Transcript DIRECT MARKETING

DIRECT MARKETING
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BSAD 113
Economics of
eliminating
intermediaries
Services provided by
intermediaries
Circumstances favoring
direct marketing
Opportunities for
segmentation
DIRECT MARKETING
Lars Perner, Instructor 1
Is “Eliminating the
Middleman” A Good Idea?
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Intermediaries
usually perform
services more
efficiently than
you can
Optimal length
of challens
• May change over
time
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DIRECT MARKETING
Lars Perner, Instructor 2
Services Provided By
Intermediaries
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Breaking bulk
Financing
Contact with
customers
Consolidating
goods
Distribution
Services
DIRECT MARKETING
Lars Perner, Instructor 3
Types of Direct
Marketing
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Direct sale to
consumer
• supposedly
eliminates “fat”
from distributors
(e.g., Dell)
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Catalog retailers
• Specialty
• Convenience
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Customizers
• e.g., Expedia
(Travel)
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Promotional
• Infomercials
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Combinations
• e.g., Geico
DIRECT MARKETING
Lars Perner, Instructor 4
Circumstances Favoring
Direct Marketing
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Large absolute
margins (e.g.,
Dell)
Need for
customization
Large inventory
Need to target
narrow segment
DIRECT MARKETING
Lars Perner, Instructor 5
Means of Segmentation
in Direct Marketing
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Income
Past purchases
Ethnic surnames
Credit history
Hobbies/interests
(magazine
subscription lists)
DIRECT MARKETING
Lars Perner, Instructor 6
Sources of Info for Direct
Marketing Segmentation
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Phone books--often contain
both names and addresses;
yellow pages
State registrations (vehicle,
driver’s licenses)
Past purchases (from
company or outside)
Professional and school
directories
Magazine subscription lists
Credit rating bureaus
DIRECT MARKETING
Lars Perner, Instructor 7
Advanced Segmentation
Techniques in Direct Marketing
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“Merge-Purge”
• merge: add lists together;
add purchased lists to own
customer list
• purge: sort of duplicates
• special software allows
for standardization of
addresses (“phonetic”
matching possible)
DIRECT MARKETING
Lars Perner, Instructor 8
Sources of List Value
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Recency
Frequency of
purchase
Value of past
purchases
Geography (zip
code as surrogate
for lifestyle)
Gender
identifiability
DIRECT MARKETING
Lars Perner, Instructor 9