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Direct MarketingDirect Marketing
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Catalog SellingCatalog Selling
Direct SellingDirect Selling Direct Action AdvertisingDirect Action Advertising
Direct MailDirect MailTelemarketingTelemarketing
TV SellingTV SellingCatalog SellingCatalog Selling TV SellingTV Selling
Direct MailDirect Mail
Direct Action AdvertisingDirect Action AdvertisingDirect SellingDirect Selling
Direct Marketing Defined
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
“The total of activities by which the seller directs 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.”
“The total of activities by which the seller directs 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.”
Miscellaneous factorsMiscellaneous factors
Technical AdvancesTechnical Advances
Direct Marketing SyndicatesDirect Marketing Syndicates
Changing Structure of SocietyChanging Structure of Society
Consumer Credit CardsConsumer Credit Cards
Technical AdvancesTechnical Advances
Direct Marketing SyndicatesDirect Marketing Syndicates
Changing Structure of SocietyChanging Structure of Society
Consumer Credit CardsConsumer Credit Cards
Growth of Direct Marketing
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
PublicRelations
PublicRelations
PersonalSelling
PersonalSelling
SalesPromotion
SalesPromotion
SupportMedia
SupportMedia
AdvertisingAdvertising
SalesPromotion
SalesPromotion
PersonalSelling
PersonalSelling
PublicRelations
PublicRelations
AdvertisingAdvertising
Direct Marketing Combines With . . .
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DirectMarketing
DirectMarketing
Improve Selection of Market Segments
Improve Selection of Market Segments
Stimulate Repeat Purchases
Stimulate Repeat Purchases
Cross-selling Other Products
Cross-selling Other Products
Customer Relationship Management
Customer Relationship Management
Cross-selling Other Products
Cross-selling Other Products
Stimulate Repeat Purchases
Stimulate Repeat Purchases
Improve Selection of Market Segments
Improve Selection of Market Segments
Objectives of Database Marketing
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
ObjectivesObjectives
List ServicesList Services
Direct MarketingAssociation
Direct MarketingAssociation
Standard Rate &Data Service
(SRDS)
Standard Rate &Data Service
(SRDS)
U.S. Postal Service
U.S. Postal Service
Simmons MarketResearch BureauSimmons MarketResearch Bureau
U.S. Census Bureau
U.S. Census Bureau
U.S. Census Bureau
U.S. Census Bureau
Direct MarketingAssociation
Direct MarketingAssociation
U.S. Postal Service
U.S. Postal Service
Standard Rate &Data Service
(SRDS)
Standard Rate &Data Service
(SRDS)
List ServicesList Services
Developing a Database
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
SourcesSources
A Comprehensive Consumer Data Base
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Name
Address/Zip Code
TelephoneNumber
Length ofResidence
Age
Sex
MaritalStatus
FamilyData
Education
Income
Occupation
TransactionHistory
PromotionHistory
InquiringHistory
UniqueIdentifier
Name
Address/Zip Code
TelephoneNumber
Length ofResidence
Age
Sex
MaritalStatus
FamilyData
Education
Income
Occupation
TransactionHistory
PromotionHistory
InquiringHistory
Comp. Contact or Decision
Makers
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
Headquarter, Multiple Location
Purchase History
Promotional History
Inquiry HistoryInquiry History
Promotional History
Purchase History
Headquarter, Multiple Location
Time in Business
Number of Employees
Revenues
Size of Business
Industrial Classification
Credit History
Source of Order/inquiry
or Referral
Telephone Number
Title of Contact
Comp. Contact or Decision
Makers
A Comprehensive Business to Business Data Base
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Unique Identifier
One StepOne Step Two StepTwo StepOne StepOne Step
• The medium is used directly to obtain an order
• Often use 800 number phone orders and credit card payment
• May use one medium to obtain inquiry and qualify prospect
• Typically follow up with a second medium to complete the sale
One-Step Versus Two-Step Approach
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Direct Response Advertising Types
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Direct Mail Pieces and Inserts Soliciting Inquiry
Recipients.
Direct Mail Pieces and Inserts Soliciting Inquiry
Recipients.
Direct Mail Pieces and Inserts Soliciting Inquiry
Recipients.
Direct Mail Pieces and Inserts Soliciting Inquiry
Recipients.
“All forms of advertising designed to obtain immediate, direct response by mail, telephone, or
personal visit from individual audience members.”
“All forms of advertising designed to obtain immediate, direct response by mail, telephone, or
personal visit from individual audience members.”
TV and CATV Commercials and Infomercials Selling
Products by Phone or Mail Order.
TV and CATV Commercials and Infomercials Selling
Products by Phone or Mail Order.
TV and CATV Commercials and Infomercials Selling
Products by Phone or Mail Order.
TV and CATV Commercials and Infomercials Selling
Products by Phone or Mail Order.
Card Decks, Coupon Booklets and Mini-catalogs Seeking Orders for One or
More Products.
Card Decks, Coupon Booklets and Mini-catalogs Seeking Orders for One or
More Products.
