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Direct Marketing 14 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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Presentation on theme: "Direct Marketing 14 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved."— Presentation transcript:

1 Direct Marketing 14 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2 QVC $6.5 billion a yearyear 2 nd most profitable channel Once sold 4,000 silver rings ($70) in just 3 ½ minutes 91 million homes 1 in 10 make purchase 40 to 6060

3 Direct Marketing Defined Radio Direct Selling Magazine and Newspaper Direct Mail Telemarketing TV Selling The total of activities by which the seller directs 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 prospect or customer

4 Growth of Direct Marketing Technological Advances Changing Structure of Society Consumer Credit Cards Miscellaneous factors Direct Marketing Syndicates Changing Structure of Markets

5 Direct Marketing Combines With... Advertising Sales Promotions Public Relations Personal Selling Internet Support Media Direct Marketing

6 San Diego Encourages Visits

7 How Database Marketing WorksDatabaseWorks

8 A Comprehensive Consumer Database Name Address/ Zip Code Telephone Number Length of Residence Age Gender Marital Status Family Data Education Income Occupation Transaction History Promotion History Inquiry History Unique Identifier

9 A Business-to-Business Database Contact Info Contact Title Telephone Number Source of order, inquiry, referral Credit History Industrial Classification Size of Business Revenues Number of Employees Time in Business Headquarters Location Purchase History Promotion History Inquiry History Unique Identifier

10 Test Your Knowledge For market segmentation and targeting, direct marketers rely most heavily on: A) Primary qualitative research B) Census data C) A database D) Survey responses E) Focus groups

11 Objectives of Database MarketingMarketing Improve Selection of Market Segments Stimulate Repeat Purchases Cross-selling Other Products Customer Relationship Management Objectives

12 Track Customer Purchases and group them on Purchase History Build a data base Keep track of communication preferences Let customers decide how to give feedback Empower staff to make decisions Track Staff actions and make improvements Try new ways to leverage customer intelligence Always add to customer intelligence Develop customer intelligence on past customers Do it now

13 Developing a DatabaseDatabase List Services Direct Marketing Association Direct Marketing Association Standard Rate & Data Service Standard Rate & Data Service U.S. Postal Service Simmons Market Research Bureau Simmons Market Research Bureau U.S. Census Bureau Sources

14 Effective Databases RFM Scoring Frequency Recency Monetary transactions

15 Direct Marketing Strategies One-Step Two-Step The medium is used directly to obtain an order Often use 800 number phone orders and credit card payment May use one medium to obtain inquiry and qualify prospect Typically follow up with a second medium to complete the sale

16 Direct-Marketing Media Home shopping Infomercials Teleshopping Print, catalogs Broadcast TV Spots Telemarketing Direct Mail

17 Types of Direct Mail House lists Broadsides Catalogs Flyers Folders Inclusions Postcards Reprints Sales letters Self-mailers All forms of advertising sent directly to prospects through the U.S. Postal Service or through private services

18 Porsche Targets Prospects with Direct Mail

19 Test Your Knowledge Which of the following statements about the use of catalogs in the direct-marketing industry is true? A) Most business-to-business marketers use print catalogs. B) The number of catalogs mailed since 1984 has decreased significantly. C) Many companies use catalogs in conjunction with their more traditional sales and promotional strategies. D) No company today relies solely on catalog sales. E) The number of catalog shoppers has declined steadily since 1984.

20 Success with CatalogswithCatalogs

21 TV Spots, Infomercials, and Homeshopping

22 Catalogs $19.2 billion 2007 TV $156 billion 2007 Infomercials –Single female 18 to 34 earning $50,000 to $99,900 per year –Tell a story –Good at Branding –Must have a store presence

23 A Direct Response Print Ad

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

25 Audiotex or Telemedia

26 Forms of Direct Selling Repetitive person-to-person Nonrepetitive person-to-person Party PlansPlans

27 Cutco Knives Employs Direct Selling

28 Measuring Effectiveness Cost per Order (CPO)

29 Direct Marketing Advantages Selective reach Segmentation capabilities Frequency potential Flexibility Timing Personalization Costs Measures of effectiveness

30 Direct Marketing Disadvantages Image factors Accuracy Content support Rising costs Do Not Contact lists

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