Direct Marketing: The Dialogue Builder LECTURE-22

Direct Marketing: The Dialogue Builder

LECTURE-22

Chapter Questions

What are the strengths of direct marketing?

What is the biggest strength of direct mail? The biggest limitation?

What are the strengths and weaknesses of telemarketing?

How can direct marketing efforts be evaluated?

What are the major issues and concerns related to direct marketing?

Advertising and Sales Promotion

Advertising and Sales Promotion

Chapter Perspective

A big advantage of Direct Marketing over A big advantage of Direct Marketing over Advertising and Sales Promotion:Advertising and Sales Promotion:

Direct MarketingDirect Marketing

VeryInteractive

Opening Case: Orange Glo

The use of a direct marketing program featuring:

• On-air demonstrations and direct selling on Home Shopping Network

• 30-minute infomercials promoting and selling its brands featuring Billy Mays as spokesperson

The use of a direct marketing program featuring:

• On-air demonstrations and direct selling on Home Shopping Network

• 30-minute infomercials promoting and selling its brands featuring Billy Mays as spokesperson

Expanding Orange Glo’s distribution and profitExpanding Orange Glo’s distribution and profit

• One of the fastest-growing private companies

• $250 million in annual sales

• One of the fastest-growing private companies

• $250 million in annual sales

Opening Case: Orange Glo

Challenge:Challenge:

Answer:Answer:

Results:Results:

Direct Marketing

Direct marketing: An interactive, database-driven messaging system that uses a range of media

to motivate a response from customers and prospects

DirectMarketing

DirectMarketing

2/3 of Americans Respond Every Year2/3 of Americans

Respond Every Year

4 Primary Media: Mail, Telephone, Email, Infomercials

4 Primary Media: Mail, Telephone, Email, Infomercials

Also Known As Direct Response: Because It Is Two-way in Nature

Also Known As Direct Response: Because It Is Two-way in Nature

4 Primary Media: Mail, Telephone, Email, Infomercials

4 Primary Media: Mail, Telephone, Email, Infomercials

2/3 of Americans Respond Every Year2/3 of Americans

Respond Every Year

Direct Marketing

Direct Marketing Flowchart

InteractiveInteractive

MeasurableMeasurable

Fast and FlexibleFast and Flexible

MeasurableMeasurable

InteractiveInteractive

Direct Marketing’s Strengths

DirectMarketingStrengths

DirectMarketingStrengths

What Are Direct Marketing’s Strategies?

Front end strategies Delivering the message

Back end strategies Handling consumer responses and

delivering the product

The OfferThe Offer Targeted DatabasesTargeted

DatabasesThe

ResponseThe

Response

FulfillmentFulfillment Customer Service

Customer Service

Privacy ProtectionPrivacy

Protection

The OfferThe Offer Targeted DatabasesTargeted

Databases

FulfillmentFulfillment Customer Service

Customer Service

Front & Back End Components

Front End ComponentsFront End

Components

Back End ComponentsBack End

Components

The Response

The Response

The Offer

The offer: Everything, both tangible and intangible, promised by a company in exchange for money or some other desired behavior

IMC In Action: 1-800-Flowers

Promoting and delivering flowers nationwidePromoting and delivering flowers nationwide

The use of an IMC program featuring:

• TV, radio, and direct mail messages delivering the offer

• 1-800-FLOWERS; web site, handling responses

• 2,500 local florists fulfilling orders

The use of an IMC program featuring:

• TV, radio, and direct mail messages delivering the offer

• 1-800-FLOWERS; web site, handling responses

• 2,500 local florists fulfilling orders

The use of an IMC program featuring:

• TV, radio, and direct mail messages delivering the offer

• 1-800-FLOWERS; web site, handling responses

• 2,500 local florists fulfilling orders

The use of an IMC program featuring:

• TV, radio, and direct mail messages delivering the offer

• 1-800-FLOWERS; web site, handling responses

• 2,500 local florists fulfilling orders

Promoting and delivering flowers nationwidePromoting and delivering flowers nationwide

Named “top gift site on the web”Named “top gift site on the web”

IMC In Action: 1-800-Flowers

Challenge:Challenge:

Answer:Answer:

Results:Results:

Direct Mail

Direct mail: One form of direct response advertising that uses mail rather than other media to deliver a brand offer

An Example Of a Set Of Materials In a Mail Package

++

Vs.

