Transcript Direct and Multilevel Marketing

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What does direct marketing do ?
How does it differ from conventional
marketing ?
How does it differ from direct selling?
How does it differ from non-store retailing/
channel less marketing in general ?
What are the distinguishing features of DM
that make it an altogether distinct form of
marketing ?
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Production, Communication, Distribution.
Customization
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DM- Marketer knows his customer, have
specific profile of each individual customer,
builds rel.ship,
“ you tell me what you want and also tell me
how to I should give it you, I’ll give it to you
accordingly”
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CM has to remain content with one way
messages from firm to market.
DM njoys adv. Of 2 way commN. b/w firm n
each 1 of its customers.
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CM – mktg activity takes place through mktg
channels/intermediaries/stores.
DM – mktg activity takes place without any
channels/stores, secures sale directly from
consumer.
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CM relies on mass promoN for generating
Demand,
DM goes for promoN on one to one basis.
Rather not @ all.
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CM relies on mass promoN for generating
Demand,
DM goes for promoN on one to one basis.
Rather not @ all.
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DM delivers near perfect solutions to
customer’s problems – bcz able to contact
individually, can knw wht custmer wants n
make it available, Developments in IT.
Enables Customization.
E.g. Levi Strauss kiosks.
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Helps achieve excellence in pdts and services.
Consumers can have customized pdts n
services.
Facilitates sharper segmentation and targeting;
ultimately each individual becomes a target
market. – more accurate segmentation n
sharper targeting facilitates formulation of
highly fine tuned marketing.
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Facilitates relations-building with customers.
Marketplace – competition – consumers
discerning – through CRM only.
More cost effective – bcz it eliminates channel
cost to large extent n advertising costs to
almost zero.
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Saves channel costs for the most part – DM
helps to slash the expenses like store rent,
expenses on staff, inventory carrying cost and
advertising cost.
Eliminates adv cost to almost n makes
communication more effective.
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A versatile form of marketing; helps being in
treating customers
Target audience can be hand picked literally
Campaign can be timed as per convenience.
To know which ones have been most effective
and profitable.
Pareto’s law of 80:20 applies here also.
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DM is a marketing method; non store retailing
is just a retailing method.
DM compresses the steps in the marketing
process like advertising – sales promotion –
channels n intermediaries.
DM is a larger process than non-store retailing
it tackles all components of marketing in
integrated n compresses manner.
Benefits the consumers too...
Comprehensive, reliable and updated customer
database
– Direct marketers can build customer database
on their own from internal lists of customers
and prospects compiled and maintained by
them, or purchase relevant mailing lists from
the mkt.
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Careful and close targeting of
markets/prospects
- DM’s potential is not realized when it is not
targeted closely. A firm can’t target all
customers for a given DM programme.
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Service guarantee and product warranty is also
essential
- Consumers should feel free to return the pdt if it
falls short of their expectations. E.g. money
back guarantee.
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Efficient Backroom logistics
- There should be systematic follow up, reminder
mailers should also go promptly wherever
applicable. Fast delivery of product is most
vital part of backroom logistics.
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An eye for details is essential in DM
e.g. care should be taken in designing mailer
Catchy reasons to open envelopes
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Sustained effort – it must be adopted as a
regular marketing endeavor; its not effective if
carried out as one shot effort.
In India , DM has been growing steadily in
recent yrs.
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Mail Order Marketing/Catalogue Marketing
Direct Mail Marketing
Mothercare India – targets mothers who buy
items for kids.
Surat Diamond focus on credit card holders
Living media sells its music today cassettes
through mail order.
HUL using DM for Denim aftershave.
Direct Response Marketing :- Difference b/w DMM and DRM – media
- Toll free no.s - tool of DRM – DELL
 Database Marketing : Telemarketing :- its through telecom/IT
facilities.
Adv- facilitates personalized contacts, better
chance to influence, enhances mktg
productivity by providing screening and
selection facility, less expensive, can be used
for diff. types of pdts (industrial, service etc.)
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How does Telemarketing Work ?
Call centre
Planning n preparation
Teleshopping/Home shopping
Benefits the customer
Benefits manufacturer
Benefits TV channel
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Also needs tight targeting as other forms of
DM to be effective.
Matching of targeted consumers and pdts.
Proper matching b/w program time and
targeted consumers’ TV viewing pattern.
Recognize what pdts will fit for Teleshopping.
Selection of right kind of ppl as hosts is also
important. They can make/brake the prog.
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Direct Selling (Home Selling)
Diff b/w dir.selling n dir. mktg,
Dir. Selling n Home selling however, are one n
the same.
Direct selling in WORLD
Avon
Amway
 Direct selling in INDIA
Oriflame, Tupperware, Modicare, HUL
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Enables one to cover large area quickly.
Effective n economic in respect of pdts.
Helps to save channel cost n advertising cost.
Helps to remain close to consumers, service
them better n get direct feedback.
High motivation of sales persons.
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Does no allow any options as the consumers
get in conventional retailing.
Limitation in terms of comparing brands when
required by customers.
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MLM is modified version of dir.selling
Often referred as :-
Network mktg, member-get-member prog. And affiliate
mktg.
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Recruitment of core group of sales personscum-distributors,
Picks up your pdts with sum of money and
directly sells them to consumers.
They are no expected to sell whole, they may
appoint another stage of distri.
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Plus points of D.S. are for MLM as well.
But specific is that it helps direct sellers grow
rapidly.
MLM network offers quick growth,
continuously and automatically.
Multiplication n growth are inherent to
network marketing.
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Similarly all drawbacks of D.S. are for MLM as
well.
MLM wins only if network keeps growing n
unbroken.
Distributors are customers, loss of distributors
will be loss of business as well.
Firm can’t control sales force to desired extent
as they are not employees of firm.
Distri. Cum sales people will reduce prices to
meet their targets.
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It is independent direct selling by third party
outfits, which direct sell others’ pdts for
commission.
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Viral mktg
Mktg through ATM/Mobile phone ( using
credit card)
Online mktg/mktg on the web