1. Direct and database Marketing
Iina kilpeläinen, Marika Laine,Sinikka Nussbaumer,Antti sario, Nicole taxis

2. What is direct marketing?
Direct marketing consists of connecting directly with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. Direct marketers communicate directly with customers, often on a one- to-one, interactive basis. Using detailed databases, they tailor their marketing offers and communications to the needs of narrowly defined segments or even individual buyers. Direct marketers usually seek a direct, immediate, and measurable consumer response. Kotler et al. 2010, ch 17, 550

3. History of direct marketing
Aaron Montgomery Ward opened first mail-order house in 1872
Ward sent free catalogs to rural areas and then used Post- Office’s delivery
Ward’s business model was based on non-negotiable prices and wider collection than local businesses could provide in the rural areas
It was only until 1967 when Lester Wunderman identified, named and defined term direct marketing
Wunderman is considered to be father of various marketing innovations such as American Express Rewards program
Greatest revolution came in the recent decades with television and internet

4. Direct Marketing
Overall approach to marketing. (Communication & distribution)
Not a separate tool, need to be considered as a part of the marketing mix
Direct marketing has become the fastest-growing form of marketing
According to the book International Direct Marketing, Canadian organizations spent US$9.669 billion on direct marketing in 2007, the eighth-largest amount in the world
Some examples are: , phone, online advertising and database marketing.
Focuses on the customer, data and testing.

5. Characteristics that distinguish direct marketing from other types of marketing
Usage of databases to identify target segments or markets
Marketing messages directly addressed to target segments
Specific action as a goal
Heavy emphazis on measurement and usage of the results

6. DMA = Direct Marketing Association, “a trade organization for data-driven marketers which seeks to advance and protect responsible data-driven marketing”
Visit the web page:

7. Forms of direct marketing
Kotler et al. 2010

8. Forms of direct marketing
Every medium which can be used to deilver communication to a customer can be used in direct marketing
Direct mail marketing (physical or virtual address):
By far the largest direct marketing medium
One-to-one communication
All kinds of products
”Junk mail” key problem. Careful targeting.
Easy to measure results
Catalogue marketing
Print, video or digital catalogues

9. Forms of direct marketing
Telephone marketing
20% of all direct marketing-driven sales.
Purchasing convenience and increased product and service information
”Junk phone calls” -> Rules, Do Not Call –list.
Direct-response Television marketing
Shopping channels or direct response television advertising
Questionable relations (get fit by doing nothing, get rich schemes, etc.)
Recent years some big comapnies (Apple, P&G, Disney)

10. Forms of direct marketing
Kiosk marketing
Information and ordering machines in airports, stores, etc.
New digital direct-marketing technologies
Mobile marketing has grown rapidly since 2007
Podcasts, vodcasts
Interactive TV

12. Database marketing
Database marketing is the use of customer databases to enhance marketing productivity through more effective acquisition, retention and development of customers (Course 27E20100 – Database Marketing, fall 2015)
Database marketing is a form of direct marketing that uses databases of customers to generate targeted lists for marketing communications (Marketing- schools.org)
Database marketing is a systematic approach to the gathering, consolidation and processing of consumer data (Techtarget.com)

13. Effective database marketing
Data collection
Customer database
Turning data into knowledge
Analysing, segmentation, CLTV, RFM
Developing and evolving marketing communication strategies
Use of the data and knowledge for shaping the strategy
Measuring the results
Tracking results, improvements

14. Database marketing strategies

15. Example of data collection

16. Direct and Database marketing in B2C Environment
Consumer lists are usually based on household level and the customer database includes demographics, psychographics and buying behavior (Meisner 2006; Kotler 2010)
Understanding the different characteristics of different industries: for example retail versus food distribution
Knowledge of privacy issues and legislation is required  Consumers have to have the possibility to decline the message or unsubscribe
Some consumers can resist to be tracked  How to change their minds?  Underlying the real benefits
Consumers can get special discounts etc. via direct marketing programs  They can be part of the inner circle and get special benefits that are available just for them (Gail 2010; Meisner 2006)
New opportunities for B2C companies to attract their customers by offering instant coupons etc. and achieve the goal of sales
 Proximity marketing = a wireless distribution of marketing content associated with a particular place. The location of a device can be determined in several ways, i.e. by cell phone, a bluetooth or WiFi, an internet enabled device with GBS or a NFC enabled mobile phone that can read a RFID chip. NOTE! Reconsider always whether it fits on your business and consumers: sometimes it can be seen as a creepy and invasive action! (Dushinski 2009)

