fifth edition Alan Tapp Ian Whitten Matthew Housden The growth of digital marketing is the most important yet unpredictable trend in marketing today How can the online world be harnessed by the companies of today and tomorrow to grow their marketing impact? What role information and databases have to play in this system? And why some non-digital means of direct marketing still remain so powerful? Alan Tapp’s successful text has long been a leading authority on direct marketing, and for this fifth edition he is joined by Ian Whitten and Matthew Housden for the most up-to-date book yet The authors all bring great expertise across direct, database and digital marketing to provide comprehensive, compelling coverage of the key theory and debates of the fields Key features of the 5th edition • Coverage of all recent developments in digital marketing, including analysis of the seemingly relentless rise of Facebook, Twitter and other forms of social media • Thoroughly updated case studies covering companies and organisations from sports teams to car manufacturers and non-profits • A new chapter on Data Protection legislation and its impact on marketers Principles of Direct, Database and Digital Marketing fifth edition fifth edition Tapp Whitten Housden About the authors Alan Tapp is Professor of Marketing at Bristol Business School at the University of the West of England Ian Whitten is a senior lecturer and tutor at the University of Greenwich with almost 20 years of professional direct marketing experience Matthew Housden is a principal lecturer at the University of Greenwich, and a tutor and senior consultant with the Institute of Direct and Digital Marketing Front cover image: © Getty Images www.pearson-books.com Principles of Direct, Database and Digital Marketing Principles of Direct, Database and Digital Marketing Alan Tapp Ian Whitten Matthew Housden Contents Principles of Direct, Database and Digital Marketing Lecturer Resources For password-protected online resources tailored to support the use of this textbook in teaching, please visit www.pearsoned.co.uk/tapp ON THE WEBSITE i Contents – ii Contents Fifth edition Principles of Direct, Database and Digital Marketing Alan Tapp, Ian Whitten and Matthew Housden iii PEARSON EDUCATION LIMITED Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published 1998 (print) Second edition 2001 (print) Third edition 2005 (print) Fourth edition 2008 (print) Fifth edition published 2014 (print and electronic) © Pearson Education Limited 1998, 2008 (print) © Pearson Education Limited 2014 (print and electronic) The rights of Alan Tapp, Ian Whitten and Matthew Housden to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988 The print publication is protected by copyright Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London EC1N 8TS The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law Any unauthorised distribution or use of this text may be a direct infringement of the author’s and the publishers’ rights and those responsible may be liable in law accordingly All trademarks used herein are the property of their respective owners The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners Contains public sector information licensed under the Open Government Licence (OGL) v1.0 www.nationalarchives.gov.uk/doc/opengovernment-licence Pearson Education is not responsible for the content of third-party internet sites The Financial Times With a worldwide network of highly respected journalists, The Financial Times provides global business news, insightful opinion and expert analysis of business, finance and politics With over 500 journalists reporting from 50 countries worldwide, our in-depth coverage of international news is objectively reported and analysed from an independent, global perspective To find out more, visit www.ft.com/pearsonoffer ISBN: 978-0-273-75650-7 (print) 978-0-273-75652-1 (PDF) 978-0-273-79480-6 (eText) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data Tapp, Alan [Principles of direct and database marketing.] Principles of direct, database and digital marketing / Alan Tapp, Ian Whitten and Matthew Housden — Fifth Edition pages cm ISBN 978-0-273-75650-7 — ISBN 978-0-273-75652-1 (PDF) — ISBN 978-0-273-79480-6 (eText) 1. Direct marketing. 2. Database marketing. 3. Internet marketing. I. Whitten, Ian. II. Housden, Matthew. III. Title HF5415.126.T35 2014 658.8’72—dc23 2013029012 10 18 17 16 15 14 Print edition typeset in Charter ITC Std Regular 9.5 pt/12.5 pt by 75 Print edition printed and bound by Ashford Colour Press Ltd, Gosport NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION Contents Preface to the fifth edition xi Part 1 Introducing direct and digital marketing 1 What is direct and digital marketing? Objectives Introduction 1.1 1.2 1.3 1.4 What is direct and database marketing? Defining direct, digital and database marketing Direct marketing in practice The historical growth of direct marketing Summary Questions References Case study: Volvo: from product to consumer-led response marketing Case study: ‘Rapid Pizza’ 3 12 17 22 23 23 25 30 2 The database 32 Objectives Introduction 32 32 2.1 2.2 2.3 2.4 2.5 33 35 38 40 51 