Marketing: Data model
One of the main concerns for a firm is when, how and to whom they should market their products. Firms make marketing decisions based on how much data they know about their customers and potential customers.
They may choose for mass market when they do not know much about their customers or they may market directly the consumer based on some observed characteristics.
Depending on the needs, the firm will use one of the two methods (primary and secondary) to collect its data.
Primary data collection is more expensive to produce as “they have to be observed and recorded or collected directly from respondents” (William M. Pride, 2008).
They are four main techniques (Baker, 2000):
- Obtrusive: the interviewee is directly observed while realising an act (e.g. movement of an individual in a kitchen). Disadvantage: its impact on the behaviour of the interviewee as he/she knows he/she is observed; the observer shouldn’t intervene during the experimentation (Hamer, 2003)
- Non-obtrusive: the interviewee is observed quietly by using “invisible” devices like electronic devices (e.g. camera, internet browser). Advantage: Nominal impact on the behaviour of the interviewee
- 3. Experiment: the interviewee is requested to test a variable (e.g. a drug, flight simulator). Its difficulty: to establish the results keeping certain variables constant so that the effects of the experimental variables can be measured
- Survey: the data are collected through mail, telephone, personal interviews that can be structured or unstructured (Amir Azarpazhooh, Winter 2008). Its difficulty: the “physical” collection of the result is not guaranteed (e.g. the interviewee is too lazy to send the answer by post mail) (Ibeh, 2004)
Secondary data collection is less expensive to produce as they are normally compiled inside or outside the firm. They include: Firm’s records (e.g. Customers sales figures), Trade associations (e.g. chambers of commerce), Government statistics (e.g. Census) or Syndicated research reports (e.g. Gartner) (Baker, 2000) .
Today, the amount of data collected is so huge that computers, spreadsheet applications or more commonly “data mining” are tools used to give value to the data collected (Montgomery, 2001).
Clickstream data, defined as “the electronic record of Internet usage collected by Web servers or third-parties services” (Randolph E. Bucklin, 2008) tracks the navigation patterns of the Internet users in order to display advertising based on the observed interest of the consumer with a high degree of precision:
- Keywords collected from pages the consumer has loaded in its browser
- Data the consumer has entered onto the web pages (e.g. Facebook profile)
- Network-based marketing take advantage of links between consumers to increase sales (Montgomery, 2001); (e.g. Friends of Facebook)
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