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Managerial Recommendations - Future Trends, Increased Usage of Internet and Database Marketing Strategies

customer privacy information company

Following the implementation of an integrated Internet and database
marketing solution in the entertainment company, results were monitored
against problem-solving expectations and the efficacy of the actions on
the problem were evaluated (Farquhar, 2000). Several implemental issues
were identified in this evaluation process. First, feedback from
customers during and after the implementation of marketing strategies
helped the company to structure its e-marketing mechanisms to assist in
further data collection and customer understanding. For example,
community/special interest groups, television show fan groups, and so
on were used by the entertainment company to encourage customers to
more actively contribute their information. Thus, a feedback loop is
depicted in the framework (Figure 3).

Second, the evaluation process highlighted several environmental
issues at both macro and micro levels regarding the successful
integration of Internet and database marketing. At the macro level,
social, legal, and technological issues need to be taken into
consideration. An important social issue is related to consumer’s
concern with privacy. There is a delicate balance between the benefits
consumers enjoy from personalized customer service and online
experience provided from personal information exchange and the amount of
information that consumers are prepared for companies to hold about
them. The entertainment company was particularly concerned that privacy
management be optimally managed given its high profile in order to
avoid any negative press and to maximize customer uptake. The project
team thus determined that privacy management was integral to the
successful integration of the Internet with database marketing.

This also brings up legal issues since many governments have
introduced specific data protection legislation to protect consumers,
such as the Australian Privacy Act 1999. Meeting privacy legislation
and guidelines remains a challenge. The entertainment company addressed
these guidelines by adopting a permissions-based transparent disclosure
approach. These principles were summarized as a result of this approach:

  • Limit the collection of personal data to only that perceived as
    necessary by the customer;
  • The purpose for which data are collected and used must be
    disclosed to customers;
  • Consumers must be given options with respect to whether and how
    personal information may be collected from them;
  • Provide
    customer access to view and validate the accuracy and completeness of
    data collected about them. As discussed previously, the project team
    also determined that this factor is effective in maximizing data
    quality; and
  • Safeguard consumer data and place restrictions on the transborder
    flow of consumer information.

Into the picture also has come the use of new network technologies
and techniques which raise new measurement issues. An important example
is the extension of e-marketing towards other media, such as mobile
phone small text messaging (SMS) and Internet-enabled wireless
application protocol (WAP) phones that herald the extension of
m-commerce. These new customer interfaces, in combination with the
online and off-line customer contact points, form a diverse customer
communication base and may present a hindrance to the process of data
integration and management.

The entertainment company, organizational culture, top management
support, and collaboration between marketing and IT teams provide a
supportive environment for the integration and is critical for overall
success. First, organizational culture must support innovative use of
the Internet in their marketing activities. Second, top management must
be philosophically and behaviorally committed to the notion that the
Internet is essential in collecting customer data in enabling effective
database marketing. Finally, an effective cross-functional team of
information systems and marketing specialists must work harmoniously to
succeed in the integration of Internet and database marketing.

Future Trends

Increased Usage of Internet and Database Marketing Strategies

As the Internet becomes more pervasive and e-business extends
further across industry models and customer access channels, it is
expected that the use of
database-driven Internet marketing will increase and will become
increasingly sophisticated (Sweiger et al., 2002). Further, this
increased usage of the Internet is expected to increasingly involve
non-Western economies and, in particular, the Chinese and Asian
economies (Anon, 2003). As such, marketers may need to adopt
multinational, multicultural, and multilingual Internet/database
marketing strategies to gain maximum value from this anticipated
growth. The experience of the entertainment company confirms these
predictions, in that the success of its customer data-driven Internet
marketing strategy has resulted in future projects for extension of the
concept into South East Asia.

Increased Emphasis on Data Quality and Data Integration

Data quality and effective data integration will continue to be a
focus for many firms as building up accurate customer/prospect
profiles, interests, and propensities over time is the critical success
factor to effectively achieve and maximize the strategic outputs
identified in Figure 3. The success of the entertainment company’s
integrated Internet marketing and database marketing strategy (as
measure by increased site traffic, numbers of customers signing on,
interest-generated responses to offers, and increase in total sales)
has resulted from the company being able to maintain data quality. The
entertainment company encouraged customers to identify themselves as
quickly as possible in return for compelling content and special
offers. A persistent customer log-on was assigned to the customer, and
rewards, such as product discounts for customer validation and upkeep
of their own profile and use of external reputable data for validation
of attributes such as Internet domain name, address, and phone details,
were used to increase data quality.

As such, as integrated Internet and database marketing becomes more
mainstream within the entertainment company, failure to adequately
address the issues of data quality, customer recognition, and data
integration, especially in a real-time capacity, will increasingly
negate the efficacy of this profile building and thus frustrate the
ability to deliver the strategic outputs. Further, as competitors
increasingly attempt to replicate the success of the data-driven
Internet marketing strategies enjoyed by the entertainment company, it
is believed by the project team that organizations that fail to
effectively monitor data quality and integration procedures risk losing
market share to competitors that can successfully build on and utilize
their prospect/customer information
assets. The future will place greater reliance on data quality and the
associated intelligent use of integrated information.

Prominence on “Value-For-Money” and Differentiation Strategies

As integrated Internet/database marketing strategies become more
commercially utilized, increased emphasis on innovative differentiation
and “value-for-money” across the identified strategies is expected to
emerge. The future success in e-marketing comes when online promotions
and catalogues are delivered fully personalized to meet the needs of
each individual customer. As the prospect/customer becomes increasingly
inundated with requests for information and data-driven Internet
marketing offers, expected future trends will involve an enhanced
expectation for incentives and/or rewards (financial, prestige, status,
other) for the targeted persons to contribute to and keep their
e-marketing data current.

Increased Emphasis on Privacy Management

The increased Internet usage and customer expectations discussed
above are expected to result in increased emphasis on privacy and
customer permissions management (Godin, 1999). This increased
expectation for information recompense will be accompanied by increased
customer/prospect intolerance for irrelevant or inappropriate offers
and a corresponding increased emphasis on privacy (Hagel & Singer,
1999). Privacy problems are difficult and often solved on an ad hoc
basis. Although self-regulation is the most common approach in handling
consumer privacy protection, more stringent government regulation will
demand compliance in the future. For example, the Australian Federal
Government imposed a stricter SPAM Act recently to regulate unsolicited
commercial messages. As such, organizations are expected to become
increasingly sophisticated in setting, tracking, and managing privacy
across their Internet marketing strategies. Technological innovation,
such as secure e-mail services, anonymous surfing tools, and cookie
cutters, are also becoming available which present greater challenges
to marketers to collect customer information.


In conclusion, the extent, degree. and speed of communication
enabled by the Internet makes it a synergistic component of an
effectual database marketing strategy. The assimilation of all the
marketing tools, including the two powerful ones – the Internet and
databases built on a platform of comprehensive data integration – is
the key to executing effective one-to-one marketing. An integrated
marketing solution appears promising in the development of e-marketing.
An action research approach was used to build a framework about how
Internet marketing and database marketing can be integrated. The
results are qualitative in nature and further research is needed to
establish the statistical generalizability of these theory-building
findings in survey research when the population of marketing managers
with the requisite expertise becomes large enough for a survey to be

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