Improving customerrelationship management

through databaseInternet marketing

A theory-building action research projectChris OrsquoLeary

Acxiom Corporation Sydney AustraliaSally Rao

School of Commerce The University of Adelaide AdelaideAustralia andChad Perry

Graduate College of Management Southern Cross UniversityGold Coast Australia

Keywords Internet marketing Database marketing Customer relations Action learning

Abstract Firms have only just begun to use the Internet to obtain customer information in theirdatabase marketing processes to enhance customer relationship management This research usesan action research approach to develop a new framework about how they can do this The actionresearch project was carried out in a large Australian database company because no other sourcesof empirical information about the topic were available and it could provide rich findings about anunder-researched practical area Results showed that integration of the Internet and databasemarketing enhances the effectiveness of customer relationship management practices Forexample the Internet offers benefits such as increased consumer data collection accuracy andspeed cost savings greater interaction and better relationships with customers This research alsoidentifies that organizational culture top management support and collaboration betweenmarketing and IT teams need to be in place to provide a supportive environment that is critical forthe success of the integration

IntroductionMany firms have adopted the Internet for promotional purposes (Williams2000) but have not yet fully capitalised on its interactive marketing capabilities(Rowsom 1998) Nevertheless some practitioners and consultants are realisingthe potential for integrating the Internet with organizational databases Forexample Rowsom (1998 p 24) noted the potential of the integration of Internetinformation into database marketing for electronic commerce and forecast thatldquoinstituting database marketing on the Web will be like making the leap fromplaying checkers to playing multi-level chessrdquo However comprehensiveacademic research about the integration of Internet and database marketing islacking There has been recognition in the academic literature about Internet

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

wwwem eraldinsightcomres earchregister wwwem eraldinsight com0309-0566 htm

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European Journal of MarketingVol 38 No 34 2004pp 338-354q Emerald Group Publishing Limited0309-0566DOI 10110803090560410518585

and database marketing separately (for example Forrest and Mizerski 1995Montgomery 1999 Hoffman and Novak 1996) but not about their integration

Hence the aim of this paper is to develop a framework for integrating theInternet and database marketing to help marketers improve customerrelationship management (CRM) based on rigorous academic researchEssentially we argue that the advent of Internetdatabase marketing bringssolutions to some of the difficulties in customer relationship management byproviding one-to-one interactivity and customisation Our contributions are thefirst academic study of the integration of Internet and database marketing andan example of how the action research methodology can be used to explore arelatively technical issue in marketing about a general academic researchproblem (Perry and Zuber-Skerritt 1992)

This paper has three parts First a preliminary framework based on theliterature is outlined Then the project methodology of focus groupsconvergent interviewing and action research is briefly described Finally acomprehensive framework based on the findings is presented implications andlimitations are discussed and possibilities for further research are identified

A preliminary framework and research issuesA preliminary framework for this study was developed from the literaturesabout the Internet and database marketing (Hagel and Singer 1999 Pepperset al 1999) This framework has the three usual parts of a system inputsprocesses and outputs That is inputs of Internet information about customersare processed and converged with a firmrsquos customer databases to produce aseries of strategic outputs such as improved customer relationshipmanagement Consider these three proposed parts in more detail

First the inputs are the customer information gathered through the InternetIn the literature four primary types of customer data are identified namelydescriptive data transaction history direct preference measures and externallyderived data (Hagel and Armstrong 1999 Holtz 1992) This informationcontains both active data or information provided by the customer with theirfull knowledge participation and often feedback and passive data orinformation derived from observation of the customerrsquos behaviour that mayoccur without their direct knowledge (Gates 1999 Heinen 1996) But how thesetypes of information apply in the integration of Internet marketing anddatabase marketing needs to be discovered Thus the first research issue is

RI1 How can customer data be gathered passively and actively through theInternet for customer relationship management purposes

Second the processes integrate information gathered from the Internet withinformation in the organizationrsquos database The literature suggests that theinformation gathered from the Internet is processed through identificationstandardisation de-duplication and consolidation procedures and a unique

Customerrelationship

management

339

reference number is applied to a customer irrespective of whether the customeris a business or an individual (Seybold 1999 Loney 1998 Inmon andHackathorn 1994) Records are stored in an organizational marketing datawarehouse and updated automatically through data derivation methods suchas cookies and web form log-ins (St Laurent 1998 Strader et al 1999) Butmore details are required for the comprehensive framework sought for thisresearch Thus the second research issue is

RI2 How can customer data gathered through the Internet be integratedinto database marketing processes

Finally the strategic outputs are the possible uses of the Internet informationthat can be ldquominedrdquo from databases (Peacock 1998) The literature suggeststhat customer data can be used in customer relationship management forexample prospecting for new customers (Hanson 2000 Campbell 1997)segmenting customers (Jackson and Wang 1994 Nash 1993) retainingcustomers (Sterne 1999 Campbell 1997) and forging customer loyalty (Forchtand Cochran 1999) That is they are used to build one-to-one long-term andsustainable customer relationships that add value to both the customer and thecompany through the use of information technology (Buttle 2000 Hamil 2000)But can Internet data about customers fulfil these strategic purposesTherefore the third research issue is

RI3 How can customer information gathered through the Internet be usedin improving customer relationship management

In brief this preliminary framework was a starting point for understandinghow Internet and database marketing can be integrated to improve customerrelationship management The next step was to confirm disconfirm or extendthe framework through rigorous research

Action research methodologyThis research adopted an action research methodology in its data collectionprocess that is a cyclical process methodology that incorporates the four-stepprocess of planning acting observing and reflecting on results generated froma particular project or body of work (Zuber-Skerritt and Perry 2000 Dick 2000Revans 1991 Kemmis and McTaggart 1988 Kolb 1984) The concept isessentially concerned with a group of people who work together to improvetheir work processes (Lewin 1946 Carson et al 2001 Altrichter et al 2000Bawden and Zuber-Skerritt 2000)

This choice of action research was based on two counts First because of theminimal research that has been conducted on integrating Internetdatabasemarketing for CRM noted above the process through which this may becompleted was unclear Thus exploratory research was required and actionresearch provides this capability better than many alternatives (Dick 2000

EJM3834

340

Farquhar 2000 Zuber-Skerritt and Perry 2000) An action research projectwithin an Australian database marketing firm was used to explore the issuesinvolved because an alternative exploratory methodology like case researchcould not be used as other sites that had integrated Internetdatabasemarketing for CRM were simply not available The second reason was thedegree of flexibility afforded by action research within an evolving informationtechnology project concerning a problem about which little was known(Altrichter et al 2000 Bawden and Zuber-Skerritt 2000 Neville 1992)

The reconnaissance before the first stage of this action research projectinvolved focus groups and convergent interviews to test and refine thepreliminary theoretical framework (Carson et al 2001) Data were collectedthrough two focus groups Because the research phenomenon is contemporaryand no prior research has been conducted focus groups were appropriate forgenerating ideas and obtaining insights from Internet database marketingpractitioners and consultants (Carson et al 2001) Two homogeneous groupswere conducted in regional Toowoomba and cosmopolitan Sydney becausediscussions within homogeneous groups produce more in-depth informationthan discussions within heterogenous groups (Bellenger et al 1989) The firstgroup comprised marketing managers with some general knowledge ofInternet and database marketing but limited practical experience The secondgroup comprised marketing managers with both knowledge and experience ofInternet and database marketing and were selected from several industrysources in Sydney Arguably these second focus group respondents representmuch of the expertise about integrated Internet and database marketing inAustralia nndash it was certainly not possible to recruit another group despitepersistent efforts to find more respondents