What is a marketing database? The data to hold Data sources Database management issues Self-regulation in direct marketing Summary Questions References Case study: Saco Drive-In 53 53 54 55 Part 2 Using direct marketing to analyse the marketing situation 3 The customer database: analysis and applications 59 Objectives Introduction 59 59 3.1 Uses of the database 3.2 Segmentation applications for database marketers 61 64 v Contents 3.3 Analytical techniques 68 Summary Questions References Case study: Segmentation in action Case study: Tesco Clubcard Case study: Training and Enterprise Councils 84 85 85 86 92 94 4 Using external databases in direct marketing Objectives Introduction 96 96 96 4.1 Introduction to external databases 4.2 What are external databases used for? 4.3 External databases explained 97 98 108 Summary Questions References Case study: The Salvation Army Case study: Depaul UK – ‘iHobo’ app 125 125 126 127 128 Part 3 Setting objectives and strategies within direct marketing 5 Direct marketing objectives and strategies vi 133 Objectives Introduction 133 133 5.1 Setting direct marketing objectives 5.2 Creating direct marketing strategies 134 140 Summary Questions References Case study: Nissan GB Qashqai Launch 2011 TMW and Indicia Case study: Managing acquisition and retention – BK Bank Case study: Coventry City Football Club Appendix 1: Extracts from research carried out with season ticket and ex-season ticket holders, November 1999 Appendix 2: Extracts from research carried out at an open day, June 1999 Appendix 3: The typical fan – research findings Appendix 4: Research carried out from segmentation of supporters study, November 1998 Appendix 5: Casual fans: two types of casuals Appendix 6: The loyalty issue Appendix 7: Groups distinguished by match-day behaviour 153 153 153 154 156 162 167 168 168 169 172 173 173 Contents 6 The strategic influences on direct and digital marketing 175 Objectives 175 Introduction 175 6.1 6.2 6.3 6.4 6.5 Influences on direct marketing strategy 176 The use of marketing databases in the wider company environment 189 Knowledge management 191 Delivering direct marketing strategies 194 The total product/service 201 Summary 210 Questions 210 References 211 Case study: Social marketing in action: how direct marketing could be used for social good (Sport England) 213 Case study: Sony Professional 227 7 Relationship marketing and CRM 228 Objectives 228 Introduction 228 7.1 Relationship marketing 229 7.2 Customer relationship management (CRM) 236 Summary 246 Questions 246 References 247 Case study: Insureco – from direct sales to direct CRM 248 8 Digital marketing and the Internet 250 Objectives 250 Introduction 250 8.1 8.2 8.3 8.4 8.5 What is the Internet? 251 The growth of the Internet 254 How companies use the Internet 257 Distinctive features and benefits of the Internet 264 The impact of the Internet on direct and database marketing 267 Summary 281 Questions 282 References 282 Case study: Dycem Ltd 284 9 Social media 295 Objectives 295 Introduction 295 9.1 9.2 9.3 9.4 Social media objectives 297 How consumers use social media 299 How businesses use social media 301 Other commercial users of social media 301 vii Contents 9.5 Geo-location based offers – how businesses COULD use social media 9.6 Measurement and control of social media 9.7 Some social media sites (not mentioned elsewhere so far) offering great potential for marketers References Case study: Where the hell is Matt? 304 304 308 310 312 Part 4 Direct marketing implementation and control 10 Offers and incentives in direct marketing Objectives Introduction 317 317 10.1 10.2 10.3 10.4 319 320 326 338 Defining offers and incentives Using incentives in direct marketing Programmes to existing customers Programmes of contact to attract new customers Summary Questions References Case study: Bounty Case study: Barclaycard Freedom Case study: ARK Skincare Case study: Friend get Friend Campaign 11 Direct marketing media 347 347 348 349 350 353 354 357 Objectives Introduction 357 357 11.1 11.2 11.3 11.4 11.5 11.6 11.7 358 359 364 364 376 382 398 The range of media in direct marketing Factors affecting media choice Discussion of individual media The Internet E-mail Direct mail Mobile marketing Summary Questions References Case study: Xerox wins gold – how to make direct mail interesting Case study: Dell Case study: Pimm turns gold Case study: Heinz At home 12 Acquisition media Objectives Introduction viii 317 403 403 404 405 406 409 409 412 412 412 Chapter 15 Legal impacts on direct, database and digital marketing The Information Commissioner’s Office (2012n) Automated Decision Taking Available at: http:// www.ico.gov.uk/for_organisations/data_protection/t he_guide/principle_6/automated_ decision_taking.aspx [Accessed 18 June 2012] The Information Commissioner’s Office (2012o) Information Security (Principle 7) Available at: http://www.ico.gov.uk/for_organisations/data_protection/t he_guide/principle_7.aspx [Accessed 18 June 2012] The Information Commissioner’s Office (2012p) Sending personal data outside the European Economic Area (Principle 8) Available at: http://www.ico.gov.uk/for_organisations/data_protection/ the_guide/principle_8.aspx [Accessed 18 June 2012] The Information Commissioner’s Office (2012q) What opt‑in and opt-out mean? Available at: http://www.ico.gov.uk/for_organisations/privacy_and_electronic_communications/opt_in_ out.aspx [Accessed 18 June 2012] The Information Commissioner’s Office (2012r) Marketing Available at: http://www.ico.gov.uk/ for_organisations/sector_guides/marketing.aspx [Accessed 18 June 2012] The Information Commissioner’s Office (2012t) Cookies Available at: http://www.ico.gov.uk/for_ organisations/privacy_and_electronic_communications/t he_guide/cookies.aspx [Accessed 18 June 2012] 546 Index Aaker, D 142, 207 acquisition costs of customer loyalty, lack of 184–5 incentives 347 media for 363–4 combining in contact strategy 444–8 direct response radio 438–41 direct response television 420–8 electronic kiosks 441 household delivery/door-to-door distribution 434–8 inserts 430–4 interactive television 428–30 magazines 417–20 national press 412–17 on-line media 441–3 QR codes 443 Acxiom 47, 98–9, 117 Ad impression 252 Adabra 263 Adler, K 302 Adobe Social 307 advertising banner 370–2 brands, on internet 374–5 creative practice, origins in 458–61 brand building 461 as entertainment 460–1 left versus right brain appeal 459 whole brain advertising 462–3 pay-per-click 368–70 Advertising Standard Authority (ASA) 52 affiliate networks 370 affinity marketing 199–200 after-sales service, delivering 202 Alexa.com 296 Allen, Elliston 111 Allied Domecq 336 Amazon.com 270, 279 American Airlines 474–5 American Express 66, 204 Amnesty International 485 Anderson, M 309 Ansoff, I 105, 135 Ansoff’s Matrix 105, 135–6, 138 ARK Skincare (case study) 353–4 Armstrong, G 33, 37, 150, 413 on customer databases 62, 64, 69 on incentives 320–2, 325, 330 Asda 205 auction houses 261–2 Audi 209, 466 Avon Products Inc 345 awareness, interest, desire, action (AIDA) model 479–89 action 488–9 awareness 479–83 getting attention 480–1 headlines 481–2 illustrations 482 semiotics 482–3 desire 487–8 interest 483–7 art direction 483 needs, appealing to 484 Baier, M 9, 143 Bain & Co 20, 141, 148, 184 Baines, P 333 Baker, M.J 234–5 banner advertising 370–2 Barclaycard Freedom (case study) 350–3 Barda, T 451–4 Barker, B 415–16 Bassi, L.J 191 Batra, A 504 Bebo 296 Belk, R.W 256 Beneficial Bank 200 Berman, B 232 Bernbach, B 457 Berners Lee, Tim 251 Berry, L.L 141 Berry, M 464 Berryman, K 259 Bessen, J 189, 190 Bike Magazine 103 Bird, D 9, 11, 38, 40, 144, 420, 439 on creative practice 456, 466, 473–4, 482, 486–7, 490 547 Index BK Bank (case study) 156–61 Blanchard, D 505 blogs 442 Boddington, A 36 Bolger, M 350–3 Bolton, R 203 Boo 260 Booth, E 410–11 Boothby, K 319 Boots’ loyalty programmes 325 bounce-back loyalty programmes 344 Bounty (case study) 349–50 Bovee, C 458 Boxall, A 308 BRAD 413 brand advertising vs direct marketing on internet 374–5 brand building, creative practice 461 brand development through direct mail 388 ‘brand response’ marketing 462 brand switchers 346 branding 207–9 creative practice on 467–9 Brandwatch 307 Brassington, F Brin, Sergey 255 British Airways 16 British Telecom 17 Broadbent, S 456, 458, 460 Broadcast Committee of Advertising Practice (BCAP) 51 Brown, S 234–5 browsers 252 Bruhn, M 231 budgeting 509–14 setting 510–14 seven-step process 510–14 what to test 511 total test budget 511 responses required 512 estimate response rates 512 which tests to use 512 identify winners 512–13 roll out 513–14 Burrows, O 428 business data, databases for 36–8 Business Process Re-engineering (BPR) 182 Butcher, D 450–1 Buttle, F 229 Buttrick, M 434 Cable & Wireless 422 CACI 117 548 California Tourism 414 Call Credit 117 campaign responses, maximising from customer databases 67 Captain Morgan rum 303 card based loyalty programmes 336 magnetic stripe 336–7 smart cards 336–7 carelines 327 Carey, P 527, 530, 533–4 cars ownership databases 50 voice assistance in 374 case studies ARK Skincare 353–4 Barclaycard Freedom 350–3 BK Bank 156–61 Bounty 349–50 Coventry City Football Club 162–74 Crocs 450–1 Dell Computers 406–8 DePaul UK 128–9 Dycem 284–94 England and Wales Cricket Board Limited 492–3 Friends of the Earth 493–4 Gillette 451–4 Heinz 409–11 Insureco 248–9 Laphroaig’s Friend Get Friend campaign 354–6 Lynx 494–5 Matt Harding 312–13 Nissan 154–6 Pimm’s 409 ‘Rapid Pizza’ 30–1 Royal National Lifeboat Institution (RNLI) 518–25 Saco Drive-In 55–6 Salvation Army 127–8 segmentation in action 86–92 Sony 227 Sport England 213–26 Tesco Clubcard 92–3 Training and Enterprise Councils 94–5 Volvo 25–9 Xerox 405–6 Chaffey, D 10, 258, 305–6, 359, 379 CHAID analysis in customer databases 83–4 Chalasani, S 12 Chandiramani, R 258–9 Charlton, P 337 Chartered Institute of Marketing (CIM) cheetah in long grass 334 Chen, I.J 234–5 Index Christopher, M 11, 190 Circle Group 188 Citroën 328 Claritas 113 classical direct marketing 140–1 Clawson, T 328 clickstream 253 clubs as loyalty programmes 329–30 cluster analysis in customer databases 79–80 cold calling 392 Colgate Palmolive Collins, T 104, 115, 209, 232, 320–2, 396, 443, 458, 461–2 Committee on Advertising Practice (CAP) 51–2 Compaq 468–9, 471 Compete.com 296 competition, growth