MKM803 – Direct Marketing

Types of Sales Promotion Activities Consumer-Oriented Trade-Oriented Samples Samples Contests, Dealer Incentives Contests, Dealer Incentives Coupons Coupons Trade Allowances Trade Allowances Premiums Premiums Point-of-purchase Displays Point-of-purchase Displays Contests/sweepstakes Contests/sweepstakes Training Programs Training Programs Refunds/rebates Refunds/rebates Trade Shows Trade Shows Bonus Packs Bonus Packs Cooperative Advertising Price-off Deals Price-off Deals Frequency Programs Frequency Programs Event Marketing Event Marketing

1. Strategic Tools/Options Franchise Building Promotional Objectives Communicate Distinctive Brand Attributes Communicate Distinctive Brand Attributes Develop and Reinforce Brand Identity Develop and Reinforce Brand Identity Build Long-term Brand Preference Build Long-term Brand Preference Franchise Building Techniques and Practices “Frequency” Programs Encourage Repeat Purchase “Frequency” Programs Encourage Repeat Purchase “Frequency” Programs Encourage Patronage Loyalty “Frequency” Programs Encourage Patronage Loyalty May Improve One-on-one Communications

Objectives of Trade Sales Promotion Obtain Distribution of New Products Obtain Distribution of New Products Maintain Trade Support for Existing Products Maintain Trade Support for Existing Products Objectives Build Retail Inventories Encourage Retailers to Display Existing Brands Encourage Retailers to Display Existing Brands

Trade Sales Promotion Strategy Options Contests and Incentives Events Buying Allowances Promotional Allowances Slotting Allowances Trade Allowances Point-of-Purchase Displays Sales Training Programs Trade Shows Cooperative Advertising

Strengths of Public Relations Credibility Credibility Image Building Cost Savings Cost Savings PR Provides Selectivity Selectivity Avoidance of Clutter Avoidance of Clutter Lead Generation Lead Generation

Limitations of Public Relations Weakens Brand or Corporate Identification Effect Weakens Brand or Corporate Identification Effect Public Relations May Deliver Inconsistent Message

News Media Tactics PR Tools Press Conferences Press Conferences Press Releases Press Releases Interviews Press Conferences Press Conferences PR Tools The Internet The Internet Exclusives Exclusives Community Involvement Community Involvement

Sponsorship Sponsorship Sporting Events Causes Cultural Events Arts Music, Entertainment Festivals Sporting Events Music, Entertainment Causes Festivals Cultural Events

Direct Marketing “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 prospective customer.” Catalog Selling Direct Selling Telemarketing TV Selling Direct Action Advertising Direct Mail TV Selling Catalog Selling Direct Mail Direct Selling Direct Action Advertising

Growth of Direct Marketing Consumer Credit Cards Consumer Credit Cards Changing Structure of Society Changing Structure of Society Direct Marketing Syndicates Direct Marketing Syndicates Technical Advances Technical Advances Miscellaneous factors

Direct Marketing Program Plan Companies must determine: What program’s objectives will be. Who to target by using a database. What direct marketing strategy will be employed. How to measure direct marketing effectiveness.

1. Direct Marketing Objectives Behavioural Response Behavioural Response Build an Image Build an Image Objectives Customer Relationship Management Inform and/or Educate Inform and/or Educate

2. Target Database Stimulating repeat purchases Uses of Databases Improving selection of market segments Cross-selling Developing a Database—one of the most important parts of the direct marketing program is the development of a database. The database is the foundation from which direct marketing decisions evolve. Figure 15-3 shows how database marketing works and 15-4 demonstrates typical database content. Keys points on where to obtain a database and the need to update the files are highlighted. Databases are used to perform the following functions: Improving the selection of market segments Stimulate repeat purchases Cross-sell Customer relationship management Key database sources and a method of assessing the effectiveness of database are identified Manage customer relationships

2. Database Marketing – How It Works

2. Sources of Database Information Statistics Canada Canada Post List Services Info Canada Marketing Research Houses

3. Direct Marketing Media Strategy One Step One Step Two Step The medium is used directly to obtain an order. Often use 800 number phone orders and credit card payment. Use one medium to obtain inquiry, qualify prospect. Typically follow up with another medium to complete sale. Direct Marketing Media Strategy—direct marketers generally pursue either a (1) one-step approach or a (2) two-step approach in developing media strategies. In the one-step approach, the medium is used to directly obtain an order (for example, direct response television ads). In the two-step approach, more than one medium may be used, with the first effort designed to screen or qualify buyers and the second designed to generate the response. A number of direct response media are available to the marketer including: Direct mail—mail order sales in Canada exceeded $16 billion in 2000, and more than half of this was in the consumer market. Keys to the success of direct mail are the mailing list and the ability to segment markets. Catalogues—catalogue sales are expected to grow significantly. Examples of successful catalogue retailers are described. Broadcast media—two broadcast media are available to direct marketers: TV and radio. The majority of direct marketing broadcast advertising now occurs on TV through the use of Infomercials, Advertorials, and Teleshopping. Print media—magazines and newspapers are difficult media to use for direct marketing because of clutter and the relative expense. Telemarketing—consumer and business-to-business telemarketing sales exceeded $16 billion in 2000 of which $7 billion represented dales to consumers.

3. Direct Marketing Media Direct Mail Catalogues Telemarketing Infomercials Direct Marketing Media Strategy—direct marketers generally pursue either a (1) one-step approach or a (2) two-step approach in developing media strategies. In the one-step approach, the medium is used to directly obtain an order (for example, direct response television ads). In the two-step approach, more than one medium may be used, with the first effort designed to screen or qualify buyers and the second designed to generate the response. A number of direct response media are available to the marketer including: Direct mail—mail order sales in Canada exceeded $16 billion in 2000, and more than half of this was in the consumer market. Keys to the success of direct mail are the mailing list and the ability to segment markets. Catalogues—catalogue sales are expected to grow significantly. Examples of successful catalogue retailers are described. Broadcast media—two broadcast media are available to direct marketers: TV and radio. The majority of direct marketing broadcast advertising now occurs on TV through the use of Infomercials, Advertorials, and Teleshopping. Print media—magazines and newspapers are difficult media to use for direct marketing because of clutter and the relative expense. Telemarketing—consumer and business-to-business telemarketing sales exceeded $16 billion in 2000 of which $7 billion represented dales to consumers. Broadcast Media TV Advertorials Teleshopping

Key variables in direct marketing The list/media Creative execution – copy and layout The cornerstone of direct marketing is the ability to specifically target a prospect, either through media/list selection or through creative to create a measureable response. The list/media - choosing the media or the list is key to reaching the right target group Creative execution – copy and layout – getting people to open the envelope and read it The offer – the proposition – how do you want them to respond? The offer – call to action

Strengths and Limitations of Direct Marketing Selective Reach Selective Reach Image Factors Image Factors Segmentation Capability Segmentation Capability Accuracy Accuracy Frequency Potential Frequency Potential Content Support Content Support Flexibility Flexibility Rising Costs Timing Timing Personalization Personalization Economy Economy Measurement of Effectiveness Measurement of Effectiveness