Direct Marketing and Database Marketing

Is it effective or merely annoying?

What Is Direct Marketing?

Reflects a distribution approach in which the seller deals directly with the consumer.

Does not utilize the services of a retailer or wholesaler

Utilizes the mass media, direct mail, door-to-door selling

Direct Marketing Objectives Direct Orders

Solicit and close a sale Lead Generation

Generate interest in a product and provide the prospective buyer to request additional information or qualify for a follow-up

Traffic Generation Motivate to visit a business to make a

purchase

Why Use Direct Marketing? targeted communications

tailor message with demos, psychographics or consumption profiles

measurable results the message of direct marketing is

personal i.e., direct mail is addressed to you!

Direct mail can be personal through one on one communication

Drawbacks of Direct Marketing

Concerns over Ethics Fraud Selling/buying customer info. Taping of conversations

Consumer sensitivity to privacy and list building Do not call lists Caller-Id, Call-blocking

Intrusive Nature of the Approach Automated dialing Timing

FCC and FTC Regulations

Telephone Consumer Protection Act Prohibits use of telephone, fax, or computer to send

unsolicited ads to a fax machine Restricts use of automatic (predictive) dialing

equipment Prohibits calls to any residential line using an

artificial/prerecorded voice without “prior consent” of the called party

Requires that the called immediately identify themselves, state that they are making a sales call, identify the company selling the product, reveal the nature of the goods/services being sold

Restricts calling times to the hours between 8 am and 9 pm (of called party’s local time)

See http://www.antitelemarketer.com/index2k1.htm

Alternative “Direct” Concepts

Direct Response Advertising Makes a definite offer, contains all information

necessary to make a decision, includes a response device

Direct Selling Uses a person to sell face-to-face

Telemarketing Uses inbound or outbound telephone calls

Television sales (infomercials) Internet

Uses electronic technologies to conduct sales directly with final consumers

Direct Response Advertising

Uses mass media or direct mail Utilizes data bases to target specific

customers (personalization) Good for identifying new customers

and serving existing ones Measures success immediately Creativity important It is action oriented

example: use a coupon, call 800 number

Direct Mail Lists Internal Lists

Existing customers Inquiries Trade shows

External Lists Company subsidiaries Other marketers List brokers

Telemarketing

Telemarketing Outboard – seek

prospects Inboard – order

taking Upselling 900 #’s (info) Random Digit

Dialing

Direct Sales Offers Catalogs

early retailers found this to be a successful way to introduce products to the frontier

directed at low and middle income families now has sales projected to exceed $65

billion in 1999; Japan - $200 million primarily successful due to changing

social conditions

Major Types of Catalogs

Retail Catalogs Full-Line

Merchandise Catalogs

Business to business catalogs

Consumer Specialty Catalogs

Current Trends of Interest in Direct Marketing

Selective Binding Newsweek and other publications

are introducing a printing technology to reach certain groups of consumers based on purchase behavior and demos

Interactive Television

Interactive Television

Shop Interactively by utilizing product menus and examining specific products

Traditional schedules will fall by the way side Menu-driven

programming/viewing Introduction of Demand Based

Advertising detailed info