Developing database marketing strategies for consumer markets: a cross-industry, theory-building study

Developing database marketing strategies for consumer markets: a cross-industry, theory-building study

The adoption of database marketing by firms has increased rapidly in many industries. Indeed, with increasing costs of marketing and fragmentation of markets, database marketing is overtaking mass marketing. The aim of this paper is to develop a framework for database marketing strategies that will help marketers and marketing researchers to better understand this mode of marketing. This paper uses interview research to build a theory about types of marketing strategies that are most suitable for implementation using a customer database. The findings of the research show that while cross-selling is an important promotional strategy in database marketing, prospecting is not. Furthermore, only two of the product strategies
identified in the mainstream marketing literature, that is, new product development for customers and product modifications for customers, are frequently used in database
marketing. The other two strategies of new product development for prospects and product modifications for prospects are not used by most firms. Furthermore, while the promotional strategy of cross-selling was popular, prospecting was not. It was concluded that organisations
use their database to implement certain strategies because the data is available to do so and because it is the most effective way to implement a strategy. Other strategies are not implemented because they are not appropriate for an organisation's operations, or because they believe that their existing non-database strategies are effective, rather than for reasons related to the database itself.