StrengthsStrengths

• Addressability• Can receive more

attention than advertising

• Not as much clutter as advertising

• Message can be tailored to any size or shape

• Addressability• Can receive more

attention than advertising

• Not as much clutter as advertising

• Message can be tailored to any size or shape

StrengthsStrengths

• Addressability• Can receive more

attention than advertising

• Not as much clutter as advertising

• Message can be tailored to any size or shape

• Addressability• Can receive more

attention than advertising

• Not as much clutter as advertising

• Message can be tailored to any size or shape

Strengths And Limitations Of Direct Mail

LimitationsLimitations

• Postage can be costly

• Some offers can be costly to produce

• Complex offers can require long lead times

• Postage can be costly

• Some offers can be costly to produce

• Complex offers can require long lead times

Telemarketing

Telemarketing: The practice of using the telephone to deliver a brand message designed to create a sale or sales lead

Controversial…Controversial… … … but Big Businessbut Big Business

43 Billion

A Range of Automated Phone System Options

Vs.

Strengths And Limitations Of Telemarketing

StrengthsStrengths

• Personal

• Addressability

• Interactive

• Personal

• Addressability

• Interactive

StrengthsStrengths

• Personal

• Addressability

• Interactive

• Personal

• Addressability

• Interactive

LimitationsLimitations

•Human callers can be costly

•Intrusive (unwanted calls)

•Human callers can be costly

•Intrusive (unwanted calls)

Media Mix Used

Media Mix Used

Creative ApproachCreative

Approach

List TypesList Types Offer ValuesOffer

Values

Frequency of

Exposure

Frequency of

Exposure

Media Mix Used

Media Mix Used

Creative ApproachCreative

Approach

Offer ValuesOffer

ValuesList TypesList Types

How Can Direct Marketing Efforts Be Evaluated?

TestingTesting

Ultimate Test: Effectiveness

Response RateResponse Rate

Number of responsesNumber of offers mailed

Number of responsesNumber of offers mailed ==

Cost Per SaleCost Per Sale

Total cost of mailingNumber of sales made

Total cost of mailingNumber of sales made ==

5 / 100 = 20

RS.1,000 / 5 = Rs.200

Insight: Tracking Customer Costs/Profits

Direct marketers are very proficient tracking their costs and profits

because the medium is the easiest to measure in terms of cost per

sale. One rule of thumb: in most direct-marketing programs, a

customer isn’t profitable until the third time he or she buys.

Think About It

Email CampaignIf you had to design an e-mail campaign for your organization, how would you make it appealing and not just annoying spam?

Email CampaignIf you had to design an e-mail campaign for your organization, how would you make it appealing and not just annoying spam?

Tales From the Real World

The public often wonders: “how did they get my name (or address, phone number, or

email account)?”

In the real world, it’s fairly easy to acquire a database list of many different types of

individuals. In fact, it’s amazing how specific some of the lists can be. Some examples of lists offered for sale by a list broker in their catalog:

“accupuncturists,” “golfers,” and “nuclear physicists.”

Final Note:

• The increasing amount of clutter and privacy concerns suggests that the Direct Marketing winners will be those organizations who:• Are creative in making their appeals stand out

• Are sensitive to consumer privacy concerns

Marketing Management – A South Asian Perspective by Philip Kotler, Kevin Lane Keller, Abraham Koshy & Mithileshwar Jha, 13th Edition, Published by Pearson Education, Inc.

Strategic Marketing Management – Meeting The Global Marketing Challenges by Carol H. Anderson & Julian W. Vincze Published by Houghton Mifflin Company.

Principles of Advertising & IMC by Tom Duncan 2nd Edition, Published by McGraw-Hill Irwin.

Principles of Marketing by Philip Kotler & Gary Armstrong Thirteenth Edition, Published by Prentice Hall

Bibliography

The End:

“Relations does not need cute voice or lovely face

It just need a beautiful and responsible heart with total

attention & affection”