Card Decks, Coupon Booklets and Mini-catalogs Seeking Orders for One or
More Products.
Card Decks, Coupon Booklets and Mini-catalogs Seeking Orders for One or
More Products.
Newspapers, Magazines and Other Print Media Ads
With Send-in or Call-in Coupon Order Forms.
Newspapers, Magazines and Other Print Media Ads
With Send-in or Call-in Coupon Order Forms.
House organsHouse organsHouse organsHouse organs
Types of Direct Mail
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
BroadsidesBroadsidesBroadsidesBroadsides
CatalogsCatalogsCatalogsCatalogs
FlyersFlyersFlyersFlyers
FoldersFoldersFoldersFolders
InclusionsInclusionsInclusionsInclusions
PostcardsPostcardsPostcardsPostcards
ReprintsReprintsReprintsReprints
Sales lettersSales lettersSales lettersSales letters
Self-mailersSelf-mailers
“All forms of advertising sent directly to prospects through the U.S. Postal Service or
through private services.”
“All forms of advertising sent directly to prospects through the U.S. Postal Service or
through private services.”
ControlControl CoverageCoverage
ExclusivityExclusivity
FlexibilityFlexibility
ImpactImpactReachReach
ResponseResponse
SelectivitySelectivity
ResponseResponse
ReachReach ImpactImpact
FlexibilityFlexibility
ExclusivityExclusivity
CoverageCoverageControlControl
Direct Mail Advantages
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
AdvantagesAdvantages
High Cost Per ExposureHigh Cost Per ExposureHigh Cost Per ExposureHigh Cost Per Exposure
ClutterClutter
Negative Image of MediumNegative Image of Medium
Delays in DeliveryDelays in Delivery
List Quality UncertaintyList Quality Uncertainty
No Content SupportNo Content Support
Saturation Among AudienceSaturation Among Audience
No Content SupportNo Content Support
List Quality UncertaintyList Quality Uncertainty
Delays in DeliveryDelays in Delivery
Negative Image of MediumNegative Image of Medium
ClutterClutter
Direct Mail Disadvantages
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DisadvantagesDisadvantages
Production Costs Are Usually Very High
Production Costs Are Usually Very High
Delivery or Fulfillment May Be Delayed
Delivery or Fulfillment May Be Delayed
Production Costs Are Usually Very High
Production Costs Are Usually Very High
Saturation for Some Markets Is Likely
Saturation for Some Markets Is Likely
Provides Buyers With Wide Selections
Provides Buyers With Wide Selections
Usually Welcomed by Shoppers
Usually Welcomed by Shoppers
Design Offers High Impact Potential
Design Offers High Impact Potential
Merchandise Is Centrally Inventoried
Merchandise Is Centrally Inventoried
Fulfillment Facilities Closely Controlled
Fulfillment Facilities Closely Controlled
Timing Can Be Geared to Seasonal Needs
Timing Can Be Geared to Seasonal Needs
Split-run Testing Can Insure Effectiveness
Split-run Testing Can Insure Effectiveness
Customer Can’t Inspect or Handle Goods
Customer Can’t Inspect or Handle Goods
Delivery or Fulfillment May Be Delayed
Delivery or Fulfillment May Be Delayed
Delivery or Fulfillment May Be Delayed
Delivery or Fulfillment May Be Delayed
Delivery or Fulfillment May Be Delayed
Delivery or Fulfillment May Be Delayed
Saturation for Some Markets Is Likely
Saturation for Some Markets Is Likely
Production Costs Are Usually Very High
Production Costs Are Usually Very High
Production Costs Are Usually Very High
Production Costs Are Usually Very High
Split-run Testing Can Insure Effectiveness
Split-run Testing Can Insure Effectiveness
Timing Can Be Geared to Seasonal Needs
Timing Can Be Geared to Seasonal Needs
Fulfillment Facilities Closely Controlled
Fulfillment Facilities Closely Controlled
Merchandise Is Centrally Inventoried
Merchandise Is Centrally Inventoried
Design Offers High Impact Potential
Design Offers High Impact Potential
Usually Welcomed by Shoppers
Usually Welcomed by Shoppers
Provides Buyers With Wide Selections
Provides Buyers With Wide Selections
Pros & Cons of Catalogs
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+ Pros+ Pros - Cons- Cons
Outbound and Inbound Telemarketing
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
InboundInbound
Telephone calling by the marketer or marketer’s agent to individual prospects, seeking purchase, subscription, membership, or participation by the call recipient.
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.
