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Direct and Database Marketing

Direct and Database Marketing

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Published by irfeea

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Published by: irfeea on May 25, 2012
Copyright:Attribution Non-commercial


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In the information-intensive marketplaces of the networked economy, database-related marketingtechniques have gained unprecedented popularity. Their development is based on the assumption thatgreater capturing of customer information in digital databases leads to superior insights about the customer.The proliferation of customer databases,According to (Vagionis and Komilis, 1999), database is the collection and systematic organization andclassification of information. Database constitutes a collection of data which emanates from a careful choiceof elements that result from a suitable organization and management of information, with base program thatcorresponds in concrete needs. More specifically, database marketing can be defined as gathering, savingand using the maximum of useful knowledge for actual and prospective customers, including behavior andtheir geo-demographic profile in order to enable marketers to make better decisions and accomplish the
organizations‟ objectives (Jutkins, 1994).
 With about 3,100 company-operated stores and about 200 franchise stores in 36 countries and online ordersshipped to over 90 countries, the company reaffirmed its goal of growing total sales outside of NorthAmerica and online to about 30 percent by the end of fiscal 2013. Sales outside North America sucha as inMalaysia increased 16 percent in the first half of the year, while revenue from its e-commerce businessduring this period increased 19 percent across its entire portfolio. (Gap.Inc, 2011).Gap direct marketing is marketing where the marketer approaches the customer directly with some form of communication in order to solicit a response. Moreover, Gap. Inc, direct marketing has one maincharacteristic and that is it approaches the customer directly. The way in which the customer is approachedcan vary from email marketing to telemarketing, direct mail or word-of-mouth advertising.The main benefit that Gap. Inc like about direct marketing is that they can see exactly how many positiveresponses they have obtained. They can track and measure the response to a particular piece of directgarment brand marketing. By seeing which direct marketing efforts bring the best results they are then ableto improve on their marketing efforts and so get even better results.
Gap Direct Marketing Strategy in Malaysia:
Direct marketing exposes customers to merchandise through an impersonal medium such as a catalog,
 brochure, and telephone conversation. The inability to inspect tangible merchandise makes the buyer‟s
decision more risky. This is a serious problem as Gap executive notes in Malaysia, since many customers inMalaysia place great value on browsing through the merchandise they will buy and take home. To reducethe Malaysian
customers‟ risk and to effectively
compete against Gap Old Navy Jeans for example ondisplay, Gap offer
generous return policies such as, For example, fig-1 L. L. Bean is famous for its earlyintroduction of an unconditional, no questions-asked warranty of its merchandise. Gap Inc. follows the suiteand they did the tried and tested direct market strategy, with variations in warranty policies. Such asexchanging the Top Value merchandise, but not refund, charge restocking fees, or impose time limits onreturns.Fig: 1 - L. L. Bean Return Policy: Source: L.L Bean. (2012).
It is reported that return rates at L.L. Bean which had historically been around 5% of sales jumped to 14%. :(L.L Bean, 2012).
Therefore, it is important for Gap. Inc, in Asian context, to create detailed statisticalmodels of their returns, and which Gap company, could learn from the market feedback they are getting toapply the above model for example. Gap Inc, should also create the market database infrastructure to havecomplete historical records for the customer behavior. Where by indexing the customer as a quick returneror a late returner. Thus, retaining the customer in the computer generated rating system from 1-5, where by#1 implies to quick returner and #5 scores as late returner. Moreover, major factor in scoring customers fordirect mailing e.t.c, because it will have a major effect on the customer lifetime value.It is also important for Gap, Inc, to have a customized model that is sophisticated enough to judge subtledifferences in races in Malaysia, rather than solely relying on average return rates. Thus, intervention may
be appropriate for a customer with a low overall average return rate if that customer buys primarily low-return-rate merchandise but returns it at an unprofitably high rate for that class of merchandise. Likewiseintervention for example sending un-necessarily e-mail, direct sales postal mail, may be inappropriate forthe High end Malaysian customers who seems to have a high return rate. Understanding the pattern of a
customer‟s returns also will help to flag
customers who are making particularly late returns or simply tobetter predict the operational flow of returnsFurthermore, company might also be interested in understanding returns to project operational staffing orprocurement demands or to develop operational standards. An early warning system could be developed thatwould warn of problems with an item in time (JIT, Just in Time), Management, to adjust ongoing ordersfrom suppliers.
Social Media investments in Malaysian Market.:
Gap Inc, to hit $1.5 billion in revenue by the end of this year, on track to reach $2 billion in revenue andoperating income of $500 million by the end of fiscal 2014.(Gap, Inc, 2011). Furthermore, Top executivesaid
that his team will considerably expand its successful “ship
store” pilot
program in Malaysia.Which taps into store inventory to meet strong online demand in Malaysia.Rock-solid, Banana Republic brand, and coming Athleta stores in Malaysia by the end of the fourth quarterof fiscal gives the rise in
shopping and the strength of the company‟s new mobile commerce platform,
conversion rates have tripled over the past year. The division also expects to test its ship-from-store conceptin Old Navy in Malaysia.Moreover, to constantly, engaging with stakeholders, Gap, Inc creates dedicated Gap Malaysia Facebook site: https://www.facebook.com/gapmalaysia, which has so far 139,510 likes so far. Gives great placementfor the company to react the market needs very quickly.

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