1. Direct and Online Marketing: Building Direct Customer Relationships
Chapter 14

2. Rest Stop: Previewing the Concepts
Define direct marketing and discuss its benefits to customers and companies
Identify and discuss the major forms of direct marketing
Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies

3. Rest Stop: Previewing the Concepts
Discuss how companies go about conducting online marketing to profitably deliver more value to customers
Overview the public policy and ethical issues presented by direct marketing

4. First Stop: Facebook
Has tremendous impact and influence, not just as a sharing community but also as an Internet gateway
Has the potential to become one of the world’s most powerful and profitable online marketers
Entering the location based, deal-of-the-day online markets, and the banking business

5. Connecting directly with carefully targeted segments or individual consumers, often on a one-to-one, interactive basis
Direct marketing

6. The New Direct-Marketing Model
For many companies today, direct marketing constitutes a complete model for doing business
Companies such as GEICO have built their entire approach to the marketplace around direct marketing

7. Marketing at Work Amazon is relentlessly customer-driven
Visitors receive a unique blend of benefits: huge selection, good value, and convenience
Online pioneer Amazon.com does much more than just sell goods on the Web. It creates direct, personalized online customer experiences

8. Direct Marketing Benefits to Buyers
Convenient
Easy
Private
Immediate and interactive
Access to a wealth of:
Products
Comparative information about companies, products, and competitors

9. Direct Marketing Benefits to Sellers
Building customer relationships
Offers sellers a low-cost, efficient, speedy alternative to reach markets
Online direct marketing results in lower costs, improved efficiencies, and speedier handling of channel and logistics functions

10. Direct Marketing Benefits to Sellers
Offers greater flexibility
Gives access to buyers that cannot be reached through other channels
Southwest Airlines uses techie direct marketing tools—including a blog, DING! widget, and smartphone app—to inject itself directly into customers’ everyday lives—at their invitation
Note to Instructor: Direct marketing allows marketers to make ongoing adjustments to prices and programs or make immediate, timely, and personal announcements and offers.

11. Organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data
Customer database

12. Customer Databases and Direct Marketing
Note to Instructor: Companies use databases to locate good potential customers and generate sales leads. They also mine their databases to learn about customers in detail and then fine-tune their market offerings and communications to the special preferences and behaviors of target segments or individuals. In all, a company’s database can be an important tool for building stronger long-term customer relationships.
Best Buy mines its huge database to glean actionable insights on customer interests, lifestyles, passions, and likely next purchases. It uses this information to develop personalized, customer-triggered promotional messages and offers.

13. Figure 14.1 – Forms of Direct Marketing
Note to Instructor: The major forms of direct marketing are face-to-face or personal selling, direct-mail marketing, catalog marketing, telemarketing, direct-response television (DRTV) marketing, kiosk marketing, and online marketing.

14. Direct Mail Marketing
Occurs by sending an offer, announcement, reminder, or other item directly to a person at a particular address
Well suited to direct, one-to-one communication
Permits high-target selectivity can be personalized, is flexible, and allows the easy measurement of results

15. Direct Mail Marketing
Traditional direct mail can be an effective component of a broader integrated marketing campaign
Insurance companies like Farmers Insurance rely heavily on TV advertising to establish broad customer awareness. However, they also use lots of good old direct mail to communicate with consumers in a more direct and personalized way.

16. Catalog Marketing
Marketing through print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online
Eliminate printing and mailing costs
Online catalogs offer
Unlimited amount of merchandise
Broader assortment of presentation formats
Real-time merchandising

17. Catalog Marketing
Note to Instructor: With the stampede to the Internet, more and more catalogs are going digital. A variety of Web-only catalogers have emerged, and most print catalogers have added Web-based catalogs and smartphone catalog shopping apps to their marketing mixes.
Digital catalogs: Days before the latest Lands’ End catalog arrives in the mail, customers can access it digitally at landsend. com , at Facebook, or via the Lands’ End mobile app

18. Telemarketing Using the telephone to sell directly to customers
Marketers use:
Outbound telephone marketing to sell directly to consumers and businesses
Inbound toll-free numbers to receive orders from television and print ads, direct mail, or catalogs
Provides purchasing convenience and increased product and service information

19. Telemarketing
Marketers use inbound toll-free 800 numbers to receive orders from television and print ads, direct mail, or catalogs. Here, the Carolina Cookie Company urges, “Don’t wait another day. Call now to place an order or request a catalog.”

