Category : Industry Overview, Management Case Studies
DATABASE MANAGEMENT IN
INTEGRATED MARKETING COMMUNICATIONS: AN ANALYSIS
The advent of information technology as applied the field of marketing has paved the way for the concept of Database Management (DM) in Integrated Marketing Communications (IMC). AS IMC basically involves incorporating all the marketing activities of an organisation into one functioning whole instead of dividing communications into several overlapping departments, the requirement of creating a database for such purposes have seeped its way into the marketing discipline, making every communication consistent with one message and one strategy. The importance of DM in IMC cannot be overemphasised, and the real challenges and potential rewards of managing a database effectively in IMC has yet to be the subject of future studies and marketing literature which would increase the field’s knowledge and utilisation of the mechanisms and processes of DM. In this fast-paced world where a lot of room is allotted for innovations and improvement, the successful integration of the mechanisms and processes of DM in IMC provides sufficient leverage for any organisation aiming to achieve sustainability in their business.
INTEGRATED MARKETING COMMUNICATIONS
Throughout the last decade, IMC appeared to have found increasing acceptance as a theoretical concept, idea, technique, or simple rhetoric with advertising agency executives, marketing, and advertising practitioners, as well as with writers in the popular and academic marketing and management press (2000). It appears that much marketing thought is driven by the basics of segments and segmentation so despite the development of integrative or systems thinking, particularly in the area of marketing and marketing communication, this may not be reflected in companies practicing communications or in advertising agencies servicing their needs (1997).
IMC in the existing literature has been found to be defined as a management philosophy (1996), an educational movement ( 1996), and a unifying business practice (1998), among others. From the mass of readings gathered and analysed, the definition of the concept as according to the Journal of Integrated Marketing Communications (JIMC) is taken due to its relevance to database management and its simple presentation. IMC, as defined by the journal, is a ‘customer-centric, data-driven method of communicating with customers’ and is ‘specifically the management of all organized communications to build positive relationships with customers and other stakeholders’ and likewise ‘stresses marketing to the individual by understanding needs, motivations, attitudes and behaviours’ (I).
In most existing academic literature on the subject, databases are often considered to be very critical to the development and practice of IMC. The concept of a database is now taken to include all the information which an organisation can gather on both customers and consumers (1996). Specifically, a database can include pertinent information about the customers like a name, address and phone number as well as the first and last time that person contacted the firm, past purchase activity, previous mailings, and even the birthdays and anniversaries of special clients or valued customers (1998). The rapidly diffusing information technologies which are impacting the marketplace, consumers, media, and distribution of products and services has caused for the marketing attention to be shifted to integration ( 1994). This assertion was supported by whose approach to retailing as ‘marketspace’ rather than ‘marketplace’ led to a wide variety of supporting arguments for new forms of electronic communication which impact not only existing systems but also up and coming forms of technology as well ( 1997). One recommendation from public relations practitioners who have gained the ear of management and put together proposals outlining the IMC process its advantages and implementation have often included the use of database development and issues management to understand stakeholders (1994).
Measurability and Accountability
As with any tool used for facilitating better approaches to doing business, the integrated method of communications in marketing needs to be evaluated to measure and justify the costs and overall success of the program. Recent years have shown that there have been a growing number of researches attempting to quantify IMC. Public relations practitioners who have put together proposals outlining the IMC process its advantages and implementation recommended creating shared performance measures through developing systems to evaluate communications activities (1994). Further according to Gonring, since IMC attempts to change consumer purchase behaviour, this behaviour must be measured to ultimately demonstrate communications' impact on the bottom line and the return on investment (ROI) can be measured either by tracking a company's own communications efforts or through syndicated customer data (1994). specifically suggested building and testing a multi-item scale to measure IMC as perceived by senior marketing managers, since no such scale exists in the literature (1979).
Internal and External Communication
The internal and external environments of the business that can affect the organisation’s ability to do business have involved marketing communications in that the areas where communications can help the most must be found in order to meet marketing goals. As asserted by Gonring, the company should determine the strengths and weaknesses of each communications function, develop a combination of promotional tactics based on these strengths and weaknesses and use this mix to maximise the potentials of the IMC of the business (1994). According to de Wolf, to implement an IMC strategy, it is necessary to identify the communications tools that will most effectively engage internal and external audiences in satisfying the overall strategy goals and trying different communication tools until the company identifies the one that effectively engages the marketing department in better internal and external communication practices is recommended (2001). Internal and external communicative activities/actions communicate whether or not they are done with the intention of communicating, thus planning for the comprehensive use of a range of activities that provide communication opportunities and coherent messages, recognizes that consumers and buyers do not see discrete advertising, public relations, and sales promotion (2001).
