THE DEVELOPMENT OF DATABASE MARKETING: DOES CONSUMER INFORMATION PRIVACY MATTER?

Consumer concerns for information privacy (CFIP) have become an important strategic issue for companies. In order to be successful companies develop consumer databases and use consumer information to develop customized products and services, and target potential consumers more effectively. However, the intensity and the volume of direct marketing communications, and the potential misuse of consumer personal data contribute to an increase in CFIP. As a result, consumers might protect their privacy, which may inhibit the growth of database marketing, direct marketing and e-commerce as well. The purpose of this paper is to examine and present the antecedents and consequences of CFIP in the context of database marketing. This paper introduces a theoretical model that examines the impacts of consumer attitudes towards database marketing on CFIP, and the effects of CFIP on willingness to provide information, purchase intentions and consumer purchases. The model posits that perceived ability to control information might alleviate the effects of unfavourable consumer attitudes towards database marketing on CFIP, while perceived usefulness of IT might reduce negative effects of CFIP on willingness to provide information, purchase intentions and actual purchases. Managerial implications are discussed in the paper