20. Direct-Response Television (DRTV) Marketing
Marketing via television, including direct-response television advertising (or infomercials) and interactive television (iTV) advertising
Note to Instructor: Using direct- response television advertising, direct marketers air television spots, often 60 or 120 seconds in length, which persuasively describe a product and give customers a toll-free number or a Web site for ordering. It also includes full 30-minute or longer advertising programs, called infomercials, for a single product. A more recent form of direct-response television marketing is interactive TV (it) marketing. It lets viewers interact with television programming and advertising using their remote controls. Interactive TV gives marketers an opportunity to reach targeted audiences in an interactive, more involved way.
Large, well-known companies—such as Kodak—are now using direct-response TV to get the message out directly to customers

21. Kiosk Marketing
Product or service information and ordering machines are placed by companies in stores, airports, hotels, college campuses, and other locations
Red box operates more than 27,000 DVD rental kiosks in supermarkets and fast-food outlets nationwide

22. Efforts to market products and services and build customer relationships over the Internet
Online marketing

23. Marketing and The Internet
Internet: Vast public web of computer networks that connects users of all types around the world to each other and an amazingly large information repository
Has given marketers a whole new way to create value for customers and build relationships with them

24. Marketing and The Internet
Click-only companies: Dot-coms, which operate online only and have no brick-and-mortar market presence
Include e-tailers, search engines and portals, transaction sites, content sites, and online social networks
Click-and-mortar companies: Traditional brick-and-mortar companies that have added online marketing to their operations

25. Click-and-Mortar Marketing
Staples backs its “that was easy” positioning by offering a full range of contact points and delivery modes
Note to Instructor: The success of the dot-coms has caused existing brick-and-mortar manufacturers and retailers to re-examine how they serve their markets. That is why, almost all of these traditional companies have created their own online sales and communications channels, and have become click-and-mortar companies.

26. Online Marketing Click-and-mortar business trends:
Almost all traditional companies have set up their own online sales and communication presence.
Many click-and-mortar firms are having more online success than their click-only competitors.

27. Figure 14.2 – Online Marketing Domains

28. Online Marketing Domains
Businesses selling goods and services online to final consumers
Business-to-Consumer (B-to-C) Marketing
Businesses using online marketing to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and better prices
Business-to-business (B-to-B) online marketing
Online exchanges of goods and information between final consumers
Consumer-to-consumer (C-to-C) online marketing
Online exchanges in which consumers search out sellers, learn about their offers, initiate purchases, and sometimes even drive transaction terms
Consumer-to-business (C-to-B) online marketing

29. Online journals where people post their thoughts, usually on a narrowly defined topic
Blogs

30. Blogs
Offer fresh, original, personal, and cheap way to enter into consumer online conversations
Cluttered and difficult to control
Purex used SocialSpark to help introduce its Purex Complete 3-in-1 Laundry Sheets via
blogs such as Freaky Frugalite, Bargain Briana, 3 Kids and Us, and others that reach homemakers

31. Figure 14.3 – Setting Up for Online Marketing
Note to Instructor: Companies conduct online marketing in any or all of the five ways shown in the figure. For most companies, the first step in conducting online marketing is to create a Web site. As consumers spend more and more time on the Internet, companies are shifting more of their marketing dollars to online advertising to build their brands or attract visitors to their Web sites. The popularity of the Internet has resulted in a rash of online social networks or Web communities. The widespread adoption of mobile devices and the surge in mobile Web traffic have made mobile marketing a must for most brands.

32. Corporate (or brand) Web Site
Designed to build customer goodwill, collect customer feedback, and supplement other sales channels rather than sell the company’s products directly
You can’t buy anything at Nestlé’s colorful Wonka.com site, but you can learn about different Nestlé candy products or just hang around for a while and “feed your imagination.”

33. Interacts with consumers to move them closer to a direct purchase or other marketing outcome
Marketing Web site

34. Web Sites Should be: Easy to use Professional looking
Physically attractive
Useful
Interactive
Linked to other related sites
Promotional

35. Appears while consumers are browsing the Web
Online advertising

36. Forms of Online Advertising
Appear anywhere on an Internet user’s screen and are often related to the information being viewed
Display ads
Text-based ads and links appear alongside search engine results on sites
Search-related ads (or contextual advertising)
Companies gain name exposure on the Internet by sponsoring special content on various Web sites
Content sponsorships
Internet version of word-of-mouth marketing
Viral marketing
Note to Instructor: Viral marketing involves creating a Web site, video, , mobile message, advertisement, or other marketing event that is so infectious that customers will seek it out or pass it along to their friends.

