.60 possible.74 Extending the Pareto principle, the ‘right’ customers are the 20 per cent of loyal, highly profitable customers who Product/service and promotional generate 80 per cent of a firm’sprofits.61 strategies Suggested tactics for customer retention Two key themes on use of database from the literature include customising marketing in implementing products and services according to product/service and promotional customers’ needs62,63 maintaining strategies emerged from the database and customer contact64,65 and developing marketing literature. First, in keeping customer loyalty programmes.66 with the marketing concept philosophy,75 databases were seen to contribute to overall product/service development76,77 Customer reactivation by providing information to monitor and While retention and reactivation are assess changing customer needs and closely related, specific reactivation wants. Secondly, databases contribute to strategies may become appropriate where promotional strategies78,79 through cross- loyal customers defect despite every best selling (offering current customers related effort in implementing retention or unrelated products)80–83 and strategies. The existing literature on prospecting (selling existing products to customer defection focuses on the prospective buyers).84–86 reasons why customers defect,67–69 the Developing Drozdenko and Drake ways in which customers could be further,87 in order to embrace all themes reactivated (for example, through which emerged from the database employee training and surveys)70,71 and marketing literature in relation to ways to stop customers from lapsing in promotional and product/service the first place.72,73 For example, strategies specifically, these strategies were reactivating lapsed customers requires categorised using Ansoff’s product-market

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Table 3: Conceptual framework

Strategy class Strategy subclass Customer class

1 Customer retention Current 2 Customer reactivation Lapsed 3 Product/service related New product/service development Current Prospective Modiﬁed product/service development Current Prospective 4 Promotion related Cross-selling Current Prospecting New

matrix.88 The top two quadrants (Table were used included new product/service 2)89 were used to categorise promotional development and product/service strategies into cross-selling (Ansoff’s modification for prospective customers market penetration) and prospecting and prospecting as a promotional strategy. (Ansoff’s market development), while the Each strategy will now be addressed in bottom two quadrants were used to the order in which they appeared in the categorise product/service strategies into conceptual framework (Table 3). new/modified product/service development (current customers — Ansoff’s product/service development) Customer retention and new/modified product/service Data analysis revealed three ways in development (prospective customers — which the case firms used database Ansoff’sdiversification). approaches in implementing a customer In summary, Table 3 represents a retention strategy (row (a) of Table 4). conceptual framework for marketing First, some firms sought to retain strategies which utilised database customers by rewarding them on an marketing approaches as identified in the ongoing basis (passive retention). The literature. three firms that did this were automobile, consumer good and charity. Charity utilised quarterly newsletters to RESULTS: CASE STUDIES its customers, automobile sent free golf Qualitative data collected focused upon tournament tickets to those of its both the extent of usage and rationale customers who noted that they were for using database marketing in pursuing interested in golf and consumer goods 2 the marketing strategies depicted in the sent invitations to some of its customers conceptual framework (Table 3). While for fashion parades and shopping nights. all such marketing strategies were cited Secondly, several firms identified by respondents, the most frequently cited potential defectors based upon triggers ones for which database marketing that managers identified through approaches were used were customer judgment and knowledge (active retention, customer reactivation, retention). The three firms falling into cross-selling (promotion strategy), new this category were publishing 2, fast food product/service development and and telecommunication. For example, product/service modification for current publishing 2 offered free gifts as customers (product strategy). The least encouragement to renew magazine frequently cited marketing strategies for subscriptions before expiry. Similarly, fast which database marketing approaches food’s management sought feedback from

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Table 4: Extent of database usage in marketing strategy development and reasons for non-usage

Strategy (i) Extent of usage (ii) Reason for not using database (iii)

(a) Retention Database not used at all Firm had not thought of the idea Passive retention Head ofﬁce overseas Active retention Not proﬁtable Reactivation Internal skills lacking

(b) Reactivation Database not used at all Lack of resources Research Not proﬁtable Testing Internal skills lacking Ineffective Firm had not thought of the idea

(c) New product Database not used at all Database consists of donors not customers development/product/ Idea generation New product development is not a usual service modiﬁcations Research occurrence for customers Testing Firm is a wholesaler not manufacturer Combination (Australian) customer database is not large enough Database not required for walk-in orders Modiﬁcations are market-driven rather than customer-driven Firm had not thought of the idea Customer input not vital

