Direct marketing

Direct marketing
Direct Marketing: Direct communications with carefully targeted
individual consumers to obtain an immediate response.

Direct marketing is the activities involved in distribution of products,

information and promotional benefits to target consumers through
interactive communication. It covers a wide array of methods, including
the following:
direct mail
telemarketing
electronic media (internet, interactive cable TV)
catalogue marketing
inserts (leaflets in magazines)
door-to-door leafleting
text messaging.
Players in Direct Response Marketing
Three main players are involved In Direct Response
Marketing.
The Advertisers: A large number of firms are now engaging
in Direct Response Marketing. They usually sell products or
services through Phone, Mail or the Web.
The Agencies: The Agency is known for taking a group-up
approach to marketing, getting involved in researching the
company as well the product before making a single Ad.
Usually agencies provide all the tactics or approaches of
advertisement to the advertisers.
The Consumers: Consumers are recipients of direct-Mail, e-
Mail, Phone calls etc. and order products via mail,
telephone or computer.
 Media decisions of DM
The direct marketer has a range of media that can be used to reach target audiences.
Direct mail is material sent by post to a home or business address with the purpose
of promoting a product and/or maintaining an ongoing relationship.
Telemarketing is a marketing communications system where trained specialists use
telecommunications and information technologies to conduct marketing and sales
activities. Inbound telemarketing occurs when a prospect contacts the company by
telephone, whereas outbound telemarketing involves the company calling the
prospect.
Mobile marketing (the sending of short text messages direct to mobile phones) is
extremely successful. Marketers now send out messages to potential customers via
their mobile phones to promote such products as fast food, movies, banks, dresses
etc.
Direct response advertising appears in the prime media such as television and the
press but is different from standard advertising since it is designed to elicit a direct
response such as a request for further information, an enquiry or an order. Usually
a tool free telephone number is provided so that interested parties can contact the
company.
 Media decisions of DM