of 20 competitions/prize draws in loyalty programmes 345–7 compiled lists 385 computer processing costs 20 comScore Media Metrix 299–300 confirmit.com 304 Constantinides, E 297 consumer buying process 477–9 AIDA model 479–89 high involvement 479 instant pleasure goods 478 layout 489–90 routine purchase 477–8 consumer control 19–20 consumer sophistication 19 consumers, internet power shifting to 267–9 contact strategy in media for acquisition 444–8 relationship approach versus campaign approach 446–8 contextual marketing 399 Cook, N 284–94 cookies 253 cookies, use of 542–3 Co-operative Bank 107 Coopers and Lybrand 20 Corner, L 231 cost per click (CPC) 504 cost per thousand (CPT) 504 Courteux, R 80 Coventry City Football Club (case study) 162–74 Cowley, D 207 Cram, T 187, 198, 232, 322, 334 creative practice 456 advertising, origins in 458–61 brand building 461 as entertainment 460–1 left versus right brain appeal 459 whole brain advertising 462–3 direct marketing, origins in 461–4 execution 469–90 consumer buying process 477–9 framework for 474–7 practical action 475–7 rules, development of 469–74 rules versus originality 473 as research 457–64 strategic drivers 464–9 branding 467–9 budget 465 customer 464 media 465 offer 466 positioning 466–7 product 464 credit cards 148 credit options in loyalty programmes 343 Crocs (case study) 450–1 Crosby, L.A 231 cross-over testing 507 cross-selling 331–3 cross-selling in loyalty programmes 331–3 Cruikshanks, J 180 Cubitt, E 42 Cui, G 80 Curtis, C 458 customer clubs 233–4 customer control on the internet 264–7 customer data, nature of 78–9 customer databases analytical techniques 68–84 CHAID analysis 83–4 cluster analysis 79–80 customer data, nature of 78–9 explanatory techniques 77–84 frequency, recency, amount and category analysis 73–7 lifetime value analysis 69–73 modelling techniques 77–9 neural networks 80–1 regression analysis 81–3 time series methods 69–77 company applications 63 data analysis 61 profiling 62 segmentation applications 64–8 campaign responses, maximising 67 and customer needs 65–7 new prospects, targeting 67–8 purchase data 64–5 549 Index customer databases (continued) segmentation strategy 61–2 uses of 61–3 customer information, new role of 278 customer loyalty 141 and competition 203 declining value of 188 delivery by segmentation 195–6 delivery by targeting 198–9 in direct marketing 183 achieving 189 economics of 183–4 importance of 182–9 and pricing strategies 203–5 problems of 187–8 retention of 8, 184–7 understanding 187 Customer Marketing Technologies (CMT) 113 customer needs in customer databases 65–7 customer relationship management (CRM) 141, 236–46 described 237–9 and direct marketing, differences 239–40 evolution of in companies 245 putting into operation 244–6 state of play 242 strategy gap 242–4 and transaction marketing 240–4 customer retention and loyalty 20 customer service, communication preferences 377 customers existing and new 148–9 keeping 149–51 new, attracting 151–3 repeat, improved service for 266 Dahlen, M 321 Dalziel, M 284–94 data collection principles 35–8 data entry in marketing databases 42–5 data fusion in lifestyle databases 117–21 Data Locator Group 117 Data Protection Act (1998) 33, 47, 527–40 background to 527 compensation under 538 cookies 542–3 definitions 528–33 future of legislation 543–4 Information Commissioner’s role 528 notification under the Act 529–30 opt in/out under 540–2 550 principles of the Act 530–40 accurate and kept up to date 534 adequate, relevant not exesssive 534 data security 538–9 data subject rights 535–8 Fair and Lawful 530–4 overseas transfers 539–40 retained no longer than necessary 534–5 specified and lawful purpose 534 data sources for marketing databases 41–2 database marketing combining databases 123–5 see also direct and database marketing; marketing databases De Bonis, N 12 de Chernatony, L 207, 467 de Kooning, W 469 De Pelsmacker, P Dell, Michael 406–8 Dell Computers (case study) 406–8 Delta Airlines 149–50 Denny, N 200, 349–50 DePaul UK (case study) 128–9 DeTienne, K 189–90, 192 dialogue with customers 326–30 Diaz, A 262 Dibb, S 62, 295, 320, 419 digital marketing 7, 10 on internet see under internet Dignam, C 260 direct and database marketing budgeting for see budgeting combining databases 123–5 in communications mix 16–17 core strategy of and customer relationship management, differences 239–40 definitions 3–4, 9–12 as discipline efficient order fulfilling 280 and general marketing 12, 15 hard and soft information in 61 historical growth 17–22 reasons for 19–20 spend and trends in 20–2 and internet 267–81 consumer, power shifting to 267–9 customer information, new role of 278 impact on 267–81 infomediaries 269–77 and interactive marketing 279–80 and personal information management 271–7 Index and reactive marketing 279 transactions, recording 280 knowledge management in see knowledge management legal restrictions on 537 levels of 15–17 market research in 514–16 media for see media misconceptions new sectors, new ideas 18–19 objectives see objectives of direct marketing positioning dimensions in 466 practice of 12–15 and relationship marketing, boundaries 232–4 