Transcript What is Direct Selling?

Direct Marketing and
Internet Marketing
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Database Marketing
Database Marketing is the Process of Building, Maintaining,
and Using Customer Databases and Other Databases for the
Purposes of Contacting and Transacting With Customers.
How Companies Use Their Databases:
Identifying Prospects
Deciding Which Customers Should
Receive a Particular Offer
Deepening Customer Loyalty
Reactivating Customer Purchases
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Developing a Marketing Database System
• Databases should be relational, talk to each other, and
integrate with each other.
• The system should be user friendly and available to
various departments.
• The data warehouse stores the information the
company receives in a central repository of customer
data.
• Managers need to make sure the data in the
databases is clean and accurate which has no entry
errors or duplication.
• The information in the database should be more than
names or addresses.
• Companies should inquire some information on
person’s lifestyle or purchase information.
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Customer Databases
• Customer Databases are an
Organized Collection of
Comprehensive Data About
Individual Customers or
Prospects Including:
– Geographic,
– Demographic,
– Psychographic, and
– Behavioral Data.
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Database contains following
information
• Consumer Lists
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Age
Income
Gender
Marital Status
Homeowner
Dwelling Type (home
or apartment)
Mail order buying (by
product type)
Interests
Presence of children
Geographical (zip, SCF,
county, state, carrier
route)
• Business Lists
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Employee Size
Annual Sales/Revenue
Title
Any other information
captured on
subscription form
(publications)
Corporate linkage
information
# of years in business
Geographical (zip, SCF,
county, state)
Credit information
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Using a database to create a
competitive advantage
Companies can utilize the database to create
a competitive advantage based on the
knowledge of their customers.
• The database will provide information regarding
customers’ likes and dislikes and which
messages will be relevant to the customers.
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Using a database to create a
competitive advantage (cont.)
• The customer list generated from the
database is critical component of a success.
• Companies can utilize the database to
provide better service to customers
• Companies can utilize the database for
service recovery
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Database and Relationship Marketing
• Customers like to deal with someone they know and
trust
• Customers like to be recognized and appreciated
• It takes 4-7 times as much effort to create a customer as
it does maintain a customer
• Research has shown a positive correlation between
repeat business and profitability.
• Most businesses are in the mature stage of the product
lifecycle.
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Direct Marketing
Direct marketing is an interactive system of marketing which uses
one or more advertising media to effect a measurable response
and/or transaction at any location.
Direct Marketing is both marketing and sales
.
Interactive
Respond
Measurable
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Direct marketing definition
In nutshell, Direct Marketing is the process by which a firm
approaches its customers on one to one basis and
markets its products directly to them.
Relationship Between Direct
Marketing and Database Marketing
Direct marketing
can be more
effective when
you have your
own database.
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Mass Marketing and Direct
Marketing
Most Mass Marketing
Involves One-Way
Communications
Aimed At Consumers.
Direct Marketing
Involves Two-Way
Interactions With
Customers.
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General Advertising and Direct Mail –
Simple Comparison
Advertising
Direct Marketing
Mass
Targeted
Breadth
Depth
Remember
Respond
Impression
Decision
A
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Integrated Direct Marketing
• Direct marketing campaigns that use multiple
vehicles and multiple stages to improve
response rates and profits.
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An Integrated Direct-Marketing
Campaign
Paid ad with a
response channel
Direct Mail
Outbound
Telemarketing
Face-to-face
sales call
Continuing
Communication
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Figure 18.1
Reasons for the growth in direct
marketing
Direct Selling Companies in India
S.N
o
Year of
Entry
Name of the company
Product Line
1
1981
EurekaForbes Ltd
Home care
2
1992
Time Life Asia
Educational Products & Multimedia
3
1992
Lotus Learning
Educational Products & Multimedia
4
1995
Avon Beauty Products India Pvt Ltd
Personal care & cosmetics
5
1995
Oriflame India Pvt Ltd
Skin care & Cosmetics
6
1995
Amway India Enterprises
Home care, personal care, cosmetics,
nutrition
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1996
Quantum International (P) Ltd
Ayurvedic health care, personal and home
care, food & beverages
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1996
Tupperware India Pvt. Ltd
Plastic moulded Kitchen containers
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1996
Modicare Ltd. ( Home grown)
Home & personal care, everyday-use
products
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1997
AMC Cookware India (P) Ltd
Stainless steel cookware
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1998
Herbal Life International
Weight management
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1999
Aviance Hindustan Lever
Cometics & skin care
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1999
Sunrider India
Home & personal care, everyday-use
products
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Objectives of Direct Marketing
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Sale of a product
Lead generation
Lead qualification
Maintenance of customer relationships
Direct ordering.