In conjunction with the focus groups convergent interviews were used tofurther test and refine the theoretical framework (Carson et al 2001)Convergent interviewing involves conducting a series of in-depth interviews inwhich data are collected during each interview analysed and used to refine thecontent of subsequent interviews That is the process is very structured but thecontent of each interview remains unstructured to allow for the flexibleexploration of the subject matter (Dick 1990) Convergence is achieved when nonew information is uncovered Dick (1990) suggested 12 interviews are usuallynecessary for convergence in organizational behaviour projects However Nairand Riege (1995) found that the sample could be smaller if prior theory wasused as a foundation for the interviews about a marketing issue as was thesituation for this research The convergent interviews involved ten in-depthinterviews with recognised industry experts some of them by phone to USAThese data were later analysed and used as input into the rest of the first actionresearch stage

This first action stage involved planning a prototype integrated Internetand database marketing system within a particular Australian Internet portal

Customerrelationship

management

341

organization It commenced with the formation of a project team (Dick 2000Edwards and Bruce 2000) Initial plans were formulated and actions for theirachievement were devised and implemented During and after implementationof these plans results were monitored against expectations In the fourthreflection stage the efficacy of the actions on the problem were evaluated(Altrichter et al 2000 Zuber-Skerritt 2000) When the team consensus was thatthe problem was not yet solved the action research process began anew as theplan for problem resolution was refined implemented and monitored Whenreflection showed the problem was then solved the project was concluded anda report prepared (Passfield 2000 Zuber-Skerritt and Perry 2000) That is thecyclical process illustrated in Figure 1 continued until the initiating problemwas satisfactorily resolved and the action research process was exited (Carsonet al 2001)

This project turned out to be emancipatory action research rather thanmerely technical or practical (Zuber-Skerrit and Perry 2000) The relationshipbetween team leader (the first author) and other participants was collaborativethe research context was somewhat ill-defined and the project involvedtransformation of the entire organization as well as of workgroupconsciousness That is the implementation of this integrated system withinthe action research organization transformed the latterrsquos business model frompassive observing to developing a virtual relationship with individual onlineconsumers differentiating interacting personalising and learning from eachconsumerrsquos communications and matching the developed consumer profileintelligently to e-business vendor offerings Indeed the manager of the

Figure 1The action researchmethodology

EJM3834

342

respondent organization confirms that this research was emancipatory ldquoThissystem has completely changed our business model from a reactivenon-differentiated style to an interactive intelligent alternative We arefinally getting to understand and maximise the profitability of our customerinteractions We could never do that beforerdquo (K Anderson personalcommunication 19 July 2000)

In brief two action cycles were incorporated in this project to determine howthe Internet may be integrated with database marketing within an AustralianInternet portal These action cycles in conjunction with the reconnaissancefocus groups and convergent interviews discussed above led to thedevelopment of the final framework of the integration of Internet anddatabase marketing strategies that is described next

Discussion of findingsThe project above was done within a particular organization We now turn toanalytic generalisation (Yin 1994) of that action research to build a theoreticalframework linked to extant literature that explains how Internet and databasemarketing can be integrated in many other organizations too Our findings aresummarised in Table I and the framework is summarised in Figure 2 and theyare discussed next

Research issue 1 inputsThe first research issue was concerned with how customer data can begathered passively and actively through the Internet for customer relationshipmanagement purposes This research confirms the literature about the twotypes of primary and secondary data and also extends the literature byidentifying that primary data are the main type of data that databasemarketers can gather through the Internet to form a complete database profileof a customer In more detail most Internetdatabase organizations use bothactive and passive information about customers gathered through the Internetbecause they give an improved understanding of customers However activelysupplied customer data is the cornerstone of a better understanding customersand thus organizations are turning to integrated permission-based e-mailcommunications as a part of their total Internet marketing strategy Thisconcept of permission marketing in the Web environment is based aroundrelationship building with consumers who have indicated an interest inaccepting promotional information from preferred e-tailers

This research also adds to the literature by identifying additional factorsthat contribute to obtaining customer data on an active basis Apart fromcorporate exchange of value in return for customer data provision identified inthe literature the credibility of the organizations collecting data the disclosureof the purpose of data collection how the organization handles security andprivacy issues and attractiveness or stickiness of the organizationrsquos Web site

Customerrelationship

management

343

Research issue Findings about the research issues

1 How can customer databe gathered passively andactively through theInternet for databasemarketing purposes

Types of data collected through the InternetBoth primary and secondary customer data can be collected

through the InternetPrimary data collected through the Internet are more useful for

Internetdatabase marketing purposesPermission marketing has to be in place for the collection and use

of customer dataActive vs passive customer dataCustomer data collected through the Internet can be categorized

into active and passive dataA mix of these two types of data is most effective for learning

about the customersPassive data needs to be matched back with active data to

become meaningfulFactors influencing active customer data collection through theInternetTrust in a web environmentWeb stickinessThe consumer must be provided with incentives andor

compensated to provide active personal dataData capture mechanismsCookies and click streamWeb registration forms and online surveysTransaction recordsInformation self-serviceDealing with ongoing management and maintenance of datacurrencyMinimizing number of data variablesReal time updates

2 How can customer datafrom the Internet beintegrated into databasemarketing processes

Data integration through data warehousing and data miningrequirement of supportive environmentSupportive organizational cultureAppropriate e-commerce infrastructureTop management commitmentUse of two marketing databases one for real-time data accruing

from e-business interactions and the other for integrating otherorganizational consumer data and linking this to the real-timedatabase

System management and data standardisationIntegrated data analytical and campaign management

functionality within the database marketing applicationArtificial intelligence learning and personalisation software for

consumer inbound marketing

(continued )

Table IFindings for each of thethree research issues

EJM3834

344

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

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org

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n

Ste

p1

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tify

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cust

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oca

ptu

rean

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ore

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omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

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cap

ture

and

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ing

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ersrsquo

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ilar

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iffe

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ces

(box

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ure

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ent

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asis

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ract

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gn

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erto

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Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

reference number is applied to a customer irrespective of whether the customeris a business or an individual (Seybold 1999 Loney 1998 Inmon andHackathorn 1994) Records are stored in an organizational marketing datawarehouse and updated automatically through data derivation methods suchas cookies and web form log-ins (St Laurent 1998 Strader et al 1999) Butmore details are required for the comprehensive framework sought for thisresearch Thus the second research issue is

RI2 How can customer data gathered through the Internet be integratedinto database marketing processes

Finally the strategic outputs are the possible uses of the Internet informationthat can be ldquominedrdquo from databases (Peacock 1998) The literature suggeststhat customer data can be used in customer relationship management forexample prospecting for new customers (Hanson 2000 Campbell 1997)segmenting customers (Jackson and Wang 1994 Nash 1993) retainingcustomers (Sterne 1999 Campbell 1997) and forging customer loyalty (Forchtand Cochran 1999) That is they are used to build one-to-one long-term andsustainable customer relationships that add value to both the customer and thecompany through the use of information technology (Buttle 2000 Hamil 2000)But can Internet data about customers fulfil these strategic purposesTherefore the third research issue is

RI3 How can customer information gathered through the Internet be usedin improving customer relationship management

In brief this preliminary framework was a starting point for understandinghow Internet and database marketing can be integrated to improve customerrelationship management The next step was to confirm disconfirm or extendthe framework through rigorous research

Action research methodologyThis research adopted an action research methodology in its data collectionprocess that is a cyclical process methodology that incorporates the four-stepprocess of planning acting observing and reflecting on results generated froma particular project or body of work (Zuber-Skerritt and Perry 2000 Dick 2000Revans 1991 Kemmis and McTaggart 1988 Kolb 1984) The concept isessentially concerned with a group of people who work together to improvetheir work processes (Lewin 1946 Carson et al 2001 Altrichter et al 2000Bawden and Zuber-Skerritt 2000)