37. Online social networks
Online communities where people congregate, socialize, and exchange views and information
Online social networks

38. Online Social Networks
Marketers can engage in these in two ways:
Participate in existing Web communities
Set up their own
Challenges of participating in existing Web communities:
Results are hard to measure
Such online networks are largely user controlled

39. Sending highly targeted, tightly personalized, relationship-building marketing messages via e-mail
marketing

40. Spam Unsolicited, unwanted commercial e-mail messages
can be an effective marketing tool. But there’s a dark side—spam, unwanted commercial that clogs up our inboxes and causes frustration.
Note to Instructor: To address the issue of spams, most legitimate marketers now practice permission-based marketing, sending pitches only to customers who opt in. Many companies use configurable systems that let customers choose what they want to get.

41. Marketing to on-the-go consumers through mobile phones, smartphones, tablets, and other mobile communication devices
Mobile marketing

42. Marketing At Work
Marketers large and small are weaving mobile marketing into their direct marketing mixes
Zipcar’s iPhone app lets members find and book a Zipcar, honk the horn (so they can find it in a crowd), and even lock and unlock the doors—all from their iPhone.

43. Public Policy and Ethical Issues in Direct Marketing
Annoys customers
Takes unfair advantage of impulsive buyers
Internet fraud
Phishing – Identity theft that uses deceptive s and fraudulent Web sites to fool users into divulging their personal data
Online security
Access by vulnerable or unauthorized groups

44. Public Policy and Ethical Issues in Direct Marketing
Internet fraud has multiplied in recent years. The FBI’s Internet Crime Complaint Center provides consumers with a convenient way to alert authorities to suspected violations

45. Public Policy and Ethical Issues in Direct Marketing – Consumer Privacy
Invades privacy
Ready availability of information leaves consumers open to abuse

46. Public Policy and Ethical Issues in Direct Marketing – A Need for Action
Government agencies are investigating on:
Do-not-call lists
Do-not-mail lists
Do-not-track lists
Can Spam legislation
Congress is drafting legislation that would give consumers more control over how Web information is used
Note to Instructor: To head off increased government regulation, four advertiser groups—the American Association of Advertising Agencies, the Association of National Advertisers, the DMA, and the Interactive Advertising Bureau—recently issued new guidelines for Web sites. Among other measures, the guidelines call for Web marketers to alert consumers if their activities are being tracked. The ad industry has agreed on an advertising option icon —a little “i” inside a triangle—that it will add to most behaviorally targeted online ads to tell consumers why they are seeing a particular ad and allowing them to opt out.

47. Public Policy and Ethical Issues in Direct Marketing – A Need for Action
The FTC is taking a more active role in policing online privacy
In 2000, Congress passed the Children’s Online Privacy Protection Act (COPPA), which requires Web site operators targeting children to post privacy policies on their sites
Many companies have responded to privacy and security issues with actions of their own
Note to Instructor: TRUSTe, a nonprofit self-regulatory organization, works with many large corporate sponsors, including Microsoft, Yahoo!, AT&T, Facebook, Disney, and Apple, to audit privacy and security measures and help consumers navigate the Web safely.

48. Public Policy and Ethical Issues in Direct Marketing – A Need for Action
Note to Instructor: In an effort to build consumer confidence in shopping direct, the DMA launched a “Privacy Promise to American Consumers.” The Privacy Promise requires that all DMA members adhere to a carefully developed set of consumer privacy rules. Members must agree to notify customers when any personal information is rented, sold, or exchanged with others. They must also honor consumer requests to opt out of receiving further solicitations or having their contact information transferred to other marketers. Finally, they must abide by the DMA’s Preference Service by removing the names of consumers who do not wish to receive mail, telephone, or offers.
By clicking on the little AdChoices advertising option icon in the upper right of this online ad, consumers can learn why they are seeing the ad and opt out if they wish

49. Rest Stop: Reviewing the Concepts
Define direct marketing and discuss its benefits to customers and companies
Identify and discuss the major forms of direct marketing
Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies

50. Rest Stop: Reviewing the Concepts
Discuss how companies go about conducting online marketing to profitably deliver more value to customers
Overview the public policy and ethical issues presented by direct marketing

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Publishing as Prentice Hall