(d) New product Database not used at all Number of prospects on the database is not development/product/ high enough and therefore not proﬁtable service modiﬁcations enough for prospects Database not required for walk-in orders (Australian) customer database is not large enough Firm had not thought of the idea

(e) Prospecting Direct marketing method Firm did not think that prospecting could be Database marketing method undertaken with the database Firm had not thought of the idea

(f) Cross-selling Implemented widely All database customers are included in campaign so there is no need for a database to segment the customer base Firm had not thought about using the database for this strategy Irrelevant for product type Sophisticated modelling requirements not available to ﬁrm Firm had not thought of the idea

customers who had ordered little to build an ‘attrition score’ that identified recently. Finally, telecommunication potential customer defectors and their examined attrition trends in its database characteristics that might trigger defection. to identify potential defectors, Similarly, publishing 1 modelled its consequently contacting them better to database to identify possible defectors understand and serve their needs. (customers who had not purchased for a Thirdly, some firms sought to identify specified time period). Financial 1 and and retain possible defectors by using publishing 1, both amply resourced, were sophisticated mathematical models rather highly experienced with the use of than relying upon managerial judgment database marketing approaches and hence and knowledge (scientific retention). For exhibited sophisticated construction, example, financial 1 modelled its database management and use of the database.

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Only one firm, financial 2, did not Thirdly, two firms (publishing 1 and implement a customer retention strategy art) pursued a selling strategy rather than a using the database but rather simply reactivation strategy. Here, lapsed observed customers during interactions customers for a product line/item were for potential defection behaviours such as simply identified and excluded from seeking payout figures for loans. This future promotional offers with no steps firm, lacking skills and knowledge of taken to find out why customers lapsed database approaches relied on traditional and how they might be reactivated. For means to monitor customer behaviour. example, publishing 1 identified lapsed Another firm, art, did not implement a customers and simply excluded them from retention strategy, with or without the future promotional campaigns because use of a database, because such strategy they ‘were not profitable’. Similarly, art was decided and implemented by head mailed various offers from its different office overseas. The firm’sheadoffice, product lines to a customer over a period however, did identify and communicate of time, recording responses and directly with ‘at risk’ customers in excluding those not responding over a Australia. two-year period. This approach is termed ‘ineffective’ because of its lack of focus on customer behaviour patterns which may Customer reactivation provide clues to underlying causes of Customer reactivation as a marketing defection or lapsing. strategy seeks to win back buying One firm (charity) pursued a support from former customers who had reactivation strategy but without database ceased buying from a firm.90 Results for use because of a lack of funds and the analysis of the six cases which sensitivities of donors to amounts of implemented this strategy through the money spent on administration. Its database showed three approaches reactivation strategy simply consisted of towardsreactivation(asshowninrow following up on customers indicating they (b) of Table 4); research, testing and were ceasing donations. While a further ineffective. First, some firms firm (automobile) did not have a (telecommunication, fast food and reactivation strategy (although it felt that publishing 2) identified lapsed customers it ‘should’) it nevertheless used and their purchasing characteristics before mathematical tools to determine conducting attitudinal research to probabilities of purchase by customer investigate the factors which caused groups. The relevance of defection in attrition. Information gained through this automobiles is lower than for consumer process was used to develop reactivating goods because of the relative infrequency offers. This approach to customer of repeat purchases in the former. reactivation was termed ‘research’. Secondly, one firm (consumer goods) identified its lapsed customers and Product/service-related strategies: designed offers geared specifically towards New product/service development reactivation, but tested these reactivation and product/service modification for offers prior to launch. That is, consumer current customers goods did not research customers before Numerous firms used the database to developing its offers to reactivate but implement marketing strategies involving rather tried strategies out through a trial new or modified products/services and error-based ‘testing’ process. because the customer was perceived to