• Providing information.
• Trial generation
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Managing a direct marketing campaign
Figure 18.5
Some Unfortunate Truths About
Direct Marketing
• The more we need people to read (listen,
watch), the less willing they are to do so.
• The more resistant the universe, the more
expensive the cost of buying sales time (choice
of medium, and devices within each medium;
offer)
• The more it costs to acquire a customer, the less
valuable the customer.
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More Unfortunate Truths - Direct Mail
• People read direct mail, looking for a reason to stop.
• There is an inverse relationship between degree of preexisting interest and cost per response.
• There is a direct relationship between readership and
response.
• People are not dying to hear from you.
• Very little body copy is ever actually re-read.
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The range of direct marketing
techniques
Face-to-Face
Selling
Catalog
Figure 18.2
Kiosk
Marketing
Direct marketing techniques
•
Direct mail - material distributed via the postal service
to a recipient’s home or business to promote a
product/service.
•
Direct response advertising - standard broadcast and
print media designed to generate a direct response, e.g
an order or personal visit.
•
Telemarketing - a direct personal, verbal approach via
some kind of written or visual method.
•
Mail order - the purchase of products featured in
advertising or selected from a catalogue.
•
Teleshopping - home based shopping.
The Relative Power of Media
Face-to-Face
Strengths
Weaknesses
 Sight
 Likeability
 Sound
 Demands Time
 Eye Contact
 Expensive
 Body Language
 Interaction
 Demo Ability
 One-to-One
 Provides Time
 Pre-selection
 No Attention Competition
 Chemistry
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Direct mail –
Strengths
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Targeting - for example using the post code, targeted campaigns
can be developed using geographical / demographical criteria.
•
Personalisation - large numbers of personalised mailings can be
undertaken regularly.
•
Response rates can be high.
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Flexibility of creative scope.
•
Can hold attention of reader/recipient.
Weaknesses
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Easy not to engage
4 seconds to involve
Postal system dependent
List dependent
Recipients of Direct Mail
• Customers
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Have pre-existing interest
Will read more copy
Require less costly mail
Mailing to customers generates $ and improves retention
• Frequency tolerance
• Prospects
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Pre-existing interest is “likely”
Requires more expensive mail to buy readership
Resistant to reading (looking for a reason to stop)
Relevance is key
• Influencers
• Gatekeepers
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Mail Room
Administrative Assistant
Spouse
Post Office
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What is Direct Selling?
• Definition: Direct Selling can be best
described as the marketing of products and
services directly to consumers in a face to
face manner, generally in their homes or the
homes of others, at their workplace and other
places away from retail locations, usually
through explanation or personal
demonstration, by an independent direct
salesperson.
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What is the difference between Direct
Selling & Direct Marketing?
• The main difference between
the two methods of selling is
the face to face or personal
contact with the consumers
in case of Direct Selling
versus a contact through
some form of media in case
of Direct Marketing.
However, Direct Selling
organisations may
sometimes use direct mail to
enhance their business.
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•
What are the primary
methods of selling?
their
Direct selling companies primarily sell their products
by one of the two approaches .
• Group Demonstration or Party Plan: Under this
system the salespersons demonstrates products to a
group of guests, invited by a host/hostess at a
convenient location to a group of prospective
customers who are aware of the purpose of the
meeting before hand and are interested in the demo.
• One-on-One or Person to Person: The salesperson
talks to one customer at a time....
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What are the primary methods of
compensation?
• The compensation / profit share plans fall into two
categories.
• Single Level: Under this plan, the salesperson earns a
commission on sales effected by him/her only. There is a direct
correlation between sales effected and earnings.
• Multi Level Marketing (MLM): In this system, salespersons
derive compensation both from the sales effected by them
personally and sales made by persons recruited by them
personally or from the sales of the group or "network" recruited
by their personal recruits where the network may go several
levels deep. The system offers an opportunity to build one's own
individual business by selling goods and services to consumers
and by developing and training a network of direct sellers to do
the same.
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Web Marketing / Online Marketing
Internet Marketing
Today’s buzzzzzz word
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Electronic Marketing
• Electronic marketing is normally associated with
Internet marketing.
• In practice, Internet marketing is integrated with
database marketing and direct marketing.
• Internet marketing captures data which feeds into
the firm’s database, the database is used to
generate profiles and lists which enable the firm to
have effective direct marketing campaigns.
