1. Chapter 14
Direct Marketing

2. 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

3. 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

4. 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

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

6. 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

7. 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

8. 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

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

10. 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
Chapter 14 : Direct Marketing

11. 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, numbers)
Chapter 14 : Direct Marketing

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. Direct Marketing Mediums
Direct Mail
Catalogues
Broadcast Media
Infomercials
TV Advertorials
Teleshopping
Electronic Teleshopping
Marketing
Chapter 14 : Direct Marketing

21. 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

22. 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

23. 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

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

25. 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

26. 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

27. 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

28. 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

29. 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

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

31. 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

32. Chapter 14 : Direct Marketing
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

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

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