Transcript Slide 1
14 Direct Marketing McGraw-Hill/Irwin Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed Direct Marketing Defined …an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location Print Interactive TV Direct Mail Telemarketing The Internet Other Media Direct Response Media tools 14-2 Growth of Direct Marketing Shop w/o leaving home Consumer Credit Cards Catalogs Changing Structure of Society Technological Advances Money rich; time poor Shop on internet 14-3 Direct Marketing Combines With… Solicit funds for charity Victoria Secret Public Relations Advertising Direct Marketing Sales Promotion Airline price changes Personal Selling Support Media Car sales Promotional product in mailer increases response rates 14-4 Example of DM / Sales Promotion Costco sends promotional offer through the mail 14-5 Direct-Marketing Objectives To seek a behavioral response To build an image To maintain customer satisfaction To inform and/or educate customers in an attempt to lead to future actions Direct Marketing Strategies One-Step Two-Step • Used directly to obtain an order • Screens potential buyers • Toll-free phone orders and credit card payments • Follow-up to complete the sale • Car or insurance sales • Knife sets or work out equipment 14-7 Types of Direct Marketing Media • Direct Mail • Unsolicited; often called “junk mail” • Success depends on mailing list / ability to segment target • Catalogs • Drives consumers on line or in store • Broadcast Media • Email (TV / radio) /Print Media • Spam is electronic equivalent of “junk mail” • Infomercials • Low cost of commercials on cable • 30 minute “programs” • Home shopping • Telemarketing (QVC / HSN) • Sales by telephone • Do Not Call List 14-8 Direct Mail Example • Target Criteria • Physicians in specialties • Highest income levels • Demographics of Porsche buyers • Specific geographic areas • Hooks • Use X-ray of a Porsche 911 Carrera 4 • Use medical terminology 14-9 Example of Direct Marketing Targeting Cabela’s catalog targets hunters and fishermen 14-10 Catalog Example Drives consumers in store and online 14-11 Infomercials One of the most successful products advertised on infomercials 14-12 Direct Marketing via Email 14-13 Forms of Direct Selling Direct, personal presentation, demonstration and sales of products to consumers in their home Repetitive person-to-person Mary Kay Nonrepetitive person-to-person Life insurance Party Plans Tupper ware 14-14 Measuring Effectiveness Cost per Order (CPO) 14-15 Example of CPO Calculation • Cost of ad = $2,500 • Profit per order = $5 • Needs more than 500 orders to be cost effective: • $2,500 / $5 14-16 Another Measure of Effectiveness • Customer Lifetime Value (CLTV): Determines the dollar value associated with a long-term relationship with a customer • Helps determine if a customer should be acquired • Optimizes existing customers’ service levels Direct Marketing Advantages Selective reach Segmentation Frequency potential Highest potential consumers Based on age, income Cheap, late night TV Testing Creative approaches Timing Put together quickly Personalization Costs Measures of effectiveness Cheap, late night TV No other medium measures as well 14-18 Direct Marketing Disadvantages Need good lists Accuracy Image factors Junk mail Do Not Contact lists Content support Mail not desirable mood Rising costs Postage increases 14-19