customer clubs 233–4 dialogue 233–4 and industry sector 235 service 232–3 strategic planning linkages 235 role of 146–8 strategic locations of 145 strategising, lack of 242 strategy see strategies of direct marketing as system 3–7 testing see testing campaigns in direct marketing total spend, UK 21 web-based and database based, merging 281 what it isn’t Direct Line Insurance 16 direct mail 8, 382–97 AIMRITE qualities 384–9 brand development through 388 compiled lists 385 inbound telemarketing 396–7 lists 385–90 changes to 385–6 outbound telemarketing 391–5 resonsive lists 385 telephone 390–1 direct marketing Direct Marketing Association (DMA) 18, 21, 37, 53, 117, 435 direct response radio 438–41 AIMRITE qualities 439–40 strength and weaknesses 440 direct response television (DRTV) 420–8 AIMRITE qualities 421–7 ‘double-duty’ response 426 profitability 426 strength and weaknesses 428 testing in 507 Disability Discrimination Act (1995) 535 disintermediation 253, 265 dog fooders 346 door-to-door distribution 434–8 Douglas, Gabby 302 Dove promotions 325–6 Dowling, G.W 204 Doyle, P 189 Dreze, X 189, 204 DRTV Centre 425 Dunn, 458 Dupin, D 70 Durand, P 331 Dycem (case study) 284–94 Dyer, M 303 e-acquisitions on internet 268–9 eBay 261–2 ebizmba.com 296 ebookers.com e-business 253 e-commerce 253, 263, 280 economies of scale, and internet 265 The Economist 35, 264, 385 Edison, Thomas 473 Ehrenberg, A.S.C 187, 477 Electoral Commission 97–8 Electoral Register 97–8 electronic kiosks 441 electronic mail 252–3 Ellis-Chadwick, F 10, 258, 359, 379 e-mail 376–82 AIMRITE qualities 378–80 changes to 380 characteristics of 376–8 emotional loyalty 333 England and Wales Cricket Board Limited (case study) 492–3 Eopinions.com 309 e-retention on internet 268–9 European Data Protection Directive 527 Evans, P.B 277 Experian Limited 109–11, 113–14, 117 explicit knowledge 192–3 external databases Electoral Register 97–8 geodemographic databases 108–14 costs and benefits 105–6 geodemographic products 97, 111–12 issues and trends 121–5 lifestyle databases 97, 113–25 extranet 253 Facebook 181, 299, 307, 442 Fairlie, R 109, 113 Fercell Engineering 344 551 Index Fifield, P 142 Fill, ? Financial Times 415 Finerty, L 192 First Direct 209 Fletcher, K 142, 190, 243–4 Foote, Cone and Belding (FCB) grid 460, 462–3 Forbes coremetrics 181 Foss, B 243–4 Foursquare 308 Fox, N 428 Fox, S 458 Foxall, G 477, 479–80 Fraser, J 267 free samples 343 free trials 343–4 Freemans Grattan Holdings 120 Freeview 421 frequency, recency, amount and category analysis on customer databases 73–7 frequent flyer programmes 337 Friends of the Earth (case study) 493–4 fruggers 102 Gale, D 151 Galvin, E 265 Gamble, P 237, 243 Garside, J 421 Gartner Group 181 Gates, Bill 264 geodemographic databases 108–14 costs and benefits 105–6 creation of 109–14 overview 108–9 strengths and weaknesses 122 geodemographic products 97, 111–12 gifts in loyalty programmes 345 Giga, Information Group 242 Gillette 436–7 case study 451–4 Gillin, P 441 Godsell, M 151 Goldsmith, R 477, 479–80 Goldwag, W 35–6, 40 Goodwin, J 432 Google 254–6, 367 Gorillaz 387 Gosling, C 122 Great Ormond Street Children’s Hospital 389 Gronroos, C 189, 230–1, 233–4, 241 Grossman, L 429 Group M Search 299 Groupon 342 552 Guinness 463 guitars 300 Gummesson, E 190, 229 Gurau, C 40, 62 Gwyther, M 260 Hagel, J 269, 279 Haig, M 401, 402 Halsey, B 395, 415–16, 502 Hamel, G 264, 266 Hansen, M.T 192 Hansotia, B 238 Harford, T 128–9 Harley Davidson 66, 195 Harris, L 192, 194 Harrison, S 455, 462, 467, 474 Hartley, M 189 Hastings Hotels 380–1 Hawking, Stephen 481 Heinz (case study) 409–11 Henley Centre 17, 20 high involvement buying process 479 Hilton Hotels 64 Hite, Morris hoarders 346 Hoffman, D 254, 266, 279 Holden, P 442 Holder, Derek 11, 330–1 home shopping 425, 430 hootsuite.com 307 Hopkins, C 460 horizontal positioning 467 Housden, M 10, 34, 62, 149–50, 331–2, 345, 359 household delivery 434–8 AIMRITE qualities 435–8 Howard, F 474–5 HP UK 471 HTML 253 HTTP 253 Humby, C 191 Hunt, L 55–6 Hunt, T 191 IBM 13–15, 198–9, 390 Ideya 305–6 inbound telemarketing 396–7 AIMRITE qualities 396–7 incentives acquisition by 347 definition 320 in direct marketing 320–6 advantages of 323 growth of 320–1 Index objectives 321 problems with 321–2 and loyalty 321 sales promotions 320 incentivised loyalty 333 infomediaries 269–77 current market 270–1 and loyalty programmes 277 possible problems 271–7 information, need for in marketing 59–60 Information Commissioner role of 528 Information Commissioner’s Office 97–8, 529, 531–2, 534, 536, 541–3 information technology (IT) and marketing changes 237 inserts 430–4 AIMRITE qualities 431–3 strength and weaknesses 434 instant pleasure goods buying process 478 Institute of Direct Marketing (IDM) 4, 10, 34, 149, 413, 461 Institute of Sales Promotion 321 Insureco (case study) 248–9 interactive marketing 279–80 interactive television 428–30 International Data Corporation 242 internet business cost base, lowered 267 companies’ use of 257–63 convenience of 266 defined 251–3 in direct and database marketing 267–81 consumer, power shifting to 267–9 customer information, new role of 278 impact on 267–81 