This choice of action research was based on two counts First because of theminimal research that has been conducted on integrating Internetdatabasemarketing for CRM noted above the process through which this may becompleted was unclear Thus exploratory research was required and actionresearch provides this capability better than many alternatives (Dick 2000

EJM3834

340

Farquhar 2000 Zuber-Skerritt and Perry 2000) An action research projectwithin an Australian database marketing firm was used to explore the issuesinvolved because an alternative exploratory methodology like case researchcould not be used as other sites that had integrated Internetdatabasemarketing for CRM were simply not available The second reason was thedegree of flexibility afforded by action research within an evolving informationtechnology project concerning a problem about which little was known(Altrichter et al 2000 Bawden and Zuber-Skerritt 2000 Neville 1992)

The reconnaissance before the first stage of this action research projectinvolved focus groups and convergent interviews to test and refine thepreliminary theoretical framework (Carson et al 2001) Data were collectedthrough two focus groups Because the research phenomenon is contemporaryand no prior research has been conducted focus groups were appropriate forgenerating ideas and obtaining insights from Internet database marketingpractitioners and consultants (Carson et al 2001) Two homogeneous groupswere conducted in regional Toowoomba and cosmopolitan Sydney becausediscussions within homogeneous groups produce more in-depth informationthan discussions within heterogenous groups (Bellenger et al 1989) The firstgroup comprised marketing managers with some general knowledge ofInternet and database marketing but limited practical experience The secondgroup comprised marketing managers with both knowledge and experience ofInternet and database marketing and were selected from several industrysources in Sydney Arguably these second focus group respondents representmuch of the expertise about integrated Internet and database marketing inAustralia nndash it was certainly not possible to recruit another group despitepersistent efforts to find more respondents

In conjunction with the focus groups convergent interviews were used tofurther test and refine the theoretical framework (Carson et al 2001)Convergent interviewing involves conducting a series of in-depth interviews inwhich data are collected during each interview analysed and used to refine thecontent of subsequent interviews That is the process is very structured but thecontent of each interview remains unstructured to allow for the flexibleexploration of the subject matter (Dick 1990) Convergence is achieved when nonew information is uncovered Dick (1990) suggested 12 interviews are usuallynecessary for convergence in organizational behaviour projects However Nairand Riege (1995) found that the sample could be smaller if prior theory wasused as a foundation for the interviews about a marketing issue as was thesituation for this research The convergent interviews involved ten in-depthinterviews with recognised industry experts some of them by phone to USAThese data were later analysed and used as input into the rest of the first actionresearch stage

This first action stage involved planning a prototype integrated Internetand database marketing system within a particular Australian Internet portal

Customerrelationship

management

341

organization It commenced with the formation of a project team (Dick 2000Edwards and Bruce 2000) Initial plans were formulated and actions for theirachievement were devised and implemented During and after implementationof these plans results were monitored against expectations In the fourthreflection stage the efficacy of the actions on the problem were evaluated(Altrichter et al 2000 Zuber-Skerritt 2000) When the team consensus was thatthe problem was not yet solved the action research process began anew as theplan for problem resolution was refined implemented and monitored Whenreflection showed the problem was then solved the project was concluded anda report prepared (Passfield 2000 Zuber-Skerritt and Perry 2000) That is thecyclical process illustrated in Figure 1 continued until the initiating problemwas satisfactorily resolved and the action research process was exited (Carsonet al 2001)

This project turned out to be emancipatory action research rather thanmerely technical or practical (Zuber-Skerrit and Perry 2000) The relationshipbetween team leader (the first author) and other participants was collaborativethe research context was somewhat ill-defined and the project involvedtransformation of the entire organization as well as of workgroupconsciousness That is the implementation of this integrated system withinthe action research organization transformed the latterrsquos business model frompassive observing to developing a virtual relationship with individual onlineconsumers differentiating interacting personalising and learning from eachconsumerrsquos communications and matching the developed consumer profileintelligently to e-business vendor offerings Indeed the manager of the

Figure 1The action researchmethodology

EJM3834

342

respondent organization confirms that this research was emancipatory ldquoThissystem has completely changed our business model from a reactivenon-differentiated style to an interactive intelligent alternative We arefinally getting to understand and maximise the profitability of our customerinteractions We could never do that beforerdquo (K Anderson personalcommunication 19 July 2000)

In brief two action cycles were incorporated in this project to determine howthe Internet may be integrated with database marketing within an AustralianInternet portal These action cycles in conjunction with the reconnaissancefocus groups and convergent interviews discussed above led to thedevelopment of the final framework of the integration of Internet anddatabase marketing strategies that is described next

Discussion of findingsThe project above was done within a particular organization We now turn toanalytic generalisation (Yin 1994) of that action research to build a theoreticalframework linked to extant literature that explains how Internet and databasemarketing can be integrated in many other organizations too Our findings aresummarised in Table I and the framework is summarised in Figure 2 and theyare discussed next

Research issue 1 inputsThe first research issue was concerned with how customer data can begathered passively and actively through the Internet for customer relationshipmanagement purposes This research confirms the literature about the twotypes of primary and secondary data and also extends the literature byidentifying that primary data are the main type of data that databasemarketers can gather through the Internet to form a complete database profileof a customer In more detail most Internetdatabase organizations use bothactive and passive information about customers gathered through the Internetbecause they give an improved understanding of customers However activelysupplied customer data is the cornerstone of a better understanding customersand thus organizations are turning to integrated permission-based e-mailcommunications as a part of their total Internet marketing strategy Thisconcept of permission marketing in the Web environment is based aroundrelationship building with consumers who have indicated an interest inaccepting promotional information from preferred e-tailers

This research also adds to the literature by identifying additional factorsthat contribute to obtaining customer data on an active basis Apart fromcorporate exchange of value in return for customer data provision identified inthe literature the credibility of the organizations collecting data the disclosureof the purpose of data collection how the organization handles security andprivacy issues and attractiveness or stickiness of the organizationrsquos Web site

Customerrelationship

management

343

Research issue Findings about the research issues

1 How can customer databe gathered passively andactively through theInternet for databasemarketing purposes

Types of data collected through the InternetBoth primary and secondary customer data can be collected

through the InternetPrimary data collected through the Internet are more useful for

Internetdatabase marketing purposesPermission marketing has to be in place for the collection and use

of customer dataActive vs passive customer dataCustomer data collected through the Internet can be categorized

into active and passive dataA mix of these two types of data is most effective for learning

about the customersPassive data needs to be matched back with active data to

become meaningfulFactors influencing active customer data collection through theInternetTrust in a web environmentWeb stickinessThe consumer must be provided with incentives andor

compensated to provide active personal dataData capture mechanismsCookies and click streamWeb registration forms and online surveysTransaction recordsInformation self-serviceDealing with ongoing management and maintenance of datacurrencyMinimizing number of data variablesReal time updates

2 How can customer datafrom the Internet beintegrated into databasemarketing processes

Data integration through data warehousing and data miningrequirement of supportive environmentSupportive organizational cultureAppropriate e-commerce infrastructureTop management commitmentUse of two marketing databases one for real-time data accruing

from e-business interactions and the other for integrating otherorganizational consumer data and linking this to the real-timedatabase

System management and data standardisationIntegrated data analytical and campaign management

functionality within the database marketing applicationArtificial intelligence learning and personalisation software for

consumer inbound marketing

(continued )

