DIRECT MARKETING Session 16 Prof: Yasmin

Direct marketing consist of direct connections with carefully targeted individuals consumers to both obtain an immediate response & cultivate lasting customer relationships. Direct marketers communicate directly with customers, often on one to one, interactive basis. Using detailed data bases, they tailor their marketing offer & communications to the needs of narrowly defined segments or even individual buyers.

Direct marketers apart from brand & relationship building also seek direct, immediate & measurable consumer responses. For e.g. Dell interacts directly with customers, by telephone or through its Web site, to design built – to –order PC’s that meet customer ‘individuals needs’.

Definition

THE DIRCT MARKETING MODEL In early days, direct marketers sold their goods using catalogues, direct mailers, & telemarketers, but with the development in the technology, the direct marketing has undergone a dramatic change. With the emergence of Internet – direct marketing has undergone dramatic transition. In recent years, the dramatic growth of Internet & the increase in the sophistication of database technologies has created an extraordinary expansion of direct marketing. Most companies still use direct marketing as a supplementary channel or medium for marketing their goods & messages.

GROWTH & BENEFITS OF DIRECT MARKETING Direct marketing has become the fastest growing form of marketing. According to the Industry observers companies spent huge amount on direct marketing. Direct marketing continues to become more Web oriented & Internet marketing is claiming fast growing share of direct marketing spending & sales.

BENEFIT TO BUYERS For buyers, direct marketing is convenient, easy, & private. Direct marketing gives buyers ready access to a wealth of products. Direct marketing has no geographical boundaries Direct marketing channel also gives buyers access to a wealth of comparative information about companies, products & competitors. Direct marketing is interactive & immediate-buyers can interact with sellers by phone or on the seller’s Web site to create exactly the configuration of information, products or services they desire & order them on the spot.

BENEFIT S TO SELLERS In case of sellers, direct marketing is a powerful tool for building customer relation ship. Using database marketing, today’s marketers can target small groups or individual consumers & promote their offers through personalized communications. Because of the one to one nature of direct marketing, companies can interact with customers by on line or phone, learn more about their needs & tailor their products & services to specific customer tastes.

Direct marketing also offers sellers a low –cost, efficient, speedy alternatives for reaching their markets. Direct marketing has grown rapidly in B2B marketing. Lower cost per contact media –such as tele marketing, direct mail, & company’s Web site – often prove more cost effective. Direct marketing can also offer greater flexibility. It allows marketers to make adjustments to its prices & programs, or to make immediate & timely announcements & offer.

CUSTOMER DATABASE & DIRECT MARKETING: Effective direct marketing begins with a good customer base. A customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychological, & behavioral data. Many companies confuse a customer database with a customer mailing list. A customer mailing list is simply a set of names, address& contact number as compared to customer data base contains much more information.

In consumer marketing, the customer database might contain a customer’s demographics (age, income, size of family, birthdays), psychographics (activities, interests, & opinions), & buying behavior (buying preference, frequency, monetary value ). In B2B marketing,the customer profile might contain the products & services the customer has bought ;past volumes& prices; key contacts, competing suppliers; status of current contacts; estimated customer spending for next few years;& assessments of competitive strengths& weaknesses in selling & servicing the account.

Companies use their databases in many ways. They use databases to locate customers & to generate sales leads. They can use their databases to learn about customers in detail, & behaviors of target segments or individuals.

FORMS OF DIRECT MARKETING The major forms of direct marketing include- –Personal selling, –Direct mail marketing, –Catalogue marketing, –Telephone marketing, –Direct –response television marketing, –Kiosk marketing, –New digital direct marketing technologies & –Online marketing.

TELE MARKETING FACE –TO – FACE SELLING DIRECT MAIL MARKETING KIOSK MARKETING ONLINE MARKETING CATLOGUE MARKETING NEW DIGITAL TECHNOLOGIES DIRECT RESPONSE MARKETING CUSTOMERS & PROSPECTS FORMS OF DIRCT MARKETING

DIRECT MAIL MARKETING This involves sending an offer announcement, reminder or other item to a person at a particular address. These addresses are chosen from the mailing lists, direct marketers send out large numbers of mails each year –letters, catalogues, brochures samples etc. Direct mail is by far the large direct marketing medium.

