Direct and Online Marketing: Building Direct Customer Relationships 14 Direct and Online Marketing: Building Direct Customer Relationships

Chapter Outline Growth and Benefits of Direct Marketing Customer Databases and Direct Marketing Forms of Direct Marketing Online Marketing Setting up an Online Marketing Presence The Promise and Challenges of Online Marketing Public Policy Issues in Direct Marketing

Direct Marketing Direct marketing consists of connecting directly with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

Benefits of Direct Marketing Convenient Easy/private Wealth of products Information Interactive Immediate Benefits to Buyers Low cost Efficient Speedy Improved efficiencies Flexibility Access to buyers Benefit to Sellers

Customer Databases and Direct Marketing A customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic (address, region), demographic (age, income, family members, birthday), psychographic (activities, interests, opinions), and behavioral data (buying preferences).

Forms of Direct Marketing Notes to Accompany Slide: Each of these will be covered in the following slides.

Direct-Mail Marketing Direct mail is the sending an offer, announcement, reminder, or other item to a person at a particular physical or virtual address.

Discussion Question What types of marketers and/or products tend to use direct mail to reach consumers? Why? Answer: Local businesses often use direct mail because of the geographical targeting they can achieve. Banks and credit card companies often use this because of privacy concerns. Not for profits often use direct mail because they can communicate their appeals more effectively through a letter and it can appear more targeted to the consumer with their names in the appeal.

Catalog Marketing Catalog marketing is the use of print, video, or digital catalogs that are mailed to select customers, made available in stores or presented online.

Telephone Marketing Outbound Inbound (800 numbers) Telephone marketing accounts for more that 19 percent of direct marketing-driven sales

Direct-Response Television Marketing (DRTV) Direct-response television advertising (or infomercials) Home shopping channels Takes one of two major forms: - Direct response television advertising. - Interactive TV (iTV) advertising. Notes to Accompany Slide: Direct-response television marketing is direct marketing via television, including direct-response television advertising (or infomercials) and home shopping channels.

Kiosk Marketing Information and ordering machines Nowadays, kiosks are everywhere in self-service hotel and airline check-in devices to in-store ordering devices. It can be used to combine touch screen and digital technologies. Information and ordering machines Consumer and business markets

Digital Direct Marketing Technologies Mobile phone marketing Podcasts and Vodcasts Interactive TV (iTV)

Discussion Question As a consumer, how do you feel about telephone marketing? Mobile marketing? Answer: Students are probably opposed to telephone marketing and screen their calls – they may not even have land lines and it is just a mobile phone issue. Students might like to receive coupons through text messaging or their email on their smartphones. There will probably be a group that does not approve and feel this is a privacy issue.

Online Marketing Online marketing is the fastest growing form of direct marketing Online Marketing Companies Click-only Click-and- mortar Notes to Accompany Slide: Click-only companies - The so-called dot-coms, which operate only online without any brick-and-mortar market presence. Click-and-mortar companies - Traditional brick-and-mortar companies that have added online marketing to their operations.

Online Marketing Domains Notes to Accompany Slide: Business-to-consumer (B2C) online marketing are businesses selling goods and services online. Business-to-business (B2B) online marketing are businesses using B2B web sites, email, online catalogs, online trading networks, and other online resources to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and offer better prices to final consumers. Consumer-to-business (C2B) online marketing are online exchanges in which consumers search out sellers, learn about their offers, and initiate purchases, sometimes even driving transaction terms. The final online marketing domain is consumer-to-business (C2B) online marketing.

Business-to-Consumer (B2C) The popular press paid the most attention to business to consumer (B2C) online marketing which is businesses selling goods and services online to final consumers.

Business-to-Business (B2B) Business marketers use online marketing (websites, e-mail, online products catalogs, online trading networks, mobile apps, and other online resources to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and better prices.

Consumer-to-Consumer (C2C) Auction sites Blogs The online exchange information and goods between final customers.

Consumer-to-Business (C2B) Consumer-to-business (C2B) are online exchanges in which consumers search out sellers, learn about their offers, and initiate purchases, sometimes even driving transaction terms.

Setting up an Online Marketing Presence

Forms of Online Advertising and Promotion Banner Ads Interstitials Search-related ads Content sponsorships Alliances Affiliate programs Viral marketing

Creating or Participating in Online Social Networks Marketers choices Participate in existing web communities Set up their own web communities

Discussion Question When using a social network such as Facebook, what do you perceive as good marketing? Answer: Students will mention banner advertising on their pages as well as Facebook sites for certain brands. It is interesting to ask why they like some but not others and how often they click vs. whether they just notice the ads.

Public Policy Issues in Direct Marketing Irritation, unfairness, deception, and fraud Invasion of privacy A need for action