1-1

1-2 McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 20 Direct Marketing Communications

1-3 Understand the objectives of direct marketing communications, and describe its distinguishing characteristics. Discuss the factors driving the growth in direct marketing communications. Understand traditional direct marketing communications techniques such as direct mail, broadcast and print media, and telemarketing. After studying this chapter you should be able to:

1-4 Recall examples of the use of technology such as electronic media in direct marketing. Understand some of the ethical and legal issues facing marketers who use direct marketing communications. After studying this chapter you should be able to:

1-5 The Role of Direct Marketing Communications Marketing Communications has two primary objectives: 1. To establish relationships by soliciting a direct and immediate response from prospects or customers. 2. To maintain and enhance customer relationships, whether those relationships have been established by direct marketing communications or by some other means.

1-6 Characteristics of Direct Marketing Communications Direct marketing targets a carefully selected audience, as opposed to a mass audience. It typically involves two-way communications; direct responses from customers make it interactive. Direct-response results are quite measurable- marketers can determine what works and what does not.

1-7 Customer Databases

1-8 Benefits of Direct Marketing Communications Offers Immediate-Response Orientation Measurable Action Objectives

1-9 The Growth of Direct Marketing Communications Global direct marketing communications increased because of saturated domestic markets.

1-10 Growth Catalysts Increase in Customized Products Fragmented Markets Product Price Sensitivity Shrinking Audiences for Network TV and Newspapers Emphasis on Immediate Sales

1-11 Growth Catalysts Lifestyles Changes Create a Need for Convenience: Two-worker families have more discretionary income but less time Ease of communication Increased use of credit cards Advancing Technology: Predictive modeling Neural networks

1-12 Direct Marketing Techniques Direct Mail Broadcast Media Print Media Telemarketing Electronic Media

1-13 Advantages and Disadvantages of Direct Mail Advantages:Disadvantages: Self-contained message Flexibility in message content and form of delivery Thorough coverage of target market Fewer distractions from other media Large numbers of consumers prefer mail-order purchases High cost per exposure Potential delivery delays Lack of support from other media “Junk mail” in easy to ignore Seen as wasteful, harmful to the environment

1-14 Types of Direct Mail Sales letter Postcards Catalogs Video catalogs Promotional videocassettes and audiocassettes Promotional interactive computer disks Leaflets and flyers Statement stuffers

1-15 Business-to-Business Direct Mail B-to-B marketing uses the same forms of direct mail!

1-16 Broadcast Media infomercials Direct-Response Radio Advertising Direct-Response Television Advertising

1-17 Print Media Consumers Can Respond To: Ads Carrying an Address Order Form Coupon Telephone Number Freestanding Insert (FSI) Reader-Response Cards

1-18 Telemarketing Telemarketing: An interactive direct marketing communications approach that uses telephone calls to initiate, develop, and enhance relationships with customers. Outbound telemarketing, also called “teleselling” Business-to-business telemarketing Predictive dialing systems

1-19 National Consumers League’s Top 10 Telemarketing Frauds List 1. Work-at-Home Schemes 2. Prizes / Sweepstakes 3. Credit Card Offers 4. Advance Fee Loans 5. Magazine Sales

1-20 National Consumers League’s Top 10 Telemarketing Frauds List 6. Telephone Slamming 7. Buyers Clubs 8. Credit Card Loss Protection 9. Nigerian Money Offers 10. Telephone Pay-per- Call Services

1-21 Electronic Media Interactive Computer Services Interactive Computer Kiosks FAX Machines – FAX-on-Demand Systems

1-22 Ethical and Legal Issues in Direct Marketing Communications Invasion of Privacy Deceptive Practices: Automatic Number Identification Caller ID Intrusion Systems Wasteful Practices