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The Website
The Internet: is a worldwide means of exchanging
information and communicating
interconnected computers.
through
a
series
When information
is made available
by the provider
–Interesting
Must Be:
–Current
–Easy to navigate
–Involving
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
of
Internet Participants
Senders
Internet
Advertisers
Sponsors
Receivers
Users
Internet
e-Commerce
Merchants
Shoppers
Customers
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Internet Communications Objectives
To Create
Awareness
To Generate
Interest
To Stimulate Trial
Objectives
To Create a
Strong Brand
To Disseminate
Information
To Create an
Image
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Benefits of Internet Marketing
Convenience
Information
Price
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Benefits of Web Marketing
Benefits to seller:•
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Access to all markets.
Renders global marketing feasible for even small firms .
Scope for enhancing customer value & customer service..
Helps target the customers individually.
Imparts speed to all responses.
Helps building relationships with customers.
Helps reduce business, marketing, channel, communication
/ promotion costs.
• A mass medium as well as personalised medium..
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Benefits of Web Marketing
• Benefits to the consumer:•
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Convenience
Scope for informed & competitive buying
Search advantage & options
Consumers can actually bargain on the net with a host of
sellers
Can get ‘more for less’
Transparency
Accuracy
Shifting of the power equation in favour of the consumers.
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Internet can be viewed in four
ways:•
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A business{to Internet service provider it is a business}
A medium { to an advertiser it is a medium}
A marketing channel{to seller it is a marketing channel}
A complete market place {to seller it is a complete market
place}
The internet has become a bazaar, the largest , most
dynamic, sleepless, electronic bazaar / mall of goods and
services
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Activities of the uses of a web-site
• Selling: hotel, cruise, and airline companies
are using the Internet to distribute their
products directly to the customer.
• Communication: the Internet is an excellent
medium to communicate what products are
offered and the benefits of those products.
• Providing Content: the companies should
design the content which will drive customers
back to the web site.
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Integrating the Internet into an IMC Program
Advertising
Sales Promotions
The Internet site
should be
integrated with:
Personal Selling
Public Relations
Direct Marketing
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Internet Advantages and Disadvantages
Advantages
Disadvantages
Target Marketing
Measurement problems
Message Tailoring
Interactive Capabilities
Clutter
Potential for deception
Information Access
Sales Potential
Privacy
Creativity
Limited production quality
Exposure
Poor reach
Speed
Irritation
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Web Site Development
• Build brand image, convey who the
company is and what the company has to
offer
• Easy to navigate
• Provide “contact us” access and respond
quickly
• Provide online purchase availability
• Keep on the top of the search engines
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Business-to-Business
E-commerce
• E- commerce involves
the exchange of
products , services ,
information &
payment through the
electronic medium of
computers &
networks.
• E- commerce is
business done online
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E- commerce
• E- commerce results when a firm connects its business
systems to its customers, distributors, vendors, and
suppliers via intranets, extranets and the Internet / Web.
• E- commerce is the umbrella term for entire
spectrum of activities like:•
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Electronic Data Interchange(EDI)
Electronic payment systems
Order management
Information Exchange and
Other business applications, with electronic
documentation.
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The three components of Ecommerce
• B { intranet transaction of e- commerce}
• B to B { inter- enterprise e- commerce}
• B to C { marketing of products & services
to ultimate customers on the net}
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The two components of Web
Marketing
• Marketing to business buyers{B 2B}
• Marketing to ultimate consumers {B2C}
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Growth of Web Marketing
WorldWide
The growth of Web Marketing has manifested
itself in three ways:• Growth in volume of business done on the net,
• Enlargement in the range of products marketed, {
toys, books, passenger cars, computers, education, consumer durables,
etc}
&
• Growth in Internet subscriber base.
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Limitations of web Marketing
• All products do not lend equally well for
Web Marketing
• Costs involved are not inconsequential
{ sizeable sum goes on running, maintaining, & updating
the site}.
• Question marks about profitability.
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Problems Web Marketing faces in India
1 Legal / Regulatory Problems:• E- documentation is not yet legally admissible
• Absence of an overall legal frame work covering cyber transactions &
payments
• Absence of taxation law
2 Infra-structural problems:•
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Low density of telephone, PCs & Internet access
Bandwidth limitation
Networking Limitation
Infra-structural bottlenecks at the delivery end
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cont.
3 Commercial Problems:• Problem relating to payment
• Low density of credit cards
• Inability to pay foreign suppliers online ( in foreign currency)
4 Other Problems:• Confidence in the system is low
• Problems of hacking
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Indian firms taking to Web
Marketing
• Notwithstanding these limitations, several
companies in India have already made a beginning
in e- commerce, especially in B 2B .
