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Direct Marketing and Personal Selling

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Marketing 3344 * * * * * * * * * * * * * * * * * * * * * * * * * * Who was Les Wunderman? He created the Columbia House record club and invented the modern era ... – PowerPoint PPT presentation

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Title: Direct Marketing and Personal Selling


1
Direct Marketing and Personal Selling
  • Marketing 3344

2
Introductory Scenario Don Mess With Less
  • Who was Les Wunderman?
  • He created the Columbia House record club and
    invented the modern era of direct marketing.
  • The genius of his idea was creating a dialogue
    (monthly response) with consumers which led to
    building a relationship with the brand.

3
Direct Marketing
  • An interactive system of marketing which uses one
    or more advertising media to effect a measurable
    response and/or transaction at any location.
  • Common purposes of direct marketing
  • Solicit and close a sale
  • Identify prospects for future contacts
  • Provide in-depth information
  • Seek information from consumers
  • Foster brand loyalty

4
Ad in Context Example
L.L. Bean built an entire business around direct
marketing.
5
Direct Marketing A Look Back
  • L.L. Bean founded in 1912
  • Fundamental strategy
  • Commitment to quality
  • Descriptive copy that was informative, factual,
    low-key
  • Satisfaction guarantee
  • Bean built a good mailing list
  • By 1990 Beans sales were 600 million by 2007,
    over 1.5 billion

6
Direct Marketing Milestones
  • 1450 Invention of movable type
  • 1667 First gardening catalog
  • 1744 Franklin formulates mail-order concept of
    satisfaction guaranteed
  • 1872 Montgomery Ward catalog
  • 1886 Sears starts mail-order business
  • 1917 Direct Marketing Advertising Association
    founded

7
Direct Marketing Milestones
  • 1928 Third-class bulk mail introduced
  • 1950 First credit card
  • 1951 Lillian Vernon places first ad
  • 1953 Publishers Clearing House founded
  • 1967 ATT introduces toll-free 800
  • 1992 Over 100 million in U.S. shop at home

8
Direct Marketing Today
  • More than just mail-order.
  • A complex, diverse tool used by organizations
    throughout the world.
  • Direct marketing often is not integrated with
    other advertising efforts.
  • Three Principle Purposes
  • close a sale with a customer
  • ID prospects and develop customer database
  • Engage customers, seek their advice and
  • generate brand loyalty

9
Whats Driving Direct Marketing?
  • CONVENIENCE! for todays dual income and single
    parent households.
  • More liberal attitudes toward using credit.
  • Greater access to toll-free calling.
  • Computer technology/new media facilitate online
    transactions.
  • More precise segmentation.
  • Opportunity for relationship building.
  • Cost per inquiry (CPI) and cost per order (CPO)
    advantages of direct marketing.

10
Ad in Context Example
Marketers, like The Adirondack Country Store, use
catalogs, toll free numbers, and the Web to take
advantage of direct marketing opportunities.
11
Database Marketing
  • Knowing who the best customers are as well as
    what and how often they buy.
  • Mailing lists
  • Internal lists
  • External lists

12
Ad in Context Example
Databases allow direct communication with
customers like this Saturn newsletter.
13
List Enhancement
  • Augmenting lists with externally provided lists
  • Incorporating information from external databases
  • Demographic data
  • Geodemographic data
  • Psychographic data
  • Behavioral data

PPT 19-13
14
The Marketing Database
  • Includes data collected directly from individual
    customers
  • RFM Analysis of customers recency, frequency,
    monetary
  • Goal Develop cybernetic intimacy
  • Marketing database applications
  • Frequency-marketing programs
  • Cross-selling
  • Privacy concerns
  • Do not call registry
  • Spam blockers
  • Opt-out options

15
Media Applications in Direct Marketing
  • Direct response advertising
  • Direct Mail
  • Telemarketing
  • E-mail
  • Other media
  • Magazines
  • Newspapers
  • Infomercials

16
Direct Mail
  • Advantages
  • Selective, flexible, little waste, lends itself
    to testing, uses many formats
  • Disadvantages
  • Direct mail is expensive
  • May cost 15 to 20 times more to reach a person
    with a direct mail piece than with a TV
    commercial
  • Mail lists can be plagued with bad addresses
  • Mail delivery dates can be unpredictable

17
Ad in Context Example
Direct mail offers some creative opportunities.
18
Telemarketing
  • Telemarketing can be a potent tool. As with
    direct mail
  • Contacts can be selectively targeted.
  • The impact of programs is easy to track.
  • Experimentation with different scripts and
    delivery formats is simple and practical.
  • Telemarketing involves live constructive
    dialogue.

19
Telemarketing
  • Telemarketing shares many of direct mails
    limitations
  • Very expensive on a cost-per-contact basis.
  • Names and addresses go bad as people move, so too
    do phone numbers - 15 percent of the numbers
    called are inaccurate.
  • Telemarketing does not share direct mails
    flexibility in delivery options. When you reach
    people in their home or workplace, you have a
    limited span of time to convey information and
    request some response.
  • Telemarketing is becoming a highly maligned
    practice in consumers.
  • By 2007, over 70 percent of US households had
    registered their phone numbers with the Do not
    call registry.

20
E-Mail
  • Bulk e-mail is known as spam
  • Fraudulent email know as phishing
  • However e-mail is an increasingly popular tool
    for marketers
  • Advantages
  • Cheap
  • Good response rates
  • Netiquette suggests getting consumer permission
    to send product information
  • Avoid bulk e-mailings

21
Direct Response Advertising in Other Media
  • Magazines use bind-in insert cards
  • Toll-free 800 numbers are vital to direct
    marketers using ads in newspapers and magazines
  • Infomercial
  • Long television advertisement
  • Range in length from 3 to 60 minutes
  • Keys to success
  • Testimonials, Frequent call to actions, ensure
    same-day response
  • New research shows that direct response ads are
    the least likely to be zapped by DVR users

22
Ad in Context Example
Magazine ads are ideal for Direct Response
Advertising.
23
Closing the Sale with Direct Marketing and/or
Personal Selling
  • Functional specialists across several media need
    to work together.
  • Marketing databases can lead to interdepartmental
    rivalries.
  • Growth of direct marketing often means cuts in
    other promotional budgets.
  • One solution the MARCOM manager.

24
The Critical Role ofPersonal Selling
  • The face-to-face communication and persuasion
    process.
  • Most effective with products or services that
    are
  • Higher priced
  • Complicated to use
  • Tailored/customized to users needs
  • Offer a trade-in option
  • Judged at the point of purchase

25
Types of Personal Selling
  • Order taking accepting orders for merchandise or
    scheduling services deal with existing
    customers who are lucrative to a business due the
    low cost of generating additional revenues from
    them. Order taking is the least sophisticated of
    selling efforts.
  • Creative selling selling where customers rely
    heavily on the salesperson for technical
    information, advice, and service. It is the most
    sophisticated and complex selling effort.

26
Types of Personal Selling
  • System selling entails selling a set of
    interrelated components that fulfill all or a
    majority of a customers needs in a particular
    area. System selling is often executed by a
    team of sales people.
  • The missionary salesperson calls on accounts
    with the purpose of monitoring the satisfaction
    of buyers and updating buyers needs. They may
    provide product information after a purchase.

27
Customer Relationship Management (CRM)
  • Salespeople play a critical role in cultivating
    long-term relationships with customerswhich
    often is referred to as a customer relationship
    management (CRM) program.
  • CRM views the relationship with buyers as a
    partnership and a problem solving situation.
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