Download Using Advertising and Promotion to Build Brands

Direct Marketing: The Dialogue
Builder
Lecture Outline

What are the strengths of direct
marketing?

What is the biggest strength of direct
mail? The biggest limitation?

What are the strengths and weaknesses of
telemarketing?

How can direct marketing efforts be
evaluated?

What are the major issues and concerns
related to direct marketing?
Lecture Perspective
A big advantage of Direct Marketing over
Advertising and Sales Promotion:
Advertising
and Sales
Promotion
Direct
Marketing
Very
Interactive
Opening Case: Orange Glo
Opening Case: Orange Glo
Challenge:
Expanding Orange Glo’s distribution
and profit
The use of a direct marketing program
featuring:
Answer:
Results:
• On-air demonstrations and direct selling on
Home Shopping Network
• 30-minute infomercials promoting and selling
its brands featuring Billy Mays as
spokesperson
• One of the fastest-growing private
companies
• $250 million in annual sales
Direct Marketing
Direct marketing:
An interactive, databasedriven messaging system that
uses a range of media to
motivate a response from
customers and prospects
Direct Marketing
2/3 of Americans
Respond Every Year
Direct
Marketing
4 Primary Media: Mail, Telephone,
Email, Infomercials
Also Known As Direct Response:
Because It Is Two-way in Nature
Figure 18-1
+
Direct Marketing’s Strengths
Interactive
Direct
Marketing
Strengths
Measurable
Fast and Flexible
What Are Direct Marketing’s Strategies?
Front end strategies
Delivering the message
Back end strategies
Handling consumer responses and
delivering the product
Front & Back End Components
Front End
Components
The Offer
Targeted
Databases
The
Response
Back End
Components
Fulfillment
Customer
Service
Privacy
Protection
The Offer
The offer: Everything, both
tangible and intangible,
promised by a company in
exchange for money or some
other desired behavior
An Offer From an Exclusive Resort
+
IMC In Action: 1-800-Flowers
IMC In Action: 1-800-Flowers
Challenge:
Promoting and delivering flowers
nationwide
The use of an IMC program featuring:
Answer:
Results:
• TV, radio, and direct mail messages
delivering the offer
• 1-800-FLOWERS; web site, handling
responses
• 2,500 local florists fulfilling orders
Named “top gift site on the web”
Direct Mail
Direct mail: One form of
direct response advertising that
uses mail rather than other
media to deliver a brand offer
An Example Of a Set Of Materials In a Mail Package
+
Strengths And Limitations Of Direct Mail
Strengths
Limitations
• Addressability
• Can receive more
attention than
advertising
• Not as much clutter as
advertising
• Message can be
tailored to any size or
shape
• Postage can be costly
• Some offers can be
costly to produce
• Complex offers can
require long lead times
Vs.
Telemarketing
Telemarketing: The practice of
using the telephone to deliver a
brand message designed to create a
sale or sales lead
Controversial…
… but Big Business
43 Billion
Figure 18-2: A Range of Automated
Phone System Options
Strengths And Limitations Of Telemarketing
Strengths
• Personal
• Addressability
• Interactive
Limitations
Vs.
• Human callers can
be costly
• Intrusive
(unwanted calls)
How Can Direct Marketing Efforts Be Evaluated?
List Types
Frequency of
Exposure
Offer Values
Testing
Media Mix
Used
Creative
Approach
Ultimate Test: Effectiveness
Number of responses
Number of offers mailed
5
/ 100
Total cost of mailing
Number of sales made
$1,000 / 5
=
Response
Rate
=
20
=
Cost
Per Sale
=
$200
Insight: Tracking Customer Costs/Profits
Direct marketers are very proficient
tracking their costs and profits
because the medium is the easiest
to measure in terms of cost per
sale. One rule of thumb: in most
direct-marketing programs, a
customer isn’t profitable until the
third time he or she buys.
Think About It
Email Campaign
If you had to design an e-mail campaign for
your organization, how would you make it
appealing and not just annoying spam?
Tales From the Real World
The public often wonders: “how did they
get my name (or address, phone number, or
email account)?”
In the real world, it’s fairly easy to acquire a
database list of many different types of
individuals. In fact, it’s amazing how specific
some of the lists can be. Some examples of lists
offered for sale by a list broker in their catalog:
“accupuncturists,” “golfers,” and “nuclear
physicists.”
Final Note:
• The increasing amount of clutter
and privacy concerns suggests that the
Direct Marketing winners will be those
organizations who:
• Are creative in making their appeals
stand out
• Are sensitive to consumer privacy
concerns
Bibliography
Principles of Advertising & IMC by Tom Duncan 2nd
Edition, Published by McGraw-Hill Irwin.
 Event Management For Tourism, Cultural, Business
and Sporting Events by Lynn Van Der Wagen Brenda
R. Carlos Published by Pearson Prentice Hall.
Advertising Principles and Practice by W. Wells, S.
Moriarty and J. Burnett, Published by Prentice Hall
International.
Integrated Marketing Communications by David
Pickton & Amanda Broderick Published by Prentice Hall.
The End:
"What lies behind us, and what lies
before us are small matters
compared to what lies within us."
Ralph Waldo Emerson