CHAPTER 5 CASE STUDY : Asking the Customer by Asking the Database

1.) Why would a customer database be so useful for a company such as Forbes or Kodak? What would happen if these companies had not kept their customer data in databases?

Forbes business model relies heavily on advertising to supplement revenue from paid subscriptions, so it is constantly looking for ways to helps its advertisers reach Forbes readers more efficient. Therefore, a customer database will be useful for Forbes because Forbes did not need to employ third party to analyse their customer data instead of just using database to know each individual customer activity on Forbes. By doing so, Forbes can target their campaigns more precisely and increase their circulation

As for Kodak, Kodak relies more heavily on actual data in its Oracle customer database which complied from direct purchases and registration on Kodak’s website and photo sharing site. From these customer database, Kodak can easily track customer behaviour and improving their strategy on marketing, promoting, distribution and pricing. A customer database can be so useful as it can consolidated data on all its marketing activities, target each type of customer precisely, and measure effect of each channels. By doing so, Kodak can improve their performance and popularity.

If these companies had not kept their customer data in database. These companies may need to conduct more complex work as the status of everything is unknown. Companies do not have customer information, no wonder what are they seeking and do not know what they need especially most up-to date info of customer was unidentified. As a result, companies cannot scale their business well as the management team in the companies cannot make wise decision competent to customers’ need as there is no database to track customer behaviour. Companies may also lost loyalty as there is no more customer relation between each other. As companies can concern customer by sending promotional email or message reminder to get customer attention all the time. Furthermore, companies cannot forecast companies’ long-term financial value for the business as there is no customer response on price perception.

2.) List  and describe two entities and several of their attributes that might be found in Kodak’s marketing database

A customer database is helpful to companies like Kodak because it lets them see who their customers are, so they can market specifically to them, and it lets them know what their customers are purchasing. If these companies did not have customer databases then they would have to find another way to gather the same information such surverys. The information that gets housed after a customer purchases something is crucial in marketing strategies and production strategies. A company like Kodak could figure out which product is selling a lot of which is not selling and ramp up production or cut don production. Kodak could also market to specific age groups or specific regions with the information they gather from purchases.

An entity would be a customer’s name, and the attributes would be their address, purchase history. An entity could also be an age group. Attributes could include specific age, where they are from, what they purchase, what they would like to purchase and how they are attracted to.

The profile of buyers for Kodaks c130 multi-function printer can be differentiated from that of people who purchase Kodak's more advanced especially office 6150 printer. Armed with that information Kodak is able to target each type of customer more precisely with its retail packaing, product descriptions, and advertising placements. Instead of advertisint its entire ink-jet printer in a broad publication, Kodak will target prospective 6150 buyers through a lower-cost combination of print ads in niche magazines, web banner ads on selected sits, and e-mail lists of small-office or home-office owners.

Kodak can also measure the actual effect of promotional offer, customer segmentation and messaging across all of its channels. Armed with that effect, Kodak can track what kind of device is used and providing efficient solutions.

3.How did better data management improve each company’s business performance? Give examples of two decisions that were improved by mining these customer databases.

Forbes used SAP BusinessObjects software to analyse its own readership data, examining variables of greatest interest to advertisers to know and understand each individual who interacts with its brand that help Forbes increase their circulation indirectly. While Kodak with asking the customer by asking the database concept improve its company platform in many ways.

  

i. Improving decision making-data warehouse. 

A data warehouse is a database with archival, querying, and data exploration tools (i.e., statistical tools) and is used for storing historical and current data of potential interest to managers throughout the organization and from external sources (e.g., competitor sales or market share). The data originate in many of the operational areas and are copied into the data warehouse as often as needed. The data in the warehouse are organized according to company-wide standards so that they can be used for management analysis and decision making.  Data warehouses support looking at the data of the organization through many views or directions. The data warehouse makes the data available to anyone to access as needed, but it cannot be altered.  A data warehouse system also provides a range of ad hoc and standardized query tools, analytical tools, and graphical reporting facilities.  The data warehouse system allows managers to look at products by customer, by year, by salesperson, essentially different slices of the data. Normal operational databases do not permit such different views.

ii.Improving decision on pricing 

Data mining is not particularly new — statisticians have used similar manual approaches to review data and provide business projections for many years. Changes in data mining techniques, however, have enabled organizations to collect, analyze, and access data in new ways. The first change occurred in the area of basic data collection. Before companies made the transition from ledgers and other paper-based records to computer-based systems, managers had to wait for staff to put the pieces together to know how well the business was performing or how current performance periods compared with previous periods. As companies started collecting and saving basic data in computers, they were able to start answering detailed questions quicker and with more ease.This help the companies to decide how much pricing for the services or product that are enough to cover overall expenses with a high profit in long term projection.