infomediaries 269–77 and interactive marketing 279–80 and personal information management 271–7 and reactive marketing 279 transactions, recording 280 distinctive features and benefits 264–7 customer control 264–7 rules, changing 264 electronic mail 252–3 facts and figures 256–7 as flea market 265 growth of 19, 254–7 infomediaries 269–77 information flows on 265 interactive capability 266 jargon 252–3 and marketing strategies 142 media for see under media nature of and personal information management 271–7 speed of 266 transparency 265–6 ubiquity and omnipresence 265 websites on see websites Internet Advertising Bureau UK 18 Interscope records 303 intranet 253 Islamic Bank of Britain 67 Jackson, R 115–16, 123 Jacobs, R 505 Jardine, A 258–9 Java 253 Jaworski, B.J 192, 194 Jobber, D 60, 63, 65, 324 Jolson, M.A 231 Jones, (1992) 482 Jones, C 204–5, 209, 325, 378 Jones, T.O 146, 338 junk mail 8–9, 386 and direct marketing 431–2 Kass, G.V 83 Katzenstein, H Kauschik, A 305 Kennedy, J.E 458 Kern 208 Kilby, N 258–9 knock and drop 436 knowledge management 191–4 database marketing in 193–4 defined 191–2 nature of 192 tacit and explicit 192–3 Kohli, A.K 192, 194 Kollman, T 266 Kotler, G 62, 72 Kotler, K 35 Kotler, P 3, 38, 141, 150, 413, 497 on customer databases 62, 64, 69 on incentives 320–2, 325, 330 Kumar, V 186 Labour Party (UK) 417 Lancaster, G 278 land Rover 329–30 Lane, N 304 Laphroaig’s Friend Get Friend campaign (case study) 354–6 lastminute.com 258–9, 328 553 Index ‘lead-to-purchase’ data 115–16 Levitt, T Lexus 69 lifestyle databases 97, 113–25 creation of 114–17 data collected 115 data fusion 117–21 ‘lead-to-purchase’ data 115–16 predictive power of 116 strengths and weaknesses 122 and US presidential elections 118–19 VALS data 115 lifetime value analysis 69–73 Linkedln 309–10, 442–3 lists in direct mail 385–90 changes to 385–6 Little, E 234 Lloyds TSB 67 London Stock Exchange 111 Lotus 413 loyaltry cards 204–5 loyalty programmes to attract new customers 338–47 bounce-back 344 competitions/prize draws 345–7 credit options 343 free samples 343 free trials 343–4 gifts/premiums 345 member get member 344 offer-with-conditions 340–2 opt in/out mechanism 342–3 decline of 277 to existing customers 326–38 card based schemes 336 clubs 329–30 cross-selling 331–3 dialogue with 326–30 magazines 328–9 proof-of-purchase based 335 up-selling 330–1 uses of 333–8 and incentives 321 Lynch, D.M 60 Lynch, J.E 204 Lynx (case study) 494–5 McAdam, R 192, 194 McCorkell, G 17, 63, 187, 233, 462, 486 McCormack, M 344 McCreedy, S 192, 194 McDaniel, C 62, 295, 303, 320, 413 McDonald, M 134, 140, 467 554 McKibben, S 346 McKinsey 298, 301–3 magazines 417–20 AIMRITE qualities 418–20 strength and weaknesses 417 magazines in loyalty programmes 328–9 magnetic stripe cards 336–7 Mamas & Papas 118 Marandi, E 234 market research in direct marketing 514–16 campaign planning and development 515–16 database analysis 514–15 using external databases 101–3 marketing databases business data 36–8 data collection 35–6 data sources 38–40 commercially available lists 40 direct contact companies 38 no direct contact 38–40 principles 38 data to hold 36 definitions 33–4 management issues 40–51 applications 49–51 campaign responses 50–1 data entry 42–5 data sources 41–2 in house or bureau choice 45 management over time 47–9 people issues 45–6 minimum requirements 34–5 software 34 self-regulation 51–3 use of in wider environment 189–91 Marketing Magazine 320 marketing mix in marketing strategy 141 marketing planning, relationship marketing in 234–6 Marketing Sherpa 363 Marketingcharts 181 Marks & Spencer 205 Marriott Hotels 203 Marsh, H 205 Martin, D 456, 458, 460, 463 Martineau, P 458 Mashable 374 mass customisation 178–80 Matt Harding (case study) 312–13 Matthews, B 187, 189 media, proliferation of 19 media for direct and database marketing Index for acquisition and retention 363–4 see also under acquisition AIMRITE, framework for 359 choice of, factors affecting 359–64 choosing 359 direct mail 382–97 e-mail 376–82 on internet 364–76 affiliate networks 370 banner advertising 370–2 brand advertising vs direct marketing 374–5 business use of 366 as media cluster 364 medium as message 361 mobile marketing 398–402 proportions spent on 366 range of 358–9 in testing campaigns 506–8 member get member loyalty programmes 344 Metropolitan Police 433–4 Microsoft 177 Mike Colling & Company 427 Mills, E 254–6 Ministry of Justice 385 Mitchell, A 92, 115, 177, 203, 333 on digital marketing 259, 265, 267, 269, 279 on direct marketing assumptions 123–5 on personal information management 271–7 Mitchell, P 204 Mitussis, D 230, 241, 244 mobile marketing 398–402 AIMRITE qualities 400–2 Mobile Marketing Association 398 modelling techniques in customer databases 77–9 Mogg, T 296, 309 moneysupermarket.com 270–1 monopoly loyalty 333 Morris, G 263 Motorola 178 Mouncey, P 515 mumsnet.com 373 Murphy, D 258–9 Nairn, A 242, 434 Nash, E, 9, 166 on creative practice 463, 467, 474, 477, 482–3, 486, 488–9 national press 412–17 AIMRITE qualities 413–17 National Society for the Prevention of Cruelty to Children (NSPCC) 65 National Trust 107–8 Neff, J 149–50 Neilsen 309 neilsen.com 