• These companies do following transaction using
internet like:- soliciting requests, orders ,
amendments, schedules, delivery instructions ,
receipts, invoices , payment Terms & clarifications
, etc.
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Players in B2C Web Marketing in India
• Banking Industry:- ICICI Bank, Citibank, HDFC Bank, IndusInd
Bank
• Entertainment Industry:- Cinema halls like PVR Anupam,
Cinemax allows customers to book seats through the net.
• Information Service:- Kotak Mahindra is an example. Kotak
markets an online information service with the brand name Matrix and
using this it sell information on the web.
• Stock Broking:- a number of stock broking firms in India have
embraced ‘ trading over the web’ ICICI became the first to launch an
online broking system in the country at the end of 1999.
• Airways:- Jet Airways allows its travellers to book their tickets on
the net.
• Hotels:- the Oberoi Group oh Hotels informs its guests through its
website about the availability of rooms. It also offers them the choice
over the net
• Other Industries:- like Asian Paints & Philips India etc…
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Internet-Marketing in India
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Billion plus population
Vast pool of English speaking public
Computer literate manpower.
Increasing IT & internet awareness
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Some Facts !
• Approx 50 million people are attached to
the internet
• College students and those below the age of
35 are the biggest segment on the Internet.
• The size of E-business by the year 2008 has
been forecasted by McKinsey and
NASSCOM to be of $ 10. Billion
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Internet marketing in India
• Growth in online marketing is largely driven by
online travel booking
Non Travel Product
:16%
Travel Product:84%
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Internet marketing in India
• Improved perception on market place
factors like
• Wider choice
• Availability of products
• Better price and bargains and not just on
• Convenience factors such as
• Saving on time and effort
• Home delivery &
• Flexibility of buying time
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Down side !!
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Low PC penetration
Poor infrastructure
Low bandwidth
Slow downloads
Higher customer inertia
Product quality & delivery concerns
Lack of credit card
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Why Internet?
• Sharing of information
• Lower cost of communication
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Entertainment
Healthcare
Govt. services
Education
Travel services &
Software
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Why Internet?
• Rapid response
• Expanded customer service capability
• Reduced geographic barriers
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Who can benefit ?
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Manufacturers
Wholesalers
Retailers
Service industries
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Placing ads and promotions online
• Banner - Standard rectangular ad found atop most web pages
• Floating ad - Animated object, like a car that races across your screen
which are very high on attention grabbing parameter.
• Interstitial or Superstitial - Full-page ad, often with video or animation.
Very useful indeed but web users complain that ads take over the screen.
• Large Rectangle- Oversize ad placed in the center of the page.
Pop up ads - It opens in a window on top of the web page.
• Pop under ads
• Skyscraper – vertical banner
• Text Ad – No frills, text only ad that appears alongside search results
Sponsorships
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Some introspection !!!
Attracting & keeping Visitors
• How can we
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Get more prospects to know and visit our site
Use marketing to spread word of mouth
Convert visitors to repeaters
Build a customer community
Capture and exploit customer data
Build and market an attractive website
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Designing an attractive website
• 7 design element ( 7 Cs)
– Context: Layout & design
– Content : Text, pictures, sound, and videos
– Community: How the site enables user to user
communication
– Customization
– Communication
– Connection : Linkage to other sites
– Commerce
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Context factors
• Ease of use
– Download time
– Easy to understand
first page
– Easy navigation
• Physical attractiveness
– Clean looking and not
overcrowded
– Attractive font types
and sizes
– Good use of colour and
sound
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Content factors
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Deep information with links to related sites
Changing news of interest
Changing free offers to visitors
Contests and sweepstakes
Humor & jokes, games
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Keeping Track !
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The time spent by the user on our website
Depth of their visits
Frequency of visits
Sources of visits
Visitor engagement / What were they looking for?
How many times he visited before making a
purchase?
• How many users are repeat customers
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E- Tailers
• E-tailers are independent web marketers
who do not have products of their own ;
they tie up with manufacturers & market
their products on the web; & usually they
stick to a few select product lines.
• Example:- Rediff-On-The-Net covers a limited range of
products like books, music discs, and cassettes.Buyers
can log in , order the products & get them delivered at
their doors.
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Tasks in Establishing Web Marketing
1.
