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
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