Abstract: In today’s information era, the pitfalls of marketing theory are not accurate, not accountable, especially considering online shopping and other novel business practices. The article established a theoretical framework of the innovative marketing theory—precision marketing, including definition, system and applications.
 
Keyword: Precision Marketing, CRM, direct communication, customized product/service, customer value, market proliferation
 
Traditional marketing theory could be inspissated as 4Ps (Product, Price, Place and Promotion, which has been regarded as the foundation of contemporary marketing theory.
However, and market landscape is changing in an unprecedented speed, as well as the economic environment as a whole. On the one hand, the competition in classified product/market becomes more and more fierce. On the other hand, the diversification of consumer needs and wants are accelerating in a speed beyond most peoples’ imagination. To confront this trend, marketing practitioners realized the imperative to adopt a customer orientation (Schultz et al, 1996), and an integrated marketing doctrine.
In the first decade of the new millennium, the effect of globalization, knowledge economy, digital and Internet are shaping a new era. In this era, marketing has to be customized and accountable, and the essential means to achieve these standards has already been widely utilized. A marketing theory for this era is outcoming.
 
 
I.        Definition
Precision means exact and measurability. We propose that precision marketing is a way to achieve well-measured expansion by pinpoint positioning, direct communication, integrated marketing activities, and customized products/services.
 
II.     The system of precision marketing
A.     Pinpoint positioning
Precision means exact and measurability. We propose that precision marketing is a way to achieve well-measured expansion by pinpoint positioning, customized communication, and integrated marketing activities.
Market segmentation and positioning is initial step of modern marketing practice, which includes measuring and analyzing consumer needs. Precision marketing employs advanced database system and analytical tools to classify and segment customer needs, and market tests to ensure the appropriate positioning.
 
B.     Direct communication
Precision marketing is the opposite of massive advertising. Rather, direct communication is the core of precision marketing. Point to point communication, such as direct mail, electronic mail, call center and SMS, is the basis of precision marketing.
 
C.     Integrated marketing activities
All major marketing activities, such as logistics, communication, transaction, services, should be integrated to achieve competitive edge in targeted market. Planning, marketing audit and control are key to synergy effect.
 
D.     Customized products/markets
To satisfy diversified customer needs and wants, products and services should be diversified as well, which means customization is the sole solution in today’s market place.
Employing advanced supply chain management, process control, call center, and Internet, Dell produces and deliveries computers on demand, which is an excellent example of massive customization.
Despite the success of Dell, most customer needs and wants are not enough to achieve economies of scale in manufacturing, that’s why there are tremendous potential for customized products and services. Through customization, businesses can harvest high profit margin by innovatively mining and satisfying diversified customer needs and wants.
 
E.     CRM—the core of precision marketing
In a customer oriented view, precision marketing and CRM are tied together in an inalienability manner. The former is a philosophical expression, while the latter is the technological tool turning the philosophy into practice.
Generally, CRM has following components: data management, process management and intelligent management. It is based on modern information technology, and integrated with Internet and wireless communication.
In the fast-pace business world of today, where change is the only thing constant, a good understanding of some basic principles for best practices will be very helpful for organizations that are thinking of implementing CRM to enhance the customer value.
 
 
III. Theory of Precision Marketing
As the new trend, precision marketing reflects the most advanced marketing of marketing theory and practices.
 
A.     Integrated Marketing
Unlike other marketing strategies, integrated marketing is distinctive because it involves three levels of integration: strategic, organizational, and message.
1      Strategic
Integrated marketing recognizes that strategic problems need strategic solutions and that promotional tactics alone will seldom solve a considerable marketing problem. If your programs are out of date or your tuition is perceived as too high, excellent promotions will only do so much. Eventually you will have to deal with the problem on a strategic level: perhaps a new curriculum, better faculty, or a revised pricing policy.
Strategic integration involves defining and meeting the needs of your target audience within the mission and vision of your organization. By learning about your target audience's characteristics and needs, you can segment and mix strategic assets such as product, place, and price (or as some call them, customer, convenience, and cost). This process relies on feedback to help assure strategic decisions are on track.
2      Organizational
Organizational integration involves not only sharing resources and goals but also the creation of an innovative organizational structure. For example, a new structure might create a vice president for market relations who would oversee all customer relations regardless of the stage at which that customer relates to the institution. In such a scenario, it might make sense that student recruiting, fundraising, public relations, advertising, and publications all fall under the jurisdiction of one vice president. What's most important is to create a true team approach to marketing-not another committee. Obviously, a healthy leader-follower relationship must exist for changes in organizational structure to be effective. Both the leader and the followers must work together to allow for complete strategic and message integration.
3      Message
Message integration is often called integrated marketing communications (IMC). Most often, people confuse IMC with integrated marketing. However, IMC is a subset of integrated marketing.
Message integration means that messages are coordinated and consistent. These messages apply to both internal and external communications. Because of the multifaceted nature of communications in organizations, leaders must ensure that all communications, verbal and nonverbal, reinforce one another and promote the organization's values and messages. They have a common look, sound, and feel across a number of mediums, including CD-ROMs, Web sites, e-mail direct marketing, and publications as well as media advertising campaigns. However, these messages may still be segmented, reflecting different target audience needs and expectations.
4      Research
Successful marketing requires integrating research with strategy. It demands the resources to explore complex challenges like new programs, new markets, and new organizational structures. According to a recent article in Marketing Times, integrated marketing is the way of the future for business and organizations that want to succeed. There is growing evidence of explosive changes in the way we do business. To succeed, organizations will become marketing driven and customer focused, and they will use integrated marketing plans as the basis for their operations.
 