17. Direct and Database marketing in B2B Environment
Business-to-business lead generation is direct marketing  a big role for a salesperson and the company: how to support sales successfully and how salespeople can make it through?
1) Maximize salespeople’s effectiveness by decreasing their prospecting time, allowing more time for closing 2) Increase the potential revenue salespeople can make, thus making them more loyal to the company and increasing their longevity with the company (Meisner 2006, 89.)
B2B DM is highly focused, highly targeted process: list selection is critical (research and acquire the right type of list), developing the offer accordingly and executing the DM based on the audience’s special characteristics (Jones 2009)
B2B list sources are usually firmographics or the characteristics of the company and then finding the right person from the company (in smaller companies owner or president but in bigger companies finding the right department and its individual in charge). (Meisner 2006) The database can consist of the buying behavior, past volumes and prices, key contacts, competing suppliers, status of the current contracts, estimation of future spending and assessments of competitive strengths and weaknesses (Kotler 2010)
Combination of different DM tactics is especially used in large B2B businesses: for example using messages, printed mail brochures and telephone calls together. In small B2B businesses cost of the marketing effort matters more: i.e. dealrized lead-generation programs, managed by the equipment manufacturer or its designated agent (Meisner 2006)
Sell to the guy who is looking to buy
No idle chitchat
Know when to quick talking
Develop an understanding of “how to craft and present a selling argument”
Go for the close
A real hunger for the sale

18. COnClusions – What are the challenges in Direct and Database Marketing?
Privacy breaches – avoid spam, and trust on non-repudiation, integrity and authentication! ( (Xu & Quaddus 2010.)
Understanding the marketing pyramid: how to make it all work together? (referring to Meisner 2006, 17)  What is actually direct marketing strategy versus i.e. sales promotion or PR?
How to use the power of selling techniques inside the chosen direct marketing programs?  Finding the best people in sales but also requires other special skills and training in DM (Meisner 2006; Jones 2009)
Using the both halves of brain: (right) creativity and subjective thinking & (left) technical and linear thinking = “whole-brain marketing” (Meisner 2006)
Need of co-operation with different departments  sharing the real thinking of direct marketing and its strategy approach remembering the overall goal of sales also inside creative department (Meisner 2006)
Successful DM programs are not appreciated enough: spicing them up even though there are no problems  “If it’s not broken, don’t fix it” (Meisner 2006)
Keeping up with the “getting a response in” –thinking instead of “getting the message out” (Meisner 2006)
How to manage lists and data successfully?  collecting targeted data, analyzing and updating it! accordingly (Meisner 2006; Kotler 2010, Jones 2009)
Designing the DM programs so that they can be tested and tracked  variations by certain media (Meisner 2006; Dushinski 2009 )

19. Direct marketing as a strategic promotional discipline!
Meisner 2006, 17
Direct marketing as a strategic promotional discipline!

20. COnClusions – Why Direct Marketing is used?
Benefits to customers (consumers/buyers)
Benefits to companies (sellers)
Social media direct marketing can provide real user benefit (special deals, early-bird offers, VIP) (Gail 2010) + combining it to “street team marketing” can enhance its strength even more
Using data warehouse and data mining in DM strategies = vast amount of business intelligence  ability to look at information from different dimensions can increase business insight + it is an opportunity to reveal hidden correlations, associations, patterns and trends: companies can make better predictions and find valuable business opportunities (Xu & Quaddus 2010)
Personalization in marketing communications can save consumer’s time and money + it can make the consumer to feel like the company really understand what are her/his needs
DM with customer data systems, such as OLAP tool (online analytical processing,) allow companies to have customer information from all customer touch points  analyzing who are profitable and non-profitable customers (RFM model) (Xu & Quaddus 2010; Meisner 2006) and using LTV (lifetime value) calculations  learning from customers (Kotler 2010)
A greater measure of control: consumers can choose between different direct marketing medias (Kotler 2010)
DM is interactive and immediate  interaction with seller by phone or online and doing the order on the spot (Kotler 2010)
It can be a low cost, efficient and speedy alternative for reaching the markets
B2B buyers can get information without having meetings with salespeople due to access to information about companies, products and competitors (Kotler 2010)
Flexibility = marketers can make ongoing adjustments to prices and programs and immediate personal announcements and offers as well (Kotler 2010)
DM gives access to buyers that the company cannot reach via other channels (Kotler 2010)
Supports the general organizational marketing goal of making sales (Meisner 2006)
DATA
BUT MOST OF ALL REMEMBER IMC STRATEGY: REACHING CUSTOMERS VIA DIFFERENT CHANNELS SIMULTANEOUSLY AND SYNERGISTICALLY!

