18C INTEGRATED MARKETING COMMUNICATIONS - 2

DIRECT MARKETING LO ANY DIRECT COMMUNICATION WITH POTENTIAL BUYERS [PROPSECTS] TO OBTAIN AN IMMEDIATE RESPONSE

TRENDS CAUSING GROWTH IN DIRECT MARKETING Growth and specialization of databases allows better definition of market segments and niche marketing. –Marriott, Hilton [from 4 target market segments in 2000 to 12 or 13 in 2010] Lack of time drives the need for convenience. –Both parents work combined with the social schedules of the children reduce the available time to shop.

FIGURE 18-8 FIGURE 18-8 Business use and response rates of popular forms of direct marketing. 18-4

BENEFITS OF DIRECT MARKETING Benefits to customers Benefits to companies Fun, Convenient & Hassle- Free Saves Time / Convenience Improved Selection More Comparison Shopping Buy Mailing Lists for Almost Any Market Customized Offers Ongoing Relationships with Customers Timed to Achieve Higher Readership & Response Order Products for Themselves or Others Direct Access to Markets Not Location Dependent More Competitive Prices Lower Marketing Costs Reduced Inventory ? Shopping Privacy

MASS vs. 1:1 MARKETING Average Consumer Customer Anonymity Standard Product Mass Production Mass Distribution Mass Advertising Individual Customer Customer Profile Customized Market Offering Customized Production Individualized Distribution Individualized Messages Mass Promotion Individualized Incentives Two-Way Messages Economies of Scope Share of Customer Profitable Customers Customer Retention One-Way Message Economies of Scale Share of Mind All Customers Customer Attraction Mass Marketing One-to-One Marketing

DIRECT MARKETING COST / CONTACT Sales Call Trade Show Internet Direct Mailer Catalog Letter Telesales Bus Pub Type of Contact Cost per contact

THE ROLE OF DIRECT MARKETING OTHER ACCOUNTS RESELLER ACCOUNTS NATIONAL ACCOUNT, OEM, DIRECT & FIELD SALES FORCES MARKETS OR INDUSTRIES LARGER ACCOUNTS SMALLER ACCOUNTS HOW DO WE COST-EFFECTIVELY REACH TARGET MARKETS OF SMALL ACCOUNTS?

SEGMENTATION IS CRITICAL TO DIRECT MARKETING SUCCESS AND COST- EFFICIENCY A firm has a fish or fish related product, so it targets & [71,095 firms]. More information is needed to also target 44512, 44521, 44529, and [48,513 firms]. Approaching all 148,528 firms in 445 would have resulted in a large waste of money. You may have spent money going after up to 77,433 firms that do not have any use for the product!

U.S. DIRECT MARKETING 2005 “U.S. Direct Marketing Today: Economic Impact 2005”, The Direct Marketing Association $161.3 billion generate $1.85 trillion in sales –Every dollar spent returned $11.49 in revenue –~13% of the $14 trillion U.S. economy [GDP] –52% of expenditures were for B→C –48% of expenditures were for B→B Responsible for employing 7.7% of the workforce Accounted for 47.9% of total advertising [2008 estimated at 53%]

U.S. DIRECT MARKETING 2005 “U.S. Direct Marketing Today: Economic Impact 2005”, The Direct Marketing Association By type of expenditure –Direct mail & catalog31% –Telephone29% –Internet mktg / comm / / insert mail 9% 2007 – growing at more than 14% / year By expenditure objective –Lead generation [heavily B2B]48% –Direct order generation [heavily B2C]40%

U.S. DIRECT MARKETING 2005 “U.S. Direct Marketing Today: Economic Impact 2005”, The Direct Marketing Association Industry leaders –Non-store retailers –Financial institutions –Motor vehicle manufacturers –General and apparel retailing

CONSUMER DIRECT MARKETING AVON TUPPERWARE DOOR TO DOOR PARTIES IN-HOME SALES CONSUMER TYPES

CONSUMER DIRECT MARKETING Coldwater CreekJUNK MAIL

CONSUMER DIRECT MARKETING

INTERNET BENEFITS* CONSUMERBUSINESS CONVENIENCE SPEED-TIME-PLACE DIRECT MARKET ACCESS -MICROMARKETING POTENTIAL COMPREHENSIVE PRODUCT SELECTION AND INFORMATION “THE OVERWHELMED CONSUMER” SALES-PROFITS-COST REDUCTION

STEALING YOUR IDENTITY SOURCE:

INTERNET – THE DIFFERENCES ARE … Market Research Target Markets Channels Sales Orgs. IMC PREVIOUSLY ALL SEPARATE VEHICLES FASTER - ITS OWN ITS OWN EASIER ACCESS DIRECT NOW

INTERNET – THE DIFFERENCES ARE … CHANNEL MARKET RESEARCH TARGET MARKETS CHANNELSSALES ORGS. IMC ARE NOW INTEGRATED INTO ONE NEW APPROACH!

INTERNET ISSUES – STRATEGIC FIT WHAT TYPE OF BUSINESS DO YOU WANT TO BE IN? HOW DOES THE INTERNET FIT WITH THE REST OF THE BUSINESS? –ORDER PROCESSING AND ORDER SIZE –COST OF DISTRIBUTION –TYPES OF TRANSACTIONS

CONSUMER DIRECT MARKETING COUNTER STAND END CAPFLOOR STANDS KIOSK MARKETING

CONSUMER DIRECT MARKETING

NEWSPAPER STICKERS

CONSUMER DIRECT MARKETING Direct-response TV marketing -QVC, HSN, the Jewelry Channel, …

DIRECT MARKETING LIFETIME VALUE: Membership Program Example Cost of Campaign:$10,000-$10, new $70 $ 7,000- 3,000 1st year “cost” $ 3,000 2d Year 80 $70 $ 5,600+ 2,600 3d Year… $ 5,600+ 8,200

CUSTOMER SERVICES Etch-A-Sketch Tech Support My Etch-A-Sketch has all of these funny little lines all over the screen. Pick it up and shake it. How do I turn my Etch-A-Sketch off? Pick it up and shake it. How do I keep from losing my Etch-A-Sketch documents in the middle of my work? Stop shaking it.