304 neural networks in customer databases 80–1 new prospects from external databases 104–8 market development 107 product development 107 strategic options 105–8 targeting from customer databases 67–8 Nissan (case study) 154–6 Norwich Union 331 notification under the Data Protection Act (1998) 529–30 Novak, T 254, 266, 279 Nucifora, A 12 Nunez, J 189, 204 objectives of direct marketing 134–40 allowable spend per customer 137–8 customers, emphasis on 136 SMART objectives 139 and strategies 140 O’Brien, L 204–5, 209, 325 O’Connor, J 265 Ofcom 53, 60, 367, 377 Ofcom Broadcast Code 52–3 offers in direct marketing 319 offer-with-conditions loyalty programmes 340–2 Office for National Statistics 110 Ogilvy, D 198–9, 208, 320, 326 on creative practice 456–60, 464, 467, 473, 482–4, 486, 489–90 O’Guinn, T 420 Olenski, S 299 O&M advertising 460 O’Malley, L 230, 241, 244 one-to-one marketing 177–80 on-line media 441–3 opt in/out under Data Protection Act (1998) 540–2 mechanism in loyalty programmes 342–3 opt-in email 253 O’Reilly, L 421 outbound telemarketing 391–5 AIMRITE qualities 391–5 four Ps of marketing 11–12, 141 Pace Sports Management 301 Page, Larry 255 paradigm shift 253 Pareto’s principle in customer databases 64–5 passive competitors 346 Patron, M 66, 80, 83, 242–3 555 Index Patti, C 305 Payne, A 12, 183, 230 Pearson, D 423 Pearson, S 12, 207, 505–6 Peattie, K & S 322, 345–6 Peppers, D 62, 144, 150, 270, 441 influences on direct marketing 177–9, 204 Persil, super-concentrated 101–2 personal information management 271–7 Peters, L 279, 373–5 Peterson, R 277 Pettitt, S Pew Forum 67 Phillips, T 191 Piercy, N 189, 190, 192 Piller, F 179 Pimm’s (case study) 409 Pine, B.J 178, 179 Pinsent Masons 541–2 Pinterest 308–9 place in four Ps 11 Polanyi, K 192 Polock, W 83 Pomegranate 353–4 portal 253 Porter, M 142 positioning 206–7 creative practice in 466–7 horizontal 467 premiums in loyalty programmes 345 Pressey, A 187, 189 price in four Ps 11 price loyalty 333 price premium of customer loyalty 185–6 priceline.com 262 pricing strategies and customer loyalty 203–5 principles of the Data Protection Act accurate and kept up to date 534 adequate, relevant not exesssive 534 data security 538–9 data subject rights 535–8 Fair and Lawful 530–4 overseas transfers 539–40 retained no longer than necessary 534–5 specified and lawful purpose 534 Privacy and Electronic Communications (EC Directive) Regulations 2003 541 Privacy and Electronic Communications (EC Directive) ( Amendment) Regulations 2011 542 Procter & Gamble 374–5, 429–30, 463 product in four Ps 11 556 product model 319 product switchers 346 product/market decision and competitive advantage 142 profiling from external databases 98–100 promotion in four Ps 11 proof-of-purchase based loyalty programmes 335 Pryce, K 233 Publicis Dialog 354–6 purchase data from customer databases 64–5 setting budgets 65 PWC IAB 18 QCi 242–3 QR (Quick Response) codes 418, 443 Quantcast.com 296 Quinton, B 425 QVC 425 Radio Advertiser’s Bureau 438 Radio Frequency Identification (RFID) 179 Ranchhod, A 40, 62 ‘Rapid Pizza’ (case studies) 30–1 Rapp, S 104, 115, 209, 232, 320–2, 396, 443, 458, 461–2 Raza, J 80 reactive marketing 279 Reader’s Digest 17, 346, 467 Red Cross Gulf War Appeal 393 Reeves, R 207, 460 regression analysis customer databases 81–3 Reichheld, F.F 334 on customer loyalty 182–7, 189, 195–6, 198, 209 on direct marketing objectives 134, 141, 143, 149–50 Reinartz, W 186 reintermediation 265 relationship approach to contact strategy 446–8 relationship marketing 141, 229–36 and direct marketing, boundaries 232–4, 239 customer clubs 233–4 dialogue 233–4 and industry sector 235 service 232–3 strategic planning linkages 235 key concepts 231 in marketing planning 234–6 understanding and defining 229–32 resonsive lists 385 retention of customer loyalty 8, 184–7 media for 363–4 Index revenue growth of customer loyalty 186–7 reverse auction houses 262–3 Reynolds, J 114, 346 Richards, A 410 Roberts, M.L Rogers, M 62, 177–9, 204, 270, 441 Roncorroni, S 203, 395, 443 Rory Sutherland Direct Mail 383–4 Rosenfeld, J.R 375 Rosier, B 260 routine purchase buying process 477–8 Rowan, W 378 Royal Mail 435, 437 Royal National Lifeboat Institution (RNLI) 392 case study 518–25 Royce, J 187 RSPCA 427, 467 Rubin, C 299 Ryan, D 378 Sabbagh, D 527 Saco Drive-In (case study) 55–6 Sahay, A 278 Sainbury’s loyalty programmes 325 sales promotions in direct marketing 322–6 as incentives 320 Salesforce Marketing Cloud 307 Salvation Army (case study) 127–8 Sampler, G 266 Scarborough, H 194 Schifrin, M 332 Schultz, A 180 Schultz, D 304–5 Schwab, V 486 Schwartzman, E 441 Scientia Data 117 search engines 253, 367–70 optimisation of 367–70 pay-per-click advertising on 368–70 segmentation in action (case study) 86–92 delivery of 194–6 by loyalty 195–6 using external databases 101–3 strategy in customer databases 61–2, 64–8 applications 64–8 campaign responses, maximising 67 and customer needs 65–7 new prospects, targeting 67–8 purchase data 64–5 self-regulation of marketing databases 51–3 sell during ‘hold’ on telephone 443 seller-controlled websites 260–1 Selnes, F 231 semiotics 482–3 service in relationship