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Mass Marketing Vs One To One Marketing

Mass marketing
Mass Marketing is a type of marketing (or attempting to sell through
persuasion) of a product to a wide audience. The idea is to broadcast a
message that will reach the largest number of people possible. Traditionally
mass marketing has focused on radio, television and newspapers as the
medium used to reach this broad audience.

Background

Mass marketing or indifferent marketing has its origins in the 1920s with the
inception of mass radio use. This gave corporations an opportunity to appeal
to a wide variety of potential customers. Due to this, variety marketing had
to be changed in order to persuade a wide audience with different needs into
buying the same thing. It has developed over the years into a world-wide
multi-billion dollar industry. Although sagging in the Great Depression it
regained popularity and continued to expand through the 40s and 50s. It
slowed during the anti-capitalist movements of the 60's and 70's before
coming back stronger than before in the 80's, 90's and today. These trends are
due to corresponding upswings in mass media, the parent of mass marketing.
For most of the twentieth century, major consumer-products companies held
fast to mass marketing- mass producing, mass distributing and mass
promoting about the same product in about the same way to all consumers.
Mass marketing creates the largest potential market, which leads to the
lowest costs.
The Evolution Into Mass Marketing

Mass marketing first emerged as a workable strategy in the 1880s. Prior to


that time, local markets in the United States were geographically isolated,
few products had brand recognition beyond their local area, and continuous
process technology had not yet come into its own. Profits in the fragmented
markets were based on a low volume/high price strategy.

Between 1880 and 1890, several things occurred that eliminated the barriers
and enhanced the appeal of mass marketing. Both the railroad and telegraph
systems were completed, thus providing the potential for nationwide
distribution and communication. Mass-production techniques and equipment
were refined and adapted to a variety of products. Additionally, the
population was growing rapidly, the country was recovering from the Civil
War, and the largest depression in U.S. history until that time was ending.

These favorable circumstances by themselves did not create mass marketing.


Entrepreneurial vision, drive, organization, and resources had to be added to
implement the strategy. From 1880 to 1920, early innovators in many
different industries stepped forward to seize the opportunity. Although the
total number was relatively small—one or a few per industry—the impact on
the U.S. economy was enormous. Many of these pioneering marketers built
national reputations for their brands and companies that continue today.

Two of the most widely recognized examples are Ford and Coca-Cola. Henry
Ford applied the concept in the automobile industry. His Model T was
conceived and marketed as a "universal" car—one that would meet the needs
of all buyers. By adopting mass-production techniques and eliminating
optional features, he was able to reduce costs and sell his product at an
affordable price. The combination catapulted the Model T to the top of the
market. As a Candler was equally successful at using mass marketing in the
softdrink industry. Like Ford, he also viewed his product as being the only
one that consumers needed. His initial mass-marketing efforts focused on an
extensive national advertising campaign. As product recognition grew, he
established a network of bottling operations throughout the county to
facilitate sales and distribution. No product in history has matched Coca-
Cola's total sales.

Other mass marketers of this era achieved success by focusing on one aspect
of the approach. Manufacturers such as Quaker Oats, Proctor and Gamble,
and Eastman Kodak used refined mass-production techniques to establish
consistent product quality. Still other manufacturers, such as Singer Sewing
Machine, developed integrated distribution systems to ensure reliable
delivery to the market. In general merchandise retailing, Sears and
Montgomery Ward developed a mass-marketing niche through mail order.
Grocery retailer A&P, on the other hand, established its mass market through
private branding and systematic operation of multiple stores.

Mass marketers continued their domination in major industries well into the
1960s. Many of them maintained essentially the same mix, while others
expanded their use of the strategy. Sears and Montgomery Ward, for
example, added store retailing in the 1920s. In the 1930s, supermarkets
appeared with a different emphasis than previous grocery retailers—national
brands. Over the next several decades, large discount stores came into
prominence with a format similar to the supermarkets.
The Evolution from Mass Marketing

The successes of mass marketers led to the appearance of an alternate


approach to marketing. Potential competitors wanting a share of the large
market had two options. One was to replicate the organization, promotion,
and distribution systems of the company that had created the mass market.
The other was to go after a part of the market that had unique needs by
developing products specifically for them. For nearly all of the challengers,
building an operation to parallel that of an entrenched industry giant was not
profitable or realistic. As a result, most of them gravitated to the more
attractive market-segmentation approach. (Figure 1 shows the different
demand curves for mass marketing and market segmentation.)

