1) Cost – As the cost of per target promotion in direct marketing tends to be substantially higher than that in case of mass marketing, marketers must send their message to a limited audience only, as sending the message to general audience at large with very few of them likely to respond positively or getting converted may increase the cost manifold and thus cause a lot of marketing dollar wastage.
2) Customer irritation – As direct marketing communication tends to be longer and more involving i.e. seek active participation of the customer, than traditional mass marketing communication, thus unnecessary and unsolicited message may lead to customer frustration, resultantly eroding brand equity.
Thus in direct marketing it is important to come up with a list of the customers who would be most interested in the product offering and thus will be most likely to respond positively rather than non-responding or responding negatively by avoiding further communication.
“Data Mining is the process of discovering interesting knowledge from large amounts of data stored either in databases, data warehouses, or other information repositories. Simply stated, data mining refers to extracting or "mining" knowledge from large amounts of data.” (Han and Kamber, 2006).
According to Fayyad et al (1996), Data mining is an important process of discovering novel, implicit, useful and comprehensive knowledge from large amount of data. For Direct marketing it translates in to a description of likely buyers or responders and thus Data mining helps in securing better results, for a direct marketing campaign than a traditional mass marketing campaign
For example - To develop marketing and service –delivery strategy, Harrah’s entertainment Inc., the gambling and hotel chain uses Data mining to target customers on individual basis for direct marketing. Using its sophisticated