Examining Direct & Interactive Marketing Applications in a Variety of Sectors Chapter 14 Copyright©...

Examining Direct & Interactive Marketing Applications in a Variety of Sectors

Chapter 14

Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall

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The Nature Of Industrial Markets

Business-to-Business direct marketing involves the process of providing goods and services to industrial market intermediaries, as opposed to ultimate (final) consumers

Industrial goods are differentiated from

final consumer goods based on their ultimate use


Types of Industrial Goods Raw Materials – These are products destined to become part

of another product.

Fabricated Materials – In contrast to raw materials, these have already been processed but may require further processing.

Installations – Major equipment with long lives such as buildings and major equipment.

Accessory Equipment – Such equipment is used to aid and implement production and includes office machines as well as machine tools.

Operating Supplies – Materials used in producing goods & services.(Are similar to convenience goods in that they are consumable)


The Characteristics of Industrial Demand

Derived Demand Inelastic Demand Widely Fluctuating Demand Knowledgeable Demand These characteristics/types of

demand distinguish industrial demand from consumer demand


Is B2B Direct Marketing on the rise?

YES!! Q: Why? A: The rising cost of a personal sales call.


B2B Applications Develop “leads” for salesperson follow-

up Achieve direct sales Reinforce sales efforts Introduce new products Develop new markets and applications Builds goodwill Conduct market research


Notable Users of the Tools of Direct Marketing are

Providers of:

Office products Industrial plant supplies Computers (& their peripherals) Building equipment Aircraft parts AND…don’t forget … SERVICES!!


Federal Express (FedEx) A direct mail program designed to

expand its market, increase its penetration & hold onto its current customers.

DM was aimed at 3 different segments:1. Frequent users of Priority 1 2. Infrequent users of Priority 13. Other FedEx customers who had never used

Priority 1 See text for results!


Challenges for B2B Direct Marketing

Marketing costs are increasing while the audience reached is decreasing

Face-to-face selling, down in efficiency, is up in cost

Customer relationship managers often do not integrate an analytical approach to combining operations with marketing programs and campaigns

Standard Industry Classification is not as predictive in the current business environment

Communication clutter is at an all time highCopyright© 2010 Pearson Education,

Inc. Publishing as Prentice Hall

How to Identify B2B Market Segments

Industrial markets are much smaller in numbers but not in sales volume

Standard Industrial Classification A common means of industrial market

segmentation has been through the SIC coding system developed by the federal government

Bases for statistical data used by the government, trade associations,

and business enterprisesCopyright© 2010 Pearson Education,

Inc. Publishing as Prentice Hall

NAICS Improved on the SIC Code system

by increasing focus on information technology, service industries & international comparability

6-digit code: identifies over 350 new industries and 9 new service sectors

Used in US, Canada, Mexico Review chapter 14 for more details


Input-Output Analysis of Industrial Markets

Input-output matrices derived basically from Census Bureau data, trace the distribution of goods from their origin to their destination

Determines the impact that specific industries have on the total economy, not just in what they sell but also in what they buy (supplies)


The Census Bureau’s TIGER System

The Global Positioning System (GPS) and the Census Bureau’s TIGER system, both associate latitude and longitude coordinates with street addresses.

Used to pinpoint locations, establish business sites, locate competition, measure distance, and generate data about the demographics of a business location

Great for mapping capabilities with the information in a company’s database


Other Industrial Market Segmentation Criteria

Industrial organization can be categorized by financial strength, size, number of employees, sales volume and/or geographic location

Other criteria differentiate whether the enterprise is a head quarters or branch office.

Most important basis for B2B market segmentation is an industrial organizations own customer list!


Why Direct Marketing Works for Non-Profit

Organizations Direct/interactive market is:

Measurable Accountable Targeted Cost-Effective Requires a Direct Response


Nonprofit Direct Marketing Users

Health concerned organizations Environmental organizations Educational institutions Religious institutions Political organizations The government


Uses of Nonprofit Direct Marketing

Gaining awareness & supporters Driving memberships Securing volunteers Raising funds


Customer Relationship Building

For nonprofit organizations, customer relationship management (CRM) simply means developing a relationship with donors, thus ensuring their future support.

Most nonprofit organizations do NOT use the word “customers”

Preferred terms are donors, volunteers, clients, board members, etc.


Customer Relationship Maintenance

Nonprofit organizations can effectively maintain and strengthen relationships with their customers by adding a feedback element to each form of communication

The most important thing non-profits can do is to listen to their customers


Corporate Partnerships Cause-related marketing is

defined as a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product, or service for mutual benefit

See Figure 14-6 for a good example


Basic Fundraising Principles (Bob Stone)

1. Form a committee of influentials with the charge to make contacts with potential contributors, establishing a targeted contribution amount for each potential donor

2. Mount a direct response campaign to a list of identified prospective contributors

3. Organize a follow up campaign to support the direct response campaign


8 Step Fundraising Plan

1. Listen to your donors2. Keep your mission in mind3. Tell your story vividly4. Go high-tech, but keep people focused5. Let your donors fund projects6. Target your audience7. Involve the CEO and board8. Launch a fundraising campaign


Non-Profits Seek Volunteers as well as

Funds Do you work for a non-profit

organization? More than 60 million people

in America do! Are you a volunteer? 26.2% of all adults volunteer

(36.5 hours per year average)


A Fundraising Appeal … must do three things…

Strike fast Personally grab and shake Make action easy


Media strategies and Award Winning Campaigns Direct Mail

The stellar medium for nonprofits Used to maintain contact, build and

sustain donor/member relations Telephone

Example- Ohio Special Olympics = added Telephone to Direct Mail


Media strategies and Award winning Campaigns

Television Example: Jerry Lewis Telethon for Muscular

Dystrophy Often used in the form of infomercials

The Internet The Internet has not been overly successful

as a fundraising medium for most nonprofit organizations; however, since 9-11 “donate here” buttons are no longer idle


Political Campaign Direct Marketing Objectives

Raising money Gaining support for their cause Securing new members Obtaining votes


Political Micro-Targeting Also referred to narrowcasting, this

technique aggregates groups of voters, based on data about them from databases and on the Internet

Political parties gather personal information about voters to target them with messages intended to influence their votes


Political Campaigns The ultimate question is “ just how

successful are political direct marketing efforts?” Unlike most nonprofit organizations,

political parties don’t measure their success by response rates or dollars.

They measure it by votes


Governmental Organizations

Many government organizations rely on direct marketing to promote their own products and services, for example US Post Office (USPS) Internal Revenue Service (IRS) US Military Convention and Visitors Bureaus


Sports Organizations Objectives of sports organizations

using direct marketing: Selling tickets/filling seats – both for

single events and for the season Getting corporate sponsors Prospecting for new fans


Direct Marketing Activities of Sports Organizations

For good Customer Relationship Management (CRM) and Partner Relationship Management (PRM), use

Newsletters E-newsletters Direct mail Outbound telephoning

To reach Business Sponsors, use Direct Mail Radio and Television direct response ads Ads in local newspapers, magazines local programs and

other publications


Case Study


Examining Direct & Interactive Marketing Applications in a Variety of Sectors Chapter 14 Copyright©...

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