Marketing

3344

 Who was Les Wunderman?

He created the Columbia House

record club and invented the

modern era of direct marketing.
The genius of his idea was creating a
dialogue (monthly response) with
consumers which led to building a
relationship with the brand.

An interactive system of marketing

which uses one or more advertising
media to effect a measurable
response and/or transaction at any
location.

Common purposes of direct marketing:

Solicit and close a sale

Identify prospects for future contacts
Provide in-depth information
Seek information from consumers
Foster brand loyalty

Ad in Context Example

L.L.
L.L. Bean
Bean
built
built an
an
entire
entire
business
business
around
around
direct
direct
marketin
marketin
g.
g.

 L.L. Bean founded in 1912

Fundamental strategy:

Commitment to quality
Descriptive copy that was informative,

factual, low-key
Satisfaction guarantee

Bean built a good mailing list

By 1990 Beans sales were $600

million; by 2007, over $1.5 billion

 1450
1667
1744

Invention of movable type

First gardening catalog
Franklin formulates mail-order
concept of satisfaction guaranteed
1872 Montgomery Ward catalog
1886 Sears starts mail-order business
1917 Direct Marketing Advertising
Association founded

 1928

Third-class bulk mail

introduced
1950 First credit card
1951 Lillian Vernon places first ad
1953 Publishers Clearing House
founded
1967 AT&T introduces toll-free 800
1992 Over 100 million in U.S. shop
at home

 More than just mail-order.

A complex, diverse tool used by organizations
throughout the world.
Direct marketing often is not integrated with
other advertising efforts.
Three Principle Purposes:
close a sale with a customer
ID prospects and develop customer
database
Engage customers, seek their advice and
generate brand loyalty

 CONVENIENCE! for todays dual income

and single parent households.

More liberal attitudes toward using
credit.
Greater access to toll-free calling.
Computer technology/new media
facilitate online transactions.
More precise segmentation.
Opportunity for relationship building.
Cost per inquiry (CPI) and cost per order
(CPO) advantages of direct marketing.

Ad in Context Example
Marketers,
Marketers, like
like The
The
Adirondack
Adirondack Country
Country
Store,
Store, use
use catalogs,
catalogs,
toll
toll free
free numbers,
numbers,
and
and the
the Web
Web to
to take
take
advantage
advantage of
of direct
direct
marketing
marketing
opportunities.
opportunities.

 Knowing who the best

customers are as well as

what and how often they
buy.

Mailing lists:
Internal lists
External lists

Ad in Context Example
Databases
Databases allow
allow
direct
direct
communication
communication with
with
customers
customers like
like this
this
Saturn
Saturn newsletter.
newsletter.

 Augmenting lists with

externally provided lists

Incorporating information
from external databases
Demographic data
Geodemographic data
Psychographic data
Behavioral data

13
PPT 19-13

 Includes data collected directly from

individual customers

RFM Analysis of customers: recency,

frequency, monetary

Goal: Develop cybernetic intimacy

Marketing database applications
Frequency-marketing programs
Cross-selling

Privacy concerns

Do not call registry

Spam blockers
Opt-out options

 Direct response
advertising
Direct Mail
Telemarketing
E-mail
Other media

Magazines
Newspapers
Infomercials

 Advantages
Selective, flexible, little waste, lends

itself to testing, uses many formats

Disadvantages
Direct mail is expensive
May cost 15 to 20 times more to
reach a person with a direct mail
piece than with a TV commercial
Mail lists can be plagued with bad
addresses
Mail delivery dates can be unpredictable

Ad in Context Example
Direct
Direct mail
mail
offers
offers some
some
creative
creative
opportuniti
opportuniti
es.
es.

 Telemarketing can be a potent tool. As

with direct mail:

Contacts can be selectively targeted.
The impact of programs is easy to track.
Experimentation with different scripts and
delivery formats is simple and practical.
Telemarketing involves live constructive
dialogue.

 Telemarketing shares many of direct mails limitations:

Very expensive on a cost-per-contact basis.
Names and addresses go bad as people move, so too
do phone numbers - 15 percent of the numbers called
are inaccurate.
Telemarketing does not share direct mails flexibility in
delivery options. When you reach people in their
home or workplace, you have a limited span of time
to convey information and request some response.
Telemarketing is becoming a highly maligned practice
in consumers.
By 2007, over 70 percent of US households had
registered their phone numbers with the Do not call
registry.

 Bulk e-mail is known as spam

Fraudulent email know as phishing
However e-mail is an increasingly
popular tool for marketers
Advantages

Cheap
Good response rates

Netiquette suggests getting consumer

permission to send product information

Avoid bulk e-mailings

Magazines use bind-in insert cards

Toll-free 800 numbers are vital to direct
marketers using ads in newspapers and
magazines
Infomercial

Long television advertisement

Range in length from 3 to 60 minutes
Keys to success

Testimonials, Frequent call to actions, ensure

same-day response
New research shows that direct response ads are
the least likely to be zapped by DVR users

Ad in Context Example
Magazine
Magazine ads
ads
are
are ideal
ideal for
for
Direct
Direct Response
Response
Advertising.
Advertising.

 Functional specialists across several

media need to work together.

Marketing databases can lead to

interdepartmental rivalries.

Growth of direct marketing often

means cuts in other promotional
budgets.

One solution: the MARCOM manager.

 The face-to-face communication and

persuasion process.
Most effective with products or services
that are:
Higher priced
Complicated to use
Tailored/customized to users needs
Offer a trade-in option
Judged at the point of purchase

Order taking: accepting orders for

merchandise or scheduling services; deal
with existing customers who are lucrative
to a business due the low cost of
generating additional revenues from them.
Order taking is the least sophisticated of
selling efforts.

Creative selling: selling where

customers rely heavily on the salesperson
for technical information, advice, and
service. It is the most sophisticated and
complex selling effort.

System selling: entails selling a set of

interrelated components
that fulfill all
or a majority of a customers needs in a
particular area. System selling is often
executed by a team of sales people.

The missionary salesperson: calls on

accounts with the purpose of monitoring
the satisfaction of buyers and updating
buyers needs. They may provide product
information after a purchase.

 Salespeople play a critical role in

cultivating long-term relationships with

customerswhich often is referred to as a
customer relationship management
(CRM) program.

CRM views the relationship with buyers as

a partnership and a problem solving
situation.

27