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Chapter 17
Relationship Building:
Direct Marketing, Personal
Selling, and Sales
Promotion
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Overview
The importance of relationship
marketing & integrating marketing
communications with advertising
17-2
Chapter Objectives
Discuss the importance
of relationship marketing
& IMC
Define direct marketing
and its role in IMC
Describe the pros & cons
of personal selling
Define sales promotion
& its importance as a
communication tool
Explain the importance
of databases to direct
marketers
Identify benefits & drawbacks of sales promotion
Discuss the role of
personal selling in IMC
Explain push & pull
strategies and give
examples of each
17-3
Relationship Marketing & IMC
Advertising can create an image,
but a reputation must be earned
17-4
Understanding Direct Marketing
Direct marketing is . . .
A
measurabl
e system
of
interactive
marketing
Using one
or more
advertising
media
To effect a
measurabl
e
response
and/or
transaction
With this
activity
stored in a
database
17-5
Direct Marketing Companies
17-6
Marketing Databases
Marketing databases enable marketers to. . .
Target, segment, and grade customers
Store key customer information
Record customer & channel transactions
Measure efficiency of direct-response ads
17-7
Marketing Databases
Two Processes
Data
Management
Data
Access
17-8
Direct Marketing’s Role in IMC
RFM is a mathematical formula that helps determine
the most valuable customers in a company’s database
17-9
Direct Marketing’s Role in IMC
Drawbacks to Direct Marketing
Negative, sales-oriented reputation
Consumers enjoy visiting retail stores to shop
Hesitation to buy goods not seen, touched, tried
Clutter
Privacy concerns
Lack of prestige
17-10
Direct Marketing Activities
Direct Sales
Personal direct selling
Telemarketing
17-11
Direct Marketing Activities
E-mail
Sales letters
Postcards
Folders
Brochures
Self-mailers
Statement stuffers
Direct-Mail Advertising
House organs
17-12
Direct Marketing Advertising
Pros
Selectivity
Personal impact
Coverage & reach
Exclusivity
Flexibility
Response
Control
Testability
17-13
Direct Marketing Advertising
High cost per exposure
Delivery problems
Lack of content support
Selectivity problems
Negative attitudes
Environmental concerns
Cons
Anti-spam laws
17-14
Buying Direct-Mail Advertising
Acquire direct-mail lists
House
Mail-response
Compiled
Consider a list broker
Charges a commission
Tailors the list
Improves list quality
17-15
Buying Direct-Mail Advertising
Produce the package
Designer
Writer
Letter shop
Distribute the package
Weight affects costs
and delivery method
17-16
Catalog Sales
Catalog sales
make up the
largest portion
of direct
marketing
17-17
Catalog Sales
Top 10 catalog companies
17-18
Direct Response Broadcast Ads
More people are watching infomericals and buying products
17-19
Direct Response Broadcast Ads
Television is a powerful instrument for direct marketers
17-20
Personal Selling
The Human Medium
See the people
Most expensive
Long-term benefits
Personal Selling
depends on the…
Type of business
Product or service
Business strategy
17-21
Personal Selling Drawbacks
Labor intensive
Costly
Time consuming
Few economies of scale
Poor reputation of sales
Finding good salespeople
17-22
Personal Selling in IMC
Communication functions of sales reps
Gathering
Information
for Company
Providing
Information to
Customers
Fulfilling
Customer
Orders
Building
Client
Relationships
17-23
Sales Promotion in IMC
Value-added tool to accelerate product’s
movement from producer to consumer
Rebate
Coupon
Sweepstakes
or contest
Special
pricing
Sponsorship
“Freebie”
Positive Effect on
Negative Effect on
Brand Volume
Brand Value
17-24
Sales Promotion in IMC
Snapple used
sales promotion
and product
positioning to
advertise its
Mango Madness
flavor
17-25
Strategies & Tactics
Push Promotions
Slotting Allowances
Premiums & Contests
Trade Deals
Display Allowances
Co-op Advertising
Buyback Allowances
Allowances
Push Money & Spiffs
Meetings/Conventions
17-26
Strategies & Tactics
Payne Heating
and Cooling
uses trade
promotion to
increase
distribution
17-27
Strategies & Tactics
Manufacturers
often pay a
display
allowance for
in-store exhibits
17-28
Strategies & Tactics
Pull Promotions
P-O-P Materials
Coupons
VIP Cards
Refunds & Rebates
Premiums
Sampling
Combination Offers
Contest/Sweepstakes
17-29
Strategies & Tactics
Effectiveness of various promotions
17-30