Database:
A database refers to the collection of comprehensive information about customers and prospects such as demographic and psychographic profiles, products and services they buy, and purchase volumes, etc., arranged in a manner that is available for easy access and retrieval. Databases allow marketers access to an abundance of information, – often through a computer system – such as sales reports, news articles, company news releases, and economic reports from government and private agencies, etc., that can be useful in making various marketing decisions.
Internal Records :
Modern technology is making information required for marketing decisions ever more accessible. It is possible to track customer buying behaviour and better analyse and understand what customers want. The integration of various modern technologies is allowing companies to access valuable information. Ever increasing numbers of market researchers and managers are having access to e-mail, voice mail, teleconferencing, video conferences, and faxes.
Internal database is the most basic starting point in developing a strong MIS. Marketers, not just the growing numbers of large retailers in our country, need information about what is demanded more by customers and what is not. Internal record systems help in tracking what is selling, how fast, in which locations, to which customers, etc. Availability of all such information relies on reports available on orders received from sales people, resellers, and customers, copies of sales invoices, prices, costs, inventories, receivables, payables, etc. Getting inputs and designing systems to provide right data to the right people at the right time is critical for marketing decisions.
Accumulated data about customers in various internal records is an important source to build database such as customer inquiries, existing customers and past purchasing histories of these customers. The key information in this regard consists of RFM (Recency, Frequency, and Money) variables. Recency refers to the time of purchase, frequency reflects the number of times the customer made a product purchase from the firm, and money denotes the quantity and monetary value of the purchase. RFM helps analyse and develop a customer index that reflects which customers are more profitable for the business. USP Age, in its September 2004 issue has reported that BPCL has been compiling its database for the past four years and has a formidable collection of more than 1.4 million customers. Shopper’s Stop has been compiling data of its regular customers through its loyalty programme, First Citizen. Further, a company in India can obtain a database for as little as 50 paise to Rs. 5 per contact. Companies involved in Direct Marketing such as Catalogue Selling and Mail Order Marketing are heavy users of databases.