Direct mail is well suited to direct, one-to –one communication. It permits high target market selectivity; can be personalized, is flexible & allows easy measurement of results. Although it is expensive than mass media such as television or magazine per thousand people reached, the people reached are much better prospects. Direct mail has proved successful in promoting all kinds of products from books, music, gift items, etc. Charities also use direct mail to raise funds each year.

The direct mail industry seeks new methods & approaches. Now a days is booming as a direct marketing tool. Today message have moved far beyond the drab text only message of old. The new breed of ad uses animation, interactive links, streaming video & personalized audio message to reach out & grab attention.

CATALOGUE MARKETING Advances in technology along with the move toward personalized, one –to –one marketing have resulted in exciting changes in catalogue marketing catalogue marketing is defined as a printed bound piece of at least 8 pages, selling multiple products, & offering a direct ordering mechanism. With Internet becoming more popular, more & more catalogues are becoming digital the rise in the Internet has provided a new avenue for catalogue sales.

Catalogue can be an effective sales & relationship builder. Web based catalogue presents a number of benefits as compared to the printed catalogue. They save production, printing & mailing costs. Where as print catalogue space is limited, online catalogues can offer an almost unlimited amount of merchandise. Web catalogue also allows real time merchandising. Products & features can be added or removed as needed & prices can be adjusted instantly to match demand.

TELEPHONE MARKETING: This involves using a telephone to sell directly to consumer & business customers. Telephone marketing accounts for major share in direct marketing, direct sales. Marketers use outbound telephone marketing to sell directly to consumers & businesses. Inbound toll – free numbers are used to receive orders from television & print ads, direct mail, or catalogues.

The use of 1800 number has taken off in recent years as more & more companies have began using them,& as current users have added new features such as toll –free numbers. Properly designed & targeted telemarketing provides many benefits, including purchasing conveniences & increased products & service information. The explosion in unsolicited outbound telephone marketing has annoyed many consumers.

DIRECT RESPONSE TELEVISION MARKETING: Direct television response marketing takes one of the two major forms. The first is direct response television advertising (DRTV). Direct marketer air television spots, often 60 secs or 120 secs long which persuasively describe a product & give consumers a toll free number or a Web site for ordering.

Direct response TV commercials are usually cheaper to make & media purchase is costly. Direct response ads always carry a toll free number or Web address, making it easier to marketer to check the impact for their pitches. Due to this DRTV is growing more quickly than traditional broadcast & TV advertising. Home shopping channels another form of direct – response television marketing are, television programs or entire channels dedicated to selling goods & services. Some home shopping channels such as Home Shopping Network broadcast 24 hrs a day. Viewers in this case call toll free number or go online to book orders

KIOSK MARKETING As consumer became more & more comfortable with computer & digital technologies many companies are placing information on & ordering machines called kiosk –in stores, airports, & other locations.

NEW DIGITAL DIRECT MARKETING TECHNOLOGIES: Due to new the digital technologies, direct marketer can reach & interact with consumer just about anywhere at any time. In this case we look in to options like mobile phone marketing, podacasts & vodacasts, interactive TV.

Mobile Phone Marketing With large number of people opting for mobile services, many marketers view mobile phones as the next big direct marketing medium. Marketers of kinds are now integrating mobile phones into their direct marketing. Cell phone promotions includes everything from ring tone give away, mobile games, & many more.

Podcasts & Vodacasts Podcasts & vodacasts are the latest on –the – go, on –demand technologies. The name podacast is derived from iPod. With podacasting, consumer can download audio files or video files via internet to an iPod or other hand held device & then listen to or view them whenever they wish.

Interactive TV Interactive TV gives marketers an opportunity to reach targeted audience in an interactive, more involving way. In past this medium has been slow to catch on. Due to satellite broadcasting systems DTH are now offering ITV capabilities, & technology appears poised to take off as a direct marketing medium.

ONLINE MARKETING Online marketing is the fastest growing form of direct marketing. Wide spread use of Internet & other powerful new technologies are having a dramatic impact on both buyers & the marketers who serves the