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Direct Response

Chapter 15

Part Five:Integration and Evaluation

• Part 5 deals with thecomplexities ofmarketingcommunications

Chapter Outline

I. Chapter Key PointsII. The Practice of Direct MarketingIII. Database MarketingIV. The Key PlayersV. The Tools of Direct MarketingVI. Integrated Direct MarketingVII. Global Considerations in Direct

Marketing

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Key Points• Define and distinguish between direct

marketing and direct-response advertising• Explain the types of direct marketing• Name the players in direct marketing• Evaluate the various media that direct-

response programs can use• Explain how databases are used in direct

marketing• Discuss the role of direct marketing in

integrated marketing programs

The Echo Awards: Celebrating GreatDirect Marketing

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The Practice of Direct Marketing

Figure 15.1 – The Direct-Marketing Industry

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The Practice of Direct Marketing

Video Snippet

Ogilvy & Mather: the firstdirect marketing company

Advantages ofDirect Marketing

• Collection of relevantcustomer information

• Purchase not restrictedto location

• Marketer controlsproduct until delivery

• Easier to evaluate• Flexibility in form and

timing

Disadvantages ofDirect Marketing

• Consumers reluctantto purchase

• Annoyancesassociated with directmarketing

• Unable to reacheveryone inmarketplace

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The Direct-Marketing

Process

Figure 15.2

Database Marketing Objectives

1. Record names ofcustomers

2. Store and measure adresults

3. Store and measurepurchasingperformance

4. Vehicle for continuingdirect communication

The Database Marketing Process

Figure 15.3

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Database Marketing

• Lists• Data-driven communication• Customer Relationship Management

The Principles of Data-drivenRelationships

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The Key Players:Advertisers

• Companies whoseprimary business isselling products andservices by mail orphone

• Retail stores who usedirect marketing as asupplement

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The Key Players:Agencies

• Advertising agencies• Independent agencies• Service firms• Fulfillment houses

The Key Players:Media Companies

• The media that deliver messages by phone,mail, or the Web

The Key Players:Customers

• Recipients of theinformation andsometimes theinitiator of thecontact– Push-button shopper– Mouse-clicking

shopper

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The Tools of Direct Marketing:Direct Mail

• A print advertisingmessage for aproduct or servicedelivered by mail– Outer envelope– Letter– Brochure– Supplemental flyers– Reply card– Return envelope

Direct Mail Solutions from Anderson

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Advantages of Direct Mail

• Tells a story• Engages attention• Personalizes message• Builds in feedback• Reaches the

unreachable

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Disadvantages of Direct Mail

• Negative perceptions• Cost• Mailing list• Response rate• Vulnerability

The Tools of Direct Marketing:Catalogs

• A multipage direct-mail publication thatshows a variety ofmerchandise

Tools of Direct Marketing:Catalogs

Catalogs are viewed as junk mail by many recipients.The cost per thousand of catalogs is higher thanmass media.The response is relatively low at 3 to 4 percent.Databases must be consistently maintained.

Negative perceptionsCosts

Response rateMailing list

DescriptionDisadvantages

Can be directed at specific market segments.Employs high-quality design and photography (seeAlsto’s cover).Extensive product information and comparisons areprovided.Offer a variety of purchase options.

TargetedEngages attention

Complete information

Convenience

DescriptionAdvantagesAdvantages and Disadvantages of Catalogs

Table 15.2

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Tools of Direct Marketing:Telemarketing

• Types of telemarketing• Criticisms of telemarketing• Telemarketing messaging design

Do Not Call Registry:Keeping Telemarketers at Bay

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The Tools of Direct Marketing:Direct-Response Advertising

• Combines thecharacteristics ofadvertising with acontact element

• All direct-responseadvertising movesconsumer to action

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The Internet and Direct Response

• Same components asdirect mail andtelemarketing

• Greater samplingopportunities

• New ways to gatherinfo

USA Mail Now:Making Direct-Mailing Easier

Integrated Direct Marketing

• Challenge is tointegrate direct mail,catalogs,telemarketing, Websites, e-mail, textmessaging, andinstant messagingwith other marketingcommunication

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Global Considerations inDirect Marketing

• Fueled by the same technologicalforces as the U.S.

• Particularly important in countries withtight restrictions on advertising

• Privacy issues more intense• Governmental regulation of postal

service

Discussion Questions

Discussion Question 1• Most people hate telemarketing. Say you work

for the local campus environmentalorganization.– How could you conduct a campus and community

telemarketing effort that would not generateresistance?

– How would you develop a telemarketing program topromote campus fund-raising?

– Would it be better to solicit money directly orindirectly by having people attend specially designedevents?

• Your primary targets are students, faculty, andstaff.

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Discussion Question 2

• We know that copy and illustration arevital parts of a successful direct-mailcampaign, but there must be somepriorities.– All of the components of creativity are

important, but which are most important fordirect-response creativity?

– What principles drive message design fordirect marketing?

Discussion Question 3• Hildy Johnson, a recent college graduate, is

interviewing with a large garden-product firmthat relies on television for its direct-responseadvertising.– “Your portfolio looks very good. I’m sure you can

write,” the interviewer says, “but let me ask you,what is it about our copy that makes it moreimportant than copy written for Ford, Pepsi, orPampers?”

• What can she say that will help convince theinterviewer she understands the specialdemands of direct-response writing?

Discussion Question 4

• One of the smaller, privately ownedbookstores on campus is considering adirect-response service to cut down on itssevere in-store traffic problems at thebeginning of each semester.

• What ideas do you have for setting upsome type of direct-response system totake the pressure off store traffic?

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Discussion Question 5

• How does the recent fervor surroundingpersonal privacy affect directmarketing—specifically, telemarketing?

• In addition to legal issues, what consumerissues must media planners considerwhen designing a direct-marketingcampaign?

Discussion Question 6

• The success of infomercials helps validatedirect marketing as a revenue generator

• What characteristics of a product mustyou consider when determining whetherto use a direct-marketing campaign?

• An infomercial?

Discussion Question 7

• Amazon.com is one of the most well-known direct marketers on the Internet.

• Browse the company’s Web site andidentify what direct-marketing strategiesthe company employs.– Which do you think are the most successful?

Why?– Which are the least effective? Why?– What does Amazon expect to gain from

direct marketing?