Lecture 9-direct mktg

Direct Marketing

Dr. George BelchSan Diego State University

Direct Marketing

Dr. George BelchSan Diego State University

Direct Marketing Defined

RadioRadio

Direct SellingDirect Selling Magazine and NewspaperMagazine and Newspaper

Direct MailDirect MailTelemarketingTelemarketing

TV SellingTV Selling

The total of activities by which the seller directs efforts to a target audience using one or more media for the purpose of soliciting a response by phone, mail, or

personal visit from a prospect or customer

The total of activities by which the seller directs efforts to a target audience using one or more media for the purpose of soliciting a response by phone, mail, or

personal visit from a prospect or customer

Growth of Direct Marketing

Technological Advances

Technological Advances

Changing Structure of

Society


Society

Consumer Credit Cards

Consumer Credit Cards

Growth of the

Internet

Growth of the

Internet

Direct Marketing Syndicates

Direct Marketing Syndicates


Markets


Markets

Direct Marketing Combines With . . .

AdvertisingAdvertising

Sales Promotions

Sales Promotions

Public Relations

Public Relations

Personal Selling

Personal Selling

InternetInternet

Support Media

Support Media

Direct Marketing

Direct Marketing

San Diego Encourages Visits

A Comprehensive Consumer Database

Name

Address/Zip Code

TelephoneNumber

Length ofResidence

Age

Gender

MaritalStatus

FamilyData

Education

Income

Occupation

TransactionHistory

PromotionHistory

InquiryHistory

UniqueIdentifier

A Business-to-Business Database

Contact Info

Contact Title

TelephoneNumber

Source oforder, inquiry,

referral

CreditHistory

IndustrialClassification

Size of Business

Revenues

Number ofEmployees

Time in Business

HeadquartersLocation

PurchaseHistory

PromotionHistory

InquiryHistory

UniqueIdentifier

Objectives of Database Marketing

Improve Selection of Market Segments

Improve Selection of Market Segments

Stimulate Repeat Purchases

Stimulate Repeat Purchases

Cross-selling Other Products

Cross-selling Other Products

Customer Relationship Management

Customer Relationship Management

ObjectivesObjectives

Direct Marketing Strategies

One-StepOne-Step Two-StepTwo-Step

• The medium is used directly to obtain an order

• Often use 800 number phone orders and credit card payment

• May use one medium to obtain inquiry and qualify prospect

• Typically follow up with a second medium to complete the sale

Direct-Marketing Media

Home shopping

Home shopping

InfomercialsInfomercials

TeleshoppingTeleshopping

Print, catalogsPrint, catalogs BroadcastBroadcast

TV SpotsTV Spots

TelemarketingTelemarketing

Direct MailDirect Mail

Types of Direct Mail

House listsHouse lists

BroadsidesBroadsides

CatalogsCatalogs

FlyersFlyers

FoldersFolders

InclusionsInclusions

PostcardsPostcards

ReprintsReprints

Sales lettersSales letters

Self-mailersSelf-mailers

All forms of advertising sent directly to prospects through the U.S. Postal Service or

through private services

All forms of advertising sent directly to prospects through the U.S. Postal Service or

through private services

Porsche Targets Prospects with Direct Mail

Success with Catalogs

Volvo Uses an Infomercial

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

TV Spots, Infomercials, and Homeshopping

A Direct Response Print Ad

Telemarketing

InboundInbound

Telephone calling by the marketer or marketer’s agent to individual prospects, seeking purchase, subscription, membership, or participation by the call recipient.

Marketers facilitate and invite prospects to call a central location via a long distance number, by a toll-free 800 number, or a fixed-cost 900 number.

OutboundOutbound

Forms of Direct Selling

Repetitive person-to-person

Nonrepetitive person-to-person

Party Plans

Cutco Knives Employs Direct Selling

Measuring Effectiveness

Cost per Inquiry (CPI)Cost per Order (CPO)

Direct Response Metrics

• Cost per inquiry – cost of media divided by the number of inquires received ($10,000 ad that generates 1,000 inquiries = $10 CPI

• Cost per order = cost of media divided by the number of orders received (e.g., $10,000 ad generating 200 orders = $50 CPO)

• Cost per point –cost of one household TV rating point in a market

• Cost per thousand = cost to deliver 1,000 persons or households. CPM calculated by dividing media cost by audience size x1000

Direct Marketing Advantages

Selective reachSelective reach

Segmentation capabilitiesSegmentation capabilities

Frequency potentialFrequency potential

FlexibilityFlexibility

TimingTiming

PersonalizationPersonalization

CostsCosts

Measures of effectivenessMeasures of effectiveness

Direct Marketing Disadvantages

ImagefactorsImagefactors

AccuracyAccuracy

ContentsupportContentsupport

Risingcosts

Risingcosts

Do NotContact lists

Do NotContact lists