Marketing is changing as well as evolving with each passing day. This change can be attributed to many factors like globalization, changing consumer preferences and most importantly technology. We hear of so many new terms which were non-existent, probably a decade ago. Today the consumer is intelligent. She/he has many sources to do the research before buying a product.
For example, let’s just trace the buying process of a smart phone by a typical engineering student, say Raj. He first sees the plethora of smart phones around him, mostly owned by his friends. Then he filters some out and finally arrives at around 4-5 phones. He then dives into the sea of information, more popularly known as the internet and searches for anything and everything about his short-listed items. From the online stores to the tech forums he can get all the details including the features, consumer reviews and prices (at different stores). Moreover he can also post a status in Facebook or for that matter a social networking site and invite comments or opinions. Finally he selects one of the lots (of course until he is satisfied) and either buy the phone from the online store or he can go to the nearest dealer and check out the phone physically and do the purchase there.
Not long ago this whole process would not have generated a lot of interest among us, the marketing managers. But today it does. We have recognized the importance of data that is generated in this process and how we can effectively put the same to use in the best interest of the company. Information Technology (IT) is now an important component of the marketing function of any company. What was seen as an addition, now serves as a requirement. The transformation of marketing from an intellectual and creative process to a data-driven process is happening. Analytics, which is the discovery of meaningful patterns in data, is something which most firms have started to use, especially web analytics. We have started to believe in numbers and use it to predict the behaviour of the consumer. Thus a proper BI solution is becoming a necessity for every firm. For those who are a bit unfamiliar with the term ‘Business Intelligence’ (BI), it is a set of theories, methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information and include functions like analytics, data mining, online analytical processing(OLAP), reporting etc. Hence a combination of all these would serve as the ideal recipe for success.
Before we discuss further on BI, we should understand the difference between Structured and Unstructured data. We are pretty familiar with structured data and as the name suggests it is the data which resides in fixed fields. For example, the sales of Company A for the last financial year can be maintained in a spreadsheet with the monthly details. We can use the spreadsheet directly without much change. Storing data in relational tables is another example for the same. We can query the database for the information we require. On the other hand, unstructured data does not have a pre-defined data model and/or does not fit well into relational tables. An example for this would be the data in all the social networking sites and blogs which is not in any particular format and thus cannot be used directly but nevertheless is a repository of highly useful information.
A firm needs to use both these kinds of data in order to have the best results and that is where an effective BI solution comes into place which help in making a better decision making process for the managers
Data warehouses and data marts would obviously help in faster retrieval of data. It would, to a large extent, depend upon the goals of the organization as to the design of the warehouse. The Key Performance Indicators (KPIs) provide vital information like sales, profits, inventory statistics, relative department performance measures etc. and is a necessary tool in the BI strategy formulation. It is absolutely necessary that the BI implementation is well aligned with the business strategy and goals. The data warehouse can serve many purposes. First and foremost, it can be used for enterprise reporting. Middle-level and higher level managers can use the well formatted and customized reports and in a glance get a fair idea of the business. From the vast amount of data we have actually filtered what we want and presented in a good-looking format with the help of reporting tools. It is as simple as that. Secondly, it can also be used for predictive modelling, data mining and forecasting. Statistical tools can be applied to the data warehouse for predicting the future sales and hence planning accordingly. Thirdly, it can also be used for Online Analytical Processing or OLAP which is analyzing multi-dimensional data. This will also help in forecasting as we can have multiple perspectives of the same data and get a much better picture.
Now all this was about the structured data. What do we do about the unstructured? Mind you, when we talk about unstructured data there is a lot of data. Much more than when we compare it to the structured data, and that is where the term ‘Big Data’ came into picture. We used to shudder at the mention of big data. But now with the hardware becoming cheaper and innovative solutions like Hadoop offering a much convenient and useful way to store the data, marketers are realizing the potential of big data. Technology today has enabled the marketers to take advantage of granular analysis which can identify patterns even up to the lowest bit of data. It has also enabled tracking of the consumer interactions with the company through a wide variety of channels. A retail store used to be the only place for interaction between the company and the consumer but today the scenario has completely changed. Not only has the number of channels increased but also the recording of these interactions and analyzing the patterns have taken place which serves in favour of the firm.
Thus, today it has become vital for an organization to have a BI solution in place to have that extra edge, to enjoy the competitive advantage. Today data holds an important role in the marketing function of a company. Moreover the meaning of data has also changed in the past few years. It used to be the visible artifacts stored in excel files and relational databases. Now it is the tweets, Facebook posts, blog entries, discussion forums and what not. Hence a BI solution needs to be employed which can handle both the kinds of data and the firms which are successful in this will emerge in the front.
PS: This article is also published in mbaskool.com. You can read it here