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Corporate Surveillance and Strategy: How Companies Use Data to Understand Consumers Student Name: Feyza Şen Student Number: 53

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Corporate Surveillance and Strategy: How Companies Use Data to Understand Consumers Student Name: Feyza Şen Student Number: 53 Corporate Surveillance and Strategy: How Companies Use Data to Understand Consumers Student Name: Feyza Şen Student Number: 536012 Supervisor: Dr. Jason Pridmore Master Media Studies – Media & Business Erasmus School of History, Culture and Communication Erasmus University Rotterdam Master’s Thesis June 2020 Abstract Consumers have grown accustomed to having various choices for both products and brands hence it has become more difficult for companies to stand out among their rivals. Since only the product offering is not adequate to acquire and retain consumers, companies try to differentiate over the relationship they establish. Understanding the customers, their needs, motivations, preferences, and behaviors are key to building this relationship. Once the companies know who their customers are, they create segments by dividing them into groups which enable them to target the right customers, with the right offering, from the right platform, at the right time. Due to the growing use of digital tools, the amount of generated data has also been increasing. Accordingly, corporations that extract meaningful insights from consumer data and leverage these insights as a strategic element in their business strategies are able to gain long-term competitive advantage. However, this practice can also be seen as surveillance and has social implications such as privacy concerns. Therefore, this research aims to examine how consumer-facing companies in the Netherlands across different sectors gather and use consumer data for commercial purposes. In this research, a qualitative critical analysis of consumer data usage by companies as a surveillance practice was carried out from a marketing perspective. In the course of this, ten in-depth interviews with businesspeople were conducted with an average duration of around 45 minutes per interview. These interviews were analyzed and interpreted according to the constructivist approach of grounded theory. The findings derived from the interviews outlined four key themes that further helped to answer the research question and sub-questions. The first theme demonstrated that building close relationships with customers plays a critical role in triggering engagement and retaining customers. Second key point is that considering a data- driven culture has been increasingly integrated into society and businesses, the ways companies connect with their customers have been affected by the use of data as well. The third theme showed that data enables companies to build detailed customer profiles and develop predictive models based on which they implement targeting strategies to change the behaviors of their audience and create market differentiation. However, in a sense, sharing their data also means giving away their privacy for consumers. For this reason, the last theme further provided new perspectives on the concept of data privacy and the regulations of data protection. KEYWORDS: relationship marketing, segmentation, targeting, consumer data, surveillance Table of Contents 1. Introduction ...................................................................................................................................1 1. 1. Social and Academic Relevance ....................................................................................................... 2 1. 2. Research Question ........................................................................................................................... 4 2. Theoretical Framework ..................................................................................................................5 2. 1. Relationship Marketing ................................................................................................................... 5 2. 1. 1. Customer Relationship Management ..................................................................................... 7 2. 2. Segmentation and Targeting ........................................................................................................... 9 2. 2. 1. Segmentation ........................................................................................................................... 9 2. 2. 2. Targeting ................................................................................................................................ 11 2. 3. Consumer Surveillance .................................................................................................................. 13 2. 3. 1. Surveillance in Marketing Practices ...................................................................................... 14 2. 3. 2. Ethical Components of Consumer Surveillance .................................................................... 15 3. Methodology ............................................................................................................................... 17 3. 1. Research Design ............................................................................................................................. 17 3. 2. Sampling Strategy .......................................................................................................................... 17 3. 3. Operationalization ......................................................................................................................... 19 3. 4. Data Collection ............................................................................................................................... 20 3. 5. Data Analysis and Interpretation .................................................................................................. 21 3. 6. Validity and Reliability ................................................................................................................... 22 4. Results and Discussion.................................................................................................................. 24 4. 1. Connecting with Customers ........................................................................................................... 24 4. 1. 1. Triggering Customer Engagement ......................................................................................... 24 4. 1. 2. Building Relationships ........................................................................................................... 26 4. 1. 3. Retaining Customers.............................................................................................................. 27 4. 2. Modernization of Data Systems .................................................................................................... 29 4. 2. 1. Digital Savviness .................................................................................................................... 29 4. 2. 2. Customers as Numbers .......................................................................................................... 31 4. 3. Customer Understanding Through Data ....................................................................................... 33 4. 3. 1. Monitoring Consumers .......................................................................................................... 33 4. 3. 2. Extracting Value from Data ................................................................................................... 35 4. 3. 3. Data-driven Market Differentiation ...................................................................................... 37 4. 3. 4. Struggles of Target Orientation ............................................................................................. 39 4. 4. Violation of Privacy ........................................................................................................................ 42 4. 4. 1. Corporate Concerns ............................................................................................................... 42 4. 4. 2. Ambivalence Toward Data Privacy ....................................................................................... 44 5. Conclusion ................................................................................................................................... 51 5. 1. Summary of Findings ..................................................................................................................... 51 5. 2. Limitations of the Research ........................................................................................................... 53 5. 3. Ideas for Future Research .............................................................................................................. 54 References ....................................................................................................................................... 55 Appendix A: Interview Guide ............................................................................................................ 65 Appendix B: (Constructivist) Grounded Theory Coding Scheme ......................................................... 67 [Preface] To Dr. Jason Pridmore, my supervisor: Thank you for everything - your encouragement, patient guidance, but also for inspiring me to always strive for more. To my interviewees: I greatly appreciate your interest in this study. I am grateful that you took the time from your busy schedules to participate in this research and shared valuable insights with me. To my friends: I feel extremely lucky that I got to share this experience with you. Thank you for being there for me whenever I needed help. To my family: Special thanks to you for believing in
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