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be an important contributor to the entire product/service idea testing. These firms process of new product/service tested the new/modified product/service development and product/service idea by selling a prototype to database modification (telecommunications). In all customers and using behavioural cases, the customer database was used responses to predict success. Other firms either for new/modified product/service used the database to help identify and idea generation, research, testing or for a research the specific customer segments combination of these activities (fast food; they sought to target when photography; financial 1; financial 2; contemplating new product/service telecommunication; publishing 1; development. These customer segments consumer goods) (row (c) of Table 4). were usually the most profitable ones as For example, telecommunication used indicated through analysis of the database the database to generate new (telecommunications, consumer goods, product/service ideas (stored in its financial 1 and financial 2). database from past customer feedback and One firm pursued a product/service comments) prior to researching its modification strategy when it was found customers to refine the new that a product/service was not selling product/service idea. well. The database was used to Further, the database was used initially determine current and lapsed users of the to research the new product/service idea product/service and to identify possible (publishing 1, financial 1 and 2, new markets for variations of the product telecommunication and consumer goods). or service (publishing 2). This was seen For example, publishing 1 formally as market expansion through sought customer responses (negative and product/service modification. Two firms positive) through questionnaires when used database research to determine the screening new book ideas for potential aspects of a product/service offering ‘winners’. Also, telecommunications used which may need modification to suit the database to identify manageable customer needs better (publishing 1 and groups of consumers in order better to publishing 2). deliver genuine value through its On the other hand, automobile had complete communication line of the capacity to modify products/services products and services. Similarly, one firm for its current customers through the pursued a product/service modification provision of ‘extras’, without reference to strategy when it was found that a a database. In a similar vein, another product/service was not selling well. The firm’sheadoffice overseas assumed database was used to determine current responsibility for new product/service and lapsed users of the product/service development, assuming the Australian and to identify possible new markets for market would simply ride on overseas variations of the product or service successes (art). Retailing firms such as (publishing 2). This was seen as market consumer goods could adjust their expansion through product/service product/service portfolios but could not modification. Two firms used database modify products/services per se.In research to determine the aspects of a instances where falling sales were caused product/service offering which might by market-related factors such as price need modification to suit customer needs and supply rather than customer better (publishing 1 and publishing 2). behaviour factors, a product/service Fast food and photography used the modification strategy became less database for new/modified appropriate. For example, one firm

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discovered that falling sales were due to toppings/herbs then fast food will do it more successful competing for them’ (fast food). While the case products/services in the market rather firms in this study exhibited little use of than particular deficiencies in its own database approaches in implementing a current offerings (financial 2). New diversification strategy, nevertheless product/service development was rare in databases of potential customers could be thecaseofonefirm which produced developed or purchased by firms seeking only one major product line, comprising to pursue new customers with new or three magazines (publishing 2). modified products/services.91 Only one firm, charity, stated that it developed new products/services without the database because of the Promotion-related strategies: nature of the database itself. Charity cross-selling could not use its customer database to Cross-selling (encompassing selling on, develop new products/services (cures selling across, up-selling, down-selling for disease in this instance) because its and repeat selling) was implemented database consisted of donors towards widely by the case firms using database the new product/service research as approaches. Database information was distinct from the beneficiary recipients used to assess profitability of various (patients) of the new product/service customer segments and to gain a more cures. Decisions about which new areas complete description of the customers to research for cures were made by and their potential buying behaviours. the firm in response to those diseases For example, one respondent that were currently of importance to (telecommunications) commented: the community rather than what the ‘Through segmentation using the database donors wanted. The database database, we identify and target the most in this instance was used merely for profitable customers and customise our obtaining donations. product/service and communications based on what we know about them.’ This firm also stressed the importance of Product/service-related strategies: use of the database to help build New product/service development relationships and long-term profitability. and product/service modification for ‘If customers are sold more than one prospects type of product then our ability to retain One firm only (telecommunications) them significantly increases’ implemented this strategy through the (telecommunications). The database was database. The remainder did not seen as a means to maximise profits by implement this strategy through the selling more product to existing database because the database either did customers, that is, targeting the most not contain prospects or contained too profitable customers with multiple few to warrant new product/service product offerings. Furthermore, the development (row (d), Table 4). database permitted ready identification of Furthermore, only one firm, fast food, customers deemed to be ‘prospects’ for modified products/services for prospects certain products. For example, financial 2 without the database because the used product/service type, age of product/service modification strategy was customer, bank balances and types of irrelevant to database marketing. ‘If accounts to determine the type of someone wants pizza with different product/service to cross-sell to its current

