Direct and Online Marketing Chapter 14

Previewing the Concepts Direct marketing and its benefits Database in direct marketing Major forms of direct marketing Internet and other new technologies with online marketing strategies Online marketing to profitably deliver more value to customers

Direct Marketing Connecting directly with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships LO 1: Define direct marketing and discuss its benefits to customers and companies

New Direct Marketing Model OLD supplemental NEW complete model for doing business Some only approach Fastest-growing form of marketing Direct marketing expenditures generate $2.1 trillion in sales, about 10% of U.S. economy Direct marketing sales are expected to grow at 5.3% annually through 2013 Continues to become more Web-oriented Internet marketing is the fastest-growing form of direct sales

Benefits of Direct Marketing Benefits to buyers: Convenient, easy to use and private Provides greater control Ready access to products Ready access to wealth of comparative information Can reach consumers in remote locations Immediate and interactive LO 1: Define direct marketing and discuss its benefits to customers and companies

Benefits of Direct Marketing Benefits to sellers: Builds customer relationships Provides a low-cost, speedy way to reach markets, including business markets Offers lower costs, improved efficiencies, and speedier handling of channel/logistics functions Offers greater flexibility Gives access to buyers that could not be reached through other channels LO 1: Define direct marketing and discuss its benefits to customers and companies

Customer Databases and Direct Marketing Customer database: An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data Many uses for customer database: Locate potential customers and generate sales leads Learn more about customers and fine-tune offerings and communications

Forms of Direct Marketing

Direct-mail Marketing Sending an offer, announcement, reminder to a person at a physical or virtual address Largest direct marketing medium (34%) One-to-one communication Use of traditional forms may decline Combination with other media Often perceived as “junk mail”

Catalogue Marketing Catalog marketing: Direct marketing through print, video, or digital catalogs distributed by mail, in stores or online Catalog marketing trends: More catalogs are going digital, minimizing costs and allowing real-time merchandising Print catalogs are the primary medium, driving web traffic and creating consumer connections Expected U.S. catalog sales in 2013 = $182 billion

Catalogue Marketing Catalog marketing trends: More catalogs are going digital, minimizing costs and allowing real-time merchandising Print catalogs are the primary medium, driving web traffic and creating consumer connections Expected U.S. catalog sales in 2013 = $182 billion

Telephone Marketing 17% of all direct marketing sales Used in both consumer and B2B markets Outbound VS Inbound Do-not-call legislation (DNCL) Outbound: Sell directly to consumer Inbound: Toll-free ordering or order faxing

Direct-response Marketing DRTV – 60 or 120 sec long Infomercials – 30 min (or longer) Home shopping channels – dedicated to selling multiple brands, items & services

Kiosk Marketing Information and ordering machines generally found in stores, airports, and other locations E.g., in-store Kodak kiosks allow customers to transfer pictures from digital storage devices, edit them, and make high-quality color prints

New digital Marketing MOBILE content, display or sponsorship advert & mobile messaging (SMS), expected to grow POD & VOD - Ad-supported podcasts, downloadable ads, informational features, and other promotions iTV - Viewer engagement is higher than regular TV ads

Online Marketing Online marketing: Marketing and the Internet: Efforts to market products, and services and build customer relationships Marketing and the Internet: 80% household penetration rate Online marketing efforts are expanding Click-and-mortar companies are having more online success than click-only companies

Online Marketing B2C -Online buying continues to grow; the Internet influences 35% of total retail sales customers initiate and control the Internet exchange process (diiff from off-line purchase) gratefulpalate.com B2B - Businesses using B2B websites, e-mail, online catalogs/trading networks, and other online resources to reach and serve customers, obtain buying efficiencies and attain better prices, offer online product information, purchasing, and support, used to build stronger customer relationships cisco systems C2C - Online exchanges of goods and information between final consumers, Auction sites such as eBay offer marketplaces to buy or exchange goods, Blogs and forums facilitate information interchanges Firms should monitor blogs for what is being said www.elevenmoms.com www.nutsaboutsouthwest.com C2B - Online exchanges in which consumers search out sellers, learn about their offers, and initiate purchases, sometimes even driving transaction terms E.g., GetSatisfaction.com allows users to post questions, voice complaints, or deliver compliments to companies

Online Marketing Creating a website Placing ads and promotions online Creating or participating in online social networks Using e-mail

Online Marketing Corporate websites: Marketing websites: Corp -Build customer goodwill, collect customer feedback, and supplement other sales channels, rather than to sell the company’s products directly Mtkg - Engage consumers in interactions that move them closer to a direct purchase or other marketing outcome

Online Marketing The seven Cs of effective website design: Context Content Community Customization Communication Connection Commerce Constant change encourages repeat visits LO 5: Discuss how companies go about conducting online marketing to profitably deliver more value to customers

Online Marketing Placing ads and promotions online: Online advertising is a major medium to build brands and attract visitors to sites Forms of online advertising: Banner ads, Interstitials, Pop-up or pop-under ads, Rich media ads, Search-related ads (contextual advertising) Other forms of online promotion: Content sponsorships (sponsoring special content) Affiliate programs (work with other companies to promote each other) Viral marketing (Internet version of word-of-mouth)

Online Marketing OfficeMax’s ElfYourself.com viral website: Viral marketing: OfficeMax’s ElfYourself.com viral website has propelled itself into the digital record books. With no promotion at all, the site logged more than 193 million visits between late November and early January. One-third of those visiting the site were influenced to shop at OfficeMax.

Social Network Marketing Online communities where individuals and companies can exchange information E.g., MySpace, Facebook, Twitter, YouTube Marketers can participate in existing online communities or set-up their own Focused niche networks are emerging which can be used to target special interest groups

Email Marketing Cost-efficient, lowest cost Used to welcome new customers, qualify leads, announce events, cross-sell and upsell, promote new products and build customer relationships Permission-based e-mail marketing is key According to the Direct Marketing Association, email marketing produces a ROI 40 to 50% higher than other forms of direct-marketing media

Challenges of Direct and Online Marketing Internet fraud and phishing Online security Difficult to restrict access by vulnerable or unauthorized groups Invasion of privacy LO 5: Discuss how companies go about conducting online marketing to profitably deliver more value to customers

Previewing the Concepts Direct marketing and its benefits Database in direct marketing Major forms of direct marketing Internet and other new technologies with online marketing strategies Online marketing to profitably deliver more value to customers

Chapter 14 Case 1. Conduct a brief analysis of the marketing environment and the forces shaping the development of StubHub? 2. Discuss StubHub’s business model. What general benefits doe sit afford buyers and sellers? Which benefits are most important in terms of creating value for buyers and sellers?

Chapter 14 Case 3. Discuss StubHub as new intermediary. What effects has this type of intermediary had on the ticket industry? 4. Apply the text’s e-marketing domains framework to StubHub’s business model. How has each domain played a role in the company’s success?

Chapter 14 Case 5. What recommendations can you make for improving StubHub’s future growth and success? 6. What are the legal or ethical issues, if any, for ticket-reselling websites?