DIRECT MARKETING Chapter-1

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DIRECT MARKETING Chapter-1

• Definition Of Direct Marketing
• Direct Marketing is the interactive use of
  advertising media to stimulate an (immediate)
  behavior modification in such a way that this
  behavior can be tracked , recorded , analyzed and
  stored on a database for future retrieval and use.

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Lets Elaborate On The Chosen Definition

• DIRECT MARKETING

Interactive
Track Record Analyze
Stored in database for future retrieval use
Use of advertising media
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• Interactive Two way interaction is a fundamental
  building block of direct marketing (two way
  interaction)
• Use of advertising media Using a combination of
  media is often more productive than using a
  single medium. Eg Direct Mail/Magazines/Newspaper
  s/TV/ Radio/Telephone/Internet/E-mail/broadcasting
  
• Track, Record Analyze Every form of direct
  marketing activity, with rare exceptions is
  measurable. (Spending, response, and return on
  investment)
• Stored in database for Future Retrieval Use
  Database are used to store
• a) History of purchase
• b) Sources of Response
• c) Credit rating etc
• The use of a database is another fundamental
  building block of direct marketing
• This detention is media based
  
  

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The Basics Of Direct Marketing

• The basic purpose of any direct marketing program
  is to get a measurable response that will produce
  an immediate or ultimate profit.
• To create a measurable response ,there must be an
  offer a call to action.
• An offer to sell a product or service direct to a
  customer or a business is but one way to create a
  measurable response.
• Offers that create leads for
• Sales representatives
• Get people to enquire for information
• Build traffic in retail stores and
• Impel people to give to causes can also be
  measured

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Components of Response

• Lists Media
• Creative Response
• Offer
• These decisions variables can be divided into
  four parts which we call it the Elements of
  response and ranked by importance
• Media lists 40
• Offer 30
• Copy 15
• Layout 15

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Media List

• Choosing the best media lists is the key to
  reaching the right target group.
• Many media forms can be selected
• Geographically
• Demographically or
• Psychographicallyby life style
• Media Forms
• Direct mail To reach the best target groups
• Newspaper By day of week
• Television By Program type
• Internet

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The Offer , also known as the proposition , is
another key to success. It is the terms under
which a specific product , service or brand is
promoted i.e. the promise of the transaction
includes mix factors that motivate customers e.g.
price, payment,gurantee,services
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Creative executions or the two elements of copy
and layout or design, is not ranked as high as
media or the offer. But creative thinking must
always be about how

• How the customers lives will be better
• How the product or service solves their problems
  or
• Will make them more successful at some endeavor
  (attempt).
• A creative should
• Involve the Customer
• Stimulating emotions that can evoke response

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Most direct response copy falls into four
categories

• Benefits
• Descriptions
• Support copy and
• Sweeteners and Facilitators

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• Benefits are the most important kind of copy,
  showing how the product or service will improve
  the potential responders life.
• Descriptive copy replaces personal
  examination(i.e the ability to touch , feel or
  try out a product or service) before purchase.
• Support copy validates the claimed benefits
  (e.g., data, statistics, research case studies,
  testimonials etc.,)
• Sweeteners and facilitators give the reader more
  reasons to take the offer by using incentives,
  offering choices reducing anxiety and making it
  easier to respond or pay

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Measuring Customer Value

• The ultimate objective of a successful direct
  marketing program is to build the long term or
  life time value of a customer.
• Direct marketers often avail themselves of four
  terms to summarize the financial dimensions of
  direct marketing.
• Lifetime value (also called long-term value)
• The total of financial transactions with a
  customer over the life of a relationship.
• Regency The amount of time since a person or firm
  last purchased.
• Frequency The number of times a customer buys
  within a season or a year.
• Monetary The amount of money a customer spends
  within a season or a year.

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Building Customer Loyalty

• Another of direct marketing uses is in growing
  and maintaining customer loyalty.
• Maintaining customer loyalty is important for all
  companies. It can cost five to ten times more to
  create a customer than it does to keep one

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Oneto-One Marketing

• Using information in customer database about
  customer behavior or demographics , companies can
  target the wants and needs of individual
  customers
• building stronger customer loyalty and
  individualizing the total customer experience.
• This kind of marketing has become known as
  one-to-one marketing.
• One-to-one marketing often involves direct
  interaction with an individual customer and then
  some form of mass customized treatment of that
  customer.
• Peppers points that One-to-one marketer create or
  find products for customer rather than finding
  customer for product

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Customer Relationship Marketing (CRM)

• CRM practitioners use many of the same data
  technologies used in direct and database
  marketing. But they use this technology to
  seamlessly integrate every area of business that
  affects customers, including marketing , sales
  and customer service.
• CRM strives to make information a driving force
  within the organization not just within the
  marketing department. Recovering ,managing and
  using information from legacy or from new systems
  becomes a goal of CRM.
• Successful CRM concepts echoed by many of the
  ideas explored, CRM uses contact strategies based
  on identifying customers needs ,values of
  relationship ,investing in customers according to
  their worth ,integrating all contacts channels in
  one campaign, supported with sophisticated
  information's system ,capable staff, and
  measuring results

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Customer Relationship Marketing (CRM)

• Successful CRM programs are a convergence of
  traditional direct marketing techniques, database
  marketing decision support tools and digital
  marketing capabilities. This convergence is
  creating new genres of direct marketing that
  approaches the individual communications promised
  by customer relationship marketing.

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Mass CustomizationKey to One-to-one Marketing

• One to- one marketers are increasingly using
  mass customization to provide customers with
  products and services that meet their needs.
• In mass customization ,mass-market goods and
  services are individualized to satisfy a customer
  need at a reasonable price.
• E.g. Motorola- Pagers different cases, colors
  and storage technologies
• Dell-for computers

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• Mass customized communications combine
  information technology and creativity of
  advertising with the skill and focus of
  manufacturing and industrial engineering.
  Combining these tools and techniques enables
  low-cost totally customized messaging to deliver
  the right message to the right person at the
  right time". This can be done with
• Direct mail
• E-mail
• Banner ads and
• Print ads

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Integrated Communications

• When direct marketing is combined as part of an
  overall campaign strategy with advertising
  ,Internet marketing ,sales promotion, public
  relations and/or personal selling ,it can be
  highly successful. The term most used to describe
  this is Integrated Marketing Communication

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Definition Integrated Communications

• The American Association of Advertising Agencies
  define Integrated Communications as
• A Concept of marketing communication planning
  that recognizes the added value in a program that
  integrates a variety of strategic disciplines
  e.g., advertising, direct response, sales
  promotion and public relations and combines these
  disciplines to provide clarity, consistency and
  maximum communications impact.

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• Much progress has been made in the last decade in
  Integrated Marketing Communications.
• However integrated marketing is still hard to
  co-ordinate, whether there are many unaffiliated
  specialty firms or one large communications
  network involved.
• Issues of who takes the lead in planning , how
  budgets are divided and how profits are
  distributed continues to be an internal problem
  for the success of Integrated marketing