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customers. In contrast, however, Secondly, the managerial process of cross-selling was essentially precluded as a cross-selling involved management feasible strategy in those cases where making judgments about the most initial purchase was a ‘one off’ such as appropriate segments to cross-sell to, for cars (automobile), books (publishing based on past experience. For example, 1) and artworks (art). In such cases, firms fast food segmented the database by total merely ‘maintained contact’ to gain spend levels for its various geographic preferential consideration in future regions to identify the ‘most profitable purchase situations. regions to sell to’ (fast food). Results showed that cross-selling could Finally, with the scientific method, the be classified into three approaches — the firm relied upon mathematical modelling trial and error approach, the managerial of historical information about customers approach and the scientific approach captured in the database in order to (row (e), Table 4). First, some firms select customer segments that appeared investigated customer needs through trial more receptive to cross-selling efforts and error (art, publishing 2 and financial than others (publishing 1). The models 2). For example, art explained that it allowed the firm to identify sought true customer motivations to characteristics associated with customers purchase works of art by seeking who bought certain products that were responses to a range of different direct similar or related to the product that was mail offerings after an initial purchase to be used in cross-selling. For example, had been made. This way, art could publishing 1 modelled the database using determine, by trial and error, if the many behavioural variables including customer was motivated by, for example, RFM (recency, frequency and monetary the designer, the design itself, the object values), how many times the customer of the design or by collection per se and had bought/not bought a product, hence maximise opportunities to whether or not the customer had paid cross-sell successfully. Further, the use of for the good, and the type of products subscriber inserts in magazines bought and their prices. represented another example of the trial and error approach in cross-selling. Here, attempts were made to cross-sell Promotion-related strategies: magazines across customer groups. Lack Prospecting of response resulted in cessation of such Prospecting was not carried out through activity for a period of time (publishing the database by most firms because they 2). The non-relational nature of felt that obtaining a list or including publishing 2’s database precluded direct advertising in magazines were the sophisticated segmentation. only available ways that could be used Finally, financial 2 typically used one for prospecting (row (f ), Table 4). There or two variables on a two-dimensional was clearly a degree of ignorance among table to segment customers for the case firms about the potential for cross-selling. For example, for cash contacting prospective customers using management products/services, the firm the database. used age and balance range to segment Of the eight firms who responded to customers. This firm, however, also used this question, six firms prospected statistical analysis where necessary to without the database and only two firms segment customers using multiple used the database to prospect. Firms who variables (financial 2). prospected without the database decided

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on segments of consumers to target for region had similar characteristics to three prospecting before initiating contact. or four individual customers residing in Firms then either bought relevant lists to that region. direct mail to those segments or The second firm, charity, used its advertised through mailbox drops or hospital’s database to select all adult through magazines read by those patients for prospecting. The hospital’s segments. These prospecting approaches database was used because it was assumed were in the form of competitions and that patients were more sympathetic to free gifts to entice prospects to send in donating towards research for cures for their personal details. Any prospective diseases than non-patients. Furthermore, customers responding to these direct adults were selected because they had the mailings were entered onto the database financial means to make donations. and were then treated as current Prospecting was implemented through customers. For example, publishing 2 the database for two main reasons. First, inserted coupons for free presents in the database was used because potential magazines read by consumer segments customers’ names could be obtained from targeted for prospecting. The aim was to other service sectors of a firm’sparent obtain customers’ personal details for organisation. For example, patients in a future mailings. Therefore, the process of hospital were willing to contribute to a prospecting in these instances did not charity’s research efforts because such require use of a database in the first efforts ultimately affected their personal instance. wellbeing (charity). Secondly, a database The remaining two firms used their was used because database prospecting databases to select relevant customer using geodemographic segmentation may segments to prospect to but used be the most effective way to prospect dissimilar approaches. The first firm, where other more scientific methods do publishing 1, used behavioural data to not currently exist. Use of a database to identify its most profitable customers. prospect for new customers rested, Next, it added geodemographic data to however, on the existence of a suitable profile these profitable customers and database for the purpose. In many identify the suburbs/cities where they instances such a database did not exist for resided. Finally, it selected those a firmanditwasforcedtouse identified suburbs/cities for its direct mail non-specific promotions such as coupons, prospecting campaign. This was based vouchers and advertisements to obtain upon the logic that regions containing a new customers (publishing 1 and firm’s best customers became the best charity). Of course, once a prospect ones for prospecting because they became a customer they then entered the contained other consumers with similar database and hence were available to use characteristics. Therefore, the more in marketing strategy implementation similar these customers were to the firm’s (publishing 2). best customers, the more likely it was that they would also be interested in the firm’s products. Publishing 1, however, CONCLUSIONS noted that although this method of While the case studies demonstrated that prospecting was the most objective different firms may place different method, it was not very effective because emphases upon the various ways in of the limiting underlying assumption which databases can be used to that all potential customers in an entire implement marketing strategies, they

