What Are the Objectives of the Various Database Marketing (Dbm) Programs and Are They Working?

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When its competitors entered new markets with advantages of innovation and lower cost during the 1990s, Harrah’s capped the business growth. However, the company rather chose to make use of an existing advantage – customer loyalty, instead attempting to create new resources. A marketing database contains information about individual customers or potential customers that is relevant to the marketing process. DBM is an important tool to build up customer relationship and increase the loyalty. To strengthen the loyalty competency, requiresd Harrah’s to process sophisticated database analysis of customer profiles, so that the company could market the right customers with right ways, in order to attract repeated visits and retain the loyalty (See Appendix A and B). Harrah’s used the data base in three programs – new business program, loyalty program, and retention program – to build up the customer relationship and strengthen the loyalty. Another objective of DBM is to predict consumer behavior and “customer worth”. Customer profiles provide information about customers’ play preferences, betting patterns, how often they visit, how much they play, etc. After retrieving detailed information from every customer, Harrah’s could predict potential customer playing behavior at all of its properties through quantitative models. After the models identified some opportunity-based customer segments for rationalized reinvestment, Harrah’s sent customized incentives to these customers, seeking relationships with them based on their future worth, rather than on their past behaviors. One more important objective of DBM is to track customers over time and conduct some “marketing experiments”, so that Harrah’s can find the right marketing instrument, for the right behavior modification, for the right customer. When Harrah’s issues special promotions, it needs to know which kind of promotion is the most effective at the lowest cost. For example, through marketing experiments,...
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