Direct marketing

By: Aulia and Ani

• Dictionary of Marketing Terms, Peter Bennett defines direct

marketing as: the total of activities by which the seller, in effecting the exchange of goods and services with the buyer, directs efforts to a target audience

using one or more media (direct selling, direct mail, telemarketing,

direct-action advertising, catalogue selling, cable TV selling, etc.) for the purpose of soliciting a

response by phone, mail, or personal visit from a prospect or

customer.• Direct Marketing is a system of marketing by

which organizations communicate directly with target customers to generate a response or transaction.

VS

Direct marketing is one of the fastest-growing forms of

promotion in terms of dollar expenditures, and for many

marketers it is rapidly becoming the medium of choice for

reaching consumers.

• Direct marketing uses a set of direct-response media, including direct mail, telemarketing, interactive TV, print, the Internet, and other media. These media are the tools by which direct marketers implement the communications process.

The Growth of Direct Marketing

• Direct marketing has been around since the invention of the printing press in the 15th century. Ben Franklin was a very successful direct marketer in the early 1700s, and Warren Sears and Montgomery Ward (you may have heard of these guys) were using this medium in the 1880s.

• The major impetus behind the growth of direct marketing may have been the development and expansion of the U.S. Postal Service, which made catalogs available to both urban and rural dwellers.

• Catalogs revolutionized America’s buying habits; consumers could now shop without ever leaving their homes.

A number of factors in American society have led to the increased attractiveness of catalogue , for both buyer and seller:

1. Consumer credit cards :

• It is estimated that over $1.23 trillion was charged on credit cards in the year 2001.

• A high percentage of direct purchases do use this method of payment, and companies such as American Express, Diners Club, MasterCard, and Visa are among the heaviest direct advertisers.

2. Direct-marketing syndicates.

• Companies specializing in list development, statement inserts, catalogs, and sweepstakes have opened many new opportunities to marketers. The number of these companies continues to expand, creating even more new users.

3. The changing structure of American society and the market.• One of the major factors contributing to the success of direct marketing is that so many Americans are now “money-

rich and time-poor.”

• At the same time, the increased popularity of physical fitness, do-it-yourself crafts and repairs, and home entertainment have reduced the time available for shopping and have increased the attractiveness of direct purchases.

4. Technological advances.

5. Miscellaneous factors.

The Role of Direct Marketing in the IMC Program

• Direct-marketing activities support and are supported by other elements of the promotional mix, they are:

1. Combining Direct Marketing with Advertising

2. Combining Direct Marketing with Public Relations

3. Combining Direct Marketing with Personal Selling

4. Combining Direct Marketing with Sales Promotions

5. Combining Direct Marketing with Support Media

1. Combining Direct Marketing with Advertising

2. Combining Direct Marketing with Public Relations

3. Combining Direct Marketing with Personal Selling

4. Combining Direct Marketing with Sales Promotions

5. Combining Direct Marketing with Support Media

Direct-Marketing Objectives

• The direct marketer usually seeks a direct response. The objectives of the program are normally behaviors—for example, test drives, votes, contributions, and/or sales.

• Not all direct marketing seeks a behavioral response, however. Many organizations use direct marketing to build an image, maintain customer satisfaction, and inform and/or educate customers in an attempt to lead to future actions.

Developing a Database

• To segment and target their markets, direct marketers use a database, a listing of customers and/or potential customers.

• Research by the U.S. Postal Service showed that 65 percent of the companies surveyed rely on their internal databases for marketing purposes.

• This database is a tool for database marketing—the use of specific information about individual customers and/or prospects to implement more effective and efficient marketing communications.

Functions of Database :

1. Improving the selection of market segments

2. Stimulate repeat purchases

3. Cross-sell

4. Customer relationship management

Sources of Database Information

• The U.S. Census Bureau. Census data provide information on almost every household in the United States. Data include household size, demographics, income, and other information.

• The U.S. Postal Service. Postal Zip codes and the extended four-digit code provide information on both household and business locations.

• List services. Many providers of lists are available. The accuracy and timeliness of the lists vary.

• Standard Rate and Data Service. SRDS provides information regarding both consumer and business lists. Published in two volumes, Direct Mail List Rates and Data contains over 50,000 list selections in hundreds of classifications.

• Simmons Market Research Bureau. SMRB conducts an annual study of customers who buy at home via mail or telephone. It compiles information on total orders placed, types of products purchased, demographics, and purchase satisfaction, among others.

• Direct Marketing Association. The direct marketers’ trade organization promotes direct marketing and provides statistical information on direct-marketing use. The DMA’s Fact Book of Direct Marketing contains information regarding use, attitudes toward direct marketing, rules and regulations, and so forth.

STRATEGIES

• one-step approach

Direct marketing media used directly to obtain an order

• two-step approach

multiple efforts used to generte a respone. First effort is used to screen, qulify or interest potential buyers. Follow-up used to achieve order or close the sale

Media

• Direct mail

• catalogs

• Broadcast media

• Print media

• Telemarketing

• Direct selling

• Electronic teleshoping

Direct mail

A marketing effort that uses a mail service to deliver a promotional printed piece to your target audience . www.businessdictionary.com

• List of goods or services on sale with their description and prices published as a printed document, or as an electronic document (e-catalog) on internet or on a diskette, CD, DVD, etc.www.businessdictionary.com

Catalogs

Broadcast Media

• Spreading an advertising message or signal over a wide area (or to all connected devices) without specific targeting.

Unlike narrowcasting, broadcasting employs a shotgun approach in dissemination of information. See also multicasting and unicasting.

www.businessdictionary.com

Printed media

Telemarketing

• Contacting, qualifying, andcanvassing prospective customers usingtelecommunications devices such as telephone, fax, and internet. It does not include direct mail marketing.

www.businessdictionary.com

Electronic teleshoping

VIDEO: Electronic Teleshopping

Direct selling• Face to

face presentation, demonstration, and sale of products or services, usually at the home or office of a prospect by the independent direct salesrepresentatives.

Employed by firms such as Avon, Mary Kay, and Tupperware, direct selling differs from network marketing in that it offers little or no incentives for recruiting ever increasing number of sales representatives.

www.businessdictionary.com

there are three forms of direct selling

1. Repetitive person-to-person selling. The salesperson visits the buyer’s home, jobsite, or other location to sell frequently purchased products or services (forexample, Amway).

2. Nonrepetitive person-to-person selling. The salesperson visits the buyer’s home,job site, or other location to sell infrequently purchased products or services (forexample, Encyclopaedia Britannica).

3. Party plans. The salesperson offers products or services to groups of peoplethrough home or office parties and demonstrations (for example, Tupperware and Party Lite Gifts).

Direct Selling

Advantages and Disadvantages of Direct Marketing

Advantages

• Selective reach

• Segmentation capabilities

• Frequency

• Flexibility

• Timing

• Personalization

• Costs

• Measures of effectiveness

Disadvantages

• Image factors

• Accuracy

• Content support

• Rising costs

Sources:

• George E. Belch and Michael A. Blech , ADVERTISING AND PROMOTION: An Integrated Marketing Communication Perspective, Sixth Edition, PDF

• www.businessdictionary.com

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