Table IFindings for each of thethree research issues

EJM3834

344

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

Farquhar 2000 Zuber-Skerritt and Perry 2000) An action research projectwithin an Australian database marketing firm was used to explore the issuesinvolved because an alternative exploratory methodology like case researchcould not be used as other sites that had integrated Internetdatabasemarketing for CRM were simply not available The second reason was thedegree of flexibility afforded by action research within an evolving informationtechnology project concerning a problem about which little was known(Altrichter et al 2000 Bawden and Zuber-Skerritt 2000 Neville 1992)

The reconnaissance before the first stage of this action research projectinvolved focus groups and convergent interviews to test and refine thepreliminary theoretical framework (Carson et al 2001) Data were collectedthrough two focus groups Because the research phenomenon is contemporaryand no prior research has been conducted focus groups were appropriate forgenerating ideas and obtaining insights from Internet database marketingpractitioners and consultants (Carson et al 2001) Two homogeneous groupswere conducted in regional Toowoomba and cosmopolitan Sydney becausediscussions within homogeneous groups produce more in-depth informationthan discussions within heterogenous groups (Bellenger et al 1989) The firstgroup comprised marketing managers with some general knowledge ofInternet and database marketing but limited practical experience The secondgroup comprised marketing managers with both knowledge and experience ofInternet and database marketing and were selected from several industrysources in Sydney Arguably these second focus group respondents representmuch of the expertise about integrated Internet and database marketing inAustralia nndash it was certainly not possible to recruit another group despitepersistent efforts to find more respondents

In conjunction with the focus groups convergent interviews were used tofurther test and refine the theoretical framework (Carson et al 2001)Convergent interviewing involves conducting a series of in-depth interviews inwhich data are collected during each interview analysed and used to refine thecontent of subsequent interviews That is the process is very structured but thecontent of each interview remains unstructured to allow for the flexibleexploration of the subject matter (Dick 1990) Convergence is achieved when nonew information is uncovered Dick (1990) suggested 12 interviews are usuallynecessary for convergence in organizational behaviour projects However Nairand Riege (1995) found that the sample could be smaller if prior theory wasused as a foundation for the interviews about a marketing issue as was thesituation for this research The convergent interviews involved ten in-depthinterviews with recognised industry experts some of them by phone to USAThese data were later analysed and used as input into the rest of the first actionresearch stage

This first action stage involved planning a prototype integrated Internetand database marketing system within a particular Australian Internet portal

Customerrelationship

management

341

organization It commenced with the formation of a project team (Dick 2000Edwards and Bruce 2000) Initial plans were formulated and actions for theirachievement were devised and implemented During and after implementationof these plans results were monitored against expectations In the fourthreflection stage the efficacy of the actions on the problem were evaluated(Altrichter et al 2000 Zuber-Skerritt 2000) When the team consensus was thatthe problem was not yet solved the action research process began anew as theplan for problem resolution was refined implemented and monitored Whenreflection showed the problem was then solved the project was concluded anda report prepared (Passfield 2000 Zuber-Skerritt and Perry 2000) That is thecyclical process illustrated in Figure 1 continued until the initiating problemwas satisfactorily resolved and the action research process was exited (Carsonet al 2001)

This project turned out to be emancipatory action research rather thanmerely technical or practical (Zuber-Skerrit and Perry 2000) The relationshipbetween team leader (the first author) and other participants was collaborativethe research context was somewhat ill-defined and the project involvedtransformation of the entire organization as well as of workgroupconsciousness That is the implementation of this integrated system withinthe action research organization transformed the latterrsquos business model frompassive observing to developing a virtual relationship with individual onlineconsumers differentiating interacting personalising and learning from eachconsumerrsquos communications and matching the developed consumer profileintelligently to e-business vendor offerings Indeed the manager of the

Figure 1The action researchmethodology

EJM3834

342

respondent organization confirms that this research was emancipatory ldquoThissystem has completely changed our business model from a reactivenon-differentiated style to an interactive intelligent alternative We arefinally getting to understand and maximise the profitability of our customerinteractions We could never do that beforerdquo (K Anderson personalcommunication 19 July 2000)

In brief two action cycles were incorporated in this project to determine howthe Internet may be integrated with database marketing within an AustralianInternet portal These action cycles in conjunction with the reconnaissancefocus groups and convergent interviews discussed above led to thedevelopment of the final framework of the integration of Internet anddatabase marketing strategies that is described next

Discussion of findingsThe project above was done within a particular organization We now turn toanalytic generalisation (Yin 1994) of that action research to build a theoreticalframework linked to extant literature that explains how Internet and databasemarketing can be integrated in many other organizations too Our findings aresummarised in Table I and the framework is summarised in Figure 2 and theyare discussed next

Research issue 1 inputsThe first research issue was concerned with how customer data can begathered passively and actively through the Internet for customer relationshipmanagement purposes This research confirms the literature about the twotypes of primary and secondary data and also extends the literature byidentifying that primary data are the main type of data that databasemarketers can gather through the Internet to form a complete database profileof a customer In more detail most Internetdatabase organizations use bothactive and passive information about customers gathered through the Internetbecause they give an improved understanding of customers However activelysupplied customer data is the cornerstone of a better understanding customersand thus organizations are turning to integrated permission-based e-mailcommunications as a part of their total Internet marketing strategy Thisconcept of permission marketing in the Web environment is based aroundrelationship building with consumers who have indicated an interest inaccepting promotional information from preferred e-tailers

This research also adds to the literature by identifying additional factorsthat contribute to obtaining customer data on an active basis Apart fromcorporate exchange of value in return for customer data provision identified inthe literature the credibility of the organizations collecting data the disclosureof the purpose of data collection how the organization handles security andprivacy issues and attractiveness or stickiness of the organizationrsquos Web site

Customerrelationship

management

343

Research issue Findings about the research issues

1 How can customer databe gathered passively andactively through theInternet for databasemarketing purposes

Types of data collected through the InternetBoth primary and secondary customer data can be collected

through the InternetPrimary data collected through the Internet are more useful for

Internetdatabase marketing purposesPermission marketing has to be in place for the collection and use

of customer dataActive vs passive customer dataCustomer data collected through the Internet can be categorized

into active and passive dataA mix of these two types of data is most effective for learning

about the customersPassive data needs to be matched back with active data to

become meaningfulFactors influencing active customer data collection through theInternetTrust in a web environmentWeb stickinessThe consumer must be provided with incentives andor

compensated to provide active personal dataData capture mechanismsCookies and click streamWeb registration forms and online surveysTransaction recordsInformation self-serviceDealing with ongoing management and maintenance of datacurrencyMinimizing number of data variablesReal time updates

2 How can customer datafrom the Internet beintegrated into databasemarketing processes

Data integration through data warehousing and data miningrequirement of supportive environmentSupportive organizational cultureAppropriate e-commerce infrastructureTop management commitmentUse of two marketing databases one for real-time data accruing

from e-business interactions and the other for integrating otherorganizational consumer data and linking this to the real-timedatabase

System management and data standardisationIntegrated data analytical and campaign management

functionality within the database marketing applicationArtificial intelligence learning and personalisation software for

consumer inbound marketing

(continued )

Table IFindings for each of thethree research issues

EJM3834

344

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

organization It commenced with the formation of a project team (Dick 2000Edwards and Bruce 2000) Initial plans were formulated and actions for theirachievement were devised and implemented During and after implementationof these plans results were monitored against expectations In the fourthreflection stage the efficacy of the actions on the problem were evaluated(Altrichter et al 2000 Zuber-Skerritt 2000) When the team consensus was thatthe problem was not yet solved the action research process began anew as theplan for problem resolution was refined implemented and monitored Whenreflection showed the problem was then solved the project was concluded anda report prepared (Passfield 2000 Zuber-Skerritt and Perry 2000) That is thecyclical process illustrated in Figure 1 continued until the initiating problemwas satisfactorily resolved and the action research process was exited (Carsonet al 2001)

