Transcript Chapter 17

Priciples of Marketing
by Philip Kotler and Gary Armstrong
Chapter 17
Direct and Online Marketing
Building Direct Customer Relationships
PEARSON
Objective Outline
1
The New Direct Marketing Model
Growth and Benefits of Direct Marketing
Customer Databases and Direct Marketing
Define direct marketing and discuss its benefits to
customers and companies.
Forms of Direct Marketing
2
Identify and discuss the major forms of direct
marketing.
Objective Outline
Online Marketing
3
Explain how companies have responded to the
Internet and other powerful new technologies with
online marketing strategies.
Setting up an Online Marketing Presence
4
Discuss how companies go about conducting online
marketing to profitably deliver more value to
customers.
Objective Outline
Public Policy Issues in Direct Marketing
5
Overview the public policy and ethical issues
presented by direct marketing.
The New Direct Marketing Model
 Direct marketing consists of connecting directly with
carefully targeted consumers, often on a one-to-one,
interactive basis.
 However, for many companies today, direct marketing is
more than just a supplementary channel or advertising
medium─it constitutes a complete model for doing
business.
 Firms employing this direct model use it as the only
approach.
Growth and Benefits of Direct Marketing
 Direct marketing continues to become more
Internet-based, and Internet marketing is
claiming a fast-growing share of marketing
spending and sales.
Benefits to Buyers
Direct marketing gives buyers ready
access to a wealth of products. No
physical store could offer handy access
to such vast selections.
Good catalogs or online sites often
provide more information in more
useful forms than even the most
helpful retail salesperson can provide.
Finally, direct marketing is immediate
and interactive. Moreover, direct
marketing gives consumers a greater
measure of control.
Benefits to Sellers
Because of the one-to-one nature of direct
marketing, companies can interact with
customers by phone or online, learn more
about their needs, and personalize products
and services to specific customer tastes.
Direct marketing also offers sellers a low-cost,
efficient speedy alternative for reaching their
markets.
Finally, direct marketing gives sellers access
to buyers that they could not reach through
other channels.
Customer Databases and Direct
Marketing
 A customer database is an organized collection
of comprehensive data about individual
customers or prospects, including geographic,
demographic, psychographic, and behavioral data.
Forms of Direct Marketing
Direct-Mail Marketing
 Direct-mail marketing involves sending an offer,
announcement, reminder, or other item to a person at a
particular address.
 Direct mail is well suited to direct, one-to-one
communication.
 It permits high target-market selectivity, can be
personalized, is flexible, and allows the easy
measurement of results.
 However, even though the new digital forms of direct
marketing are gaining popularity, traditional direct mail is
still by far the most widely used method.
Catalog Marketing
 Catalog marketing is direct marketing through print,
video, or digital catalogs that are mailed to select
customers, made available in stores, or presented online.
 Online catalogs can offer an almost unlimited amount of
merchandise.
 Online catalogs allow real-time merchandising; products
and features can be added or removed as needed, and
prices can be adjusted instantly to match demand.
Telemarketing
 Telemarketing involves using the telephone to
sell directly to consumers and business customers.
 Marketers use outbound telephone marketing to
sell directly to consumers and business.
 They also use inbound toll-free numbers to
receive orders from television and print ads,
direct mail, or catalogs.
Direct-Response Television Marketing
 Direct-response television (DRTV) marketing
takes one of the two major forms:
••
•
•
Direct-response
Interactive TV
television
(iTV)
advertising
Direct
marketers
air television
spots, often
60 or 120and
seconds
in
It lets viewers
interact
with television
programming
advertising.
length,
which persuasively
describe
a product
give customers
a
Also, increasingly,
as the lines
continue
to blurand
between
TV screens
toll-free
or a Webinteractive
site for ordering.
and othernumber
video screens,
ads and infomercials are
It
also includes
fullon30-minute
or longer
advertising
appearing
not just
TV, but also
on mobile,
online,programs,
and social
called
for a even
singlemore
product.
media infomercials,
platforms, adding
TV-like interactive direct
marketing venues.
Kiosk Marketing
 Many companies are placing information and
ordering machines─called kiosks (good oldfashioned vending machines but so much
more)─in stores, airports, hotels, college
campuses, and other locations.
 Some machines can even use facial recognition
software that lets them guess gender and age and
make product recommendations based on that
data.
Online Marketing
 We define online marketing as efforts to market
products and services and build customer
relationships over Internet.
 Wide-spread use of the Internet is having a
dramatic impact on both buyers and the
marketers who serve them.
Marketing and the Internet
Internet
Click-andmortar
companies
Click-only
companies
• A vast public web of computer networks,
connects users of all types all around the world
each other
and an amazingly
large
• to
Traditional
brick-and-mortar
companies
that
information
repository.
have added online
marketing to their operations.
