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Stephen OngBSc(Hons)Econs (LSE), MBA (Bradford)
Visiting Professor, Shenzhen UniversityAcademic Fellow, Entrepreneurship & Innovation,
The Lord Ashcroft International Business School, Anglia Ruskin University Cambridge UK
MARKETING
•What is DIRECT MARKETING ?
1
•Direct Marketing Channels & Methods 2
•Case Discussion : TESCO Direct
3
1. To introduce direct marketing as a special form of marketing communications
2. To discuss the different channels and methods of direct marketing and their effectiveness
3. To discuss the use of direct marketing by business to consumers
Direct marketing is the use of consumer-direct
channels to reach and deliver goods and services
to customers without using market middlemen.
Direct MarketingviaDirect mailCataloguesInfomercials,
teleshopping other direct
response media
Any communication with a consumer or business recipient that is designed to generate a response in the form of:
1. An order
2. Request for further information
3. A visit to a store or other place of business
Building from Customer Relationship Management Identify customers and accumulate
detailed information about them Differentiate customers and rank them in
terms of their value to the company Interact with customers and develop more
cost efficient and effective forms of interaction
Customize the product/service offered to the customer
The world is full of people who are not Malaysians. Be sure not to treat them like they are.
Like politics, all marketing is local. Just because your direct mail campaign worked in Kuala Lumpur, do not assume it will work in Tokyo.
Although there may be a European Union, there is no such thing as a "European."
Pick your target, focus on one country, and do your homework.
Customers need to be able to return products locally or at least believe there are services available in their country.
Direct Marketing Association Prospecting 60%
Customer retention 40%
It works!
Customers respond Telephone
Retail store
Personalised URL
Direct mail
Catalogues
Telemarketing
Interactive TV
Internet
Mobile
Other direct response
Methods of Direct Marketing
24%
16%
46%
55%
17%
22%
29%
8%
10%
21%
24%
16%
73%
77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Outbound telemarketing
Inbound telemarketing
E-mail to prospects
E-mail to customers
Search engine optimization
Search engine marketing
Direct response-Internet
Direct response-TV
Direct response-radio
Direct response-promotions
Catalogs
Statement stuffers
Direct mail to prospects
Direct mail to customers
% of Companies Using Particular DM Methodology
Source: Based on Richard H. Levy, “Prospects Look Good,” Direct, Vol. 16 (December 1, 2004), pp. 1-5.
A vehicle for delivering a personally addressed offer to a prospect targeted by a marketer
Popular with banks, insurance co., other financial service providers
U.S. direct mail lists are easy to rent; Europe and Japan lists are lower in quality
Germans spend the most, US$500 per capita, in mail-order shopping
Most common form of direct marketing
Types of lists Response list
Compiled list
Digital direct-to-press
Advantages Target mailings
(consumer, B-to-B)
Measurable
Driver of online sales
Disadvantages Clutter
Costs
•Catalogue: magazine-stylepublication that featuresphotographs, illustrations, andextensive information about acompany’s products•U.S. 1/3 of world market, 17billion mailed in 2008•EU: Elimination of barriers hasled to a boom•Hong Kong and Singapore haveefficient postal systems andhighly educated consumerswith credit cards
Long-term impact
Low-pressure sales tactics
First stage in buying cycle
Database
Specialty catalogues
Business-to-business
Television
Radio
Magazines
Newspapers
An infomercial is a form of paid TV in which a particular product is demonstrated, explained, and offered for sale to viewers who call a toll-free number on the screen
In Asia, infomercials make $100s of millions in sales. Low penetration rates of private phones, credit cards create difficulties
Teleshopping on channels like HSN and QVC is exclusively devoted to demonstration and selling
ITV allows viewers to interact with the programming content they are viewing
In the U.K., more than half of pay-TV subscribers use ITV
Remote controls have buttons to push to order products shown on screen
Direct response to ads
Cost-effective
Builds relationships
Personalization of communication
Customization of offer
Search engine ads
Consumer direct sales
Host parties
Amway, Mary Kay, Avon
Inbound telemarketing
Cross-selling
Outbound telemarketing
Cold calling
Database
Prospects
Irritation
Unfairness
Deception/fraud
Invasion of privacy
Environmental
Background Founded in 2006, Tesco Direct retails a wide range of non-
food products via the Internet and catalogues. In 2008, the organisationissued 11.5 million catalogues, attracted around 1.5 million visits to itswebsite each week and increased sales by more than 50% in the year.
Group Discussion 30 mins discussion in Groups of 7
5 mins presentation by Group representative
► Individual Assignment
Individual coursework (contributes to 15% overall mark of course)
2 pages written in English in WORD format
►Summary
► Issues discussed
►Solutions proposed
“Sell good merchandise at a reasonable profit, treat your customers like human beings, and they will come back for more.” Leon Leonwood (L.L.) Bean
Keegan, W.J. and Green, M.C. (2014) Global Marketing, Pearson 8th edition
Kotler, P. and Keller, K. (2012) Marketing Management, Pearson, 14th edition
Timm, P.R. (2014) Customer Service: Career Success Through Customer Loyalty, Pearson 6th edition
Clow, K.E. and Baack, D.E. (2014) Integrated Advertising, Promotion, and Marketing Communications , Pearson 6th edition
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