Nowadays, marketers have more access to information than ever regarding the market’s behaviour and preferences. Marketers have learned, over time, to maximise the use of market data and basing marketing decisions from what information they have at hand. Vital information such as general marketing statistics, demographics and industry overviews, country data, consumer lifestyles, consumer market sizes, forecasts, companies & brands and major market profiles are now at the fingertips of marketers, readily available for interpretation and use for making good marketing decisions.
The web of marketing activities like research, sales forecasting, distribution-costs studies, operations research, statistical analysis, and budgeting done on a normal basis proves to be a source of bits and pieces of data which without a database would other wise be very hard to figure out. Difficult questions like ‘How great is the market potential for a new product or service?’, ‘Should a company add or delete products to improve its products line?’, ‘Should it change the price?’, ‘Are its distribution channels effective?’ and ‘How may it improve its promotional effort?’, which prior to IMC have confronted marketing people are now concerns of the past as a result of gathering data, analyzing and interpreting them, and presenting them in operational form ( 1971). It requires an amalgamation of information concerning both internal and external factors, a characteristic inherent of IMC.
At its most basic, communication is a two way process which involves the sending and receiving of a message from the encoder (sender) to the decoder (receiver) through the use of a medium, the latter being able to send a feedback to the former and conversely, as in a circle. Examples of two-way communication in marketing are advertising, public relations, personal selling, and so forth. IMC uses a variety of a completely synergized communication mix for the purpose of communicating an integrated and consistent message in response to the consumer’s needs and wants, providing later on achievement of the goals of the corporation. Integration of database management with the IMC plan ‘should not be considered an end goal but rather a starting point in the development and implementation of a smart marketing program. This approach changes the way we have traditionally viewed advertising and the concept of Integrated Marketing Communication as well’ (2003).
An integrated approach to marketing synchronises the marketing mix into one functioning whole directed at achieving marketing objectives and, ultimately, organisational goals. Prior to the adoption of IMC, the firm may have different strategies allotted for such activities and therefore may have certain communication difficulties in sending and receiving information regarding these strategies. With IMC, a system is devised by the company that ensures two-way communication flows smoothly to and from the marketing department with regards to the forms of marketing communications discussed above.
Message Consistency/Tool Integration
IMC advocates the alignment of all of the organisation’s business processes, from the very early stages of product development up until extending quality service to the customers. As claimed by (2001), consistency of message related to the market must be present, which leads to appropriate outcomes for marketing communication efforts, and harmony with what is being told and asked by other people in the corporation, customers, news media, and competing providers. Therefore a need to incorporate the various marketing tools employed by the marketing field consistent to the messages being sent out to the customers must be recognized, for it is one of the sure-fire ways to gain the public’s trust and loyalty. As everything that the people of the proving corporation do (and sometimes do not do) can generate meanings for stakeholders, these can strengthen or weaken the relationships upon which the business enterprise is founded (2001). As theoretically claimed by existing marketing literature, successful brands are built on the continual positive perceptions of loyal customers who trust that their product experiences will remain consistent each and every time. The marketing department can only ensure the perceptions and expectations of their brand become and remain consistent through steady and coordinated marketing communications to all of the customers, prospects, and other product stakeholders - internal and external - throughout the distribution channels.
Every IMC strategy begins with an acute understanding of the customers. The method goes far beyond demographics to uncover the segments of the market and consumer motivation which drives purchasing decisions. , in an interview by said that ‘Customer-centric says you put the customer in the middle, or at the center of the organization, and then you try to figure out what they need, and what they want, and what they require, and, you try to fill those needs’ (2006). With the customer at centre stage, the marketing people can then align their organization and manage the messages that they send out to the public, more specifically to prospect, sell, cross-sell, upsell, and resell. added that ‘Customer-centricity says that you really are looking at a demand chain, rather than a supply chain. A supply chain is one where we try to figure what is the most efficient way to serve you. A demand chain is: How do we figure out what we want, and then how do we make it?’ ( 2006). Two significant issues that organizations should keep in mind as they move toward being more customer centric, according to (1998), is that one, not every customer is a valued customer, which is why it is important to identify key customer segments, determine current customer value and future potential value, understand the needs and requirements of those customers who have the greatest long-term value or potential and invest the firm’s resources in them rather than in marginal, less profitable customers. Second, still according to (1998), customers are in the marketplace 24/7 and that should change how the marketing field thinks about customers, and should force the organization to think about long-term relationships and not short-term exchanges.