B.     Customer Value
People can try to satisfy their needs in many ways. The marketing way of satisfying them is to offer something of attractive value in exchange for what one wants from the other party. The basic concept of marketing is exchange. It is the most reasonable and voluntary way for people to acquire goods in a civilized society.
Over the years, customer value has had various meanings. These days, however, most marketing-oriented managers take it to be another term for the benefits that customers think they can get from the portfolio of attributes, or features, that make up the product, whether it is a good or a service. So by this definition managing customer value means striving to improve this portfolio by increasing the performance level of one or more existing attributes of the product, adding one or more new attributes, or both.
For example, if a business unit is offering a high-end shaving system for men, it might seek to enhance, among other things, its blade-coating and cutting-speed attributes, and by doing so "give a closer shave" (as Gillette did prior to putting on the market its "Mach3 Turbo" system). Or if a unit is offering a high-end shaving system for women, it might seek to enhance, among other things, its lathering and shaving attributes, and by so doing provide women "an easy, hassle-free way to achieve a close, comfortable shave that leaves their skin soft and smooth" (as Schick did prior to putting on the market its "all-in-one wet shaver Intuition" system).
To develop a customer value strategy that works to maximize a business unit’s contribution to shareholder value, the unit needs to be equipped with at least four strategic assets:
①，          Superior customer intelligence: detailed knowledge of what customers have learned about the unit’s product attributes, how they rank these attributes in importance and what they think the product’s benefit-price ratio is currently.
②，          Superior competitor intelligence: detailed knowledge of competitor offering strategies and how they are likely to change if the unit improves its product attribute portfolio.
③，          Superior product design skills: the capabilities necessary for "inventing" improvements in the attribute portfolio – that not only will increase the product’s customer benefit ratio but will do so cost-effectively.
④，          Superior pricing management skills: the capabilities necessary for determining whether to price an unmatched offering improvement for ROI or for market share.
 
C.     Direct Marketing
Precision marketing is the opposite of massive advertising. Rather, direct communication is the core of precision marketing. Point to point communication, such as direct mail, electronic mail, call center and SMS, is the basis of precision marketing.
The term ‘direct marketing’ was first used in 1961. It was the brainchild of another American pioneer, Lester Wunderman. This term caught on because it was more inclusive than ‘mail order.’ It included a new method of ordering – by telephone – and marketing methods, such as magazine subscription and continuity publishing (book and music series), that did not readily come to mind under the heading of mail order.
Many would agree that direct distribution remains direct marketing’s most important function. However, the lessons learned from direct distribution experience have enabled the principles of direct marketing to be applied to every kind of business. Direct marketing has come to mean more than just selling direct.
If Thomas Jefferson (…all men are created equal) was the hero of mass marketing, Vilfredo Pareto is the hero of direct marketing. Pareto’s Principle (of the distribution of incomes) was that 80% would end up in 20% of pockets however society attempted to regulate matters. To Pareto, whether all men are created equal or not, they certainly don’t end up that way.
So it is with customers. Every direct marketer knows that some customers are much more valuable than others. Every astute direct marketer knows who the valuable ones are. The really smart direct marketer has a system for forecasting who the valuable ones are going to be.
 
D.     Chain Reaction and Marketing Mobility
Marketing mobility are rooted in declining attention spans, brutally increased competition, and ever-increasing depersonalization in business relationships, arising from misuse or overuse of today's communications technology. Furthermore, there are more salespeople today than there are potential buyers. Precision marketing employs the theory of chain reaction as a means to exploit marketing mobility.
A chain reaction refers to a process in which neutrons released in fission produce an additional fission in at least one further nucleus. This nucleus in turn produces neutrons, and the process repeats. The process may be controlled (nuclear power) or uncontrolled (nuclear weapons). If each neutron releases two more neutrons, then the number of fissions doubles each generation. In that case, in 10 generations there are 1,024 fissions and in 80 generations about 6 x 10 23 (a mole) fissions.
Applying precision marketing, a chain reaction of sales occurs when a highly mobile customer group are identified and was imposed to focused marketing effort in order to create an explosion of sales increase.
For example, a manufacturer of therapeutic mattress made first really big sale to a very large hotel chain. His cost of sales for landing this customer was the cost of one of his mattresses--plus shipping--plus a few phone calls. "I sent the CEO and his wife one of our mattresses. Shortly afterwards, I got a call from one of the CEO's top staffers with a request for a meeting. The order is so big that our small manufacturing facility can't meet the demand. So we're going to license them to build our mattress, and they're going to help us market it!"
This illustrates a key principle of selling with marketing mobility: Wherever possible, multiply your effects, not your efforts. Each one of your prospects must have the ability to tender more than one sale. They must be conduits for getting additional qualified prospects.
As you can see, the concept of marketing mobility fits a dizzying array of products, services and solutions. Precision marketing means that  your sales efforts should qualify a prospect who has depth of market and can lead you to future business. In other words, always pick a prospect who can take you to many more prospects. (I like to use a multiplier of at least 10, preferably more.) So put on your thinking cap, and figure out how your prospects can become your best marketers.
 
 
                                                         xuhailiang   professor
 
References:
　　　　
 
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