One decision in which businesses use data mining techniques is the decision of which products should be marketed/advertised to a certain demographic of customer. A good example would be Target's method of marketing baby products to their customers. Target, along with almost every other business today, records EVERY piece of data that customers generate; everything from the type of product purchased to how the product was purchased (be it with debit, credit, cash, check, online, on-site, during the day, at night,... the list goes on and on). Once all of this raw data is analyzed, Target is able to make pretty accurate predictions of what customers want and need, create very informative profiles for each of the customers, and very effectively market certain products to customers, tailoring those products to very specific times in the customers' lives. Target practices this marketing technique to increase customer loyalty by creating an image that Target has "everything for every occasion."
Pretty good way to use data, right? Yeah, that's what I thought as well.
As good of a way to use data as it may seem, there is a lot of controversy surrounding Target's marketing practices. There are claims that Target is being too intrusive into the personal lives of customers and are invading their privacy!
Forbes released an article that supports these claims with the title of "How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did." The article simply summarized Target's marketing technique of analyzing their customers' buying habits to make predictive profiles of their customers for more effective marketing. The article also explains how Target accurately profiled one of their customers, a teenage girl, as pregnant based on her buying habits in comparison to other customer's buying habits.
Some feel that her privacy was invaded due to the fact that the teenage girl never disclosed her pregnancy to anyone affiliated with Target, yet still got targeted promotional advertisements for baby and pregnancy products mailed to her home.
What do you think?
This is very interesting, I never noticed that Target does that. I always assumed that target sends out the same standard ads to everyone. I do not think they did anything wrong in their methods of marketing. If anything it is quite clever.
ReplyDeleteI don't believe Target did anything wrong with their marketing practices. However, If that had been me, I would have been extremely upset and embarrassed receiving pregnancy and baby information before even notifying my parents that I was pregnant. She probably hadn't even come to terms with being pregnant.
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