This project turned out to be emancipatory action research rather thanmerely technical or practical (Zuber-Skerrit and Perry 2000) The relationshipbetween team leader (the first author) and other participants was collaborativethe research context was somewhat ill-defined and the project involvedtransformation of the entire organization as well as of workgroupconsciousness That is the implementation of this integrated system withinthe action research organization transformed the latterrsquos business model frompassive observing to developing a virtual relationship with individual onlineconsumers differentiating interacting personalising and learning from eachconsumerrsquos communications and matching the developed consumer profileintelligently to e-business vendor offerings Indeed the manager of the

Figure 1The action researchmethodology

EJM3834

342

respondent organization confirms that this research was emancipatory ldquoThissystem has completely changed our business model from a reactivenon-differentiated style to an interactive intelligent alternative We arefinally getting to understand and maximise the profitability of our customerinteractions We could never do that beforerdquo (K Anderson personalcommunication 19 July 2000)

In brief two action cycles were incorporated in this project to determine howthe Internet may be integrated with database marketing within an AustralianInternet portal These action cycles in conjunction with the reconnaissancefocus groups and convergent interviews discussed above led to thedevelopment of the final framework of the integration of Internet anddatabase marketing strategies that is described next

Discussion of findingsThe project above was done within a particular organization We now turn toanalytic generalisation (Yin 1994) of that action research to build a theoreticalframework linked to extant literature that explains how Internet and databasemarketing can be integrated in many other organizations too Our findings aresummarised in Table I and the framework is summarised in Figure 2 and theyare discussed next

Research issue 1 inputsThe first research issue was concerned with how customer data can begathered passively and actively through the Internet for customer relationshipmanagement purposes This research confirms the literature about the twotypes of primary and secondary data and also extends the literature byidentifying that primary data are the main type of data that databasemarketers can gather through the Internet to form a complete database profileof a customer In more detail most Internetdatabase organizations use bothactive and passive information about customers gathered through the Internetbecause they give an improved understanding of customers However activelysupplied customer data is the cornerstone of a better understanding customersand thus organizations are turning to integrated permission-based e-mailcommunications as a part of their total Internet marketing strategy Thisconcept of permission marketing in the Web environment is based aroundrelationship building with consumers who have indicated an interest inaccepting promotional information from preferred e-tailers

This research also adds to the literature by identifying additional factorsthat contribute to obtaining customer data on an active basis Apart fromcorporate exchange of value in return for customer data provision identified inthe literature the credibility of the organizations collecting data the disclosureof the purpose of data collection how the organization handles security andprivacy issues and attractiveness or stickiness of the organizationrsquos Web site

Customerrelationship

management

343

Research issue Findings about the research issues

1 How can customer databe gathered passively andactively through theInternet for databasemarketing purposes

Types of data collected through the InternetBoth primary and secondary customer data can be collected

through the InternetPrimary data collected through the Internet are more useful for

Internetdatabase marketing purposesPermission marketing has to be in place for the collection and use

of customer dataActive vs passive customer dataCustomer data collected through the Internet can be categorized

into active and passive dataA mix of these two types of data is most effective for learning

about the customersPassive data needs to be matched back with active data to

become meaningfulFactors influencing active customer data collection through theInternetTrust in a web environmentWeb stickinessThe consumer must be provided with incentives andor

compensated to provide active personal dataData capture mechanismsCookies and click streamWeb registration forms and online surveysTransaction recordsInformation self-serviceDealing with ongoing management and maintenance of datacurrencyMinimizing number of data variablesReal time updates

2 How can customer datafrom the Internet beintegrated into databasemarketing processes

Data integration through data warehousing and data miningrequirement of supportive environmentSupportive organizational cultureAppropriate e-commerce infrastructureTop management commitmentUse of two marketing databases one for real-time data accruing

from e-business interactions and the other for integrating otherorganizational consumer data and linking this to the real-timedatabase

System management and data standardisationIntegrated data analytical and campaign management

functionality within the database marketing applicationArtificial intelligence learning and personalisation software for

consumer inbound marketing

(continued )

Table IFindings for each of thethree research issues

EJM3834

344

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

respondent organization confirms that this research was emancipatory ldquoThissystem has completely changed our business model from a reactivenon-differentiated style to an interactive intelligent alternative We arefinally getting to understand and maximise the profitability of our customerinteractions We could never do that beforerdquo (K Anderson personalcommunication 19 July 2000)

In brief two action cycles were incorporated in this project to determine howthe Internet may be integrated with database marketing within an AustralianInternet portal These action cycles in conjunction with the reconnaissancefocus groups and convergent interviews discussed above led to thedevelopment of the final framework of the integration of Internet anddatabase marketing strategies that is described next

Discussion of findingsThe project above was done within a particular organization We now turn toanalytic generalisation (Yin 1994) of that action research to build a theoreticalframework linked to extant literature that explains how Internet and databasemarketing can be integrated in many other organizations too Our findings aresummarised in Table I and the framework is summarised in Figure 2 and theyare discussed next

Research issue 1 inputsThe first research issue was concerned with how customer data can begathered passively and actively through the Internet for customer relationshipmanagement purposes This research confirms the literature about the twotypes of primary and secondary data and also extends the literature byidentifying that primary data are the main type of data that databasemarketers can gather through the Internet to form a complete database profileof a customer In more detail most Internetdatabase organizations use bothactive and passive information about customers gathered through the Internetbecause they give an improved understanding of customers However activelysupplied customer data is the cornerstone of a better understanding customersand thus organizations are turning to integrated permission-based e-mailcommunications as a part of their total Internet marketing strategy Thisconcept of permission marketing in the Web environment is based aroundrelationship building with consumers who have indicated an interest inaccepting promotional information from preferred e-tailers

This research also adds to the literature by identifying additional factorsthat contribute to obtaining customer data on an active basis Apart fromcorporate exchange of value in return for customer data provision identified inthe literature the credibility of the organizations collecting data the disclosureof the purpose of data collection how the organization handles security andprivacy issues and attractiveness or stickiness of the organizationrsquos Web site

Customerrelationship

management

343

Research issue Findings about the research issues

1 How can customer databe gathered passively andactively through theInternet for databasemarketing purposes

Types of data collected through the InternetBoth primary and secondary customer data can be collected

through the InternetPrimary data collected through the Internet are more useful for

Internetdatabase marketing purposesPermission marketing has to be in place for the collection and use

of customer dataActive vs passive customer dataCustomer data collected through the Internet can be categorized

into active and passive dataA mix of these two types of data is most effective for learning

about the customersPassive data needs to be matched back with active data to

become meaningfulFactors influencing active customer data collection through theInternetTrust in a web environmentWeb stickinessThe consumer must be provided with incentives andor

compensated to provide active personal dataData capture mechanismsCookies and click streamWeb registration forms and online surveysTransaction recordsInformation self-serviceDealing with ongoing management and maintenance of datacurrencyMinimizing number of data variablesReal time updates

2 How can customer datafrom the Internet beintegrated into databasemarketing processes

Data integration through data warehousing and data miningrequirement of supportive environmentSupportive organizational cultureAppropriate e-commerce infrastructureTop management commitmentUse of two marketing databases one for real-time data accruing

from e-business interactions and the other for integrating otherorganizational consumer data and linking this to the real-timedatabase

