Database marketing is the technique of gathering all the information available about customer, leads and prospects into a central database and using that information to drive all marketing efforts. The information is stored in a marketing database and can be used at both the strategic and tactical levels to drive targeted marketing efforts. (www.itsallgoodwebdesign.com/html/database_marketing.html). A database is a collection of data arranged for computer retrieval. Marketing can defined as "performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need satisfying goods and services from producer to customer. A marketing database is described as a collection of data, such as customer name, addresses and etc. In addition, database marketing can define as "gathering, saving and using the maximum amount of useful knowledge about customer and prospects". (Denise, Geoffrey, Dawn and Linda, 1997).
There are a lot of benefits that can be sought using database which can measure the value of their individual customers, send targeted promotion to any segment of their customer and prospect lists, track promotion efforts, measure responses, purchase and the return on investment for every dollar spent on their promotional efforts and etc.
For example, your clothing store is going to have sale on children's clothing. Rather than mail a postcard to the whole customer list, you mail the postcard only to customers who have purchased children's clothing in the past. The result of that targeting effort will be reduced marketing costs and increased return on your investment. (www.itsallgoodwebdesign.com/html/database_marketing.html).
The benefit of the database marketing to the firm is the firm can easily build up a customer loyalty by using it. For example, perhaps the best known database success story is American Airlines Advantage Club which was the pioneer in airline loyalty programs. The Advantage Club...