Direct Direct MarketingMarketing

Direct MarketingDirect MarketingDM is a system of marketing by which organizations communicate directlyWith target customers to generate a response or transaction.This response may take the form of an Inquiry A purchase or even a Vote.

As per Peter Bennett DM is:As per Peter Bennett DM is:The total activities by which seller, in effecting the exchange of goods and services with the buyer, direct its efforts to a target audience, using one or more mediamedia viz: direct selling, direct mail, telemarketing, direct action advertising, catalogue selling, cable TV selling etc for the purpose of soliciting a response by phone, mail or personal visit from a prospect or customer.

Difference between DM & DM-mediaDifference between DM & DM-media• DM is an aspect of total marketing i.e. it involves marketing research, Segmentation, Evaluation( just same as in marketing process).DM also uses a set of Direct Response MediaDM also uses a set of Direct Response Media, including direct mail, telemarketing, interactive TV, print, the internet and other media.These media are the tools by which direct marketers implement the communication process.

Growth of DMGrowth of DM• DM has been around since the invention of printing press

in the 15th century.• Ben Franklin (in 1700’s) and Warren Sears &

Montgomery ward were using this medium in 1880’s.• The major impetus behind the growth of DM have been

the development & expansion of U.S. Postal Services which made catalogs available to both urban & rural dwellers.

• Catalogs revolutionized America’s buying habits; consumers could now shop without even leaving their homes.

Growth of DMGrowth of DMFactors responsible for the growth of DM are:

1.1. Consumer credit cardsConsumer credit cards (feasible for consumers to purchase both high & low ticket items)

2.2. Direct marketing syndicatesDirect marketing syndicates(companies specializing in list development, statement inserts, catalogs &

sweepstakes have opened many new opportunities to marketers)

3.3. Changing structure of society & the marketChanging structure of society & the market(rapid increase in nuclear & dual income families i.e. “money rich & time poor”

families)

4.4. Technological advancesTechnological advances(electronic media & computers)

5.5. Misc.factorsMisc.factors

Role of DM in IMC programRole of DM in IMC programCombining with:AdvertisingAdvertising:

DM is in itself a form of advertising-whether thru

mail, print or TV, the direct response offer is an ad.It usually contains toll free number or a form that

request mailing information.Sometimes the ad support the direct selling effort.Direct response ads or informercials are also

referred to in retail outlet displays.

Role of DM in IMC programRole of DM in IMC programPublic Relations:Public Relations:

PR activities often employ direct response techniques.

Private companies may use telemarketing activities to

solicit funds for charities or cosponsor that use these and

other direct response techniques to solicit funds.

Direct response ads or infomercials are also referred to in

retail outlet displays.

Role of DM in IMC programRole of DM in IMC programPersonal Selling:Personal Selling:Telemarketing & direct selling are two methods of personalselling.Non profit organizations like charities often use

telemarketing to solicit funds.Profit organizations also use telemarketing with much

greater frequency to screen and qualify prospects and to generate leads.

Direct mail pieces are often used to invite prospective customers to invite customers viz to their showrooms toproduct testing. (viz-cars/auto industry use this )

Role of DM in IMC programRole of DM in IMC programSales Promotions:Sales Promotions:

Mail announcement of special end-of-season salesend-of-season sales.

Airlines Airlines send out mailers or –emails announcing

promotional airfares.

Retail outlets call their existing customers to notify them of

special sales promotions.

Above examples are of direct marketing tools to inform

customers of sales promotions.

Sales promotion event may support direct marketing effort.

Role of DM in IMC programRole of DM in IMC programSupport Media:Support Media:

Adding a promotional product to a direct mailer

has proved to increase response rates viz-

including promotional product in half of its 10,000

mailers and not in the other half.

A firm must take following decisions

to successfully implement direct marketing to successfully implement direct marketing programs:programs:

1.What program objectivesobjectives will be

2.Which marketsmarkets to targettarget3.What direct marketing strategiesmarketing strategies will be

employed

4.How to evaluate the effectivenessevaluate the effectiveness of the program.

Direct Marketing ObjectivesDirect Marketing ObjectivesThe objectives of the programs are behaviors viz-

test drives, votes, contributions and /or sales.

Many organizations use DM to build an image,

maintain customer satisfaction & inform or educate

customers in an attempt to lead to future actions.

Developing a DatabaseDeveloping a DatabaseSuccess of direct marketing program is in large

part tied to the ability to do one-to one marketing.

To segment and targets their markets, direct

marketers use-DatabaseDatabase, a listing of

customers/potential customers.

This database is a tool for Data base marketingData base marketing - -the use of specific information about individual

customers and /or prospects to implement more

effective & efficient marketing communications.

Contents of a Comprehensive DatabaseConsumer DatabaseConsumer Database Business to Business DatabaseBusiness to Business DatabaseName Name of company/contact/decision maker

Address/Pincode Title of contact

Telephone number Telephone number

Distance of Residence Source of order/inquiry of referral

Age Credit history

Gender Industrial classification

Marital status Size of business

Family data Revenues

Education Number of employees

Income Time in business

Occupation Headquarters location

Transaction history Purchase history

Promotion history Promotion history

Inquiring history Inquiring history

Unique identifier Unique identifier

Functions of DatabaseFunctions of DatabaseThis database serves as the foundation from which

the DM programs evolve.

Data base are used to perform the following functions: Improving the selection of market segmentsStimulate the repeat purchaseCross sell(customers who demonstrate a specific interest also constitute strong potential for

other products of same nature)

Customer relationship management

Direct Marketing Strategies & MediaDirect Marketing Strategies & MediaMarketers must decide the message to be conveyed, size of the

budgetand so on.The major difference between direct marketing (DM) programs &other promotional mix programs regards is the Use of Media.Direct marketing employs a number of media, including Direct Mail Telemarketing Direct response broadcasting Internet & Print

Each medium is used to perform specific functions, although they all

generally follow a One or Two Step approachOne or Two Step approach.

