Direct marketing and personal selling Lecture 8

Direct and interactive marketing communications

Used to create a personal dialogue with customers and stakeholders (not through an intermediary) Widely used Technology enabled

Driving forces
Changing dynamics in demographics and lifestyles Increasing competition Customer power Fragmentation of the media Increasing costs of media Emerging distribution channels Changes in market information (EPOS, smart cards, etc) New technologies

Direct marketing objectives

Increase direct mail order levels from new and existing customers Dissemination of information and provision of information to aid customer enquiries and support the adoption process Generation of sales leads to increase the number of sales leads and ultimately to influence a rise in sales income Generation of trial leads to increase the number of customers willing to trial the product, to influence the process of adoption and to influence a rise in sales income.

Figure 27.1 Types of direct marketing

Types of direct marketing

Complementary tool Used to complement other promotional activities used to support brand Used to generate leads, awareness, information and reinforcement Primary differentiator Primary form of communication Used provide distinct point of differentiation Used to cut costs, avoid use of intermediaries, reach finely targeted audiences

Types of direct marketing

Sales channel Use as a means of developing greater efficiency and augmenting current services Multiple sales channels can be used to meet needs of different customer segments Brand vehicle Brands developed to exploit market space opportunities e.g. lastminute.com, amazon

Direct marketing techniques

Direct mail Advantages:
Targeting, being able to personalised messages, improve response rates, flexibility

Disadvantages
Mailing only as good as market research information that underpins it

Direct response advertising Demands a response Use website address, telephone number, coupon to achieve this Targeting less scientific than direct mail Information collected can be used as a database for other forms of direct marketing

Direct marketing techniques

Telemarketing Personal approach Customers find it intrusive Resistant to embracing deeper and meaningful relationships with companies they purchase from Direct access to new and existing customers in a flexible environment wherever they are! Used for customer service initiatives and customer satisfaction surveys

Direct marketing techniques

Telemarketing Pivotal role in:
Increasing sales levels Supporting customers Increasing levels of customer service Providing technical support Information gathering Credit control

Disadvantage Cost Typical number of calls per day 30 60 One of least effective direct marketing techniques, personally intrusive and does not achieve necessary volume of hits on a day-to-day basis Call centres Fast growing area for new business in UK, India

E-media
Internet can provide on-line versions of other promotional tools Good for providing information Cost-effective Can be good at prompting immediate action

Personal Selling
Involves face to face dialogue Gives flexibility of message Immediate feedback gained Very useful in business to business markets Very useful when products and services are complex

Table 11.2

Three selling strategies

Source: Adapted from Rackman and DeVincetis (1999)

Table 11.3

When personal selling is a major element of the communications mix

Source: Adapted from Cravens (1987)

Table 11.4

Comparison of channel characteristics

Figure 11.2

Multichannel mix allocation

Sales force objectives

Increase sales turnover by 20% within a 12-month period Reduce the number of clients with minimum viable order levels at the end of a 12-month period Reduce the cost of sales by 10% within a 6-month period Increase the number of distribution outlets by 15% in a 12-month period

Table 11.1

Tasks of personal selling

Figure 28.1 The main stages in the sales process

Figure 28.6 A geographically based sales force structure

Figure 28.8 A market-based sales force structure

Figure 28.9 Key steps in territory design

Source: From Churchill et al. (1990); used with kind permission.