1. McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 17 Relationship Building: Direct Marketing, Personal Selling, and Sales Promotion

2. 17-2 Chapter Overview The importance of relationship marketing & integrating marketing communications with advertising

3. 17-3 Chapter Objectives Discuss the importance of relationship marketing & IMC Describe the pros & cons of personal selling Identify benefits & draw- backs of sales promotion Define direct marketing and its role in IMC Explain the importance of databases to direct marketers Define sales promotion & its importance as a communication tool Discuss the role of personal selling in IMC Explain push & pull strategies and give examples of each

4. 17-4 Relationship Marketing & IMC Advertising can create an image, but a reputation must be earned

5. 17-5 Understanding Direct Marketing Direct marketing is... To effect a measurabl e response and/or transaction A measurabl e system of interactive marketing Using one or more advertising media With this activity stored in a database

6. 17-6 Direct Marketing Companies

7. 17-7 Marketing Databases Marketing databases enable marketers to... Target, segment, and grade customers Store key customer information Record customer & channel transactions Measure efficiency of direct-response ads

8. 17-8 Marketing Databases Data Management Data Access Two Processes

9. 17-9 Direct Marketing’s Role in IMC RFM is a mathematical formula that helps determine the most valuable customers in a company’s database

10. 17-10 Direct Marketing’s Role in IMC Drawbacks to Direct Marketing Negative, sales-oriented reputation Consumers enjoy visiting retail stores to shop Hesitation to buy goods not seen, touched, tried Clutter Privacy concerns Lack of prestige

11. 17-11 Direct Marketing Activities Personal direct selling Telemarketing Direct Sales

12. 17-12 Direct Marketing Activities E-mail Brochures Sales letters Self-mailers Postcards Statement stuffers Folders House organs Direct-Mail Advertising

13. 17-13 Direct Marketing Advertising Flexibility Control Selectivity Personal impact Coverage & reach Exclusivity Pros Response Testability

14. 17-14 Direct Marketing Advertising Lack of content support Selectivity problems High cost per exposure Negative attitudes Delivery problems Environmental concerns Anti-spam laws Cons

15. 17-15 Buying Direct-Mail Advertising Acquire direct-mail lists House Mail-response Compiled Consider a list broker Charges a commission Tailors the list Improves list quality

16. 17-16 Buying Direct-Mail Advertising Distribute the package Weight affects costs and delivery method Produce the package Designer Writer Letter shop

17. 17-17 Catalog Sales Catalog sales make up the largest portion of direct marketing

18. 17-18 Catalog Sales Top 10 catalog companies

19. 17-19 Direct Response Broadcast Ads More people are watching infomericals and buying products

20. 17-20 Direct Response Broadcast Ads Television is a powerful instrument for direct marketers

21. 17-21 Personal Selling The Human Medium See the people Most expensive Long-term benefits Personal Selling depends on the… Type of business Product or service Business strategy

22. 17-22 Personal Selling Drawbacks Labor intensive Costly Time consuming Few economies of scale Poor reputation of sales Finding good salespeople

23. 17-23 Personal Selling in IMC Communication functions of sales reps Building Client Relationships Gathering Information for Company Fulfilling Customer Orders Providing Information to Customers

24. 17-24 Sales Promotion in IMC Value-added tool to accelerate product’s movement from producer to consumer Rebate Sweepstakes or contest Coupon“Freebie” Sponsorship Special pricing Negative Effect on Brand Value Positive Effect on Brand Volume

25. 17-25 Sales Promotion in IMC Snapple used sales promotion and product positioning to advertise its Mango Madness flavor

26. 17-26 Strategies & Tactics Push Promotions Slotting AllowancesTrade Deals Display AllowancesBuyback Allowances Allowances Meetings/Conventions Premiums & Contests Push Money & Spiffs Co-op Advertising

27. 17-27 Strategies & Tactics Payne Heating and Cooling uses trade promotion to increase distribution

28. 17-28 Strategies & Tactics Manufacturers often pay a display allowance for in-store exhibits

29. 17-29 Strategies & Tactics Pull Promotions P-O-P MaterialsVIP Cards Refunds & RebatesSampling Combination Offers Coupons Contest/Sweepstakes Premiums

30. 17-30 Strategies & Tactics Effectiveness of various promotions