Harnessing the power of database marketing

Abstract

Increasing competition and accelerating market fragmentation, coupled with lower information systems costs, have spurred many organizations into developing marketing strategies which capitalize on the opportunities presented by powerful databases. Some organizations have been able to harness the power of database marketing systems to achieve competitive advantage in their marketplaces; conversely, others find themselves inhibited by the intricate human, technical and organizational problems created by the adoption of these systems. A review of database marketing literature identifies the competitive advantages and factors inhibiting these systems. The main body of the paper proposes a generic model designed to assist managers’ understanding of the interactions and processes necessary to create effective systems. This model encompasses a data‐rich information environment, a market modelling facility and feedback from performance measures. We consider how managers might use this model to justify and appraise their database marketing system proposals.