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14. Direct Marketing. Direct Marketing Defined. Print. Interactive TV. Direct Mail. Telemarketing. Other Media. The Internet. …an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location. - PowerPoint PPT Presentation
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Copyright © 2012 McGraw-Hill Companies, Inc., All right reversedMcGraw-Hill/Irwin
14
Direct Marketing
Direct Marketing Defined
Interactive TV
The Internet Other Media
Direct MailTelemarketing
…an interactive system of marketing which uses one or more advertising media to effect
a measurable response and/or transactionat any location
14-2Direct Response Media tools
Growth of Direct Marketing
Technological Advances
CatalogsConsumer
Credit Cards
Changing Structure of
Society
14-3Money rich; time poor Shop on internet
Shop w/o leaving home
Direct Marketing Combines With…
Support Media
Support Media
Public Relations
Public Relations
Personal Selling
Personal Selling
AdvertisingAdvertising
Sales Promotion
Sales Promotion
Direct Marketing
Direct Marketing
14-4
Victoria SecretSolicit funds for charity
Car sales
Promotional product in mailer increases response rates
Airline price changes
Example of DM / Sales Promotion
14-5
Costco sends promotional offer through the mail
Direct-Marketing Objectives
To seek a behavioral response
To build an image
To maintain customer satisfaction
To inform and/or educate customers in an attempt to lead to
future actions
Direct Marketing Strategies
One-StepOne-Step Two-StepTwo-Step
• Used directly to obtain an order
• Toll-free phone orders and credit card payments
• Knife sets or work out equipment
• Screens potential buyers
• Follow-up to complete the sale
• Car or insurance sales
14-7
Types of Direct Marketing Media
• Direct Mail• Unsolicited; often called “junk mail”• Success depends on mailing list / ability to segment target
• Catalogs• Drives consumers on line or in store
• Broadcast Media (TV / radio) /Print Media• Email
• Spam is electronic equivalent of “junk mail”
• Infomercials• Low cost of commercials on cable • 30 minute “programs”
• Home shopping (QVC / HSN)
• Telemarketing• Sales by telephone• Do Not Call List 14-8
Direct Mail Example
• Target Criteria• Physicians in specialties• Highest income levels• Demographics of Porsche buyers• Specific geographic areas
• Hooks• Use X-ray of a Porsche 911 Carrera 4• Use medical terminology
14-9
Example of Direct Marketing Targeting
14-10
Cabela’s catalogtargets
hunters and fishermen
Catalog Example
14-11
Drives consumersin store and
online
Infomercials
14-12
One of the most successful products advertised on infomercials
Direct Marketing via Email
14-13
Forms of Direct Selling
Repetitive person-to-person
Nonrepetitive person-to-person
Party Plans
14-14
Direct, personal presentation, demonstration and sales of products to consumers in their home
Mary Kay
Lifeinsurance
Tupperware
Measuring Effectiveness
Cost per Order (CPO)
14-15
Example of CPO Calculation
• Cost of ad = $2,500• Profit per order = $5
• Needs more than 500 orders to be cost effective:
• $2,500 / $5
14-16
Another Measure of Effectiveness
• Customer Lifetime Value (CLTV): Determines the dollar value associated with a long-term relationship with a customer
• Helps determine if a customer should be acquired
• Optimizes existing customers’ service levels
Direct Marketing Advantages
Selective reach
Segmentation
Frequency potential
Testing
Timing
Personalization
Costs
Measures of effectiveness
14-18
Highest potential consumers
Based on age, income
Cheap, late night TV
Creative approaches
Put togetherquickly
Cheap, late night TV
No other mediummeasures as well
Direct Marketing Disadvantages
ImagefactorsImagefactors
AccuracyAccuracy
ContentsupportContentsupport
Risingcosts
Risingcosts
Do NotContact lists
Do NotContact lists
14-19
Junk mail
Need good lists
Mail not desirable mood
Postage increases