• Now, almost all of these traditional companies
created their
own online
and online
• have
The so-called
dot-coms,
whichsales
operate
communications
becomingmarket
click-andonly and have nochannels,
brick-and-mortar
mortar
companies.
presence.
• They include a wide array of firms, from etailers such as Amazon.com that sell products
and services directly to final buyers.
Online Marketing Domains
Blogs
Business-to-Consumer
 The four major
online marketing(B-to-C)
domains are
Advantages
• The
popular
press has paid the(B-to-C),
most attention
to business-to-consumer
business-to-consumer
business-to(B-to-C) online marketing—businesses selling goods and services
business
consumer-to-consumer
(C-toonline
to final(B-to-B),
consumers.
Consumer-to-Business
(C-to-B)
• They
can offer
fresh, original,
C), and
consumer-to-business
(C-to-B).
• Online
exchanges
in which consumers search
out sellers, learn about
•
•
•
•
personal, and cheap way to enter
(B-to-B)
their offers, initiateBusiness-to-Business
purchases, and sometimes
even drive transaction
into
consumer
online
conversations.
Businesses
using online marketing to reach new business customers,
terms.
serve current customers more effectively, and
obtain buying efficiencies
Disadvantages
and better prices.
• The blogosphere is cluttered and
Consumer-to-Consumer
(C-to-C)
difficult to control.
Online exchanges of goods and
information
consumers.
• They
remain between
largely afinal
C-to-C
Blogs are online journals wheremedium.
people post their thoughts, usually on a
narrowly defined topic.
• Consumers remain largely in control.
C-to-C means that online buyers don’t just consume product
information─increasingly, they create it.
Setting Up an Online Marketing
Presence
 Companies conduct online marketing in any or
all of the five ways:
Creating Web Sites
 However, beyond simply creating a Web site, marketers
must design an attractive site and find ways to get
consumers to visit the site, stay around, and come back
often.
Corporate (or
brand) Web Site
• A Web site designed to
build customer goodwill,
collect customer feedback,
and supplement other sales
channels rather than sell
the company’s products
directly.
Marketing Web
site
• A Web site that interacts
with consumers to move
them closer to a direct
purchase or other
marketing outcome.
Placing Ads and Promotions Online
 We define online advertising as advertising that appears
while consumers are browsing the Internet, including
display ads, search-related ads, online classifieds, and
other forms.
 Content sponsorships means that companies gain name
exposure on the Internet by sponsoring special content on
various Web sites, such as news or financial information
or special interest topics.
 Viral marketing is the Internet version of word-of-mouth
marketing: a Web site, video, e-mail message, or other
marketing event that is so infectious that customers will
seek it out or pass it along to friends.
Creating or Participating in Online
Social Networks
 Online social networks are that countless independent
and commercial sites have arisen that give consumers
online places to congregate, socialize, and exchange
views and information.
 Marketers can engage in online communities in two ways:
• They can participate in existing communities.
• They can set up their own.
Sending E-mail
 We define E-mail marketing as sending highly targeted,
highly personalized, relationship-building marketing
messages via e-mail.
 The explosion of spam─unsolicited, unwanted
commercial e-mail messages that clog up our e-mail
boxes─has produced consumer irritation and frustration.
 To address these concerns, most legitimate marketers now
practice permission-based e-mail marketing, sending email pitches only to customers who “opt in.”
Using Mobile Marketing
 We define mobile marketing as marketing to onthe-go consumers through mobile phones,
smartphones, tablets, and other mobile
communication devices.
Public Policy Issues in Direct Marketing
 Direct marketers and their customers usually
enjoy mutually rewarding relationships.
 The direct marketing industry has also faced
growing privacy concerns, and online marketers
must deal with Internet security issues.
Irritation, Unfairness, Deception, and
Fraud
 Most of us dislike direct-response TV
It, including identity theft and financial scams, has
Internet
commercials
that are too loud, long, and insistent.
become a serious problem.
fraud
 Beyond irritating consumers, some direct
marketers It’s
have
been
accused
taking
unfair ea type
of identity
theftofthat
uses deceptive
and fraudulent
sites to fool users into
Phishing
advantagemails
of impulsive
or online
less-sophisticated
buyers. divulging their personal data.
Online
security
Unscrupulous snoopers will eavesdrop on their
online transactions, picking up personal information
or intercepting credit and debit card numbers.
Consumer Privacy
 Invasion of privacy is perhaps the toughest public
policy issue now confronting the direct marketing
industry.
 Using sophisticated computer technologies, direct
marketers can mine these databases to
“microtarget” their selling efforts.
A Need for Action
 All of these concerns call for strong actions by
marketers to monitor and prevent privacy abuses
before legislator step in to do it for them.
The End