Essentially, companies use integrated marketing as a disciplined approach to communicating to both internal and external audiences for the purpose of advancing its goals and strategic vision. Effective communications between the firm and its customers is a vital component of its marketing programme and a core requirement for building relationships with the firm’s key constituents. Building relationships with prospective customers, as well as with the existing customers, is crucial for success in a highly competitive market. The tasks required to build and maintain business relationships are neither expensive nor extremely complicated, but they do require resources and expertise which the organisation can get from external agencies or initiate to develop within the company through consistency of message and effective tool integration which IMC fosters. Consistency is vital because it builds trust, and trust builds relationships. Customers are therefore aware and knowledgeable about the fit of the benefit of the service or product that the firm is providing to their needs, and consumers who clearly can perceive this fit in their interactions with the marketing people. This clarity and consistency in turn fosters a commitment to the brand, which translates into a harmonious customer relationship, overall confidence in the products and services provided by the firm and customer loyalty to the brand. This kind of relationship with the market translates into favourable bottom line results for the organisation as a whole, not only realizing specific marketing objectives, but attaining overall company objectives as well.
DATABASE MANAGEMENT IN IMC FACILITATION
Database management plays a vital role in the facilitation of the activities of IMC. Measurability and accountability is made possible by database management through the possibility of access to all customized, automatically-generated reports providing database profiles with all key data elements to provide marketers a summary of the status of the marketing database and campaign tracking which may include custom reports that monitor the business impact of relationship marketing campaigns, including ROI reports for bottom line results and analysis data from warehouses. Because all customer contact points are fed to the database automatically, the marketer can leverage the most up-to-date marketing database possible, containing the latest customer transactions, inquiries and service details. The popularity of database management marketing is rooted in the small business philosophy of staying close to the customers, understanding and meeting their needs and treating them well after the sale. According to (2006), the information made available by the database to the company during the process of each transaction with the customer enables the marketing department to decide how to respond to the customer's needs. Additionally, the information is also available to marketing policy makers to enable them to decide such things as which target markets/ segments are appropriate for each product/service etc. (2006). To accomplish this, firms must develop ways to collect information at the individual level using traditional and/or electronic means and use that data to create information intensive customer communication strategies that proactively use the new media to become interactive with customers (2003). Through an efficiently managed marketing database, data at hand is turned into meaningful information which the marketing field can use in measuring the effectiveness of IMC and evaluating its performance, in terms of its significant contributions to the company.
Database management aids in the process of internal and external communication. Internal, through a common database which the members of the organisation can access and make use of, and external, in that the information gathered from the databases comes from people other than those inside the organisation, specifically the market. In essence, the art and science of database management simply involves collecting, analysing and interpreting figures garnered from the market segment into meaningful data like the purchasing patterns of consumer, changes in the marketing trends, variations in consumer behaviour, taste and preferences, etc. An effective database management makes the interpretation of data such as general marketing statistics, demographics and industry overviews, country data, consumer lifestyles, consumer market sizes, forecasts, companies & brands and major market profiles readily available for interpretation and use for making good marketing decisions. Two-way communication, much like internal and external communication, is facilitated by the management of a database that should integrate the marketing mix into one functioning whole in order for IMC to become a useful tool for the organisation.
Database helps the marketing field to deliver consistent messages to the customer through keeping track of individual client’s records of transaction and making sure that the same level of expected quality of product and service gets delivered to the respective customers each time they choose to do business with the company. This fosters an environment in which the customer feels that he or she is being valued by the firm because the latter takes pains to know everything that the particular client wants thus keeping up with the expectations set by the customer. Consequently, trust and loyalty builds up, and the organisation shifts from being profit-driven to being customer centric. Relationships are then build, harmonious relationships which serves as the groundwork for which the company is primarily aimed: at delivering quality products and services while keeping the profits rate high. At the bottom line, an efficiently managed database in an integrated marketing communications approach benefits both organisation and customer.
