CASE 17 Active Endeavors Analyzes Its Customer Database Active Endeavors is an o

Question

CASE 17 Active Endeavors Analyzes Its Customer Database Active Endeavors is an outdoor apparel and accessory wide and deep assortment, but he thinks there might be arn retailer located in lowa City, Iowa. The store is locally opportunity to increase the store's market position by uti- owned and has been in business for 13 years, and it has a lizing a transactional database of its customers. The store reputation for high quality and product innovation. Its has the customers' transaction records, which include cus- target market is high-income individuals with an interest tomer name and address, transaction date, products and in outdoor activities and travel. quantity purchased, and purchase price. He is thinking of using the transactional database to design and target a the founder of the store, has felt pressure Ken Stu on profit margins and increased competition, especially due to the emergence of the Internet. He tries to remain on top of competition by offering new products and a art, mpaign designed to increase traffic. Ken analyzed the customers' past purchase behavior direct mail ca using the RFM analysis and classified the customers into

Explanation / Answer

Q1) The type of customers in each of the groups include -

1. Frequent purchasers of high value - most active customers

2. Moderate frequent purchasers of moderate value - moderately active customers

3. Less frequent purchasers of low value - less active and inactive customers

Q2) Below is what Active Endeavors needs to do to get more business from each group -

1. For the more frequent customers, the firm needs to provide promotional offers in the form of reward points etc. aiming at further increase of purchases and retention.

2. For the moderately frequent and moderate value customers, the frequency and value of purchase can be increased by providing promotional offers and increasing marketing communications regarding product features and quality.

3. For the less frequent and low value purchase customers, the focus should be on the product and its features while also trying to decode the reason for their low purchase value and volume. Trying to understand their requirements will help the firm to undertake initiatives centered around these customers.

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