Chapter 14 Direct Marketing. Chapter 14 : Direct Marketing Chapter Objectives To recognize the purpose of direct marketing as a communications tool To.

Chapter 14

Direct Marketing

Chapter 14 : Direct Marketing

Chapter Objectives

• To recognize the purpose of direct marketing as a communications tool

• To demonstrate the use of direct-marketing media

• To appreciate the strategies and tactics involved in direct marketing

• To determine the scope and effectiveness of direct marketing


Direct Marketing Defined

• “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, or personal visit from a prospective customer.”

• Aspect of total marketing– involves marketing research, segmentation, evaluation.


Defining Direct Marketing

• Media for Direct marketing include:

– Direct Selling– Direct mail– Telemarketing– Internet selling – Direct action marketing – Catalog selling– Cable TV selling, etc.


Factors influencing Growth of Direct Marketing

• Consumer Credit Cards

• Direct Marketing Syndicates

• Changing Structure of Society

• Technological Advances

• Miscellaneous Factors



• Consumer Credit Cards

– Over 1 billion credit cards issued.

– Makes it feasible for purchase of items through direct response channels.



• Direct Marketing Syndicates– new marketing opportunities with list development,

statement inserts, catalogues, and sweepstakes.

• Changing Structure of Society– Money-rich, time -poor– Dual income families increasing– Busier society with less time for shopping



• Technological Advances– Electronic media and computers facilitating shopping

and marketing to desired target market.– 11 million Canadian Households receive home

shopping programs



• Miscellaneous Factors

– changing values– sophisticated marketing techniques– industry’s improved industry


Top 10 Direct Marketing Industries

115.2

55.2

50.4

47.3

40.6

39.3

35.3

34.9

29.4

28.8

0% 5% 10% 15%Entertainment

Depository institutions

Health services

Food and kindred products

Insurance carriers/agents

Membership organizations

Auto dealers/service stations

General merchandise stores

Real estate

Nonstore retailers $ Billions

Percentage Annual Growth 1994-1999


Role of Direct Marketing in IMC Program

• Combines Direct Marketing & Advertising

– Direct Marketing is a form of advertising.

• Combines Direct Marketing & PR

– PR often employs Direct Marketing techniques

• (I.e. telemarketing, 1-800 numbers)


Role of Direct Marketing in IMC Program

• Combines Direct Marketing & Personal Selling

– Telemarketing and direct selling are two methods of personal selling.

• Combines Direct Marketing & Sales Promotion

– Direct Mail pieces are used to distribute sales promotion

– Sales promotions build databases that can be used in Direct Marketing.


Direct Marketing Objectives

• Behavioral – test drives– votes – contributions– sales– I.e. 2 to 3% response

rat

• Non Behavioral– build an image– maintain customer

satisfaction– inform/educate

customers


Developing a Database

• Database– a list of customers and potential customers.

• Database Marketing– use of specific information about individual customers

and/or prospects to implement more effective and efficient marketing communications.


Contents of a ComprehensiveConsumer Data Base

• Name• Address/Zip code• Telephone number• Length of residence• Age• Gender• Marital status• Family data

• Education• Income• Occupation• Transaction history• Promotion history• Inquiring history• Unique identifier


Contents of a ComprehensiveB2B Data Base

• Name of company, contact or decision maker(s)

• Title of contact

• Telephone number

• Source of order/inquiry or referral

• Credit history

• Industrial classification

• Size of business

• Revenues

• Number of employees

• Time in business

• Headquarters location

• Multiple locations

• Purchase history


Sources of Database Information

• Statistics Canada– census data provide information on every household in

Canada.

• Canada Post– Postal Codes provide information on household and

business locations.

• List services – Many providers of lists are available.

• Info Canada– Provincial Business Directory.


Sources of Database Information

• Marketing research houses– Large research houses conduct annual studies of

customers who buy at home via mail or telephone.

• Direct Marketing Association– The direct marketers’ trade organization promotes

direct marketing and provides stats on direct marketing use.

• Others – Canadian Marketing Association, Dunn and Bradstreet,

Fortune 500, Book of Lists, etc.


Direct Marketing Media Strategy

• Two approaches to Direct Marketing:– One-step approach - medium is used directly to obtain

an order. (I.e. commercials with toll-free numbers.)– Two-step approach - may involve the use of more than

one medium.• 1st effort - screen, qualifies potential buyers.

• 2nd effort - generates the response.


Direct Marketing Mediums

• Direct Mail• Catalogues• Broadcast Media• Infomercials• TV Advertorials• Teleshopping• Electronic Teleshopping• E-mail Marketing


Direct Mail

• Unsolicited mail you receive– Often called junk mail– more advertising dollars being spent on direct mail than

most other forms.

• Not restricted to small companies– Large companies also increasing expenditures in direct

mail. (I.e. American Express, AOL, RBC)


Catalogues

• Many companies use catalogues in conjunction with traditional sales and promotional strategies– Ie) Sears selling directly through catalogues and using

them to inform consumers about products in store

• Now available on the internet for both B2B and consumer use


Direct Mail

• Mailing Lists are keys to success of Direct Mail– lists are more current, eliminating waste coverage.


Strengths of Direct Mail(Fig. 14-4)


Broadcast Media

• Two major broadcast media:

– Television– Radio

• Direct Response– Product or service is offered and a sales response is

solicited through one or two-step approach

• Support Advertising– Supports other forms of advertising


Infomercials

• Long commercial ranging from 3-60 minutes

• Produced by advertisers and designed to replace TV shows

• Very effective


TV Advertorials

• Show the public the entire model range of a product

• Provides information in a series of 5-minute films


Teleshopping

• Shopping via the TV set

• At maturity point of their cycle due to increase in internet shopping


Print Media

• Magazines and newspapers are difficult media to use for direct marketing due to high clutter from competition and expensive rates.

• Most likely found in specific areas


Telemarketing

• Sales by the telephone

• Two types:– Outbound and Inbound


Outbound and Inbound Telemarketing

• OutboundTelephone calling by the

marketer or marketer’s agent to individual prospects, seeking purchase, subscription, membership, or participation by the call recipient.

• InboundMarketers’ facilities and

invitations to prospects to call a central location or long distance number or by toll-free, 800 or fixed cost 900 number.


E-Mail Marketing

• A form of direct marketing via the internet

• One of the fastest growing forms of direct marketing over the last 5 years


Direct Marketing Strengths

• Selective Reach

• Segmentation Capability• Frequency Potential• Flexibility• Timing• Personalization• Economy• Measurement of Effectiveness


Direct Marketing Weaknesses

• Image Factors

• Accuracy

• Content Support

Chapter 14 Direct Marketing. Chapter 14 : Direct Marketing Chapter Objectives To recognize the purpose of direct marketing as a communications tool To.

Documents

direct marketing factors

direct marketing media

direct marketing techniques

purpose of direct marketing

direct marketing industries

direct marketing pr

use of direct

direct efforts