Direct Marketing (DM)

“Direct Marketing is an interactive system of marketing, which uses one or more advertising media to effect a measurable response and /or transaction at any location.”

- Direct Marketing Association (DMA)

Unique Features of DM

Action Orientation

“Create share-of-market, rather than, share-of-mind” -Lester Wunderman

Prospect Selectivity (Targetability) Customization ability Measurability Relationship building

DM Initiatives of some FMCG Majors HUL – Project Sangam Direct, HLL Network Marico –Harghar Procter & Gamble LG Electronics

IDSA – Indian Direct Selling Association WFDSA – World Federation of Direct Selling

Association

Forms of DM

Catalogue Marketing

Tele Marketing: 1)Inbound 2) Outbound

TV Direct–Response Marketing (Tele-Shopping)

Mail order

Kiosk Shopping (Touch Screen)

Multi-level Marketing

Ethical issues in Direct Mktg. Irritation Deception and Fraud Invasion of privacy

Permission Mktg. Clutter in Advertising and spurt in DM

Invades privacy of customers “Permission Marketing”----Seth Godin

e.g. Mitsubishi Lancer (Hindustan Motors)

e.g. Bose audio systems Difference between Permission Mktg.and DM

Network Marketing(NM) / Multi-Level Marketing(MLM) Network Marketing is a form of DM, which uses a

network of people (consultants) to demonstrate and sell products to people they know.

Nuts & Bolts of Network Marketing Products suitable for the system Use of IT-Data mgmt., Inventory mgmt. ,e-business. Strengths of MLM Drawbacks of MLM Future of MLM in India

Some DM Co.s and their Products Amway – Household,Personal Care,Cosmetics, Nutritional Avon - Cosmetics, Jewellery,Home furnishing,Baby Care Tupperware – Food Storage Containers,Kitchenware,Toys Discovery Tops- Toys, Books, Games Brite Music Enterprises – Children Songbooks,Cassettes Encyclopedia Britannica- Educational Publications Mary Kay Cosmetics – Cosmetics, Skin care Products Oriflame - Cosmetics, Skin care Products Modi Care – Home care,Kitchen care,Car care,Personal

care

Strengths of MLM Continuous growth of network . Quicker & easier entry into new markets. Low overheads. Easy to add new products. Better demonstration of innovative products Loyal & captive base of consumers. Word of mouth magic.

Weaknesses of MLM Sales forecasting is difficult – high inventories . Distributors often become the largest consumers Brand building is difficult. The chain could break down. Prices are normally high. Pyramid structure of income distribution. High turnover of distributors.