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Preparation
Effective targeting & Knowing everything about the target
audience
Setting up the IT infrastructure
Setting up the electronic store front
Making the site interesting, & getting high traffic
Devices for securing traffic
Discounts, gifts, sweepstakes, contests & games
Making the site interactive
Keeping the site updated
Making the site user friendly
Specialization – becoming product magnets and customer magnets
Securing affiliates
Embracing a large number of search engines/ search services
Brand building
Developing right messages for online display
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Creating a system for delivering the products.
1 Preparation
• Web marketing needs a great deal of preparation.
• Any e- business needs an effective strategy and a
carefully crafted business plan.
• Strategy decides what kind of IT infrastructure is
needed.
• Success in web marketing depends on getting
customers to visit one’s website.
• Another important task is developing the right
product categories that can be marketed on the
web
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2 Effective targeting & Knowing
everything about the target audience
• Web marketer should know all relevant
details about the target consumers
• He has to know what excites them so as to
provide them irresistible online offer.
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3 Setting up the IT infrastructure
• This includes the creation of the required satellite
& internet connectivity.
• Getting the networking in place is important
because – commerce & web marketing rely
totally on networking.
• Connectivity between the information systems of
the partnering businesses/ customers is rendered
possible on account of the networking.
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4 Setting up the electronic store front
• Information is provided in text as well as
pictorial form in this electronic store.
• It also provides for placing of an order
online.
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5 Making the site interesting, &
getting high traffic
Good website must be :•
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simple,
interesting,
interactive,
up-to-date and
user friendly.
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6 Devices for securing traffic
• The more the traffic , the greater is the
chance of a transaction taking place .
• Example:- Yahoo! Is in fact the most trafficked site on
the net. With its high traffic , it helps Amazon, of which it
is an affiliate, to get a huge business.
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7 Discounts, gifts, sweepstakes,
contests & games
• Web marketing firms offers number of discounts,
gifts, etc as a means of attracting the prospects to
their site & increasing the sale.
• For participating in them , the users will usually be
required to give their names & addresses which
helps the marketer in database building & using
the data to attract the surfers with specific offers &
messages.
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8 Making the site interactive
• The more interactive the site , the greater is
the success as this will enthuse the visitors
to frequent the site.
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9 Keeping the site updated
• The content must be rich , relevant and latest.
• The web marketer must keep the site updated to
reflect the latest face of his business / company.
• He must project his new products / new
acquisitions, new brand launches, discount, offers,
and festival sales.
• Users visiting the site should find some fresh
content every time they visit.
• Company news consisting of current events, latest
financial results, new offers and laurels won by the
company , usually find a place in the updates of
the storefront.
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10 Making the site user friendly
• The user should be guided through each step of the buying
process. At the same time he must not be pressurised to
buy. The rationale is if the consumers like a product and
find the offer attractive, they will buy it.
• Site must facilitates speedy loading.
• Operating discussion groups among users so that they can
share their views .
• By providing customised products and personalised
services to them web marketers tries to build relationship
& tries to win their trust.
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11 Specialization – becoming product
magnets and customer magnets
• Product magnets are web marketers who
specialize in one product category.
• Amazon is an example of product magnet as it has
chosen to specialise in books.
• Customer magnet usually organise
themselves around a specific segment of
customers and keep meeting their needs.
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12 Securing affiliates
• An affiliate is a selling agent & affiliate
programme is a tool by which web marketers
acquire a bunch of selling agents.
• An affiliate program can be described as a
relationship between an online marketer (the
Parent) and a bunch of independent websites ( the
affiliates) who are willing to work for the parent.
• The affiliate generates sales for the parent & the
later pays a commission to the affiliate for each
sale generated by him.
• Affiliates are equivalent of the sales force in
mass marketing.
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13 Embracing a large number of
search engines/ search services
• Search engines are also known as portals .
• Services offered by them are:- a directory of
websites, a facility to search for other sites, news ,
weather information, e-mail, stock quotes, and
phone and map information.
• Portals have to provide compelling content on
their site .
• If the content is good , surfers will recognise that
the portals concerned are sources of information
and will keep visiting them.
• Example Yahoo, C-net, Netscape
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14 Brand building
• To gain mind share web marketers has to do effective
brand building.
Brand building is done at three levels:• By manufacturer
• By commercial web marketers
• By Portals.
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15 Developing right messages for
online display
• Online message must be true, significant,
interesting, essential & simple.
• A surfer wants entertainment, interactivity,
information & incentive.
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16 Creating a system for delivering the
products
• Ultimately the success in web marketing
rests on the effectiveness of delivery of
products ordered by the customer.
• Customers wants quick delivery of
products.
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Thank You
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