The Targeting strategy

Data strategy paper

The business that I am going to examine is a typical business to consumer type dealing with music related product sales and distribution directly to customers (direct sell). All music is an e-commerce site that provides a large inventory of musical genres. It has a user friendly search engine to explore the huge music database of the site. It provides advanced searching methods that help the user to explore the database according to mood, genre, song and album title. All music provides moreover to the user an extra service that can give him/her the opportunity to become a registered member of the site (free) in order to gain specific information concerning: special prices, offers, music information according to his/her preferences, advanced search, expanded artist information (credits, songs), editorial features as well as the ability to listen audio samples (30 second duration) before purchasing the record. Moreover it uses a 5 star album rating system with 5 being the best rating in order to assist the customer about the specific release.

Target Group

The Targeting strategy that All music utilizes is based on market segmentation in order to collect and manipulate current and prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action.

Our target group comprised on:

Primarily males and females aged 18-30 years

Lifestyle

Customers that like to purchase musical products such as cd-albums, t-shirts, music accessories as well as musical concerts.

Location

Living in Western Europe and America and can be able to perform credit card transactions.

The main reason that All music focus more on those areas is due to the fact that the specific customers (from statistical information):

1) Perform on-line transactions via credit card on a daily basis(have proper knowledge of the internet technology)

2) Affluent target groups that are affordable to pay for music downloads and cd-purchases charged by record labels via the internet.

Data element

The data that should be maintained in the specific marketing database should be:

Customer ID
Customer name
Country
Customer gender

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Location

Living in Western Europe and America and can be able to perform credit card transactions.

The main reason that All music focus more on those areas is due to the fact that the specific customers (from statistical information):

1) Perform on-line transactions via credit card on a daily basis(have proper knowledge of the internet technology)

2) Affluent target groups that are affordable to pay for music downloads and cd-purchases charged by record labels via the internet.

Data element

The data that should be maintained in the specific marketing database should be:

Customer ID
Customer name
Country
Customer gender
Customer age
Occupation
Customer marital status
Customer address
Customer telephone(or cell phone)
Customer email
Customer search history
Financial information
Preferred genre
Prospect customer

Source(where will All music get the data sources?)

All music should use information concerning the data sources both external and internal. Examining the external data all music will get the data elements with the use of a combined approach of compiled and response data in order to identify the source of information. To be more specific through compiled data All music will collect from business data suppliers information concerning a variety of primary sources including music surveys and phone books. Through this method the company will gather general information for prospect customers. On the other side with the use of response data, that is more expensive than the compiled data, the company will acquire valuable and responsive information about customer segments (ex. information concerning subscription of a prospective customer in a web site music catalogue).

Another external source that All music should get data elements is from the application of banners to music related sites in order to attract prospect customers. It is been advertised in big portals-search engines like yahoo, excite, google etc. When the prospective customer enters music related keywords a highlighted logo of All music site appears.

Examining the internal sources All music manipulates customer information from the server of the company that is the pre existing database that is collected over the years .Another internal source that all music handles comes mainly from the current site of the company concerning the sales contact, the billing system, customer service system or through questionnaires. Through internal data All music is increasingly investing in customer-focused enterprise applications to link together internal databases and deliver a snapshot of interactions between the organization and its customers.

Intended use/Rationale

The main reason that All music collects the specific data fields is to avoid spam mails that irritates the customer and provide more interest specific information. From the customer search history(data field) you can determine the preferences of the prospective customer if isn’t registered. Although you collect vast amount of information you can determine the preference of the visitor and provide him interesting offers. This can be established with the efficient use of CRM software. This process might be costly and may need an advanced information system in order to be sustained but the benefit exceeds the costs. With the use of CRM All music will learn more about customers' needs and behaviours in order to develop stronger relationships with them.

The main reason that all music should collect Customer ID(data field) is due to fact that it uniquely identifies the database customer in order to prevent name collisions. With this technique All music can be more accurate, reliable as well fast for retrieving data.

For the registered customers through the marital status (data field) all music can determine the type of household and furthermore can provide special offers in order to attract new customers and expand the market share.

From the financial history (data field) All music can segment the customers according to their buying tendency and thus can elevate them to a specific category provide them special privileges. Through this segmentation that is the quintile approach All music divide customer file into 5 groups based on profitability. As a member moves up the categories is offered more premiums such as reduced prices, rare items, customer priority for new records as well as free tickets for concerts. In top quintile is where the profits of all music lie. In the next quintile are the high potential customers and at the two bottom quintiles are the potential worst customers. All music should use an interesting strategy to identify who are the worst customers for the company. First it has to advertise in national publications and invites the customers to take 11 cds for a dollar with an agreement to buy 5 more cds over the year. With this approach All music can easily identifies which customers will traffic on the situation (take the cds and never buy) as well which customer will obey the agreement(take the offer and continue purchasing).

A more combined strategy that should include all data fields from our marketing database is the RFM strategy. Through RFM (recency, frequency, monetary) All music from each data elements (descriptive and behavioral data) will be able to analyze customer behavior and defining market segments. To be more specific the recency (When was the last order?) attribute might be broken into three categories: customers with purchases within the last 90 days; between 91 and 365 days; and longer than 365 days. The frequency (How many orders have they placed with us?) will examine the number of times purchases made and the monetary(What is the value of their orders?) the dollar spent in the period(gross margin) This attribute will help All music to identify the interaction with their customers and will provide a lift in response rates for promotions.

Conclusions

With the appropriate use of marketing database All music can