Direct and Online Marketing: Building Direct Customer Relationships

Chapter 14

Rest Stop: Previewing the Concepts

• Define direct marketing and discuss its benefits to customers and companies

• Identify and discuss the major forms of direct marketing

• Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies

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Rest Stop: Previewing the Concepts

• Discuss how companies go about conducting online marketing to profitably deliver more value to customers

• Overview the public policy and ethical issues presented by direct marketing

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First Stop: Facebook

• Has tremendous impact and influence, not just as a sharing community but also as an Internet gateway

• Has the potential to become one of the world’s most powerful and profitable online marketers

• Entering the location based, deal-of-the-day online markets, and the banking business

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The New Direct-Marketing Model

• For many companies today, direct marketing constitutes a complete model for doing business

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Companies such as GEICO have built their entire approach to the marketplace around direct marketing

Marketing at Work

• Amazon is relentlessly customer-driven

• Visitors receive a unique blend of benefits: huge selection, good value, and convenience

Online pioneer Amazon.com does much more than just sell goods on the Web. It creates direct, personalized online customer experiences

Direct Marketing Benefits to Buyers

• Convenient• Easy• Private• Immediate and interactive• Access to a wealth of:

• Products• Comparative information about companies,

products, and competitors

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Direct Marketing Benefits to Sellers

• Building customer relationships• Offers sellers a low-cost, efficient, speedy

alternative to reach markets• Online direct marketing results in lower costs,

improved efficiencies, and speedier handling of channel and logistics functions

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Direct Marketing Benefits to Sellers

• Offers greater flexibility

• Gives access to buyers that cannot be reached through other channels Southwest Airlines uses techie direct

marketing tools—including a blog, DING! widget, and smartphone app—to inject itself directly into customers’ everyday lives—at their invitation

Customer Databases and Direct Marketing

Best Buy mines its huge database to glean actionable insights on customer interests, lifestyles, passions, and likely next purchases. It uses this information to develop personalized, customer-triggered promotional messages and offers.

Figure 14.1 – Forms of Direct Marketing

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Direct Mail Marketing

• Occurs by sending an offer, announcement, reminder, or other item directly to a person at a particular address

• Well suited to direct, one-to-one communication

• Permits high-target selectivity can be personalized, is flexible, and allows the easy measurement of results

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Direct Mail Marketing

• Traditional direct mail can be an effective component of a broader integrated marketing campaign

Insurance companies like Farmers Insurance rely heavily on TV advertising to establish broad customer awareness. However, they also use lots of good old direct mail to communicate with consumers in a more direct and personalized way.

Catalog Marketing

• Marketing through print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online

• Eliminate printing and mailing costs• Online catalogs offer

• Unlimited amount of merchandise• Broader assortment of presentation formats• Real-time merchandising

Catalog Marketing

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Digital catalogs: Days before the latest Lands’ End catalog arrives in the mail, customers can access it digitally at landsend. com , at Facebook, or via the Lands’ End mobile app

Telemarketing

• Using the telephone to sell directly to customers

• Marketers use:• Outbound telephone marketing to sell directly to

consumers and businesses• Inbound toll-free numbers to receive orders from

television and print ads, direct mail, or catalogs

• Provides purchasing convenience and increased product and service information

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Telemarketing

Marketers use inbound toll-free 800 numbers to receive orders from television and print ads, direct mail, or catalogs. Here, the Carolina Cookie Company urges, “Don’t wait another day. Call now to place an order or request a catalog.”