System management and data standardisationIntegrated data analytical and campaign management

functionality within the database marketing applicationArtificial intelligence learning and personalisation software for

consumer inbound marketing

(continued )

Table IFindings for each of thethree research issues

EJM3834

344

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

Research issue Findings about the research issues

1 How can customer databe gathered passively andactively through theInternet for databasemarketing purposes

Types of data collected through the InternetBoth primary and secondary customer data can be collected

through the InternetPrimary data collected through the Internet are more useful for

Internetdatabase marketing purposesPermission marketing has to be in place for the collection and use

of customer dataActive vs passive customer dataCustomer data collected through the Internet can be categorized

into active and passive dataA mix of these two types of data is most effective for learning

about the customersPassive data needs to be matched back with active data to

become meaningfulFactors influencing active customer data collection through theInternetTrust in a web environmentWeb stickinessThe consumer must be provided with incentives andor

compensated to provide active personal dataData capture mechanismsCookies and click streamWeb registration forms and online surveysTransaction recordsInformation self-serviceDealing with ongoing management and maintenance of datacurrencyMinimizing number of data variablesReal time updates

2 How can customer datafrom the Internet beintegrated into databasemarketing processes

Data integration through data warehousing and data miningrequirement of supportive environmentSupportive organizational cultureAppropriate e-commerce infrastructureTop management commitmentUse of two marketing databases one for real-time data accruing

from e-business interactions and the other for integrating otherorganizational consumer data and linking this to the real-timedatabase

System management and data standardisationIntegrated data analytical and campaign management

functionality within the database marketing applicationArtificial intelligence learning and personalisation software for

consumer inbound marketing

(continued )

Table IFindings for each of thethree research issues

EJM3834

344

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

all contribute to the amount of active data that the marketers can obtainthrough the Internet Organizations may use different mechanisms to captureand update active and passive customer data The findings also identifyproblems associated with these mechanisms such as the inability of cookiestracking customers at an individual level

Research issue 2 about processesThe second research issue concerned how customer data collected through theInternet can be integrated into database marketing processes The findings ofthis research supported the literature that standard data warehousingprocedures and techniques are used in integrating data In addition thisresearch highlights some important issues in implementing these technologiessuch as periodic updates and one unique identifier for all relevant data of onecustomer This research also identifies the elements of a supportiveorganizational environment and appropriate e-commerce infrastructure as anoutbound element of the integration of the Internet and database marketingFurther this research found that artificial intelligence and data analyticaltechniques can be applied to the integrated Internet and database marketinginfrastructure to enable the organization to effectively incorporate and respondto the volumes of customer data in an Internet real-time environment andprovide proficient marketing strategies

In this process organizational culture top management support andcollaboration between marketing and IT teams provide a supportiveenvironment and are critical for integration Organizational culture must

Research issue Findings about the research issues

3 How can customerinformation gatheredthrough the Internet beused to improve customerrelationshipmanagement

Strategies that are most likely to be derived from the integration ofInternet and database marketing to improve customer relationshipmanagementProspecting new customersSegmenting customersRetaining customersUse of one-to-one marketing where consumer interests are elicitedand refined on an individual basis and the organizationrsquoscommunications campaigns and offers are structuredaccordinglyForging customer loyaltyPromoting and advertising pertinent to a customerrsquos identifiedinterestsCross marketing and relationship marketingAffiliate marketingStealth marketing

Source analysis of action research data Table I

Customerrelationship

management

345

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

support innovative use of the Internet in their marketing activities Topmanagement must be philosophically and behaviourally committed to thenotion that the Internet is essential in collecting customer data and in enablingeffective database marketing Finally an effective cross-functional team ofinformation systems and marketing specialists must work harmoniously tosucceed in the integration of Internet and database marketing

The next finding concerns the benefits of integrating Internet and databasemarketing First improved quality of customer information (in box 1 ofFigure 2) enables marketers to target their most valuable prospects moreeffectively tailor their offerings to individual needs improve customersatisfaction retention and loyalty and identify opportunities for new productsservices and marketing of affiliates or through stealth (box 3 in Figure 2)

Figure 2The final framework forthe integration ofInternet and databasemarketing

EJM3834

346

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

In conclusion the extent degree and speed of communication enabled by theInternet makes it a synergistic component of an effectual database marketingstrategy An integrated Internet and database marketing solution appearspromising for Australian organizations

Research issue 3 outputsThe third research issue concerned how customer information gatheredthrough the Internet can be used to improve customer relationshipmanagement This research shows that nine strategies are most likely to bederived from the integration of Internet and database marketing to improvecustomer relationship management prospecting new customers segmentingcustomers retaining customers providing one-to-one marketing promotingand advertising pertinent to a customerrsquos identified interests cross marketingand relationship marketing affiliate marketing stealth marketing and forgingcustomer loyalty The Internet and customer databases are potential means ofgathering customer information and communication to build a strongrelationship in the customer relationship management and ultimately impacton the way in which customer relationship is built developed and maintained

In general the benefit of integrating database marketing and Internetmarketing is that it enables marketers to increases the effectiveness of bothInternet marketing and database marketing On one hand the Internet enablesdatabase marketers to increase their communication capabilities with theircustomers in terms of the speed and relevance of the communication That isby providing rich data the Internet offers companies unprecedentedopportunities for getting to know their customers in depth and forcustomizing offerings to meet their preferences on a one-to-one personalisedbasis On the other hand database marketing assists Internet marketers to bemore focused on their profitable customers and direct their Internet marketingstrategies to meet their needs and provide them with customized products andservices so that the relationships become enduring

This research also emphasises that these marketing uses or marketingstrategies not only assist in achieving marketing goals for the organization butalso provide feedback as to how effective the collected data are and thus assistthe organization in further data collection That is customers are fullyincorporated into the organizational value chain by identifying customer needsand feedback through the interaction with the customer For example theorganization has the ability through an integrated Internetdatabase marketinginfrastructure to understand what specific productsservices attributes appealto a customer It then may be used in corporate Web site updates to encouragecustomers to more actively contribute their information Thus a feedback loopis depicted in the framework (Figure 2)

In conclusion there is little research about how Internet information can beused in strategic database marketing processes From the sparse literature and

Customerrelationship

management

347

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

our empirical findings a final framework about integrating Internet anddatabase marketing can be developed and was shown in Figure 2 The threeusual components of inputs processes and strategic outputs have beenestablished from rigorous theory-building research about the integration of theInternet and database marketing That framework is a contribution because itis a new comprehensive and rigorously researched step towards understandingthe important confluence of two new and powerful streams of business activity

Implications for practice policy and theoryImplications for practice and policyThe results of this research have implications for both theory and practice Thefirst implication of this research relates to the benefits of integrating Internetand database marketing as detailed in this research The model developed inthis research for integrating Internet and database marketing (as shown inFigure 2) suggests that the integration processes go through data inputsprocessing and strategic outputs The model also highlights the feedback loopthat goes from the strategic outputs back to the data inputs That is there is acircle through which the performance of the integration can be improvedcontinuously The model further emphasizes the importance of organizationalculture top management support and collaboration between marketing and ITpersonnel Thus managers need to be aware of those issues and provide asupportive environment for the integration to take place and to make sure aperiodic evaluation eventuates to improve their Internet and databasemarketing performance

