Page 54 - DMGT408DMGT203_Marketing Management

Unit 2: Understanding the Marketplace and Consumers

2.4 Computer Networks and Internet Notes

Present day computer networks enable marketers to access data sources and customers with
immediate information about products and performance. Through such networks, marketers
can exchange e-mails with employees, customers, and suppliers.

Example: Online information services such as Compu Serve and America Online typically
offer their subscribers access to e-mail, discussion groups, files for downloading, chat rooms,
and databases and other related research materials. Marketers can subscribe to “mailing lists”
that periodically deliver electronic newsletters to their computer screens.

This helps increased communication with a marketer’s customers, suppliers, and employees
and boosts the capabilities of a company’s marketing information system. Online information
services are available only to subscribers. However, the Internet allows global exchange of
e-mails, discussion through newsgroups on almost any subject, downloading of files, chat rooms,
etc. A well-maintained database enables a company to analyse customer needs, preferences, and
behaviour. It also helps in identifying right target customers for its direct marketing efforts.

Self Assessment

State whether the following statements are true or false:

12. Online information services are available only to subscribers.
13. A well-maintained database enables a company to analyse customer needs, preferences,
and behaviour.

2.5 Data Mining and Data Warehousing

The term ‘data mining’ refers to automated data analysis of large amount of data stored in a data
warehouse. This is similar to extracting valuable metals from mountains of mined ore. The
purpose is to unearth – with the help of modern computing power – meaningful patterns of
information that might be missed or remain undiscovered. Data mining creates customer
database, which is extremely important for all narrowly defined target-marketing efforts. Data
mining also leads to build database on resellers, distribution channels, media, etc.

Example: A Midwest grocery chain used the data mining capacity of Oracle software to
analyze local buying patterns. They discovered that when men bought diapers on Thursdays
and Saturdays, they also tended to buy beer. Further analysis showed that these shoppers typically
did their weekly grocery shopping on Saturdays. On Thursdays, however, they only bought a
few items. The retailer concluded that they purchased the beer to have it available for the
upcoming weekend. The grocery chain could use this newly discovered information in various
ways to increase revenue. For example, they could move the beer display closer to the diaper
display. And, they could make sure beer and diapers were sold at full price on Thursdays.

Data warehousing refers to storing subject-based, integrated, non-volatile, time variant data in
support of managerial decisions. It can be viewed as a central collection of clean, consistent, and
summarised information gathered from several operational systems. With increasing computing
capabilities, organisations are collecting large amounts of a variety of information or data possibly
faster than they can use, and for this reason all the collected data or information needs to be sorted,
classified and warehoused, so that it can be retrieved when needed in a meaningful manner.

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