General Motors used market segmentation as early as the 1920s when it


produced different models for different groups of customers to compete with
Ford. Pepsi made a series of attempts, beginning in the 1930s, to crack into
Coca-Cola's market share through changes in product and targeted promotion
strategy. In the 1940s, television provided a powerful tool for both new and
old companies to reach segmented markets. By the 1960s, market
segmentation had surpassed mass marketing as the primary approach.

Mass Marketing Now and in the Future

In spite of the shift to market segmentation, mass marketing


continues to be used in many situations and has potential for others.
Products with broad appeal and few distinguishing characteristics
—such as household cleaners, potato chips, and pain relievers—
lend themselves to mass marketing just as they always have. At the
same time, businesses that use mass marketing for their goods and
services continue to look for ways to enlarge their markets by
designing different appeals for noncustomers. Chewing gum, for
example, is presented as an alternative to smoking. Utilities and
credit cards offer special rates to entice potential high-volume
customers. And discount retailers, such as Wal-Mart, match their
mix of mass-marketed products to local customer bases.

Any current or future product that has mass-marketable attributes


will likely be marketed by some form of the approach. In addition,
the Internet provides a new medium for mass-marketing initiatives,
and newly opened international markets offer a possible arena for
mass-marketing opportunities.

One-to-one marketing
One-to-one marketing (sometimes expressed as 1:1 marketing) is a customer
relationship management (CRM) strategy emphasizing personalized
interactions with customers. The one-to-one marketing of interactions is
thought to foster greater customer loyalty and better return on marketing
investment. The concept of one-to-one marketing as a CRM approach was
advanced by Don Peppers Only the term is new; the approach is almost as
old as commerce itself. In the past, for example, proprietors of a general
store would naturally take a one-to-one approach, remembering details about
each customer's preferences and characteristics and using that knowledge to
provide better service. One-to-one marketing seeks to reinvest marketing
with the personal touch absent from many modern business interactions.

There are two main definitional characteristics which distinguish it from


other types of marketing or advertising. The first is that it attempts to send its
messages directly to consumers, without the use of intervening media. This
involves commercial communication (direct mail, e-mail, and telemarketing)
with consumers or businesses, usually unsolicited. The second characteristic
is that it is focused on driving purchases that can be attributed to a specific
"call-to-action." This aspect of direct marketing involves an emphasis on
traceable, measurable positive (but not negative) responses from consumers
(known simply as "response" in the industry) regardless of medium.

If the advertisement asks the prospect to take a specific action, for instance
call a free phone number or visit a website, then the effort is considered to be
direct response advertising.
• One-to-one marketing is treating different customers in different ways.
This focus demands meticulous knowledge of the customer, based on
his or her value and potential lifespan in the heart of the company.
• One-to-one marketing is a very fashionable term in the marketing
world, but to apply it is a complex thing, since it demands a previous
capacity for segmentation and very refined profiling.
• One-to-one marketing strategies are directly related to Marketing One-
to-One theories, which entail an entire organizational shift towards the
customer, instead of the product.
• The four basic pillars on which One-to-One Marketing rests are:
identify high-value customers, differentiate proposals for different
customers, interact with the customer, and customize the business
culture.
• Not all one-to-one marketing strategies are profitable: every company
must predict the return on investment in this type of strategy, before
they go into it.
• We should not offer excessively personalized products and services.
“A la carte” Marketing must satisfy the customer’s need to be
individualized; in no case should that be confused with an excess of
proposals.
• It’s not the customer who must define him or herself to the provider,
personalizing their demands. It is the obligation of the provider to
know these needs and anticipate them.
“Treating different customers in different ways”. This is the premise
underlying One-to-One Marketing, a new concept of sales and
marketing management, whose philosophy puts the customer at the
center of the company. Derived from One-to-One Marketing theories,
one-to-one marketing strategies and Individualized Marketing opt for
exhaustive knowledge of the customer and his or her needs, in order
to provide them with what they need, when they need it, and
differentiate them clearly from the rest of customers. However, One-
to-One Marketing techniques have limitations, which can only be
overcome by an accurate Customer Intelligence strategy.