This research showed that the most important output of the integration ofInternetdatabase marketing is an enabling of effective customer relationshipmanagement An important implication for practitioners as a result of theincreased effectiveness of Internetdatabase marketing is one-to-one marketing(Peppers and Rogers 1997) That is marketers can use their enhanced datacapture accurate and timely information about their customers to ldquounderstandand satisfy the needs wants and resources of individual customers ratherrather than those of mass market or market segmentsrdquo (Sheth et al 2000 p 56)The notion of one-to-one marketing is closely linked to customer relationshipmanagement as it relies on the building of relationships with customers toacquire retain and maximize the value of such relationships (Peppers andRogers 1995 1999) In the implementation of one-to-one marketing four stepscan be taken Table II details the specific actions based on this researchrsquosfindings Each of the steps is discussed next

The first step involves identifying customers and organizations must havethe technical capability to capture and conduct sophisticated analysis ofcustomer data for one-to-one marketing to be achievable The setup costs andexpensive ongoing data management can be high Thus it is inappropriate to

EJM3834

348

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

Ste

ps

req

uir

edin

one-

to-o

ne

mar

ket

ing

Aim

sof

the

step

Req

uir

emen

tsof

the

org

aniz

atio

n

Ste

p1

Iden

tify

ing

cust

omer

sT

oca

ptu

rean

dst

ore

cust

omer

det

ails

(box

1in

Fig

ure

2)T

he

cap

acit

yto

cap

ture

and

pre

sen

tin

form

atio

nin

au

sab

lefo

rmS

oph

isti

cate

dw

ebsi

tes

and

app

rop

riat

ed

ata

cap

ture

tech

nol

ogy

and

exp

erti

seS

tep

2D

iffe

ren

tiat

ecu

stom

ers

To

bu

ild

anu

nd

erst

and

ing

ofcu

stom

ersrsquo

sim

ilar

itie

san

dd

iffe

ren

ces

(box

2in

Fig

ure

2)S

up

por

tiv

eor

gan

izat

ion

alen

vir

onm

ent

such

asor

gan

izat

ion

alcu

ltu

reA

sou

nd

un

der

stan

din

gof

cust

omer

sD

ata

anal

yti

cs

such

asd

ata

min

ing

m

odel

ing

and

OL

AP

Ste

p3

Inte

ract

wit

hcu

stom

ers

To

cap

ture

each

con

tact

and

inte

ract

wit

hth

ecu

stom

er(b

oxes

1an

d3

inF

igu

re2)

Fle

xib

ilit

yto

stor

ean

dre

spon

dto

cust

omer

info

rmat

ion

Cap

abil

ity

and

des

ire

toh

and

leea

chcu

stom

erre

lati

onsh

ipon

ain

div

idu

alb

asis

Dem

onst

rati

onof

the

ben

efits

ofsh

arin

gin

form

atio

nC

apab

ilit

yan

dd

esir

eof

the

org

aniz

atio

nto

dev

elop

the

inte

ract

ion

and

the

wil

lin

gn

ess

ofth

ecu

stom

erto

tak

ep

art

Art

ifici

alin

tell

igen

cero

uti

nes

toen

able

toor

gan

izat

ion

toin

tera

ctef

fect

ivel

yw

ith

the

mu

ltit

ud

eof

cust

omer

dat

ap

rese

nt

thro

ug

hth

eIn

tern

etS

tep

4C

ust

omiz

efo

rcu

stom

ers

To

mee

ta

cust

omer

rsquosin

div

idu

aln

eed

san

dp

ut

cust

omer

sat

the

cen

ter

ofth

eir

own

un

iver

se(b

ox3

inF

igu

re2)

Con

tin

ual

lyu

pd

ate

and

resp

ond

ing

tocu

stom

erin

form

atio

nT

ang

ible

rew

ard

sfo

rcu

stom

ers

from

thei

rin

tera

ctio

nw

ith

the

org

aniz

atio

nP

erso

nal

izat

ion

Source

An

aly

sis

ofth

ere

sear

chfi

nd

ing

s

Table IIGuidelines of the

implementation ofone-to-one marketing

through the integrationof Internet and database

marketing

Customerrelationship

management

349

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

assess the value of the integration of Internet and database marketing withoutcomparing the costs

The second step is to differentiate customers through customer dataanalysis By differentiating the organization can capitalize on differing levelsof customer value and prioritize their efforts and gain the most advantage withthe most valuable customers (Peppers et al 1999) Supportive environment isrequired at this stage in the one-to-one marketing process Factors such assupportive organizational culture top management commitment customerorientation and use of data analytical tools such as data mining and modelingall impact on the success implementation of integration of Internet anddatabase marketing (Figure 2)

The third step in implementing one-to-one marketing is to interact with thecustomer That is every conversation and interaction with a customer needs toset up the opportunity for the next At this stage the privacy and securityissues are important because many customers are wary about protecting theirpersonal information from commercial organizations (Peppers et al 1999) Thebottom line is the practice of permission marketing in the Web environmentand the delivery of superior value to the customer (Mitchell 2000)

The final step to implement one-to-one marketing is to customize forcustomers That is organization must use the insights gleaned from the abovesteps to meet a customerrsquos individual needs amp being sufficiently responsive andflexible to respond to the differences between customers The Internet givescustomers the capability to influence how they interact with an organizationand to customize and personalize the services and offers they receive

As well this research has implications for policy makers For exampleethical considerations need to be addressed in the Internetdatabase marketingprocess because of the increasing concerns amongst consumers about theimpact of the marketing management techniques on their privacy (Tweney1998 Prabhaker 2000) Therefore members of the direct marketing industryshould implement self-regulation themselves that met or exceed the regulatoryPersonal Privacy Act due in December 2001 by moderating the amount ofintrusive and spam communications For example the Australian DirectMarketing Association and other concerned businesses may require thatInternet pages that prompt users for information explicitly state how theinformation will be used

Implications for theoryThe research findings and contributions have several implications for thetheory about Internet marketing and database marketing as well as for thequalitative research methodology of action research This research providesnew insights into Internet and database marketing theory in two ways Firstthis research appears to provide the first investigation about the intersection ofInternet and database marketing in Australian organizations and how it may

EJM3834

350

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

be achieved Thus this research contributed to the theory-deficient area of theintegration of Internet and database marketing and provided the firsttheoretical framework (Figure 2) for such a phenomenon Second literature alsotends to be from the perspective of countries such as the USA and the UKwhich are more advanced than Australia in Internet and database applications(for example Smith 1998 Geiger and Martin 1999) Therefore there is littleliterature about Internet and database marketing pertinent to countries such asAustralia and thus this research appears to be the first academic investigationof this phenomenon in Australian organizations

This research also has methodological implications That is this researchconfirmed the usefulness of action research methodology that provided theopportunity to build theory rather than test theory with the end result beingthe actual effective implementation of integrated Internetdatabase marketingwithin a major Australian organization This practical orientationstrengthened the foundations for this research and confirmed that actionresearch methodology useful for complex contemporary and real lifesituations It also demonstrates that the methodology can be used inrelatively technical areas of marketing to build theories that should coversituations other than the projectrsquos own

Further researchThis research identifies a number of areas requiring further research Thefindings from this research could be tested from other perspectives Theorganizations included in this research represent only business-to-consumerorganizations Future research could investigate the integration of Internet anddatabase marketing in the context of business-to-business because someelements may differ from those in the context of business-to-consumer contextFor example different types of data may be collected through the Internet anddifferent e-commerce infrastructures may by required As well further researchis needed to establish the statistical generalisability of these theory-buildingfindings in survey research when the population of marketing managers withthe requisite expertise becomes large enough for a survey to be done

References

Altrichter H Kemmis S McTaggart R and Zuber-Skerritt O (2000) ldquoThe concept of actionresearchrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith University Brisbane

Bawden R and Zuber-Skerritt O (2000) ldquoThe concept of process managementrdquo in ActionLearning Action Research and Process Management Theory Practice Praxis ActionResearch Unit Faculty of Education Griffith University Brisbane

