Database Marketing Sales Force Automation and Virtual Term Paper

Excerpt from Term Paper :

Database marketing, sales force automation and virtual reality are three of the newest trends in technology to impact the way company's market to their customers. All three technologies offer specific advantages and disadvantages for their use. The appropriate use of the technology must be based solidly on the type of product, costs incurred, and the nature of relationship with clients. When used in a judicious way, all three technologies can have a viable and positive effect on a company's marketing strategy.

Database Marketing

As the name suggest, database marketing simply involves the extensive use of database systems, and tools related to databases within the field of marketing. Database marketing allows a company to use all information in their databases (or any other useful external information) in a potentially wide variety of marketing efforts. Further, information gleaned from company databases can be used to evaluate new markets, and assess the potential for potential products (, Overview).

Database marketing requires several technological tools. First, a company must set up a database management system. This is simply the system where information is stored. Database Management systems can be relational or object-oriented. Relational systems use information from different tables that are linked using "relations" (references between table items). Object-oriented database management systems treat database entries like real objects that have different properties (, Tools).

Querying tools help to retrieve information from the database management systems. These tools are used to query information in the system, and prepare reports. The most common query tool is Structured Query Language (SQL). Other tools allow help companies to keep data in the system up-to-date. Further, presentation tools allow for the preparation and organization of data in the database management system. Commonly-used tools are MS-Excel and Lotus 1-2-3 (, Tools).

Database marketing can meet several needs. For example, it can help to overcome the limitations of mass marketing, and allow a company to market to individuals. Further, database marketing can be an invaluable in providing information on the return on investment, as marketing budgets continue to be reduced. Further, database marketing can allow more precise customer service (, Overview).

Database marketing is especially useful in customer relations aspect of marketing. It can help a company evaluate the value of individual customers, select specific target markets, and calculate potential new markets, and target groups within the database (

Ultimately, database marketing can be an effective tool in saving company money. It allows a company to target market segments more precisely than other marketing techniques, thus improving response rates from direct mailings. Further, database marketing techniques can help to reduce the need for external market research, which can often be prohibitively expensive (, Overview).

Database marketing can take several forms. The most common of these are data warehousing and data mining. Data warehousing is a fairly simple concept that refers to copies of transaction data that are "specifically structured for query and analysis" (DWIS). Data mining is defined as "the process of data selection, exploration and building models using vast data stores to uncover previously unknown patterns" (SAS Institute Inc.). Data mining can encompass using information from sources as diverse as Web transactions, sales histories, call data, and point of sale data.

One common use of database marketing is gold card programs. Gold card programs like American Airlines Advantage Gold use their database marketing to reward frequent flyers. Perks are varied include preferred customer status, and discounts on many coveted services. These gold card programs allow the company to track valuable customers through database marketing (Middleton Hughes, The Merits). Database marketing has also been used successfully by the Wilmington Savings Fund Society (WSFS). According to a bank official, the program "paid for itself many times over by our ability to price less aggressively" (Middleton Hughes, Keeping).

Database marketing can be useful in targeting customers for specific sales. For example, marketing for a clothing store's sale on children's clothing could be targeted only to customers that had purchased children's clothing in the past. Further, database marketing can be used to select first-time buyer offers to customers that have not purchased a specific item. For example, a cable company could send "first-time buyer" offers to individuals who used their television service, but did not use their Internet service. Finally, database marketing can be used for customer-directed marketing. Customers of an online bookseller could specifically sign up on Web page to receive offers on novels, but not special offers for cookbooks, for example (It's All Good Web Design).

The field of database marketing is rapidly expanding.

Database marketing is beginning to grow beyond the traditional corporate use, and move into non-profit sectors like fundraising, and hospitals and universities. In addition, the recent emergence of even more powerful database technologies, and the continued refinement of techniques like data mining ensure that the field of database management will continue to be both viable and valuable to many sectors in upcoming years.

Sales Force Automation

Sales force automation involves the use of a computer-assisted data management system in managing a company's sales force. This can include the use of software to segment customers into specific markets, and to enable the most efficient use of the salesperson's time. Further, sales force automation is involved in customer account management and increasing customer satisfaction.

Sales force automation has a wide variety of benefits. A recent study by Best Practices, a Chapel Hill, N.C.-based firm, reveals several benefits. These benefits include improvements in customer management, and improved sales call planning, scheduling and reporting. IN addition, sales managers and field representatives had improved communication using sales force automation. Further, the technique allows for easier access to databases, and reduced errors. Ultimately, sales force automation has the important and crucial benefit of resulting in significant increases in sales growth (Kaneshige).

Despite its clear usefulness, sales force automation can also be fallible to many factors. In the current economy, many companies are rushing to use new marketing techniques, including sales force automation. This leaves them especially vulnerable to factors that can damage sales force automation initiative. Johathan Copulsky lists 10 main sales force automation warning signs: "1. We don't see the need to build a business case, 2. We have a lot to do and not a lot of time to do it, so we're going to do one big-bang release, 3. We don't have the support of the Senior Execs; but once they see some results, they'll be on board, 4. Since the Information Technology group is building the solution, IT should run the project, 5. The sales force will get what we give them, 6. We'll build efficiency by standardizing our sales force all on the same sales process, 7. The data conversion will be easy; we'll worry about that once we have the system ready, 8. Supporting things like training and communication are nice to have, but we have a budget to manage, 9. We need to customize the software to perform the way we want it to work, and 10. It's great to think about integrating with other systems, but too much of that could really slow us down."

Simply put, these ten warning signs note that sales force marketing must be used with a clear understanding of its appropriate timing, usefulness, and implementation. Budgeting, proper planning, the appropriate use of resources and information, and technological issues like data conversion are absolutely crucial to the success of any new sales force marketing initiative. Like any other marketing strategy, sales force marketing must be implemented judiciously, using standard, developed better business methods and practices. Otherwise, sales force marketing may actually damage both a company's marketing strategy and lead to financial repercussions for the company.

The benefits of sales force marketing are very real and tangible. However, they require the successful match of corporate culture and sales force marketing techniques to develop a sound business case that will be supported by both employees and management (Kaneshige). Like any other new technology or methodology, sales force automation must be closely matched to the organization in which it is to be implemented. In a recent study by Best Practices, a Chapel Hill, N.C.-based firm, investigated the implementation of sales force automation. The study interviewed executive from 45 companies, representing 12 industries and 42 vendors (Kaneshige).

In this survey, Best Practices determined that successful sales force automation implementation requires the full cooperation of both management and employees. Obtaining this level of cooperation requires a concerted effort to review the needs of all players. Sales representatives must be consulted, and testing and piloting are crucial steps. The support of senior management is absolutely crucial in stopping political infighting that can kill a project before it gets off the ground (Kaneshige).

Successful sales force automation also requires other factors. Aligning the technique with business goals is crucial, and defining the rationale behind the implementation is crucial. Ongoing maintenance must be consistent, and training must be implemented at both the beginning of the project, and on an ongoing basis. Maintenance and support systems are also absolutely crucial to…

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