Drawbacks presented by managing an effective database for the use of IMC has been enumerated and analysed by numerous academic literature on the subject. (1996) analyse organisational impediments to their integration, such as (1) compensation systems, organizational cultures, and power structures. The compensation system would naturally be affected by the adoption of an integrated approach to marketing communications. For one, IMC eliminates work redundancy, thus removing the need for certain tasks, which prior to IMC eats up a portion of the marketing budget. People who would be affected would naturally not support for the adoption and possibly maintain the status quo which they have been very used to. The culture of the organisation with regards to its attitude to change could significantly make adoption of an integrated approach either easier or a lot harder for the company as a whole. A shift in power structures could create a rift between the members of the organisation, an occurrence which Is inevitable in the carrying out of IMC within the company. (1996) likewise examined these barriers in the implementation of IMC programs.
Given the numerous number of challenges posed by having the database management aligned with IMC, it is understandable that companies shy away from adoption of such an approach for fear of failure. However, organisations that have taken the plunge and braved the challenges have been found to gain much from an efficiently managed database in IMC, making the efforts exerted worthwhile. After the initial hurdles of maintenance of great volumes of detailed customer data, the requirement to develop a long-term marketing systems development policy, and requiring most people in the company to forget their traditional way of doing business, potential benefits can be reaped. If database management is properly facilitated in IMC, it can prove to be a powerful competitive weapon for companies - especially large ones (2006). For the provider, integration of marketing communication activities can avoid confusion and disaffection in the minds of consumers and buyers, offering a comfortable identity to customers and staff. Agencies who support the marketing communication process can take a more holistic and thus strategic stance to their client's business, concentrating on strategic development rather than separate agendas ( 2001).
According to , an efficiently managed database makes it possible to segment customers and prospects based on value and potential, and to align distribution so that more expensive channels are focused on higher payback opportunities (1995). Through full automation and innovative tools that enable rapid data mapping for setting up databases and new data sources, the initial concern of high costs of maintaining a database will be replaced with easier data storage and retrieval and information interpretation, which saves the organisation not only valuable monetary resources, but time as well. Flexible reporting is also likely, as a through posing queries, a database user can make logical connections among data items and produce a report that shows the connections - such as a list of customers who buy a particular product, are headquartered in a particular region and who generally take advantage of discounts for payment within 30 days. These reports may be ‘fixed (the format and content are determined ahead of time) or ‘ad hoc’ in that the format and content aren't anticipated and can be developed and adjusted as the need arises (1995).
More importantly, having an efficiently managed database in IMC is the most cost-effective method of generating new business for a company. According to , database investment may range from $100,000-$750,000, with hardware as an additional cost factor, but several companies have reported paybacks in less than a year, realized through expense reduction and revenue growth resulting from cross-selling and new business acquisition (1995). An effective database management in IMC likewise fosters ‘relationship marketing’ in that it facilitates the company's effort to identify, maintain, and build a network of individual consumers and to continuously strengthen the network through interactive, individualized, and value-added contacts over a long period (1992) which results to the ability to establish, maintain, enhance, and commercialize customer relationships so that the objectives of the parties involved are met, which is done by a mutual exchange and fulfillment of promises (1990). Clearly, the more a company is able to engender loyalty from its customers, the more likely the relationships will be enduring and profitable, thus the development of customer loyalty comes from constantly refining the information available on specific customers including customer preferences, buying habits and patterns, product usage, and other data specific to individual customers (Harcar & Khalil, 1999). Keys to better marketing are customer focus and systems built to track customer relationships (1997).
CASE STUDY 1
A FIRM DEVELOPING AN INTERACTIVE IMC PROGRAM
The case study reported here was done in conjunction with an energy-conservation organization. Energy conservation was chosen for five reasons. First, recent energy shortages and high-energy prices in California and other states illustrate the critical nature of energy conservation. Second, the melding of behavioural, psychographic and descriptive data to better understand and communicate with customers has previously been advocated in the energy literature (1999). Third, demographics and psychographics "individually" have been found to be only weak predictors of attitudes towards energy conservation and/or conservation behaviours (1993). Fourth, while utility companies have little experience with consumer databases, recent developments in the deregulation of these industries has lead to a number of these firms beginning to compile data on their customers (1999). Finally, little is understood about how psychographic and behavioural data can be captured and utilized to better define customer relationships, how this understanding can be used to better segment customers to target communication and offers, and the impact that interactivity might have on maximizing long-term customer value. As a consequence, the energy field has much to gain by developing specific and target-oriented energy conservation communication programs.