Bellenger DN Bernhardt KL and Goldtucker JL (1989) ldquoQualitative research techniquesfocus group interviewsrdquo in Hayes TJ and Tathum CB (Eds) Focus Group InterviewsA Reader American Marketing Association Chicago IL

Customerrelationship

management

351

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

Buttle F (2000) ldquoThe SCOPE of customer relationship managementrdquo CRM-Forum available atwwwcrm-forumcom

Campbell L (1997) ldquoOrange sets up loyalty schemerdquo Marketing November p 6

Carson D Gilmore A Gronhaug K and Perry C (2001) Qualitative Marketing Research SageLondon

Dick B (1990) Convergent Interviewing Chapel Hill Brisbane

Dick R (2000) ldquoPostgraduate programs using action researchrdquo in Action Learning ActionResearch and Process Management Theory Practice Praxis Action Research UnitFaculty of Education Griffith University Brisbane

Edwards SL and Bruce C (2000) ldquoReflective Internet searching an action research modelrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Farquhar M (2000) ldquoReflections of a founding member of ALARPM an interview with OrtunZuber-Skerrittrdquo in Action Learning Action Research and Process Management TheoryPractice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Forcht KA and Cochran K (1999) ldquoUsing data mining and data warehousing techniquesrdquoIndustrial Management amp Data Systems Vol 99 No 5 pp 189-96

Forrest E and Mizerski R (1995) Interactive Marketing the Future Present AmericanMarketing Association NTC Business Books Lincolnwood IL

Gates B (1999) Business the Speed of Thought Using a Digital Nervous System VikingPenguin Books Ringwood

Geiger S and Martin S (1999) ldquoThe Internet as a relationship marketing tool ndash some evidencefrom Irish companiesrdquo Irish Marketing Review Vol 12 No 2 pp 25-36

Hagel J and Armstrong AG (1999) Net Gain Harvard Business School Press Boston MA

Hagel J and Singer M (1999) Net Worth Shaping Markets When Customers Make the RulesHarvard Business School Press Boston MA

Hamil J (2000) ldquoInternet supported customer relationship managementrdquo available at wwwcrm-forumcom

Hanson W (2000) Principles of Internet Marketing South-Western College PublishingCincinnati OH

Heinen J (1996) ldquoInternet marketing practicesrdquo Information Management amp Computer SecurityVol 4 No 5 pp 7-14

Hoffman DL and Novak TP (1996) ldquoMarketing in hypermedia computer-mediatedenvironments conceptual foundationsrdquo Journal of Marketing Vol 60 No 3 pp 50-68

Holtz H (1992) Databased Marketing John Wiley amp Sons New York NY

Inmon WH and Hackathorn RD (1994) Using the Data Warehouse John Wiley amp SonsNew York NY

Jackson R and Wang P (1994) Strategic Database Marketing NTC Business BooksLincolnwood IL

Kemmis S and McTaggart R (1988) The Action Research Planner 3rd ed Deakin UniversityGeelong

Kolb DA (1984) Experiential Learning Experience as the Source of Learning and DevelopmentPrentice-Hall Englewood Cliffs NJ

EJM3834

352

Lewin K (1946) ldquoAction research and minority problemsrdquo Journal of Social Issues Vol 2 No 4pp 34-6

Loney K (1998) Oracle 8 DBA Handbook Osborne McGraw-Hill Berkeley CA

McKay J and Marshall P (1999) ldquo2 pound 6 frac14 12 or does it equal action researchrdquo Proceedings ofthe 10th Australasian Conference on Information Systems Victoria University ofWellington New Zealand 1-3 December

Mitchell A (2000) ldquoDatabases donrsquot add up to one-to-one marketingrdquo Marketing Week Vol 23No 7 pp 34-5

Montgomery B (1999) ldquoNet sales surge as shoppers go on-linerdquo The Australian 6 October p 3

Nair GS and Riege AM (1995) ldquoUsing convergent interviewing to develop the researchproblem of a post graduate thesisrdquo Proceedings of the Marketing Education andResearchers Conference Griffith University Gold Coast Australia

Nash EL (1993) Database Marketing The Ultimate Marketing Tool McGraw-Hill New YorkNY

Neville B (1992) ldquoResearcher as consultant consultant as researcher ndash a phenomenological-experiential model of action researchrdquo A Quarterly Experience Vol 28 pp 33-9

Passfield R (2000) ldquoThe University of Queensland action research program a parallel actionlearning structurerdquo in Action Learning Action Research and Process ManagementTheory Practice Praxis Action Research Unit Faculty of Education Griffith UniversityBrisbane

Peacock PR (1998) ldquoData mining in marketing part 1rdquo Marketing Management Vol 6 No 4pp 9-20

Peppers D and Rogers M (1995) ldquoA new marketing paradigm share of customer not marketsharerdquo Managing Service Quality Vol 5 No 3 pp 48-51

Peppers D and Rogers M (1997) Enterprise One-to-one Tolls for Competing in the InteractiveAge Doubleday New York NY

Peppers D Rogers M and Dorf B (1999) ldquoIs your company ready for one-to-one marketingrdquoHarvard Business Review Vol 77 No 1 pp 151-60

Perry C and Zuber-Skerritt O (1992) ldquoAction research in graduate management researchprogramsrdquo Higher Education Vol 23 No 2 pp 195-208

Prabhaker PR (2000) ldquoWho owns the online consumerrdquo Journal of Consumer MarketingVol 17 No 2 pp 158-71

Revans RW (1991) ldquoThe concept origin and growth of action learningrdquo in Zuber-Skerritt O(Ed) Action learning Action Research and Process Management ALARPMAEBISPublishing Brisbane

Rowsom M (1998) ldquoBridging the gap from traditional marketing of electronic commercerdquo DirectMarketing Vol 60 No 9 pp 23-36

Seybold PB (1999) Customerscom How to Create a Profitable Business Strategy for the Internetand Beyond Times Business New York NY

Sheth JN Sisodia RS and Sharma A (2000) ldquoCustomer-centric marketingrdquo Journal of theAcademy of Marketing Science Vol 28 No 1 pp 55-66

Smith ML (1998) ldquoOne to one put the customer in the information driver seat and build betterrelationshipsrdquo Direct Marketing Vol 60 No 9 pp 37-40

St Laurent S (1998) Cookies McGraw-Hill New York NY

Sterne J (1999) World Wide Web Marketing 2nd ed John Wiley amp Sons Chicago IL

Customerrelationship

management

353

Strader TJ Lin F and Shaw MJ (1999) ldquoThe impact of information sharing on orderfulfilment in divergent differentiation supply chainsrdquo Journal of Global InformationManagement Vol 7 No 1 pp 16-25

Tweney D (1998) ldquoThe consumer battle over online information privacy has just begunrdquoInfoWorld Vol 20 No 25 p 66

Williams M (2000) ldquoSpam bam thank you Marsquoamrdquo Marketing amp e-business March pp 38-40

Yin RK (1994) Case Study Research Design and Methods Sage Publications Thousand OaksCA

Zuber-Skerritt O (2000) ldquoA generic model for action learning and action research programsrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Zuber-Skerritt O and Perry C (2000) ldquoAction research in graduate management thesesrdquo inAction Learning Action Research and Process Management Theory Practice PraxisAction Research Unit Faculty of Education Griffith University Brisbane

Further reading

Hackathorn RD (1998) Web Farming for the Data Warehouse Morgan KaufmannSan Francisco CA

Stone M (2000) Data Chaos A Court Case Waiting to Happen Bristol Business School Bristol

EJM3834

354