1. Individualized Marketing: treating different


customers in different ways

Sales has traditionally been an assisted process... When someone goes to a


dealer to buy a car, the salesperson acts as an advisor, steering the customer
towards the product that most fits his or her tastes and needs. It is up to the
salesperson’s intuition to figure out what impulses move that potential
customer and play with those purchasing impulses and habits in order to
close the coveted deal. Intuition is an excellent sales tool, but it relies on
factors as arbitrary as they are subjective. The skills of the people monitoring
a sales process must be supported by empirical and provable information,
and that only exists if a Customer Intelligence strategy has been
implemented in the company.

“One-to-one marketing” has been a very fashionable term in the marketing


world recently. If we go back to the example we opened the chapter with, we
will see that the principle of “personalizing” the relationship with the
customer is not very far from the elements we mentioned: orienting, guiding,
collaborating with the customer not only in the purchase / sale process, but
also before and after.

However, for several years now, the term “one-to-one marketing” has
proliferated to the point of being applied to almost any marketing action,
from a mere letter to a customer with their name and surname, to setting up a
mobile phone or PC screen according to the consumer’s taste. Today, “One-
to-one marketing” is a word on the minds of the majority of marketing and
sales experts, but which translates into true results on only a few occasions.

. What is one-to-one marketing? Perhaps the simplest and most accurate


definition is “treating different customers in different ways”, in order to
increase their level of linking and loyalty to the company. It’s as simple and
as complicated as this. When there are a dozen customers, personalizing
treatment is relatively easy. But what happens when there are thousands or
millions? Every company with a large customer portfolio, especially those
that are aimed towards the final customer – although this includes companies
that work in B2B -, know that in a market as competitive as today’s, in which
the customer is well-informed and changes providers with extreme ease,
“personalizing” its relationship with the customer is one of the keys to
success.
“One-to-one marketing is not only being able to call the
customer by his or her first name. It involves creating very
refined profiles, based on the customer’s value and potential
lifespan”

Several years ago, Don Peppers and Martha Rogers revolutionized the world
of marketing when they coined the phrase “One-to-One”, which calls for
differentiated strategies for differentiated customers, within the framework of
an entire organizational shift towards the customer. Since then, “one-to-one
marketing”, “One-to-One” , and “Individualized Marketing” are expressions
that have invaded marketing plan presentations, obsessed directors in this
area, and appeared in thousands of articles; but in practice, they are efficient
in very few cases.

One-to-one marketing is not only being able to call someone by their first
and last names from a “contact center”. One-to-one marketing is not only
running a direct marketing campaign that identifies its target audience one by
one. One-to-one marketing is about refining segmentation strategies until we
obtain very specific individual or company profiles, with similar
characteristics, but also with a similar value and potential lifespan for the
company, and apply marketing and sales actions with them accordingly.

2. Accurate one-to-one marketing requires intelligent


segmentation
It is essential to understand that there can be no accurate one-to-one
marketing without first adopting accurate segmentation strategies. The
American banking entity First Union recently launched a complex strategy to
segment its customer portfolio, assigning them importance according to their
current value and potential lifespan in the heart of the bank. The bank’s sales
reps have a scorecard in which not only are customers rigorously classified
by these two factors, but which invites the reps to offer maximally
personalized treatment to those customers of greatest interest. At First
Union’s customer service center, operators have weather information for
each state in the United States at their disposal at all times, so that the first
thing they do is ask the most potentially “interesting” customers about the
weather in the place they’re calling from…It’s a curious and intelligent way
of making the customer feel that their financial entity is following their steps
very closely…

If we stop to examine the differences that separate traditional marketing’s


customer strategies from those of “One-to-One Marketing” or Individualized
Marketing, we find that:

• While traditional marketing focuses on market share, Individualized


Marketing opts for the “share of customer”
• Traditional marketing speaks of products that are differentiated for the
market as a whole, while Individualized Marketing entails strategies
for differentiated customers.
• Traditional marketing focuses on product management, while
Individualized Marketing focuses its efforts on customer management.
• Traditional marketing sees the customer as an “enemy to be
conquered”, while Individualized Marketing relies on the customer as
a collaborator in the growth and improvement of the company and its
products and services.
• Traditional marketing struggles to find customers that adapt to new
product launches, while Individualized Marketing strives to find
products adapted to the customers.
• Traditional marketing is based on mass marketing, while
Individualized Marketing is founded on personalized messages.
• Traditional marketing uses standard promotions, while Individualized
Marketing employs incentives that adapt to each customer.

When a company is dealing with thousands or millions of customers, the key


is to identify in the greatest detail possible the groups and segments with
very similar characteristics, using profiling techniques and offering solutions
that are practically custom-made.

Based on these premises, a well-known American pharmaceutical company


has adopted an extremely interesting one-to-one marketing strategy for its
services on the Internet. It used this strategy to loyalize chronic patients, who
are potential consumers of their pharmaceuticals. It divided these patients
into four groups, each with very specific characteristics: “individualists”,
“connected”, “abdicators” and “newly arrived”. The first group includes
patients who are well-informed about their disease and who want to make
their own decisions about it, and the laboratory attends to them with on-line
medical support, a personalized newsletter, and tools for carrying out routine
checks over the Internet. The pharmaceutical company has invited the
“connected” patients, who like to be informed in order to make the most
appropriate decisions, to participate in forums and chats about their
disease.To the “abdicators”, patients who do not want to be informed
regularly and resign themselves to living with the disease without fighting it,
the laboratory offers resources for home care, nutritional information,
diets… resources that help them live with their disease. Finally, the “newly
arrived” patients are those that were recently diagnosed and completely lack
information and resources. Therefore, the company offers them basic
information about their disease, medical directories, etc...

3. The four pillars of One-to-One Marketing

The rules of One-to-One Marketing rely on four axes to focus customer


relations:

• Identify customers individually (Identify)


• Differentiate customers by value and needs (Differentiate)
• Interact with customers, optimizing costs (Interact)
• Customize the business culture (Customize)

Identifying our customer’s forces us to respond to the following questions:

• Who are our highest-value customers?


• Does our company have a customer strategy defined according to that
value?
• Which customers do we still need to identify and how do we solve it?
• What customer information do we have and where is it?
• Do you have accurate customer information analysis?
• Does that analysis translate into an appropriate customer strategy?

Differentiating our customers forces us to respond to the following


questions:
• Do we know how to distinguish our customers according to their
potential
• Do we know how to distinguish our customers by need segments?
• What are the key questions we must ask ourselves in order to know
exactly what our customers’ value and needs are?
• What information must we have in order to determine our customers’
value and needs?

Interacting with our customers forces us to respond to the following


questions:

• Through what channel and in what way can we optimize our contact
with the customer?
• What customer needs are we able to anticipate?
• How can we measure this interaction with the customer?
• Can we transform our monologues at the customer into dialogues with
the customer?
• How does the customer knowledge we have benefit the customers?

Customizing our strategy forces us to responder to the following questions:

• Is our organization aimed at the customer or is its structure still


marked by the product culture?
• How can we improve our products, services, and messages in order to
adjust to the customer’s needs?
• What must we offer our highest-value customers in order to increase
our share of customer?
• How can we save the customer time, effort, and money, and at the
same time generate more income for the company?

Asking this barrage of questions is a duty and a necessity for any company
that wishes to bury the orientation towards the product once and for all, and
opt for sales growth based on dialogue with and exhaustive knowledge of the
customer.

