DIRECT MARKETINGDirect marketing is the use of consumer-direct channels to reach and deliver goods and services to customers without using marketing middlemen.These channels include direct mail, catalogs, telemarketing, interactive TV, kiosks, Web sites and mobile devices.Direct marketers seek a measurable response, typically, a customer order . This is sometimes called direct-order marketing. Today many direct marketers use direct marketing to build a long relationship with customer.Direct marketing is one of the fastest- growing avenues for serving customers. More and more business marketers have turned to direct mail and telemarketing in response to the high and increasing costs of reaching business markets through sales force.In addition to trying to increase sales force productivity, companies are seeking to substitute mail and phone based selling units to reduce field sales expenses.THE BENEFITS OF DIRECT MARKETINGTO CUSTOMER1. Home shopping can be fun, convenient, and hassle free.2. It saves time and introduces consumers to a larger selection of merchandise.3. Consumers can do comparative shopping by browsing through mail catalogs and online shopping services.4. Business customers also benefit by learning about available products and services without tying up time in meeting sales people.TO SELLER1. Direct marketers can buy a mailing list containing the name and address of almost any group.2. Marketers can customize and personalize messages according to the customer group3. Direct marketers can build a continuous relationship with each customer.OTHER BENEFITS1. Direct marketing can be timed to reach prospects at the right moment and receive higher readership because it is send to more interested prospects. 2. Direct marketing permits the testing of alternate media and messages in search of the most cost effective approach.3. It also makes the direct marketers offer and strategy less visible to competitors.4. It can measure response to their campaigns to decide which have been the most profitable.5. More personalization, direct, personal contact to establish a one-on-one relationship.6. Faster ability to respond to consumer inquiries, questions and concerns.7. Allows for two-way personal communication to occur.8. Greater personalization develops staff and consumer relationships.9. Better understanding of individual consumer needs and reactions. 10. Ability to use this form of communication as reinforcement to other forms of communication or as a stand-alone activity.

HOW DATABASE WORKS.

FORMS OF DIRECT MARKETING

DIRECT MAILDirect mail marketing involves sending an offer, announcement, reminder, or other item to a person. Direct mail encompasses a wide variety of marketing materials, including brochures, catalogs, postcards, newsletters and sales letters. Major corporations know that direct-mail advertising is one of the most effective and profitable ways to reach out to new and existing clients. Direct mail lets you communicate one-on-one with your target audience. That allows you to control who receives your message, when it's delivered, what's in the envelope and how many people you reach.Direct mail marketing has passed through number of stages:1. CARPET BOMBING - Direct mailers gather or buy as many names as possible and send out a mass mailing.2. DATABASE MARKETING Direct marketers mine the database to identify prospects who would have most interest in an offer. 3. INTERACTIVE MARKETING Direct marketers include a telephone number and web address, and offer to print coupons from the web site.4. REAL TIME PERSONALISED MARKETING Direct marketers know enough about each customer to customize and personalize the offer and message.5. LIFETIME VALUE MARKETING Direct marketers develop a plan for lifetime marketing to each valuable customer, based on knowledge of life events and transitionsOBJECTIVESMost direct marketers aims to receive an order from prospects. A campaigns success is judged by the response rate. An order response rate of 2% is normally considered good.Direct mail can achieve other communication objectives as well, such as Producing prospect leads, strengthening customer relationship, informing and educating customers, reminding customers of offers, and reinforcing recent customer purchase decisions.RFM ANALYSISRFM analysis uses information about customers past behavior that is easily tracked and readily available. Recency is how long ago the customer last made a purchase. Frequency is how many purchases the customer has made (sometimes within a specified time period, such as average number of purchases per year). Monetary is total dollars spent by the customer (again, sometimes within a specified time period).

