Transcript Direct Marketing Communications

20
C H A P T E R
Direct Marketing
Communications
McGraw-Hill/Irwin
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
After studying this chapter, you should be able to:
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Understand the objectives of direct marketing
communications, and describe their distinguishing
characteristics.
Discuss the factors driving the growth in direct marketing
communications.
Understand traditional direct marketing communications
techniques such as direct mail, broadcast and print media,
and telemarketing.
Recall examples of the use of technology such as
electronic media in direct marketing communications.
Understand some of the ethical and legal issues facing
marketers who use direct marketing communications.
Bearden Marketing 5th Ed
20-2
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Skechers USA, Inc
Skechers USA, Inc., is a global powerhouse in the
lifestyle footwear industry, doing business in 100
countries, including Australia, Chile, China, India, and
Japan. Skechers has always had popular products, with
current offerings in 20 product lines with 200 styles.
A multichannel international marketer, Skechers sells
through a wide variety of outlets, including department
stores, specialty and athletic stores, the Internet, and
company-owned stores.
In the United States Skechers operates 125 of its own
stores. Outside the United States the company goes to
market through 30 global distributors and has 22
company-owned stores.
Bearden Marketing 5th Ed
20-3
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Direct Marketing Communications
Direct Marketing Communications (DMC)
have two primary objectives.
Establish
Relationships
Soliciting a direct and immediate
response from prospects or
customers.
Maintain and
Enhance
Relationships
Whether those relationships have
been established by direct
marketing communications or by
some other means.
Bearden Marketing 5th Ed
20-4
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Direct Marketing Communications
Several characteristics distinguish direct
marketing from other marketing communications
methods:
Direct marketing targets a carefully selected
audience, as opposed to a mass audience.
It typically involves two-way communication; direct
responses from customers make it interactive.
Direct-response results are quite measurable marketers can determine what works.
Bearden Marketing 5th Ed
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Customer Database
Bearden Marketing 5th Ed
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DMC Benefits
Immediate
Response
Orientation
Direct marketing communications
often have deadlines for action and
offer special incentives for taking
immediate action.
Measurable
Action
Objectives
Although all marketing
communications should try to achieve
measurable results, their objectives
are generally not as action-specific as
those of direct marketing.
Bearden Marketing 5th Ed
20-7
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The Growth of DMC
Direct marketing communications have become
a larger part of the total marketing
communications picture in recent years.
From 2002 to 2007, direct marketing is forecast to
increase in efficiency with annual sales growing steadily
at more than 9 percent.
Total direct marketing expenditures will reach an
estimated $255 billion by 2007, split fairly evenly
between business and consumer markets.
Expenditures on direct marketing are growing at a
healthy rate, with the 2002–2007 growth rate expected
to be 12 percent.
Bearden Marketing 5th Ed
20-8
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Growth Catalysts
1. Increase in Customized Products
2. Fragmented Markets
3. Product Price Sensitivity
4. Shrinking Audiences for Network TV and
Newspapers
5. Emphasis on Immediate Sales
Bearden Marketing 5th Ed
20-9
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Direct Marketing Techniques
Direct
Mail
Electronic
Media
Direct
Marketing
Techniques
Print
Media
Telemarketing
Bearden Marketing 5th Ed
Broadcast
Media
20-10
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Direct Mail
Advantages
Disadvantages
Self-contained message.
High cost per exposure.
Flexibility in message content
and form of delivery.
Potential delivery delays.
Lack of support from other
media.
Thorough coverage of target
market.
“Junk mail” easy to ignore.
Fewer distractions from other
media.
Seen as wasteful, harmful
to environment.
A large number of consumers
like to make mail-order
purchases.
Bearden Marketing 5th Ed
20-11
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Types of Direct Mail
Sales Letter
Typically includes recipient’s name;
may be mailed with brochures, price
lists, reply cards, and envelopes.
Postcards
Generally used to offer discounts,
announce sales, or generate
customer traffic.
Catalogs
Describe and often picture the
product sold.
more
Bearden Marketing 5th Ed
20-12
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Types of Direct Mail
Video
Catalogs
Serve same purpose as print catalog,
but are on videocassettes or CDs.
Promotional
Cassettes
Promotional videocassettes,
audiocassettes, and CDs: used to
send product information to selected
audiences.
Promotional
Disks
Promotional interactive computer
disks: allow the recipient to select
information of interest.
more
Bearden Marketing
5th
Ed
20-13
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Types of Direct Mail
Leaflets and
Flyers
Typically single pages that can be
folded and included with sales
letters.
Statement
Stuffers
Ads included in other mail such as
bank or credit card statements or
shipped with catalog orders.
Bearden Marketing 5th Ed
20-14
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Broadcast Media
Infomercials
Broadcast
Media
Direct
Response
Television Ads
Direct
Response
Radio Ads
Bearden Marketing 5th Ed
20-15
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Print Media
Although not so tightly targeted as other direct
marketing communications media, newspapers
and magazines can also provide an opportunity
for direct response. Consumers can respond to:
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Ads carrying an address
Order form
Coupon
Telephone number.
The response can be either to purchase or to
request additional information.
Bearden Marketing 5th Ed
20-16
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Telemarketing
Telemarketing is an interactive direct marketing
communications approach that uses telephone
calls to initiate, develop, and enhance
relationships with customers.
The public’s irritation with telemarketers and
unethical practices by some telemarketers
prompted the Federal Trade Commission (FTC)
to enact a national “do not call” list that prohibits
telemarketing calls to consumers who register
with the FTC.
Bearden Marketing 5th Ed
20-17
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Telemarketing Fraud
National Consumers League’s top 10
telemarketing frauds list:
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Work-at-home schemes—Kits sold with false promises of
profits.
Prizes/sweepstakes—Phony prize awards requiring
payment of fees first.
Credit card offers—Phony promises of credit cards
requiring payment of fees in advance.
Advance fee loans—Empty promises of loans requiring
payment of fees in advance.
Magazine sales—Fake sales or renewals for magazine
subscriptions that are never received.
Bearden Marketing 5th Ed
20-18
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Telemarketing Fraud
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Telephone slamming—Consumers’ phone service is
switched without their knowledge or consent.
Buyers clubs—Consumers’ credit card and bank accounts
may be charged with unauthorized purchases.
Credit card loss protection—Unnecessary insurance sold
using scare tactics or misrepresentations.
Nigerian money offers—Consumers are lured into
revealing their bank account numbers, against which
fraudulent checks are written.
Telephone pay-per-call services—Some 900 number and
other “pay-per-call” services are not worth the price of the
call.
Bearden Marketing 5th Ed
20-19
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Summary
After studying this chapter, you should be able to:





Understand the objectives of direct marketing
communications, and describe their distinguishing
characteristics.
Discuss the factors driving the growth in direct marketing
communications.
Understand traditional direct marketing communications
techniques such as direct mail, broadcast and print media,
and telemarketing.
Recall examples of the use of technology such as electronic
media in direct marketing communications.
Understand some of the ethical and legal issues facing
marketers who use direct marketing communications.
Bearden Marketing 5th Ed
20-20
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.