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 Chapter 14 : 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. Chapter 14 : Direct Marketing

Defining Direct Marketing Media for Direct marketing include: Direct Selling Direct mail Telemarketing Internet selling Direct action marketing Catalog selling Cable TV selling, etc. Chapter 14 : Direct Marketing

Factors influencing Growth of Direct Marketing Consumer Credit Cards Direct Marketing Syndicates Changing Structure of Society Technological Advances Miscellaneous Factors Chapter 14 : Direct Marketing

Factors influencing Growth of Direct Marketing Consumer Credit Cards Over 1 billion credit cards issued. Makes it feasible for purchase of items through direct response channels. Chapter 14 : Direct Marketing

Factors influencing Growth of Direct Marketing 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 Chapter 14 : Direct Marketing

Factors influencing Growth of Direct Marketing Technological Advances Electronic media and computers facilitating shopping and marketing to desired target market. 11 million Canadian Households receive home shopping programs Chapter 14 : Direct Marketing

Factors influencing Growth of Direct Marketing Miscellaneous Factors changing values sophisticated marketing techniques industry’s improved industry Chapter 14 : Direct Marketing

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 $ Billions 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 0% 5% 10% 15% Percentage Annual Growth 1994-1999 Chapter 14 : Direct Marketing

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) Chapter 14 : Direct Marketing

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. Chapter 14 : 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 Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing 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. Chapter 14 : Direct Marketing

Contents of a Comprehensive Consumer 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 Chapter 14 : Direct Marketing

Contents of a Comprehensive B2B 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 Chapter 14 : Direct Marketing

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. Chapter 14 : Direct Marketing

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. Chapter 14 : Direct Marketing

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. Chapter 14 : Direct Marketing

Direct Marketing Mediums Direct Mail Catalogues Broadcast Media Infomercials TV Advertorials Teleshopping Electronic Teleshopping E-mail Marketing Chapter 14 : Direct Marketing

Chapter 14 : Direct 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) Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing 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 Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing Direct Mail Mailing Lists are keys to success of Direct Mail lists are more current, eliminating waste coverage. Chapter 14 : Direct Marketing

Strengths of Direct Mail (Fig. 14-4) Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing 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 Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing Infomercials Long commercial ranging from 3-60 minutes Produced by advertisers and designed to replace TV shows Very effective Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing TV Advertorials Show the public the entire model range of a product Provides information in a series of 5-minute films Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing Teleshopping Shopping via the TV set At maturity point of their cycle due to increase in internet shopping Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing 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 Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing Telemarketing Sales by the telephone Two types: Outbound and Inbound Chapter 14 : Direct Marketing

Outbound and Inbound Telemarketing Telephone calling by the marketer or marketer’s agent to individual prospects, seeking purchase, subscription, membership, or participation by the call recipient. 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. Chapter 14 : Direct Marketing

Chapter 14 : Direct Marketing 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 Chapter 14 : Direct Marketing

Direct Marketing Strengths Selective Reach Segmentation Capability Frequency Potential Flexibility Timing Personalization Economy Measurement of Effectiveness Chapter 14 : Direct Marketing

Direct Marketing Weaknesses Image Factors Accuracy Content Support Chapter 14 : Direct Marketing