Transcript chap020p

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Chapter
20
Direct Marketing Communications
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McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
After studying this chapter
you should be able to:
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Understand the objectives of direct
marketing communications, and describe
its distinguishing characteristics.
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Discuss the factors driving the growth in
direct marketing communications.
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Understand traditional direct marketing
communications techniques such as
direct mail, broadcast and print media,
and telemarketing.
After studying this chapter
you should be able to:
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Recall examples of the use of
technology such as electronic
media in direct marketing.
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Understand some of the ethical and
legal issues facing marketers who
use direct marketing
communications.
The Role of Direct Marketing
Communications
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Marketing Communications has two
primary objectives:
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To establish relationships by soliciting a
direct and immediate response from
prospects or customers.
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To maintain and enhance customer
relationships, whether those relationships
have been established by direct marketing
communications or by some other means.
Characteristics of Direct Marketing
Communications
Direct marketing targets a carefully selected
audience, as opposed to a mass audience.
It typically involves two-way communications;
direct responses from customers make it interactive.
Direct-response results are quite measurablemarketers can determine what works
and what does not.
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Customer Databases
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Benefits of Direct Marketing
Communications Offers
Immediate-Response
Orientation
Measurable Action
Objectives
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The Growth of Direct Marketing
Communications
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Global direct marketing
communications
increased because of
saturated domestic
markets.
Growth Catalysts
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Increase in Customized Products
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Fragmented Markets
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Product Price Sensitivity
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Shrinking Audiences for Network TV
and Newspapers
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Emphasis on Immediate Sales
Growth Catalysts
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Lifestyles Changes Create a Need for
Convenience:
Two-worker families have more discretionary
income but less time
 Ease of communication
 Increased use of credit cards
 Advancing Technology:
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• Predictive modeling
• Neural networks
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Direct Marketing Techniques
Direct Mail
 Broadcast
Media
 Print Media
 Telemarketing
 Electronic
Media
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Advantages and Disadvantages
of 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” in easy to ignore
Fewer distractions from
other media
Seen as wasteful, harmful to the
environment
Large numbers of consumers
prefer mail-order purchases
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Types of Direct Mail
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Sales letter
Postcards
Catalogs
Video catalogs
Promotional
videocassettes and
audiocassettes
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Promotional interactive
computer disks
Leaflets and flyers
Statement stuffers
Business-to-Business Direct Mail
B-to-B
marketing uses
the same forms
of direct mail!
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Broadcast Media
Direct-Response
Television Advertising
infomercials
Direct-Response
Radio Advertising
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Print Media
Consumers Can Respond To:
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Ads Carrying an Address
Order Form
Coupon
Telephone Number
Freestanding Insert (FSI)
Reader-Response Cards
Telemarketing
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Telemarketing:
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An interactive direct marketing
communications approach that uses
telephone calls to initiate, develop, and
enhance relationships with customers.
• Outbound telemarketing, also called
“teleselling”
• Business-to-business telemarketing
• Predictive dialing systems
National Consumers League’s Top 10
Telemarketing Frauds List
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Work-at-Home
Schemes
Prizes /
Sweepstakes
Credit Card Offers
Advance Fee
Loans
Magazine Sales
National Consumers League’s Top 10
Telemarketing Frauds List
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Telephone Slamming
Buyers Clubs
Credit Card Loss
Protection
Nigerian Money Offers
Telephone Pay-perCall Services
Electronic Media
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Interactive Computer Services
Interactive Computer Kiosks
FAX Machines – FAX-on-Demand
Systems
Ethical and Legal Issues in Direct
Marketing Communications
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Invasion of Privacy
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Deceptive Practices:
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Automatic Number
Identification
Caller ID Intrusion
Systems
Wasteful Practices