Database Marketing - Growth and Evolution of Database Marketing

Growth and Evolution of Database Marketing

The growth of database marketing is driven by a number of environmental issues. Fletcher, Wheeler and Wright (1991) classified these issues into four main categories: (1) changing role of direct marketing; (2) changing cost structures; (3) changing technology; and (4) changing market conditions.

DRIVER #1: THE CHANGING ROLE OF DIRECT MARKETING

• The move to relationship marketing for competitive advantage.
• The decline in the effectiveness of traditional media.
• The overcrowding and myopia of existing sales channels.

DRIVER #2: CHANGING COST STRUCTURES

• The decline in electronic processing costs.
• The increase in marketing costs.

DRIVER #3: CHANGING TECHNOLOGY

• The advent of new methods of shopping and paying.
• The development of economical methods for differentiating customer communication.

DRIVER #4: CHANGING ECONOMIC CONDITIONS

• The desire to measure the impact of marketing efforts.
• The fragmentation of consumer and business markets.

Shaw and Stone (1988) noted that companies go through evolutionary phases in the developing their database marketing systems. They identify the four phases of database development as:

1. mystery lists;
2. buyer databases;
3. coordinated customer communication; and
4. integrated marketing.