A mail survey was sent to 2,000 randomly selected homeowners. To enhance the response rate, a post card was mailed prior to distribution and a $2 participation incentive was attached to the survey. A total of 1330 people responded to the survey request. Of these, 33 were deemed unusable due to an excessive amount of missing data. This resulted in a total of 1297 usable surveys with 68 surveys returned as undeliverable. The net result was a response rate of 67.1% (1297/1932). These data was integrated with other available information from the companies database (e.g., energy usage, previous energy audits, etc.) to form the initial database.
DATABASE MANAGEMENT ANALYSIS
Respondents were classified into energy conservation segments using k-means cluster analysis. While a number of different segment construction analyses were employed, in the final analysis, the use of the individual energy-oriented attitudinal and the psychographic questions (in contrast to using factors scores), along with a "summed energy conservation score," worked best. The summed energy conservation score was formed by adding up all of the self-reported energy conservation behaviours from a battery of sixteen activities (i.e., had an in-home energy efficiency audit, installed storm windows, etc.). Ultimately, a four-segment model best represented the data. The segments were named as follows: Apathetics, Proactives, Receptives, and Comforts. Each cluster/segment had specific psychographic characteristics associated with it, and the names of the segments were derived from their scores on the battery of psychographic and behavioural questions.
The results highlight the value of collecting additional information from customers over time. The more information the organization has on its customers, the more accurately they will be able classify them. This also suggests that continuous analysis of data is needed to improve the classification models. In the final analysis, the ability of the organization to create a differentiated integrated marketing communication program is predicated on its ability to correctly classify its customers. It is important to note that although the energy segments were validated via a test and holdout sample, the focus of this paper is on how interactive IMC can be enhanced using combined attitudinal data and not on whether these energy segments can be generalizeable to other studies. Moreover, the model is designed to turn these attitudinal and behavioural data into actionable interactive IMC strategies.
CASE STUDY 2
POLYSERVE LEAD GENERATION
About a year after the launch of its first major product, PolyServe wanted to ratchet up the pace of its lead generation. It had managed to build a small database for its server and storage clustering software, but knew it was only scratching the surface of its potential IT customer base among Global 1000 companies. With this need in mind, the company engaged the services of an eternal agency specialising in database management in order to help them build and execute a plan for developing a lead database.
Rapidly expand the database of prospects for PolyServe’s clustering software among large IT enterprises.
The recommendation was to focus on two things: 1) Use integrated online campaigns to capture leads, with an emphasis on white papers and Webcasts, and 2) keep communicating to the prospects in PolyServe’s database. The agency provides PolyServe turnkey services for database development and communications for achieving PolyServe’s goals, including: Media research, planning, negotiation through researching the online media venues most relevant to the product areas PolyServe wants to promote, plans a media schedule that matches the company’s budget and lead goals for the quarter and negotiates the costs and deliverables of individual media contracts; Database communications: In parallel with adding names to its database, ongoing communications are provided to the PolyServe customers and prospects. Correspondence includes a monthly e-newsletter and individual emails in support of upcoming Webcasts and other events. A constant monitoring of the ROI by publisher and tactic was also carried out.
Within 18 months of expanding its database development program, PolyServe added 12,000 names to its database of prospects. As its database has grown, so has its value. With a much larger database, PolyServe can expand on the potential for becoming its own publisher. It can now go direct to large numbers of prospects in its database to deepen their awareness of and preference for PolyServe solutions, turning cool leads into hot prospects. It also has the advantage of using survey capabilities to query its customers and prospects to help inform future product development and marketing campaigns.
IMC is an important trend that affects the way advertising programs are managed in today's complex business environment. Although IMC is not, and may never be, a one-dimensional concept but instead, a multidimensional one, depending in all cases on where the market happens to be at a specific point in time (2004), there will remain a significant interest in the approach as real life-examples have proven that the use of IMC brought about the realization of marketing goals. Without some form of an integrated marketing communications plan, and coordinated efforts toward a common sales goal, hardly anything of value would exchange hands due to lack of awareness, conflicting agendas and distribution channel confusion. As with all tools used in marketing, there is the need to evaluate the outcome of the IMC approach to ensure the effectiveness of the effort. The efficient handling of the company’s database fro the use of the marketing department, as evidenced by the two case studies and the wealth of available literature on the subject presented in this paper leads to a conclusion that database management is hugely important if a productive IMC plan is to be carried out within the organisation. It is undeniable that efficient database management in IMC requires considerable effort on the marketers’ part up front, but the benefits derived from it will make the effort worthwhile.