Step ApproachStep ApproachOne Step ApproachOne Step Approach: The medium is used directly to obtain an ordermedium is used directly to obtain an order. Viz work out equipments or magazine subscriptions in which the viewer is urged to phone a toll free number to place an orderimmediately. Usually these ads accept credit cards or cash ondelivery and give an address.

The Two Step ApproachTwo Step Approach use more than on medium.The first effort is to designed to screenfirst effort is to designed to screen or qualify potential buyers. The second effort generates the response. second effort generates the response. Viz many companies use telemarketing to screen the basis of interestand then follow up to interested parties with more information designed to achieve an order or use personal selling to close the sale.

Junk MailJunk MailOften called as “Junk mail”-the unsolicited

which we receive, often used in auto industry, cars and credit cards industry.

Key to the success of junk mail is the mailing list, which constitutes the database from which the names are generated and the ability to segment markets.

CatalogsCatalogs It is one of the major participants of direct marketing.The number of catalog mailed and the number of

catalog shoppers have increased significantly in developed countries, but in India it is at infancy stage.

Many companies use catalog in conjunction with their traditional sales & promotional strategies.

In addition to hard copies, catalogs are now available on the Internet for both consumer & b-2-b customers.

e.g of Catalogs marketing in Indian context

Broadcast mediaBroadcast mediaTwo broad cast media are available to direct

marketers: TV & Radio.TV & Radio.Radio was used extensively in 1950’s & 1960’s

quite extensively, its use and effectiveness have dwindled substantially in recent years.

Majority of DM broadcast advertising now occurs on TV, which receives the bulk of our attention.

Two step approach is very common on the Two step approach is very common on the radio,radio, particularly with local companies.

Broadcast mediaBroadcast media• DM in the broad cast industry involves both Direct Direct

Response Advertising & Support Advertising.Response Advertising & Support Advertising.• In Direct Response AdvertisingDirect Response Advertising, the

product/service is offered and a sales response is solicited, through either one or two step approach. e.g. ads for magazine subscription, CD’s & tapes and tips on personal health equipments on various channels viz-Zee TV Sky shop.

• Toll free numbers are provided so that receiver can immediately call to order.

Pic of direct response marketing

Support AdvertisingSupport AdvertisingSupport Advertising:Is designed to do exactly that support other

forms of advertising.Ads for publishers clearing house or Readers

Digest or other companies telling you to look in your mail box for a sweepstakes entry are examples of support advertising.

InfomercialsInfomercialsThe lower cost of commercials on cable &

satellite channels has led advertisers to a new form of advertising.

An infomercial is along commercial that ranges from 30 to 60 minutes.

Many infomercials are produced by the advertisers and are designed to be viewed as regular TV shows.

TV AdvertorialsTV Advertorials

It is first step into TV programming by developing a series of advertorials to show the public its entire model range viz cars

e.g. developing a a series of 5 minute films positioning the autos/cars as “The drive of your life” while providing comprehensive information on Test drives, technical specifications and demonstrations.

TeleshoppingTeleshopping• The development of toll-free numbers

combined with widespread use of credit cards, as lead to a dramatic increase in the number of people who shop via their TV sets.

• Jewelry, Kitchenware, fitness products, insurance, compact discs and a variety of items are now promoted. viz Zee TV sky shop

Print MediaPrint MediaMagazines and news-papers are difficult media to

use for direct marketing, because these ads have to

compete with clutter of other ads and because the

space is relatively expensive, response rates and

profits may be lower than in other media.

TelemarketingTelemarketingTelemarketing or sales by telephone.Both profitable and charitable organizations

have employed this medium effectively in both one and two step approaches.

B-2-B marketers like Adobe systems 7 HP are using the DM system effectively.

Potential problems with telemarketing include its potential for fraud and deception for annoyance.

Electronic Tele-shoppingElectronic Tele-shopping• Electronic tele-shopping is an on line

shopping and information retrieval service accessed through potential computers.

• Also called as e-commerce.

Direct SellingDirect SellingAn additional element of direct marketing program is direct selling, the direct personal presentation, demonstration and sales of products & services to consumers in their homes.Viz-Avon. Tupper ware, Amway are some of the best known direct selling companies.Three forms of direct selling are:Repetitive person to person sellingNon repetitive person to person sellingParty Plans

Advantages of DMAdvantages of DMAdvantages:Advantages: Selective ReachSelective Reach (lets the advertiser reach a large number of people &

reduces the waste coverage)

Segmentation capabilitiesSegmentation capabilities (marketers can purchase list of recent product purchase, car buyers, bank card holders & so on)

FrequencyFrequency (depending on the medium used it may be possible to build frequency level, viz direct response TV advst are inexpensive hence can be repeated)

FlexibilityFlexibility (can take variety of creative forms)

TimingTiming (direct response advertising can be much more timely, viz Direct mail can be put together very quickly and distributed to the target population)

PersonalizationPersonalization CostsCosts Measure of effectivenessMeasure of effectiveness

Disadvantages of DMDisadvantages of DM

Disadvantages:Disadvantages:Image factorsImage factors (viz Junk mail-people believe that unsolicited mail

promotes junk products)

AccuracyAccuracy (effective-ness of these methods depends on the accuracy of the lists used)

Content supportContent support (ability of the magazines to create mood contributes to the overall effectiveness of the ads they carry, direct mail and on line services are unlikely to create a desire-able mood)

Rising costsRising costs