OutboundOutboundOutboundOutbound
Namelist InadequaciesNamelist Inadequacies
High Termination RatesHigh Termination Rates
High Reneges, ReturnsHigh Reneges, Returns
Poor Image of MethodPoor Image of Method
Low Conversion RateLow Conversion Rate
Intrusive NatureIntrusive Nature
High Cost of ContactHigh Cost of Contact
Extensive Caller TrainingExtensive Caller Training
Interactive ContactInteractive Contact
Extensive ReachExtensive Reach
Caller-controlled TimingCaller-controlled Timing
High ImpactHigh Impact
High Termination RatesHigh Termination Rates
Namelist InadequaciesNamelist Inadequacies
Extensive Caller TrainingExtensive Caller Training
Low Conversion RateLow Conversion Rate
High Cost of ContactHigh Cost of Contact
Poor Image of MethodPoor Image of Method
Intrusive NatureIntrusive Nature
High ImpactHigh Impact
Caller-controlled TimingCaller-controlled Timing
Extensive ReachExtensive Reach
Interactive ContactInteractive Contact
Outbound Telemarketing
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
AdvantagesAdvantages DisadvantagesDisadvantages
Personnel Direction System May Be Required
for Efficiency
Personnel Direction System May Be Required
for Efficiency
Labor-intensive Call Answering Facilities May
Be Required
Labor-intensive Call Answering Facilities May
Be Required
Nonproductive Call Rates May Be Exceedingly or
Unacceptably High
Nonproductive Call Rates May Be Exceedingly or
Unacceptably High
Response Is Highly Convenient for the
Audience
Response Is Highly Convenient for the
Audience
Method Permits Interactive Selling and Service
Method Permits Interactive Selling and Service
Transactions Are Facilitated by High Rate of
Credit Card Holding
Transactions Are Facilitated by High Rate of
Credit Card Holding
Immediacy of Method Permits Great Control of
Inventory
Immediacy of Method Permits Great Control of
Inventory
Personnel Direction System May Be Required
for Efficiency
Personnel Direction System May Be Required
for Efficiency
Labor-intensive Call Answering Facilities May
Be Required
Labor-intensive Call Answering Facilities May
Be Required
Immediacy of Method Permits Great Control of
Inventory
Immediacy of Method Permits Great Control of
Inventory
Transactions Are Facilitated by High Rate of
Credit Card Holding
Transactions Are Facilitated by High Rate of
Credit Card Holding
Method Permits Interactive Selling and Service
Method Permits Interactive Selling and Service
Response Is Highly Convenient for the
Audience
Response Is Highly Convenient for the
Audience
Inbound Telemarketing Pros & Cons
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+ Pros+ Pros - Cons- Cons
Three Forms of Direct Selling
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DirectSellingDirectSelling
PartyPlansPartyPlans
Repetitiveperson-
to-person selling
Nonrepetitive person-
to-person selling
Repetitiveperson-
to-person selling
Nonrepetitive person-
to-person selling
Direct Response Advantages
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
No Store Is Required and Customers Can Buy From Their Own Homes
No Store Is Required and Customers Can Buy From Their Own Homes
Response Options Enable Audience to Act Right After Exposure Occurs
Response Options Enable Audience to Act Right After Exposure Occurs
Customers Are Served With a Greater Selection From a Central Inventory
Customers Are Served With a Greater Selection From a Central Inventory
Advertisers Acquire or Enhance a Data Base of Individual Customers
Advertisers Acquire or Enhance a Data Base of Individual Customers
Response Options Enable Audience to Act Right After Exposure Occurs
Response Options Enable Audience to Act Right After Exposure Occurs
Customers Are Served With a Greater Selection From a Central Inventory
Customers Are Served With a Greater Selection From a Central Inventory
Advertisers Acquire or Enhance a Data Base of Individual Customers
Advertisers Acquire or Enhance a Data Base of Individual Customers
Customers Can’t Handle or Inspect the Product Before Purchasing
Customers Can’t Handle or Inspect the Product Before Purchasing
Merchandise Returns and Subscription Cancellations
May Be Numerous
Merchandise Returns and Subscription Cancellations
May Be Numerous
Seller Reputation and Prestige May Be Compromised by
Method’s Poor Image
Seller Reputation and Prestige May Be Compromised by
Method’s Poor Image
Merchandise Returns and Subscription Cancellations
May Be Numerous
Merchandise Returns and Subscription Cancellations
May Be Numerous
Customers Can’t Handle or Inspect the Product Before Purchasing
Customers Can’t Handle or Inspect the Product Before Purchasing
Direct Response Disadvantages
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DisadvantagesDisadvantages
Overall Direct Marketing Pros & Cons
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
AccuracyAccuracy
Rising CostsRising Costs
Image FactorsImage Factors
Content SupportContent Support
Selective ReachSelective Reach
Segmentation CapabilitySegmentation Capability
Frequency PotentialFrequency Potential
FlexibilityFlexibility
TimingTiming
PersonalizationPersonalization
EconomyEconomy
AdvantagesAdvantages DisadvantagesDisadvantages
Measurement of Effectiveness
Measurement of Effectiveness
AccuracyAccuracy
Image FactorsImage Factors
Content SupportContent Support
Selective ReachSelective Reach
Segmentation CapabilitySegmentation Capability
Frequency PotentialFrequency Potential
FlexibilityFlexibility
TimingTiming
PersonalizationPersonalization
EconomyEconomy
Measurement of Effectiveness
Measurement of Effectiveness