21. Case Kesko and S-Ryhmä
On the their way to sufficient Direct Marketing

22. Loyalty Programs
Swiping a Plussa-card or a S-card has become second nature to Finnish people these days
Both grocery stores get valuable data of our shopping habits in order to improve their store selection as well as marketing
Finland is a late bloomer when it comes to direct marketing in grocery stores, in the US it has been common already from the mid 90’s
Perhaps small rewards (points and vouchers) cannot only convince consumers to favor one retailer over another?

23. How about Privacy Protection?
It is not illegal to collect individual shopping information and use it in direct marketing as long as they have consent of the customer
Stores have made restrictions to collect data to their own loyalty programs, perhaps thinking it would scare the consumers away if it was allowed
There was a fuss over S-ryhmä changing these rules and informing it in a way that majority of people would not notice it
In these kind of cases media often takes the side of the consumer and makes it sound like sham -> S-Ryhmä has later explained the fuss and ensured that the customer information is being used carefully and by no means against the customer, quite the opposite
Privacy protection concerns and new EU regulation about using shopping information for profiling people keeps grocery stores cautious

24. Sufficient Direct Marketing = better customer service
Kesko started their direct marketing about three years ago. Starting from Keskos’s loyalty program Plussa is making major improvements to their services making them more personal, easier and rewarding
S-Ryhmä is getting pass the media fuss and improving their data collection in order to satisfy customer needs, not only to enhance direct marketing but also for digital services such as electronic warranty receipts
In the future there might be an advanced direct marketing program where stores could predict customers wants and needs and offer compelling personal roll- in products
Kesko and S-ryhmä have been both collecting shopping data for a while now but mostly to manage their stock not sufficiently in a marketing purpose
Kesko has advanced computer technique to enable effective direct marketing; hundreds of sale items are matched with hundreds of thousands customer’s saved shopping history information
Every purchase is saved on the loyalty card and that information is used to target suitable offers to specific consumers either through s or text messages

25. What do you think about grocery stores using your shopping history for direct marketing?
There was a scandal in US where the grocery store concluded a teenage girl to be pregnant based on what she had bought from the store and congratulated her and her family with suitable offers and vouchers, when in fact her parents were not aware of what had been going on in their daughter’s bedroom

26. Thank you!

27. references
Dushinski, K The Mobile Marketing Handbook: A Step by-Step Guide to Creating Dynamic Mobile Marketing Campaigns. Info today: New Jersey. Gail, Z. M Days to Social Media Success: The 30 Days Results Guide to Making the Most of Twitter, Blogging, LinkedIn and Facebook. Franklin Lakes. (Pages ). Jones, S. K Business-to-Business Marketing. Seven Proven Strategies for Increasing Profits through Internet Direct Marketing. Fifth edition. Maximum: Canada. Meisner, C The Complete Guide to Direct Marketing. Creating breakthrough programs that really work. Kaplan: United States. Xu, J. & Quaddus, M E-business in the 21st century. Realities, Challenges and Outlook. World Scientific: Singapore. Kuningaskuluttaja Ruokakauppa toi Suomeen henkilökohtaiset tarjoukset. Yle.fi web article S-Ryhmä S-Ryhmä: asiakas voi päättää miten hänen tietojaan käytetään. S-Ryhmä website hyodynnetaan/ _ K-Plussa Plussa uudistuu. K-Plussa website.

28.  "Direct Marketing Association emphasizes the importance of being 'Data Driven'". Retrieved 
 The Power of Direct Marketing: ROI, Sales, Expenditures, and Employment in the US, Edition
Brandweek 50, no. 36. D1-D4 "The Next Generation of Direct Marketing." Academic Search Complete, EBSCOhost, 2009, p. 6.
Kotler, Philip R, 2010 Principles of Marketing, Eighth Canadian Edition, Pearson Education Canada
what is database marketing and when can it be used