Chapter 6

Direct Marketing

What is Direct Marketing? Direct communication with carefully

targeted individual consumers The use of telephone, mail, fax, email,

Internet and other tools to communicate directly with specific consumers

For buyers DM is convenient, easy to use and private DM is immediate and interactive Easy access – at home and around the globe

For sellers DM is a powerful tool for building customer

relationship DM can offer sellers a low-cost, efficient

alternative for reaching their markets

Growth of Direct Marketing The need to use more cost effective communication

methods Advertising has become too cluttered

Introduction and explosion of database

Introduction of IT

Changes in social trends Consumers are too busy too shop

Consumers are responsive

Consumers are quick to response

Increased emphasis on measurable advertising results Companies can get immediate result

Direct Marketing Techniques Direct Responses Television Marketing

Direct Mail

Catalog Marketing

Direct Selling

Telemarketing

Database Marketing

Internet Marketing

Direct Marketing Techniques

Direct Responses Television Marketing

1.Direct Response Advertising Television spots

30 minutes advertising program i.e. infomercials

Usually include toll-free number

2. Home shopping channels TV programs or entire channels dedicated to

selling goods/services

Home Shopping Network (usually broadcasted 24 hours)

Direct Marketing Techniques

Direct Mail Involved sending an offer, announcement, reminder,

or other item to a person at a particular address

Advantages Most selective and direct marketing communication tool

Offer the most potential for personalization

The most flexible and suitable for testing

Simple and inexpensive to change

Three new forms of mail delivery have become popular Fax Mail

E-mail

Voice mail

Direct Marketing Techniques

Catalog Marketing

Direct marketing through print, video or electronic catalogs that are mailed to select customers, made available in stores or presented online

Direct Marketing Techniques

Direct Selling

i.e. Avon, Cosway, Insurances

Conducted at buyer’s / seller’s location

Can be face-to-face or via telephone

Direct Marketing Techniques Telemarketing

Using the telephone to sell directly to consumers and business consumers

Marketer uses outbound telemarketing to sell directly to consumers and businesses

Inbound toll-free number are used to receive orders from TV and print ads, direct mail or catalog.

Advantages to company Place the company one step ahead of its competitor Improve relationship with customers (2-way dialogue) Increase customer awareness Cost efficiency

Advantages to customers Research shows that >80% customers prefer to do business by

phone The feeling of control of the situation Direct contact with the company

Direct Marketing Techniques Database Marketing

Database contain info about customer of prospects that has been collected over a considerable time

Marketing database is an organized set of data of individual/prospect

The database can allocate good potential buyers, tailor product / services to the special needs of the targeted customers

Direct Marketing Techniques Internet Marketing

IM is catching up very quickly with the marketers

Tremendous increase in computer literacy

Government encouragement in e-commerce

Internet Marketing

Advantages

High selectivity

Low cost

Interactive capabilities

Disadvantages

Relatively low impact

Direct Marketing-Strengths

Strengths

More targeted than other forms of marketing communication

Ability to personalized approach and therefore it is extremely flexible

Results are measurable

Direct Marketing-Weaknesses

Weaknesses

Ineffective, unless use as long term strategy

Poor image & distrust if poorly executed

Lead to decrease in goodwill

Message conflict with other marketing communication message

Evaluating Direct Marketing

Profitability Analysis

Customer characteristics and response

Respondent/non-respondents survey

Tracking studies

Geodemography

Public Policy and Ethical Issue in Direct Marketing

Irritation, Unfairness, Deception, Fraud Annoy and offend consumers

Direct response TV commercial that are too loud, too long

Mailers that intended to mislead buyers Investment scam

Invasion of Privacy Names of customer who enter

sweepstakes, applying for credit card, subscriber of magazine are entered into some company’s database Direct marketers use these database to

target their selling efforts

Next Chapter

Sales Promotions