Direct-Response Television (DRTV) Marketing

• Marketing via television, including direct-response television advertising (or infomercials) and interactive television (iTV) advertising

Large, well-known companies—such as Kodak—are now using direct-response TV to get the message out directly to customers

Kiosk Marketing

• Product or service information and ordering machines are placed by companies in stores, airports, hotels, college campuses, and other locations Red box operates more than

27,000 DVD rental kiosks in supermarkets and fast-food outlets nationwide

Marketing and The Internet

• Internet: Vast public web of computer networks that connects users of all types around the world to each other and an amazingly large information repository• Has given marketers a whole new way to

create value for customers and build relationships with them

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Marketing and The Internet

• Click-only companies: Dot-coms, which operate online only and have no brick-and-mortar market presence• Include e-tailers, search engines and portals,

transaction sites, content sites, and online social networks

• Click-and-mortar companies: Traditional brick-and-mortar companies that have added online marketing to their operations

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Click-and-Mortar Marketing

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Staples backs its “that was easy” positioning by offering a full range of contact points and delivery modes

Online Marketing

• Click-and-mortar business trends:• Almost all traditional companies have set up

their own online sales and communication presence.

• Many click-and-mortar firms are having more online success than their click-only competitors.

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Figure 14.2 – Online Marketing Domains

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Online Marketing Domains

Blogs

• Offer fresh, original, personal, and cheap way to enter into consumer online conversations

• Cluttered and difficult to control Purex used SocialSpark to help introduce its

Purex Complete 3-in-1 Laundry Sheets viablogs such as Freaky Frugalite, Bargain Briana, 3 Kids and Us, and others that reach homemakers

Figure 14.3 – Setting Up for Online Marketing

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Corporate (or brand) Web Site

• Designed to build customer goodwill, collect customer feedback, and supplement other sales channels rather than sell the company’s products directly

You can’t buy anything at Nestlé’s colorful Wonka.com site, but you can learn about different Nestlé candy products or just hang around for a while and “feed your imagination.”

Web Sites

• Should be:• Easy to use• Professional looking• Physically attractive• Useful• Interactive• Linked to other related sites• Promotional

Forms of Online Advertising

Online Social Networks

• Marketers can engage in these in two ways:• Participate in existing Web communities• Set up their own

• Challenges of participating in existing Web communities:• Results are hard to measure• Such online networks are largely user controlled

Spam

• Unsolicited, unwanted commercial e-mail messages

E-mail can be an effective marketing tool. But there’s a dark side—spam, unwanted commercial e-mail that clogs up our inboxes and causes frustration.

Marketing At Work

• Marketers large and small are weaving mobile marketing into their direct marketing mixes

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Zipcar’s iPhone app lets members find and book a Zipcar, honk the horn (so they can find it in a crowd), and even lock and unlock the doors—all from their iPhone.

Public Policy and Ethical Issues in Direct Marketing

• Annoys customers• Takes unfair advantage of impulsive buyers• Internet fraud• Phishing – Identity theft that uses deceptive

e-mails and fraudulent Web sites to fool users into divulging their personal data

• Online security• Access by vulnerable or unauthorized groups

Public Policy and Ethical Issues in Direct Marketing

Internet fraud has multiplied in recent years. The FBI’s Internet Crime Complaint Center provides consumers with a convenient way to alert authorities to suspected violations

Public Policy and Ethical Issues in Direct Marketing – Consumer Privacy

• Invades privacy• Ready availability of information leaves

consumers open to abuse

Public Policy and Ethical Issues in Direct Marketing – A Need for Action

• Government agencies are investigating on:• Do-not-call lists• Do-not-mail lists• Do-not-track lists• Can Spam legislation

• Congress is drafting legislation that would give consumers more control over how Web information is used

Public Policy and Ethical Issues in Direct Marketing – A Need for Action

• The FTC is taking a more active role in policing online privacy

• In 2000, Congress passed the Children’s Online Privacy Protection Act (COPPA), which requires Web site operators targeting children to post privacy policies on their sites

• Many companies have responded to privacy and security issues with actions of their own

Public Policy and Ethical Issues in Direct Marketing – A Need for Action

By clicking on the little AdChoices advertising option icon in the upper right of this online ad, consumers can learn why they are seeing the ad and opt out if they wish

Rest Stop: Reviewing the Concepts

• Define direct marketing and discuss its benefits to customers and companies

• Identify and discuss the major forms of direct marketing

• Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies

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Rest Stop: Reviewing the Concepts

• Discuss how companies go about conducting online marketing to profitably deliver more value to customers

• Overview the public policy and ethical issues presented by direct marketing

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