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MKTG 431 > Module 1 Test > Flashcards

Module 1 Test Flashcards

(64 cards)

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1
Q

Direct marketing

A

a database-driven interactive process of directly communicating with targeted customers or prospects using any medium to obtain a measurable response or transaction via one or multiple channels

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2
Q

What makes direct marketing effective?

A

Customer/prospect databases
Experimentation and testing
Measurement of results
Accountability for costs
Communication

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3
Q

Factors contributing to the growth of direct marketing

A

Printing technology
Credit cards, internet and mobile payment systems
Personal computers and smart devices
Changing consumer lifestyles
Negative aspects of retail shopping

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4
Q

Convergence of Direct and Brand Marketing

A
  1. The differences have blurred due to the digital revolution today.
  2. Most traditional brand marketers have a virtual storefront in the form of a website and utilizes.
  3. Most direct marketers now create and reinforce brand building strategies at the individual customer level.
  4. Direct and Brand Marketing are now considered complementary strategies.
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5
Q

The processes of direct marketing

A

Reaching the right people with the right offer using the right creative approach.
Analyzing responses from consumers to evaluate effectiveness.
Revising targeting, communication and distribution.
Basic premise: customer data drives all DM strategies and customer and prospect responses are measurable, emerging importance of multiple channels (compare media).

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6
Q

Omnichannel experience and omnichannel direct marketing

A

Challenge: managing customer experience through all available shopping and communication channels.
Emerging ways consumers engage with a company:
Physical store, Online website, Mobile app, Catalog, Social media.
A direct marketer needs to create synergy between the various channels.

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7
Q

Scope of Direct Marketing

A

Many applications of DM
Users include: big and small businesses, individuals, non-profit organizations, political organizations, government organizations, sports organizations.

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8
Q

Benefits of direct marketing

A

Building customer loyalty
Cost-effectiveness
Building relationships
Increasing sales
Measurable results
Personalized communication
Simplifying the buying process
Testing products and services
Increasing word-of-mouth

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9
Q

Factors contributing to the growth and mainstreaming of Direct Marketing

A

ability to precisely target specific customer segments, personalize communication, deliver measurable results, and leverage the increasing accessibility of digital platforms

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10
Q

Customer database

A

A list of customer names to which the marketer has added additional information in a systematic fashion

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11
Q

Relational Database

A

A database that organizes data in tables made up of rows and columns. Structured so that the data points in each table are related to each other.

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12
Q

Database development process

A

Marketer’s often used a centralized computing system that collects, integrates, and manages big data via a Data Management Platform.
Customer interaction-> Basic Data -> Information -> Knowledge -> Marketing Strategy

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13
Q

Types of source data

A

Customers name
Address
Number
Email
First contact media or event
Past purchases
Non-purchase behavioral data
Lifestyle data

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14
Q

Database Maintenance

A

Lists and data are perishable
Merge/Purge: eliminating duplicates
Creating match codes to keep house list records from being duplicated
Identifying multi-buyer customers

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15
Q

Database Currency

A

Information privacy
Proper database storage
List marking- salting or seeding: placing decoys

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16
Q

8 Database Usage and applications

A

Profile customers
Retain best customers
Thank customers for their patronage
Cross-selling and up-selling
Develop a customer communication program
Perform market research
Generate new customers
Send customized offers

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17
Q

Database Analytics

A

Using software tools and stats to find relevant information and knowledge from large amounts of data stored in a database

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18
Q

RFM

A

recency, frequency, and monetary value

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19
Q

Customer Lifetime Value

A

present value of all future profits from a customer

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20
Q

Datamining analysis

A
  1. Cluster analysis
  2. Market basket analysis
  3. Conjoint analysis
  4. Neural networks
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21
Q

Cluster analysis

A

categorize or segment customers and prospects based on similarity in one or more variables

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22
Q

Market basket analysis

A

determine which products and services are purchased together

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23
Q

Conjoint analysis

A

determine which set of attributes in a product or service is most attractive

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24
Q

Neural networks

A

models that help unearth relationships among multiple variables that is not easily identified by statistical analysis