The termdirect mail,is used to refer to communications sent to potential customers or donors via the postal service and other delivery services. Direct mail is sent to customers based on criteria such as age, income, location, profession, buying pattern, etc. Direct mail includes advertising circulars, catalogs, free-trial CDs, pre-approved credit card applications, and other unsolicitedinvitations delivered by mail to homes and businesses. Bulk mailings are a particularly popular method of promotion for businesses operating in the financial services, home computer, and travel and tourism industries.In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out followingdatabaseanalysis to select recipients considered most likely to respond positively. For example, a person who has demonstrated an interest in golfmay receive direct mail for golf-related products or perhaps for goods and services that are appropriate for golfers.

ADVANTAGES OF DIRECT MAIL MARKETING1. Directly targeting your customersA good quality mailing list, crafted with the right selections and purchased from a reliable and reputed source that updates their data frequently, can help you connect with people who are more likely to be interested in your products or services. Whereas if you focus on internet traffic only you are likely to get generic visitors who may or may not be interested in buying from you. A mailing list can help you targets women, seniors, other businesses etc. There are a number of Demographic and Behavioral variables available to select the right audience for your business.2. Flexible spendingDirect Mail Marketing Ad campaigns give you the opportunity to spend as per your budgets. Sending postcards, letters or brochures is a cost effective solution to get your message in the hands of your customer. You can also choose to have your offer included in coupon books that have a large reach and the cost is split with other businesses.3. Reach more customersFor most small businesses, a number of their potential customers are not computer and internet savvy. Direct Mail Marketing helps reach that segment which is not likely to find your business or learn about your products on the internet. And even if most customers were using the internet, just by building a website you cannot make sure that they will frequently visit the site and purchase from it. Direct mail will end up in the hands of the people that you select and the communication will be tailored for them.4. Promotions and deals increase salesSending promotional offers and coupons that are tied with holidays or major events for your customers (for example their birthday or anniversary) can be an effective way to realize sales growth. And doing that on a regular basis with controlled pricing segmentation can even impact the life time value from those customers.In summary, Direct Mail Marketing can offer many advantages that other marketing channels dont, as long as the campaigns are designed and executed well.

CATALOG MARKETINGCatalogue is a list of the product range that a company sends directly to its customers. The catalogue usually contains details of various products, prices, variants, promotional schemes, along with a product preview. Customers may preserve the catalogue and use it in the future whenever they feel the need to order or replenish the products offered by the company.Customers prefer catalogues mainly because of the convenience of placing an order. Convenience for the customer essentially means saving time and effort of searching for and evaluating products in the decision making process.Price (promotional offers), product (many variants, extensive range, full product line) and service attributes (free home delivery, installations, payment facilities) could be used by marketers for differentiating their offerings. The most important expectation of customers from catalogue companies are guarantees of product delivery and the quality of products delivered.Catalogue Marketing is form of direct marketing where the seller prepares catalogues of merchandise or products and sells directly to the customer. The catalogues are generally in printed form but can also be distributed in the form of CDs. To avoid printing and distribution costs, the catalogues are being increasingly made available online. Products from various companies or vendors may be combined into a single catalogue to provide a one shop point for customer looking out for a particular type of product.Example: Avon is a good example of a company successfully leveraging this channel to sell its range of cosmetics.Guidelines for catalogue marketing:The catalogue should evince the interest of the prospective customer, and should provide all such information as might be sought by him. Some guidelines for an effective catalogue are:

1. The catalogue should be addressed to an interested audience. Developing a catalogue is expensive and the least that the company should expect is to make the customer sift through it. Therefore, a good database is decisive in ensuring the success of catalogue marketing.2. The catalogue should be factual and descriptive. It should preferably carry the product specifications along with a preview. Samples of new products may also work out well.3. The catalogue should be updated regularly. It should contain and retain products that are profitable for the company and of particular interest to the target customer (these items can be estimated from responses to previous offers). New products should be indicated in the catalogue.4. To attract the interest of the customer, the catalogue should be sequenced properly. For instance, the catalogue may have a table of contents indicating the location of various categories of products. If the company sells only one line of product (for instance, cosmetics), it may insert new products first, or keep the more interesting merchandise in the first few pages. The consumer is likely to pay more attention to the cover pages and the pages around the order form.5. The company should ensure that the products ordered by the customer are in stock, and they are delivered on time.Applications of catalogue marketing:Companies can exclusively use catalogues to sell their products, or they may be combined with other means of communication by the company.1. A company that operates exclusively through catalogues, i.e., does not use any other method to approach customers, offers the complete range of its products by using catalogues.2. Some companies use catalogues as a supplement to other forms of selling. A catalogue can be used in addition to personal selling or telemarketing. The salesperson may call upon the prospect and leave a catalogue from which orders may be placed later. A telemarketer in the company can call a prospect and ask if the customer would be interested in knowing more about the company and its products. Mail catalogues may be a follow up of this process.3. Catalogues can also be used to invite customers to visit retail outlets. The catalogue presents details of the product range that the company holds in its retail store. Customers can browse the catalogue and purchase from the retail outlet. Such catalogues can be sent by mails, or they can be printed (or used as inserts) in magazines or newspapers. In addition to these, the electronic media can also be used to advertise catalogues. Package inserts can also be used by marketers.Advantages of catalogue marketing:

Catalogue marketing has several advantages:1. Catalogue marketing ensures that only interested customers respond to the companys offer, or visit their retail outlets.2. The catalogue provides a prospective customer with some idea about the companys offerings to elicit interest in its products.3. If the customer is even slightly interested in the product, there is a high probability that he would retain the catalogue for future usage. Therefore, the catalogue acts as a constant communication link between the company and the consumer, with a onetime expense for the company.4. Catalogues can be useful for start-ups and small firms as it does not involve setting up expensive marketing and selling infrastructure.Disadvantages of catalogue marketing:There are several disadvantages of catalogue marketing:1. Producing the catalogue is very expensive.2. The degree of success of catalogue marketing rests on the accuracy of the database, and how descriptive the database is about target customers. Collecting such information is a difficult and time consuming task.3. Readying the catalogue is only the first step in selling the product to the customer. Companies may fail in ensuring timely delivery to the customer, or may not have the ordered product in stock.4. Product offerings may be easily copied by competitors, because of which catalogue marketers must look for other means of differentiation. TELEMARKETINGTelemarketing is a form of direct marketing where specially trained marketers use telecommunication and information technologies to contact customers and conduct marketing and sales activities.Roles of telemarketing:Telemarketing is very versatile and it can be used for a number of purposes:

1. Direct selling:Telemarketing is used to reach and service a customer, when the sales potential of the customer does not warrant a face-to-face interaction with a salesperson. In an outbound telephone call, a marketer simply enquires about a reordering possibility. Such a call and its ensuing transaction of the marketer taking a customers order, does not require complex sales arguments that need face- to-face interaction. In an inbound telephone call, a customer places an order in response to a direct mail or an advertising campaign.2. Supporting the sales force:Telemarketing supports the sales force by providing a communication link, or an enquiry, or order handling function. Customers feel comfortable in the knowledge that there is a telemarketer at the sellers company who they can easily contact, if they have a problem, enquiry or wish to place an order.3. Generating and screening leads:Outbound telemarketers establish contact with prospective customers and try to make them agree to a salespersons visit. They also screen leads that have been generated by direct mail or advertising. Prospective customers who request further information, are contacted by outbound telemarketers to ascertain their potential and if qualified, to arrange a salesperson visit.4. Building and updating marketing database:A secondary source of information such as a directory provides a list of companies that are only partially qualified for being included in the companys database. Outbound telemarketers check that the companies in the directory fulfil other conditions like their buying potential and frequency of purchase, before they are included in the companys mailing list. Outbound telemarketers also update the companys mailing list by calling the members on the list.Applications of telemarketing:Telemarketing can be cost efficient, flexible and an accountable medium. Telephone permits a two-way dialogue that is instantaneous, personal and flexible. An organization may use telemarketing efforts as a supplement to other techniques of customer contact, or it can use telemarketing as a main mode of making sales to customers.1. Telemarketing linked to field selling activities:The missionary seller who contacts customers initially, and the order taker who takes orders from customers, can take the help of telemarketers to do their job. Telemarketers can act as an organizations primary sales force. Telemarketing makes an important supplementary contribution to personal or face-to-face selling, when the selling process is routine, and the customer does need a lot of convincing, in which case a salesperson would need to visit him.2. Supporting role to other promotional activities:Face to face contact may be required for closing the sale, but selective buyer-seller interactions can be accomplished by telemarketers. These activities include establishing initial contact, taking orders and handling reorders. Implementation of a telemarketing support effort requires close co-ordination of field and telemarketing salespeople.The supporting role of telemarketers creates a major organizational design task in terms of aligning their roles so that sales task is achieved at minimum cost. Resistance from the sales force should be anticipated when they are asked to share commissions with telemarketers. When face to face interaction is needed, telemarketers play a secondary role.3. Primary role of telemarketing:Telemarketers provide sales and customer support in selling situations, in which face-to-face contact with a salesperson is not required. Telemarketing can be productively used in routine selling process, low value purchases, a large and widely dispersed customer base and non-technical products.The high cost of face-to-face interaction between a customer and a salesperson warrants that telemarketing be considered as the first option to reach a customer, and only when a telemarketer has failed to impress a customer, should a salesperson be asked to meet him.4. Combination roles:A company uses its telemarketers in both supporting and primary roles. A company may have large number of customers, who may be widely dispersed, and whose purchases may range from very small amounts to very large amounts. Telemarketers serve customers whose purchases are too small to justify a visit by a salesperson, or they may be too far away. Telemarketers have primary responsibility of such small and far away customers, and provide backup services for large customers, when salespeople are not available to serve them.5. No role:A company cannot rely on its telemarketers when the selling process is complex- personal contact is imperative. Customers who may buy different products from the company should compulsorily be served by salespeople, because it is only during face-to-face interaction that customers varied needs can be unearthed, and then they can jointly explore how those needs can be served by the company. A salesperson should visit customers, who buy in large lots, because such customers cannot be allowed to defect, and hence even their small worries and concerns have to be addressed.Guidelines for telemarketing:Some general rules should be followed when a telemarketer contacts a customer.1. Identify yourself and the company2. Establish a rapport: This would be easy if the potential clients and their businesses have been well researched3. Make an interesting comment4. Deliver your sales message and emphasize benefits over features5. Overcome objections6. Close the sales: ask for the order-would you place an order now? Or fulfill another sales objective-can I send you a sample?7. Action agreement: arrange for a sales call or product demonstration8. Express thanksAdvantages of telemarketing:Telemarketing has several advantages:1. It costs lower per contact than a personal visit by a salesperson.2. It is less time consuming than personal visits both for the company as well as for the customer.3. Growth in telephone ownership has increased access to customers. The use of toll free lines has reduced the cost of responding by telephone for customers.4. Mobile phones enable contact with prospects anytime, anywhere. Messaging services can be used which are less expensive than telephone calls (for the company) and less intrusive for customers.5. Increased sophistication of new communication technology has enabled digital networks to allow seamless transfer of calls between organizations.6. Telephones retain the advantage of two-way communication.Disadvantages of telemarketing:Though it is less expensive and less time consuming than many other direct marketing methods, telemarketing has several disadvantages:1. Telemarketing lacks the visual impact of a personal visit, and hence it is not possible to assess the moods or reactions of the buyer by observing body language, especially facial expressions.2. It is easier for a customer to react negatively over telephone, and the number of rejections can be high.3. Telephone selling can be intrusive and some people may object to receiving unsolicited telephone calls.4. It is more expensive than direct mail or media advertising.5. Labour costs can be high, although computerized answering can cut costs of receiving incoming calls.Direct-response television (DRTV) marketing involves 60- to 120-second advertisements that describe products or give customers a toll-free number or Web site to purchase and 30-minute infomercials such as home shopping channels Less expensive than other forms of promotion Easier to track resultsKiosk marketing involves placing information and ordering machines in stores, airports.Digital direct marketing technologies.1. Mobile phone marketing includes Ring-tone giveaways, Mobile games, Ad-supported content,Contests and sweepstakes2. Podcasts and Vodcasts involve the downloading of audio and video files via the Internet to a handheld device such as a PDA or iPod and listening to them at the consumers convenience3. Interactive TV (ITV) lets viewers interact with television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences

Marketing and the InternetInternet is a vast public web of computer networks that connects users of all types around the world to each other and to a large information repository

Online Marketing Domains1. Business to consumer (B2C) involves selling goods and services online to final consumers2. Business to business (B2B) involves selling goods and services, providing information online to businesses, and building customer relationships3. Consumer to consumer (C2C) occurs on the Web between interested parties over a wide range of products and subjects4. Consumer to business (C2B) involves consumers communicating with companies to send suggestions and questions via company Web sitesTypes of Online MarketersA. Click-only marketersB. Click -and-mortar marketers Click-only marketers operate only online without any brick and mortar presence1. E-tailers are dot coms that sell products and services directly to final buyers via the Internet. Eg. Amazon, Expedia2. Search engines and portals are ports of entry to the Internet. Eg Yahoo, Google3. Internet service providers (ISP) provide Internet connections for a fee. Eg AOL, Earthlink 4. Shopping or price comparison sites provide product and price comparison information. Eg Yahoo! Shopping5. Transaction sites take commissions for transactions on their sites. Eg eBay6. Content sites provide financial, news, research, and other information. Eg New York Times.com, ESPN.com Click-and-mortar companies are brick-and-mortar companies with an online presenceAdvantages of click and mortar companies include:i. Known and trusted brand names.ii. Strong financial resources.iii. Large customer bases.iv. Industry knowledge.v. Reputation.vi. Strong supplier relationships.vii. More options for customersCorporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the companys products directly to: Provide information Create excitement Build relationshipsMarketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome

Designing Effective Web SitesTo attract visitors, companies must: Promote in offline promotion and online links Create value and excitement Constantly update the site Make the site usefulDesigning Effective Web SitesThe seven Cs of effective Web site design1. Context is the sites layout2. Content is the sites pictures, sound, and video3. Community is the sites means to enable user-to-user communication4. Customization is the sites ability to tailor itself to different users or to allow users to personalize the site5. Communication is the way the site enables user-to-user, user-to-site, or two-way communication6. Connection is the degree that the site is lined to other sites7. Commerce is the sites capabilities to enable commercial transactionsThe eighth C- To keep customers coming back, the site needs to constantly change

Placing Ads and Promotions OnlineForms of online advertising Display ads Banners are banner-shaped ads found on a Web site Interstitials are ads that appear between screen changes Pop-ups are ads that suddenly appear in a new window in front of the window being viewed Rich media ads incorporate animation, video, sound, and interactivity

Search-related ads are ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo! and are effective in linking consumers to other forms of online promotion

Other forms of online promotion include: Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information Alliances and affiliate programs are relationships where online companies promote each other Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends

THE PUBLIC AND ETHICAL ISSUES IN DIRECT MARKETINGDirect marketers and their customers usually enjoy mutually rewarding relationships, a darker side occasionally emerges. Key public and ethical issues include:

Irritation: Many people find the increasing number of hard-sell, direct-marketingsolicitations by phone, television, and e-mail to be a nuisance. Unfairness: Some direct marketers take advantage of impulsive or less sophisticated buyers. Television shopping channels and infomercialsextended-length, direct response commercials that appear to be television shows demonstrating or discussing a productmay be the worst culprits. They feature smooth-talking hosts, elaborate demonstrations, claims of drastic or short-time price reductions, and easy purchasing to capture buyers who have low sales resistance.

Deception and fraud: The Federal Trade Commission receives thousands ofcomplaints annually about scams and frauds. Some direct marketers exaggerateclaims about products and performance, some political fundraisers usequestionable gimmicks such as envelopes that resemble official documents, andsome nonprofit organizations pretend to conduct surveys when they are actuallytrying to identify donors.

Invasion of privacy: Critics worry that marketers may know too much about theircustomers lives, and that they may use this knowledge to take unfair advantage.