4. From profile strategy to lifespan strategy

One-to-one marketing and Individualized Marketing strategies have relied in


the past on the study of customer behavior and spending habits in one
segment or profile, in order to offer similar proposals to similar customers.
The leading on-line bookstore, Amazon.com, usually proceeds in the same
way: if it observes a customer’s purchases, it sees that that customer fits one
of the company’s previously determined profiles, and it offers products
accordingly. There is one drawback: the on-line bookstore’s
recommendations are “automatic”, not truly personalized.

This strategy is valid, but it is beginning to reveal itself as incomplete.


Moreover, we must base our strategy on the customer’s lifespan in the
company, and not only on similar customers, in order carry out cross-sales
activities with that customer. The final customer evolves over time (they get
older, obtain higher incomes, have children, etc…), and their provider must
know how to anticipate those life changes in order to offer them appropriate
products and services. Therefore, one-to-one marketing demands not only
segmentation by behavior, but also by moments.
5. Is it profitable to personalize? The limits of
“marketing a la carte”

Although any company with the desire to grow must consider an


Individualized Marketing strategy in which each customer is attended to
according to their needs, an excessive zeal for market micro-segmentation
can have its risks. As we mentioned in previous chapters, an accurate
segmentation strategy is that which allows us not only to detect groups of
customers with similar characteristics, but also to generate profitable sales
and marketing actions in those segments.

Moving in the right direction

Strategic levels of implementation

Identify the
One-to-one
Company’s Identify Differentiate Interact
marketing
Situation
The company
The company looks to Massive
Constant
1-to-1 “possesses” improve One-to-one
feedback from
Company individual each marketing
each customer
preferences customer’s for each individual
needs
Customers
Two-way The segment
The company are
Focused on the Interactions, obtains
identifies the differentiated
customer increasingly customized
customers by value and
coordinated. options
needs
Attentive to Product Customers Unconnected The segment
are only
lines interactions,
differentiated obtains the
customer identify the many only
by same result
customers one-way
their value
Product
Oriented Scarce The same size
follow-up, Products, not
towards the contact with for everyone
not customer customers
product customers
follow-up

The risk of excessively segmenting the market in order to offer practically


customized products and services, is undertaking actions of dubious
economic benefits. Hence the need to have an accurate profiling strategy that
justifies the return on the investment foreseen, before it is made.

Behind an Individualized Marketing strategy, it is essential to have a


meticulous evaluation of costs, not only sales and marketing costs, but also
logistical and human resource costs. Several years ago, the automobile
company Renault decided to create an on-line system in order to
manufacture cars “a la carte”, with elements chosen by the customer. The
company had to face over 50 million euros of investments in production,
logistics, and training...

“One-to-one marketing strategies are not always profitable. A proper,


previous segmentation that justifies future sales and Individualized
Marketing actions is obligatory”

It makes sense that one-to-one marketing is costly and return on investments


is slow, if not unprofitable. That is why some are starting to speak of One-to-
One Marketing more as a business culture philosophy than a theory capable
of being applied without difficulties… The limits to excessive one-to-one
marketing are not just economic: the excessive diversification some
companies have turned to, especially consumer goods companies aimed at
the final customer, has ended up confusing the consumer, when what the
company wanted was to satisfy their most specific needs as much as
possible. In some eating establishments, just reading the menu is an
extremely laborious task... Whoever has ordered a pizza over the telephone
will know what it means to face several dozen combinations of toppings,
drinks, sized, and condiments. These end up overwhelming the customer,
when the idea was exactly the opposite, that is, to free the customer from
standardization and let them order according to their own taste.

This trend is expanding into other sectors as diverse as telecommunications,


where the customer often faces real headaches by trying to figure out which
telephone contract is best for their needs. It is essential to remember that
knowing “what type of customer the customer is”, is not the customer’s task,
but rather the provider’s. Hence, the previous portfolio segmentation,
potential market, and profiling strategies must be accurate and appropriate.
And this is only possible if the company’s strategy is based on true Customer
Intelligence, capable of practicing not only One-to-One Marketing, but also a
profitable, studied, and effective “One-to-Few” Marketing…

Resource: http://www.bitpipe.com/tlist/Direct-Marketing.html
http://managementpedia.com/index.php?title=Marketing