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nonetheless have shown that the confirm the findings of this study and conceptual framework of Table 3 possibly to refine the conceptual embraces the marketing strategies which framework developed. In addition, future may be implemented through database research will be needed to explore how approaches. Examples of database use for the internet may be fully integrated with all marketing strategies contained in the database approaches to implement conceptual framework (Table 3) were selected marketing strategies. cited by at least one respondent from the case firms. This research found that References certain combinations of marketing 1 Paltschik, M. and Storbacka, K. (1992) strategy and database approach occurred ‘Monitoring the customer base to achieve more frequently in practice than others. profitability’, Marketing and Research Today, August, Factors such as nature of the industry pp. 155–165. 2 DeTienne, K. B. and Thompson, J. A. (1996) (products and services), characteristics of ‘Database marketing and organizational learning buyer behaviours, technological theory: Towards a research agenda’, Journal of sophistication within the firm, size of the Consumer Marketing,Vol.13,No.5,pp.12–34. 3 Palmquist, J. and Ketola, L. (1999) ‘Tu r n in g d a ta firm, satisfaction with current into knowledge’, Marketing Research,[CD-ROM], non-database approaches and availability Vol.11,No.1,available:BusinessSourceElite. of database data contribute to variations 4 Drozdenko, R. G. and Drake, P. D. (2002) ‘Optimal database marketing’, Journal of Marketing in database usage in marketing strategy Research,Vol.39,No.4,pp.499–501. implementation. For example, product 5 Styles, C. and Uncles, M. (1998) ‘Marketing modification for current customers was management in Australia — joint MI/UNSW not a popular database marketing strategy survey’, Professional Marketing, February/March, pp. 32–33. for most firms because products can be 6 Australasian Business Intelligence (2002) ‘Direct modified (customised) for customers marketing in a changed world’, B & T Weekly, during the order and purchase process [CD-ROM], 3rd December, available: ABIX via Comtex, scheme from: http://comtexnews.com. without the need to use a database. 7 Drozdenko and Drake (2002) op. cit. In brief, this research has developed a 8 Ibid. conceptual framework which embraces 9 Lane, M. S. and Cavaye, A. L. M (2000) ‘Integrating web and database marketing: the range of marketing strategies which Australian study of direct marketing firms’, Journal may be implemented with database of Research and Practice in Information Technology, approaches and has shown, through Vol. 32, No. 3–4, pp. 168–180. examination of 11 case businesses, that 10 Berman, K. (1994) ‘Database marketing: A new secret weapon’, Folio: The Magazine for Magazine such a framework is a valid one for Management, Vol. 22, No. 19, pp. 185–187. identifying opportunities for using 11 Jutkins, R. (1994) ‘Power direct marketing: How database marketing in marketing strategy to make it work for you’, NTC Business Books, Lincolnwood, USA. implementation in practice. It is 12 Stanton, W. J., Miller, K. E. and Layton, R. A. suggested here that firms, when choosing (1994) ‘Fundamentals of marketing’,3rdedn, and implementing marketing strategies, McGraw-Hill Book Company, Sydney. 13Li.S.,Kinman,R.,Duan,Y.andEdwards,J.S. canvass the potential ways in which (2000) ‘Computer-based support for marketing database marketing approaches may be strategy’, European Journal of Marketing,Vol.34, fully integrated into marketing planning No. 5–6, pp. 551–575. processes.92 For example, choice of 14 Bhattacharyya, S. (1999) ‘Direct marketing performance modelling using genetic algorithms’, marketing strategies themselves may be Journal of Computing,Summer,Vol.11,No.3,pp. influenced by the potential to utilise 248–257. databases in various ways. Further 15 Hughes, A. M. (1996) ‘The complete database marketer: Second-generation strategies and research, using quantitative techniques for tapping the poser of your customer methodologies, will be necessary to database’, Irwin Professional Publication, Chicago.

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