direct marketing

M.imad

1. Direct Marketing Direct Marketing
14
McGraw-Hill/Irwin© 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

2. Direct Marketing Defined
¾Direct selling ¾Direct mail ¾Telemarketing ¾Internet selling ¾Direct action marketing ¾Catalog selling ¾Television/ print media ¾Cable TV
“The total of activities by which the seller . . . direct
efforts to a target audience using one or more media for
the purpose of soliciting a response by phone, mail, the
internet or personal visit from a prospective customer.”
Includes:

3. Factors contributing to the growth of direct marketing
¾¾Consumer Credit Cards Consumer Credit Cards
ƒOver 1 billion credit cards in circulation
¾¾Direct Marketing Syndicates Creating Opportunities Direct Marketing Syndicates Creating Opportunities
ƒList development ƒStatement inserts ƒCatalogs/Sweepstakes
¾¾Changing Structure of American Society Changing Structure of American Society
ƒIncrease in two income households ƒMoney-rich/Time-poor – need for convenience
¾¾Technological Advances Technological Advances
ƒBetter communications via electronic media & computers ƒRapid package delivery ƒElectronic delivery systems
¾¾Ability to measure effects of direct marketing efforts Ability to measure effects of direct marketing efforts
ƒCost per order/ Cost per inquiry

4. Direct Marketing Combines With . . .
¾Advertising ¾Public Relations ¾Personal Selling ¾Sales Promotion ¾Support Media

5. Database Marketing
Used to: ¾Improve selection of target markets ¾Encourage repeat purchase ¾Cross-sell other products and services ¾Develop one-to-one relationships with
customers
The use of specific information about individual
customers and/or prospects to implement more
effective marketing communications and selling.

6. Sources of data base information Sources of data base information
Developing a Database
¾Internal Records ¾U.S. Census Bureau ¾U.S. Postal Service ¾List Services ¾SRDS – Direct Mail Lists and Data ¾Simmons Market Research Bureau ¾Direct Marketing Association

7. PETCO builds a database through its loyalty
program

8. Contents of a Comprehensive Consumer
Data Base
ƒName ƒAddress/Zip code ƒTelephone number ƒLength of residence ƒAge ƒGender ƒMarital status ƒFamily data
ƒEducation ƒIncome ƒOccupation ƒTransaction
history
ƒPromotion history ƒInquiring history ƒUnique identifier

9. Contents of a Comprehensive Business to
Business Data Base
ƒName of company,
contact or decision
maker(s)
ƒTitle of contact
ƒTelephone number
ƒSource of order/inquiry
or referral
ƒCredit history
ƒIndustrial classification
ƒSize of business
ƒRevenues
ƒNumber of
employees
ƒTime in business
ƒHeadquarters
location
ƒMultiple locations
ƒPurchase history

10. Direct Marketing Strategies
¾¾OneOne-
-
step approach step approach
-
direct marketing media
used directly to solicit an order
¾¾TwoTwo-
-
step approach step approach
–
multiple efforts used to
generate a response. First effort is used to screen,
qualify or interest potential buyers. Follow-up used to
achieve order or close the sale.
¾¾Direct Marketing Media Direct Marketing Media
ƒDirect mail ƒBroadcast media (direct response ads/informercials) ƒPrint media ƒTelemarketing ƒDirect selling

11. Types of Direct Mail
ƒCatalogs ƒFlyers ƒFolders ƒPostcards
ƒInclusions ƒReprints ƒSales letters ƒSelf-mailers
“All forms of advertising sent directly to
prospects through the U.S. Postal Service or
through private services.”

12. Direct Mail Advantages and Disadvantages
ƒControl
ƒCoverage
ƒFlexibility
ƒImpact
ƒReach
ƒResponse
ƒSelectivity
ƒDelays in delivery
ƒHigh cost per exposure
ƒList quality assurance
ƒSaturation among
audience
Advantages Advantages
Disadvantages Disadvantages

13. Porsche uses direct mail to target potential
customers

14. Direct Response Advertising Types
ƒTV and CATV commercials and infomercials selling
products by phone or mail order.
ƒNewspapers, magazines and other print media ads with send-in or call-in coupon order forms ƒDirect mail pieces and inserts soliciting inquiry recipients. ƒCard decks, coupon booklets and mini-catalogs seeking orders for one or more products. ƒE-mail messages to computer users“
All forms of advertising designed to obtain
immediate, direct response by mail, telephone, the
Internet or personal visit from audience members.”

15. Direct Response Pros & Cons
ƒAdvertisers acquire or
enhance a data base of
individual customers.
ƒCustomers are served
with a greater selection
from a central inventory.
ƒResponse options enable
audience to act right
after exposure occurs.
ƒNo store is required and
customers can buy from
their own homes.
ƒCustomers can’t handle or
inspect the product before
purchasing.
ƒMerchandise returns and
subscription cancellations
may be numerous.
ƒSeller reputation and
prestige may be
compromised by the poor
image of the method.
Advantages AdvantagesDisadvantages Disadvantages

16. Catalogs - Pros & Cons
Advantages Advantages
ƒProvides buyers with wide
selections
ƒUsually welcomed by shoppers
ƒDesign offers high impact
potential
ƒMerchandise is centrally
inventoried
ƒFulfillment facilities closely
controlled
ƒTiming can be geared to
seasonal needs
ƒSplit-run testing can insure
effectiveness
Disadvantages Disadvantages
ƒProduct costs are usually
very high
ƒCost per contact is
relatively high
ƒSaturation for some
markets is likely
ƒDelivery or fulfillment
may be delayed
ƒCustomer can’t inspect or
handle goods
ƒReturns may sometimes
be excessive

17. Neiman Marcus uses traditional and online
catalogs

18. Outbound and Inbound Telemarketing
Outbound Outbound
Telephone calling by the marketer or marketer’s
agent to individual prospects, seeking purchase,
subscription, membership, or participation by
the call recipient.
Inbound Inbound
Marketers’ facilities and invitations to prospects
to call a central location or long distance number
or by toll-free, 800 or fixed cost 900 number.

19. Outbound Telemarketing Advantages Advantages
ƒInteractive contact
ƒExtensive reach
ƒCaller-controlled
timing
ƒHigh impact
Disadvantages Disadvantages ƒIntrusive nature
ƒPoor image of method
ƒHigh cost of contact
ƒLow conversion rate
ƒExtensive caller training
ƒNamelist inadequacies
ƒHigh termination rates
ƒHigh reneges, returns

20. Inbound Telemarketing Pros & Cons
Advantages Advantages ƒResponse is highly
convenient for the
audience.
ƒMethod permits interactive
selling and service.
ƒTransactions are facilitated
by high rate of credit card
holding.
ƒImmediacy of method
permits great control of
inventory
Disadvantages Disadvantages
ƒLabor-intensive call answering facilities may be required.
ƒPersonnel direction system may be required for efficiency.
ƒNonproductive call rates may be exceedingly or unacceptably high.

21. Overall Direct Marketing Pros & Cons
Advantages Advantages ƒSelective Reach
ƒSegmentation Capability
ƒFrequency Potential
ƒFlexibility
ƒTiming
ƒPersonalization
ƒEconomy
ƒMeasurement of Effectiveness
Disadvantages Disadvantages ƒImage Factors
ƒAccuracy
ƒContent Support