marketing 232–3 Shani, D 12 Shaw, R 36, 44 Sherman, M 458 Simms, R 301 Singer, M 269 SJ, F 297 Sleight, P 100, 102, 113, 120 smart cards in loyalty programmes 336–7 SMART marketing objectives 139 smartphones, ownership 399 Smith, I 386 Smith, P 322, 359, 479 social media 295–310 free services or content 307 gains from implementation of Web 2.0 303 growth of access UK 300 measurement and control of 304–8 mobile engagement of 304 most popular sites 296 objectives 297–9 paid for tools 307–8 sites of great potential 308–10 technical enablers 297 in testing campaigns for direct marketing 505 uses of 302 by business 301 by companies 302 by consumers 299–301 by other commercial 301–3 utility and applications 298 and value chain 301 worldwide engagement 300 Social Mention 307 society, fragmentation of 19 Sons of Maxwell 300–1 Sony (case study) 227 Sony Walkman 12–13 Spalter, M 279 Spiller, L 143 Sport England (case study) 213–26 Starkey, M 228, 242–4, 246 Steel, E 301–2 Stevens, J 335 Stone, B 9, 70, 74, 98, 210, 505 on creative practice 476–7, 481, 486, 490 on incentives 343, 347 on media 359, 394 Stone, M 36, 44, 189, 237, 242–4 557 Index strategic influences on direct marketing 176–89 customer loyalty, importance of 182–9 future of direct marketing 180–2 mass customisation 178–80 one-to-one marketing 177–80 total product/service 201–10 strategies of direct marketing 140–53 delivery of 194–201 affinity marketing 199–200 by segmentation 194–6 by targeting 196–9, 200–1 essence of strategy 142–5 framework for creating 145–6 using 146–53 influences on see strategic influences on direct marketing above major influences 140–2 and objectives 140 problems with 140 role of 146–8 and tactics, compared 318 testing and control 147–8 suggers 102, 514 Surowiecki, J 177 Swinyard, W.R 66 tacit knowledge 192–3 tactics and strategy, compared 318 tailored service, delivering 202 Tapp 328 targeting, delivery of 196–9, 200–1 by customer profiles 198 by loyalty 198–9 previous contact 197 timing in 197 Taylor, J 359 Taylor, M 527 T-cube 120–1 teenagers 440 telemarketing inbound 396–7 outbound 391–5 telephone 390–1 reassurance with 395 sell during ‘hold’ on 443 Temkin, B 304 Tesco 205 Tesco Clubcard 191, 325, 337 case study 92–3 financial benefits of 335 testing campaigns in direct marketing 497–509 benefits of 499–502 definition 498–9 558 different media 506–8 doing without 499–502 financial justification 503–5 getting it wrong 498 sample size and uncertainty 509 social media, using 505 test variables 505–6 uncertainty, calculating 508–9 what is it 497–9 Therezien, L 258–9 Thinkbox 422 Thomas, B 10, 34, 62, 149–50, 331–2, 345, 359 Thompson, J.A 189–90, 192 ticket management systems 281 Time Group Limited 470 time series methods in customer databases 69–77 T-mobile 422 TNT Post 435, 437 total product, delvering 205–10 branding 207–9 direct distribution 206 incentives, using 209–10 positioning 206–7 Total Quality Management (TQM) 182 total service, delivering 201–5 after-sales 202 pricing strategies 203–5 regular communication 202–3 tailored service 202 Touryalai, H 332 Trackur 307 traditional marketing methods 20 Training and Enterprise Councils (case study) 94–5 transaction marketing 240–4 True Social Metrics 305–6 Tumblr 309 Tweetreach 307 Twitter 299, 307, 443 Tylee, J 410–11 typeface, importance of 490 Uhrenbacher, S 258–9 uncertainty in testing campaigns calculating 508–9 and sample size 509 Uncles, M 204 United Airlines 300 university sector, marketing in 16–17 up-selling in loyalty programmes 330–1 uses of 98–108 market research and segmentation 101–3 new market prospects 104–8 profiling 98–100 Index VALS data 115 Vaughan, R 463, 477 Verheof, P 205 virtual customers 119 voice assistance in cars 374 Voltaire Volvo (case study) 25–9 Wallinger 42 Wall-Mart 205 Walters, D 278 WARC 22 Ward, G 120 Wasserman, T 442 Web 2.0 295, 303 web-based and database marketing, merging 281 Webber, R 101, 110–11 websites 252 AIMRITE qualities 372–6 auction houses 261–2 characteristics of 365–72 customer behaviour with 372 as medium 372–6 reverse auction houses 262–3 seller-controlled 260–1 Weiber, R 266 Weitz, B 331 Wells Fargo 332 Wheeler, M 303 Whitewater 427 Whitten, I 420 Whitten’s Wine Club 340–1 whole brain advertising 462–3 Wilson, H 134, 140 ‘Wine Direct’ operation 323 Woodcock, N 43, 189 on relationship marketing 228, 237, 242–4, 246 World Gold Council 472–3 World Wide Web 253 worldwide population 257 Wright, G 190 Wurster, T.S 277 Xerox (case study) 405–6 Yang, Z 277 Young, J.W 487 Young, M 423 YouTube 299 Zwass, V 265 559 ... www.pearson-books.com Principles of Direct, Database and Digital Marketing Principles of Direct, Database and Digital Marketing Alan Tapp Ian Whitten Matthew Housden Contents Principles of Direct, Database and Digital. .. definition of direct, digital and database marketing 1.2 Defining direct, digital and database marketing Direct (and digital and database) marketing is a rather complex collection of principles and. .. Library of Congress Cataloging-in-Publication Data Tapp, Alan [Principles of direct and database marketing. ] Principles of direct, database and digital marketing / Alan Tapp, Ian Whitten and