Database marketing in supermarkets

This master thesis surveys the current state of database marketing in supermarkets. Database marketing, usually associated with customer relationship marketing (CRM), is concerned with the application of information systems to direct marketing. The current state of database marketing varies widely across industries and even between companies within the same industry. Proponents of database marketing speak often and loudly of its role as a source of competitive advantage. Yet surveys of database practitioners show few supermarkets realize significant advantages from their systems. This master thesis discusses the drivers, the stages of development, the current state of the field, and the obstacles to database marketing. The drivers include the changes in the roles of direct marketing, cost structures, technology, and economic conditions. The development of database marketing sophistication in individual firms is described by a number of models, four of which are discussed here. These models agree on how such systems are started and their ultimate stage of development, but differ in how they describe the middle phases. Database marketing is seen as a source of strategic and tactical competitive advantage by some supermarkets and a competitive burden or strategic necessity by others. Obstacles to database marketing, including environmental, technical, marketing, and strategic problems, are discussed in detail. Another objective of this master thesis is to advise on the suitability of data warehousing and data mining in a retail environment. I first describe the general aspects of this information system and later give a detailed analysis of a particular case study to highlight important issues. Finally both the pros and cons have been discussed. At the end of this master thesis, data warehouse case of X, which is one the biggest retail company in Turkey, is given. I thank my adviser Prof. Dr. Doğan Altuner and the company X very much. Without them I cannot finish my master thesis and special thanks to my family. They always support me.