Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed McGraw-Hill/Irwin 14 Direct Marketing

Direct Marketing Defined Interactive TV The Internet Other Media Direct Mail Telemarketing Print …an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location 14-2

Growth of Direct Marketing Technological Advances Catalogs Consumer Credit Cards Miscellaneous factors Changing Structure of Society Changing Structure of Markets 14-3

Direct Marketing Combines With… Sales Promotions Public Relations Personal Selling Advertising Support Media Direct Marketing 14-4

Promotional Offers Through the Mail 14-5

How Database Marketing Works 14-6

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 14-7

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 14-8

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 14-9

Objectives of Database Marketing Improve Selection of Market Segments Stimulate Repeat Purchases Cross-selling Other Products Customer Relationship Management Objectives 14-10

Developing a Database List Brokers Direct Marketing Association Direct Marketing Association Standard Rate & Data Service Standard Rate & Data Service U.S. Postal Service Experion Simmons Market Research Bureau Experion Simmons Market Research Bureau U.S. Census Bureau Sources 14-11

Effective Databases RFM Scoring Frequency Recency Monetary transactions 14-12

Direct Marketing Strategies One-Step Two-Step The medium is used directly to obtain an order Often uses toll-free phone orders and credit card payments May use one medium to obtain inquiry and qualify prospect Follow-up with a second medium to complete the sale 14-13

Porsche Targets Prospects Target Criteria Physicians in specialties Highest income levels Demographics of Porsche buyers Specific geographic areas Hooks Use X-ray of a Porsche 911 Carrera 4 Use medical terminology 14-14

Success with Catalogs 14-15

Test Your Knowledge Which of the following statements about the use of catalogs in the direct-marketing industry is true? A) The emotional appeal of Internet catalogs exceeds that of print catalogs. B) The number of catalogs being mailed each year has decreased significantly. C) Many companies use catalogs in conjunction with their more traditional sales and promotional strategies. D) No company in business today relies solely on catalog sales

TV Spots, Infomercials, Home Shopping 14-17

Direct-Response versus Support Ads Direct- response advertising Support advertising Product/service offered Sales response solicited Supports other advertising Toll-free numbers included Reader’s Digest asks you to watch mailbox for sweepstakes entry TV spots, infomercials, home shopping shows 14-18

Direct Marketing via Print Media 14-19

Telemarketing Big industry, but decreasing sales Used by for-profit & charitable organizations Supports one- and two-step marketing Impacted by Do Not Call lists Potential for fraud and deception Annoys consumers 14-20

Forms of Direct Selling Repetitive person-to-person Nonrepetitive person-to-person Party Plans 14-21

Measuring Effectiveness Cost per Order (CPO) 14-22

Direct Marketing Advantages Selective reach Segmentation Frequency potential Testing Timing Personalization Costs Measures of effectiveness 14-23

Direct Marketing Disadvantages Image factors Accuracy Content support Rising costs Do Not Contact lists 14-24