Catalogue marketing is the promotion and sale of goods through catalogues

distributed to agents and customers by mail or at outlets.
Infomercial is a long commercial that ranges from 30 to 60 minutes. Many
infomercials are produced by the advertisers and are designed to be viewed
as regular TV shows.
Electronic teleshopping is an online shopping and information retrieval
service accessed through personal computers. For example, QVC, the home
shopping channel, has started iQVC, an Internet home shopping channel that
complements its cable TV channel and adds incremental sales.
Direct selling is the direct, personal presentation, demonstration, and sales
of products and services to consumers in their homes. Avon, Cutco and
Tupperware are some of the best-known direct-selling companies in the
United States.
 Advantages
Some of the strengths of direct marketing include:
Targeting: Sender can send specific messages to particular groups of
customers and potential customers based on demographics and buying
behavior. The more targeted campaigns, the more successful they are
likely to be.
Personalization: Reach audience with a personal touch. Direct mail or
email can be addressed to a specific person, and even include details like
past orders. A phone call can engage a customer in conversation to start
building a relationship with your business.
Affordable: Tactics like email marketing or leafleting can be very cost
effective. Most direct marketing will be more cost effective than mass
media advertising campaigns.
Measurable: If marketing messages ask the recipient to take a particular
action or use a specific voucher code, it can easily track the success of
campaigns. This can help to plan future campaigns.
Informative: Detailed information on products, services and prices could
be delivered unlike other forms of advertising.
 Disadvantages
Some of the downsides to overcome when using direct marketing include:
Intrusive: Many people find direct marketing annoying and intrusive. This is
especially true of telemarketing and door-to-door sales. Some people dislike
marketing mail and consider it to be junk mail. If consumers find the
marketing tactics annoying , it can create a negative brand association and
make them less likely to buy.
Environment: Using leafleting or paper-heavy direct mail campaigns can be
bad for the environment. To avoid this, and any negative impact on brand
image, use recycled materials or try email campaigns.
Low response rates: direct marketing response rates tend to be around 1-
3%.When seller reach a consumer who isnt interested in his products or
services, it wastes money and they are likely to find it irritating. Need to use
more targeted lists as opposed to sending out mass messages to minimize
this.
Competition: It can be hard to make specific message stand out when the
recipient receives high number of marketing emails or direct mail.
Cost: Tactics like telemarketing and direct mail may have high financial and
resource costs.
 Database Marketing
Direct marketing activity requires accurate information
on customers so that they can be targeted through
direct mail or telemarketing campaigns.
This information is stored on a marketing database
which comprises an electronic filing cabinet containing
a list of names, addresses and transactional behavior.
Information such as types of purchase, frequency of
purchase, purchase value and responsiveness to
promotional offers may be held in the database.
This allows future campaigns to be targeted at those
people who are most likely to respond.
 Database Marketing
Database marketing is defined as an interactive
approach which uses individually addressable
marketing media and channels (such as mail, telephone
and the sales force) to:
(a) provide information to a target audience;
(b) stimulate demand;
(c) stay close to customers by recording and storing an
electronic database memory of customers, prospects
and all communication and transactional data.
 Contents for
a comprehensive database
 Database Information
Typical information stored on a database includes the following:
1. Information on actual and potential customers. Basic data such as
names, addresses and telephone numbers enable customers to be
contacted.
2. Transactional information. Such information as frequency of purchase,
when the customer last bought and how much was bought for each
product category may be stored.
3. Promotional information. Data covering what promotional campaigns
have been run, customer response patterns and results in terms of
contact, sales and profiles can be stored on a marketing database.
4. Product information. Information relating to which products have been
promoted, how, when, where and associated responses can be held.
5. Geo demographic information. Information about the geographical areas
of customers and prospects and the social, lifestyle or business
categories to which they belong can be stored.
 Importance of database marketing
1. Direct mail. A database can be used to store customer information for mailings.
2. Telemarketing. A database can store telephone numbers of customers and
prospects. Also when customers contact the supplier by telephone, relevant
information can be held, including when the next contact should be made.
3. Loyalty marketing. Highly loyal customers can be drawn from the database for
special treatment as a reward for their loyalty.
4. Campaign planning. The database can be used as a foundation for sending
consistent and co-ordinated campaigns and messages to individuals and businesses.
5. Target marketing. Specific groups of individuals or businesses can be targeted as a
result of analyzing the database.
6. Marketing evaluation. By recording responses to marketing mix activities, for
example, price promotions, special offers on products and direct mail messages, the
effectiveness of different approaches to varying consumers and market segments can
be evaluated.
 The Role of DM in the IMC Program
Combining Direct Marketing with Advertising Obviously, direct marketing is in
itself a form of advertising. Whether through mail, print, or TV, the direct
response offer is an ad. It usually contains a toll-free or 900 number or a form
that requests mailing information.
Combining Direct Marketing with Public Relations Public relations activities
often employ direct-response techniques. Private companies may use
telemarketing activities to solicit funds for charities or cosponsor charities.
Combining Direct Marketing with Personal Selling Telemarketing and direct
selling are two methods of personal selling. Nonprofit organizations like
charities often use telemarketing to solicit funds. For-profit companies are also
using telemarketing with much greater frequency to screen and qualify
prospects (which reduces selling costs) and to generate leads.
Combining Direct Marketing with Sales Promotions company use direct-
marketing tools to inform customers of sales promotions. The sales promotion
event may support the direct-marketing effort. Databases are often built from
the names and addresses acquired from a promotion, and direct mail and/or
telemarketing calls follow.
DIRECT MARKETING CAMPAIGN
 DIRECT MARKETING CAMPAIGN
1.Identifying and understanding the target audience.
The target audience is the group of individuals at which the direct
marketing campaign is aimed.
For consumer markets the target audience may be described using
market segmentation variables such as age, gender, social class and
lifestyle.
Population census data are used to classify households according to
a wide range of variables such as household size, number of cars,
occupation, family size and ethnic background.
For business markets, the target audience will be described as the
type of organization that the direct marketer wishes to target and
the type of individual within each organization who should be
reached.
 DIRECT MARKETING CAMPAIGN
2.Setting campaign objectives
Campaign objectives can be set in different ways:
a. Financial objectives : sales volume and value, profit, return
on investment.
b. Communication objectives : awareness, stimulate trial,
positioning of brand in consumers minds , remind and reinforce.
c. Marketing objectives: customer acquisition, customer
retention, number of orders, response rate (proportion of
contacts responding).
 DIRECT MARKETING CAMPAIGN
3.Creative decisions
In order to achieve their level of success, companies need to produce an effective
creative brief which includes the following:
a. Target market analysis. Target consumers will be identified, profiled and their
needs and buyer behavior analyzed.
b. Development of the offer. Potential offers should be pre-tested with the target
audience to establish their attractiveness. This can take the form of small-scale
individual tests.
c. Message communication. In direct mail the offer can be communicated by the
envelope as well as the internal contents. Recipients must also be told clearly
how to respond. Including a free phone number as well as the usual freepost
envelope can increase response.
d. Action plan. An action plan focusing on when the campaign is to run, how often
and recommendations regarding the most appropriate media to use needs to be
drawn up.
 DIRECT MARKETING CAMPAIGN
4.Media decisions
The direct marketer has a range of media that
can be used to reach target audiences. Direct
mail, telemarketing, direct response advertising
catalogue marketing and the internet are the
different media used in direct marketing.
 DIRECT MARKETING CAMPAIGN
5.Campaign execution and evaluation
Once the creative and media decisions have been made, the action
plan will be executed. This may be done in-house or through the
use of a specialist direct marketing agency. The campaign should be
evaluated against clearly defined objectives which include:
sales volume and value;
response rate (the percentage of contacts responding);
number of enquiries;
number of new customers;
number of existing customers re-buying;