Direct and Online / Interactive Marketing

Session Coverage

• DM and its Importance• Growth of Direct Marketing• Customer Database and Direct Marketing• Channels of Direct Marketing• Online Marketing-Internet and E-

Commerce

The Rise of Direct Marketing

– Use of consumer-direct channels to reach and deliver goods and services to customers without using market middlemen.

Importance & Benefits of Direct Marketing-For Buyers:

– Convenient– Easy to use– Private – Access to a wealth of information– Immediate – Interactive (Two Way Communication)

Importance & Benefits of Direct Marketing-For Sellers

– Powerful tool for building relationships– Allows for targeting of small groups or

individuals with customized offers in a personalized fashion

– Offers access to buyers that couldn’t be reached via other channels

– Low-cost, effective alternative for reaching specific markets

Direct Marketing Channels

Direct mail

Catalogs

Telemarketing

Other direct response

1. Mail Order MarketingEntire Marketing takes place by mail

• Sending an offer, announcement, remainders or other items to ind. customer

• Interested customers respond by placing mail order

• Order response rate of 2 % considered good

• Cost / thousand people reached higher than mass media but people are much better prospects

Mail Order MarketingElements Considered

• Outside Envelope should be colourful or catchy reason to open it.

• Sales letter should be brief on a good quality paper.

• Should be personally addressed• Should have a toll Free No and Weblink• Postage free envelop drastically increases

response rate.

Mail Order MarketingBest Prospects DATABASE

• Customers who have bought products in past OR DM can buy Database from list Brokers (Problem: Oblelete, Duplication, Outdated, incomplete data)

• Writing to people will get only 1-2 percent response

• Better Approach-Create your own list.

ICICI Bank-Creating Database• Objective: Develop mailer list for “Children Growth

Bond”.• Painting Competition for School Children• “What is your Dream Career?”• 40,000 Children in Three Cities participate• Parents of participating children receive letter about their

Children Choice of Career• It also shared their Child’s Painting• Than Provided details of GROWTH BOND• RESULT: RESPONSE WAS MORE THAN 20 %

GENERATING HEALTHY BUSINESS AT VERY LOW MARKETING EXPENSE.

• Writing to people would have got 1-2% response

2. Catalogue Marketing• Avon Sells Cosmetics, IKEA Sells Furniture,

Saks Sells Clothing.• Putting entire catalogue online provide better

access to global customers, saving on printing and mailing costs

• Success depends on managing customer lists– Avoid Duplication– Offer quality products– Operate special hotline to answer questions– Send gifts to best customers

E-Catalogues

• www.futurebazaar.com (Pantaloon Retail)Thousands of products, price, features,

payment gateway, promises delivery within 7 days.

• www.phoolwala.com – Displays flowers on E-Catalogue, Promises next day delivery to most cities of India.

• www.indiamart.com – Link to different sites, business marketplace, wholesale catalogues

Types of Telemarketing• Telesales• Telecoverage• Teleprospecting• Customer service

and technical support

3. TelemarketingUse of Telephone & Call Centers to attract prospects & Selling to

existing customers

• Inbound Telemarketing-Receiving Calls• Outbound Telemarketing- Making Calls• L’Oreal India (Cosmetic Company)- Offers

advice about “How to look Good”• JK Tyres “ Vans with trained Machanics in NCR,

who deliver and fit new tyres at customers homes.

• Although it is major DM tool, GOI has put restrictions on Banks/F.Institutions regarding its use.

4. Other Media and Direct Response MarketingUse all major media-Radio, Magazines, N.Papers, TV via toll free Nos

• Infomercials:• 30-60 minutes video to promote products

that are complicated and technology advanced or require great deal of information.

• At Home Shopping Channels: Showing various products by showing features, use, advantages and price (Toll Free No with 48 Hrs Delivery).

4. Other Media and Direct Response Marketing Cont….

• Asian Sky Shop (Essel Group-1995):• Distribution 75 cities, caters to Dubai,

B’Desh, Pakistan, Nepal etc.• Reach out to customers across 10

different channels of Essel Group. (Backed by 24 hour, 7 days a week hotline

• Benefits to TV Channels: New Source of Revenue, In some cases profit sharing on per unit basis.

Public Issues in Direct Marketing

IrritationIrritation

UnfairnessUnfairness

Deception/fraudDeception/fraud

Invasion of privacyInvasion of privacy

Direct Marketing VS Direct SellingSome Marketers consider them same as both do-not involve Store

Retailing

Direct Selling (Part of Non Store Retailing, A Part of Marketing)

Direct Marketing

Two Different TermsDirect Selling or Home Sellingare same

•Home Selling: Done by Employees/Sales Person. One to One, Takes products to buyers home

•Direct Selling: Done by Independent Salesperson/Distributors, If done in a group, referred to party selling, Home or Workplace

•Larger than Non Store Retailing

•Tackles all tasks of Marketing (Customer Identification, Demand Generation, Packaging, Modification, distribution, price negotiation, promotion, sales promotion in integrated compressed manner.

Direct Selling Facts

• World-wide $ 200 Billion Industry• Employs 50 Million Workforce• Over 35,000 companiesExamples: Avon, Tupperware, Oriflame,

Amway, Encyclopedia Britannica

Direct Selling CompaniesAvon (Century Old)

•133 Countries

•Turnover $ 4.5 Billion

•4 Lakh DS persons

•Cosmetics, Jewellery, Healthcare, Baby care Products

•Hires Housewife's for Selling to neighborhood

Amway

•85 Countries

•Turnover $ 7 Billion

•480 Products, 380 Petents

•Personal Care, Health Care, Cosmetics, Nutrition, Wellness etc

•Over 3 million independent sales cum distributors

Online Marketing Facts-India

• Clocked 53000 Crores• 30% User time used for shopping• Juxt Consultants “India Online Survey Research”• Sample: 12,500 Households, 40 Cities, 160

Villages.• Findings:• 1 out of every 10 urban customer connected to

net

Juxt Consultants “India Online Survey Research”

• 70% on internet users reside outside metro.

• 50 million users (40-U, 10-R)• Regular Users-50 Million (40-U, 10-U)• Rural Penetration-5 Percent• 77% users between 19-35 years.• Faith in online shopping increasing

gradually, 80% of regular users buying through net.

Maruti’s “Dil Se Program”www.marutinri.com

• Interactive marketing to tap NRIs• People residing overseas can purchase gift for

their friends/relatives to show love, affection and gratitude.

• Multiple payment Options: Credit Card, Money Transfer, Bank Installment.

• Coverage: 200 Cities, Special Discount Price• Delivery: Arranges gift wrapping, free• Website: Shares experiences of emotional

satisfaction.

Placing Ads and Promotion Online

• Websites• Micro sites: Limited area on web,

managed and paid by external ad company. Can create micro site on different common websites.

• Search Ads (40% online ads): Pay only if people click on links.

Placing Ads and Promotion Online

• Display Ads: Small rectangular boxes containing text and picture that company pay to place on website.

• Online Communities: Companies sponsor online communities whose members communicate through postings about special interests related to companies products and brands.