To what extent do you agree that one-to-one marketing will replace traditional market segmentation methods.
Market segmentation may be defined as the identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy. Its object is to identify groups of customers with similar requirements so that they can be served effectively while being of a sufficient size for the product or service to be supplied efficiently. Traditional segmentation methods have been based around identifying a sizeable group of the potential market within similar needs and characteristics. The Internet and advanced technology allow for segmentation strategies to be taken a step
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Indeed, one-to-one marketing is closely related to relationship marketing in that the value of the customer relationship lies at the heart of both relationship marketing (or CRM) and one-to-one marketing. Relationship marketing theory provides the conceptual underpinning of one-to-one marketing since it emphasizes enhanced customer service through knowledge of the customer, and deals with markets segmented to the level of the individual. one-to-one marketing ‘involves a company developing a long-term relationship with each customer in order to better understand that customer’s needs and then deliver services that meet these individual needs. Improvements in data capture and management have made it possible for marketers to pursue the ‘segment of one’ and better customer relationship management. For example, when customers visit Tesco online and register their details and card number, they are presented with recommendations as to what and how much to buy. In this way, with the help of the Internet, Tesco is able to segment and target its customers on an individual basis and better manage the customer relationship. Moreover, by tailoring the level and content of marketing effort to customer value, the effectiveness of marketing spend can be increased.
As one-to-one marketing has many benefits, many businesses have developed customized marketing approach. For instance,