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25
Database enhancement
To learn more about the customer. To increase the effectiveness of future promotional activities targeted to current customer. To better prospect for new customers who are similar to current customers.
26
Customer relationship management
Identify touch points between the business and customers and prospects. Understand customer value and journey . Direct communication with customer at the appropriate time. Time/ event based customization/personalized.
27
Customer value hierarchy
Suspects > Prospects > Customers > Clients > Advocates
28
Customer journey map
Pre-purchase > Purchase > Post-purchase
29
List
Spreadsheets with information on consumers and customers. Specifically defined group of consumers that possess some common characteristics. A market segment. They are perishable.
30
3 types of lists
House Lists Response Lists Compiled Lists
31
House lists
A company’s own databases Contains info on: Active customers Past customers Enquirers Referred Kind of degree of activity or enquiry Promotional strategy used for acquisition Media used for enquiry List Hygiene: merge/ purge
32
Response Lists
House list of other direct marketers Made up of individuals who has shown a particular kind of response to direct marketing efforts. Buyer lists Attendee/ membership lists Subscription lists Donor lists Credit card holder lists Merged database lists
33
Compiled Lists
Generated by third party and market research firms. Made up of individuals showing similarities in some well defined characteristics. Made up of individuals who do not share similarities in purchase behavior. Consumer lifestyle enhance lists: voting patterns and donation. Business compiled lists: industry and number of employees.
34
Creating consumer profile from lists
Linking external list with house list. Appending data from external list to house list. Analyzing merged lists to develop profiles.
35
List Research: What to consider when researching lists
Description: who is on the list? Overlap: similarity with individuals in the list and the profiles of the best customers of the list seeker. Affinity: similarity in the list and the target group that the list seeker is trying to reach. List source: the origin of the names in the list.
36
Selecting Lists: Criteria to evaluate lists before selection
Size Cost List description Selection available Frequency of updating List usage report (popularity score) Active vs inactive Hot lead Average order size Percentage of the list that is DM generated Response lists: most commonly rented for single use Compiled lists: frequently bought List price The more responsive the names are on the list the more it costs to rent
37
The who’s of the list industry
List managers: manages list for list owners List compilers: develops lists from public and sells them List brokers: brings list users and owners together List bureaus: provides data processing and mining
38
Ways to measure the effectiveness of lists
Key code in response device tied to individual lists Different toll free numbers Hot line names tagged and response measured Multi Buyer names tagged and response measured Responses may vary based on factors beyond list efficacy such as environmental factors and timing
39
Testing
Determines impact of a controllable factor (independent) (eg offer) on outcomes (eg response rate)
40
Types of tests
List tests (which is more impactful) Offer tests (style of ads) Creative tests Contact strategy tests
41
Steps in designing a test
1. Create control and experimental consumer groups. 2. Manipulate one independent factor (eg medium of communication). 3. Schedule experiment (place unique identifiers in response device). 4. Track response and calculate impact of independent factor on outcomes
42
Response measurement
Hypothesis testing Develop null and alternative hypotheses Select statistical level significance and determine degrees of freedom Compute statistics (chi square test) Compare computed against critical value of chi square If > critical value null hypothesis is rejected and alternative hypothesis accepted
43
Calculation of response rate
Number of customers who responded to the offer/ total number of of consumers who received the offer.
44
Quantitative customer/prospect segmentation and profiling
Customer value Customer lifetime value Market penetration Lift Conversion rate
45
Customer Value
Based on past purchase history Customer value = (total sales rev from segment $/Total # customer in segment) x average profit margin %
46
Customer Penetration Rate
The expressed percentage relationship of customer volume to some benchmark universe. CPR = number of customers in a geographic location who purchased your brand / total number of customers of that category in that geographic location
47
Lift
Increase in the average response rate because of an offer Lift = 100 * new response rate/ old response rate
48
Conversion rate
The rate by which a company converts leads into sales = buyers / inquiries
49
Fixed costs
costs that don’t change with units produced and sold (rent and advertising creation)
50
Variable costs (cost of goods sold)
costs that increase with increase in units produced and sold (raw materials, assembly, order processing, returns)
51
Margin $
selling price - variable cost per unit
52
Margin %
Margin $ / selling price
53
Break Even
number of units to manufacture and sell to cover fixed costs
54
BEV in units sold
Fixed costs $ / Unit margin (profit) per sale
55
Target profit volume
(Fixed costs $ + Target Profits $) / Contribution per unit $
56
Cost per inquiry or Cost per order
Promotion costs / responses
57
Return on Advertising Investment (ROAI)
Profit from DM sales is compared to the cost of enabling (getting) those sales
58
Calculate ROAI
net profit/ DM advertising campaign expenses
59
Fulfillment
Includes all interactions with the customer and delivery functions! The act of carrying out a customer’s expectations. Sending the product to the customer. Delivering the service agreed on.
60
6 steps of the Fulfillment Process
Offer Response processing Shipping (in most but not all cases) Billing Customer service ??
61
Fulfillment Options
In-house fulfillment Integrated order fulfillment Outside fulfillment centers Virtual enterprise Online fulfillment
62
In House Fulfillment: Integrated Order Fulfillment
Based on the idea that the process of building and delivering products should not begin until after an order has been taken. Primarily designed for custom-made products on a customer-by-customer basis. Ex: computers, wedding cakes
63
Advantages of outside fulfillment vs. in-house fulfillment
Focus efforts on marketing and sales More likely access to advanced technologies Less financial risk (virtual vs fixed costs) Less expensive per order
64
Fulfillment Problems
Accuracy Package quality Speed of delivery Stock availability Return processing Not thanking the customer

MKTG 431 (1 decks)

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