Direct Marketing Is The Use Of Consumer Direct Marketing Essay

“Direct Marketing” is the use of consumer-direct channels to reach and deliver goods and services to customers without using marketing middlemen.

Direct marketing implies marketing to the consumers directly without secondary media such as TV commercials. Direct Marketing includes the distribution of fliers, displaying signs such as “weekly specials” inside the store. Direct Marketing carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. Direct marketers communicate directly with customers, often on a one-on-one, interactive basis. Using detailed database, they tailor their marketing offers and communications to the needs of narrowly defined segments or even individual buyers. Direct Marketing is generally used by small to medium size companies that do not have the budget for expensive commercial.

There are many forms of direct marketing. The major types are as follows:

Direct mail – the advertiser contact prospective customers by sending some form of advertisement through the mail. Music and book clubs, magazine clearing house, and credit card companies make use of direct mail.

Catalogue marketing – companies mail catalogues to consumers and to businesses or make them available at retail stores, and consumers make their purchase from the catalogues. For example, Sears and Canadian Tire’s catalogue shopping. Catalogue retailers appear well suited to operating on the internet as they has the systems and distribution experience required for such an undertaking.

Telemarketing – using the telephone and call centers to sell directly to prospects and existing consumers. Companies use call centers for Inbound (receiving calls from customers) and outbound (initiating calls to prospects and customers) telemarketing.

Direct marketing has been a major growth area in retailing. Its advantages related particularly to its ability to direct the marketing effort to those consumers who are most likely to respond positively. It also offers products and services in a way that is most convenient for the consumer.

2. _____ consist(s) of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.

“Sales promotions” consist of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.

Sales promotion as tools and techniques used to stimulate demand, encourage purchase or sales of a product or services, reward royal customers and attract switchers from competitors,. Advertising and personal selling offer reasons to buy, sale promotion offers reasons to buy now.

Here are a few examples of sales promotions: A freestanding insert in the Sunday newspaper contains a coupon offering $1 off Nabob Coffee. An e-mail from Amazon.ca offers free shipping on your next purchase over $35. Sales promotion includes a wide variety of promotion tools designed to stimulate earlier or stronger market response.

There are two categories of sales promotion tools:

The consumer promotions Tools – aimed at consumers; tools include samples, coupons, cash refund, price packs, premiums, advertising specialities, patronage rewards, point of purchase displays and demonstrations, contests, sweepstakes, and games.

A trade promotions Tools – manufacturers direct more sales promotion dollars toward retailers and wholesalers than consumers. Trade promotion can persuade resellers to carry a brand, give it shelf space, promote it in advertising and push it to consumers. Shelf space is so scarce these days that manufacturers often have to offer price-offs allowances, volume rebates, buy-back guarantees, or free goods to retailers and wholesalers to get products on the shelf and, once there, to stay on it.

There are several factors to be considered when deciding which particular incentive to use; volume of the incentive, conditions for participation, timing and duration of the promotion, method of distribution, & budget for the sales-promotion.

3. Some companies set their promotion budget to achieve share-of-voice parity with competitors. This is called the _____ method.

Some companies set their promotion budget to achieve share-of-voice parity with competitors. This is called the “Competitive Parity” Method.

After determining company’s advertising objectives, the next steps are setting its advertising budget for each product and market. “Competitive Parity” is one of the adverting budget setting methods used to determine promotion budget that matches competitors’ outlays.

Company monitor competitors’ advertising or get industry promotion spending estimates from publications or trade associations and then set their budgets based on the industry average.

There are two arguments support this method (Kotler, 13/e, chapter 17):

Competitors’ budgets serve as a benchmarking of the industry.

Avoid promotion war by spending what the competitors spend.

In realiality, there is no evidence indicating all competitors are equal and competitive parity will discourage promotional war. Each company’s dynamic, goals and objectives are different.

Neither argument is valid. There are no grounds for believing that competitors know better. Company reputations, resources, opportunities, and objectives different so much that promotion budgets are hardly a guide. Furthermore, there is no evidence indicate budgets based on competitive parity will discourage promotional wars.

4. A program designed to promote or protect a company’s image or its individual products is called _____.

A program designed to promote or protect a company’s image or its individual products is called “public relation”.

Public relations is a broad communications effort designed to build or maintain a favourable image for an organization and favourable relationship with its various public – customers, prospects, shareholders, employees, labour unions, the local community, and government.

The functions of public relations are the following:

Press relations management

Product publicity

Manage corporate internal and external communications

Lobby

Provide counseling re public issues, company positions to management

Unlike advertising, public relations needs not use the media to communicate its message. Good public relations can be achieved by supporting charitable projects by supplying volunteer labour or other resources, participating in community service events, sponsoring athletic teams, funding the arts, producing an employee or customer newsletter, and disseminating information through exhibits, displays, and tours. Major companies often sponsor public events or special programs on television as part of their public relations efforts. For example, the Labatt hot-air balloon is a familiar example of a public relations device. Many large companies, such as Royal Banlk of Canada and Air Canada, gain national attention through their sponsorship of organizations and events such as symphony orchestras and the Special Olympics. Culture organizations would not survive without major corporations’ support.

5. _____ is/are any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

“Advertising” is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Advertising is a medium of mass communication that facilitates larger scale of marketing.

Manufacturers supply information through advertising about new products. Ccompanies spend lots of money through TV, radio and newspapers advertising to gain sales promotion benefits. Advertising is within the scope of promotion which is one element in the marketing mix. It is getting popularity in the present highly competitive and consumer oriented marketing. All products old and new, consumer and durable, cheap and costly need extensive advertising for sales promotion and consumer support. New communication techniques are now used for making advertising attractive and agreeable. The core purpose of advertising is to provide information, to attract customer attention, to create awareness and finally to influence the consumer buying behavior. Advertising is certainly needed in marketing but is equally important and essential in social, cultural and political aspects of our life.

Exercises:

1. Describe the eight major modes of communication in the communications mix.

Communications mix consists of the explicit mix of advertising, sales promotion, events and experiences, public relations and publicity, direct marketing, interactive marketing, word of mouth marketing, and personal selling that the company adopts to achieve its advertising and marketing objectives:

Advertising – A non-personal related presentation and ideas of good /service promotion that are paid by specific sponsor.

Sales promotion – Activities, including contests for salespeople, trade shows, in store displays, samples, premiums, and coupons that are designed to supplement advertising and co-ordinate personal selling of goods and services.

Events and experiences – Company-sponsored activities and programs designed to create daily or special brand-related interactions.

Public relations and publicity – A broad communications effort designed to build and maintain a positive image for a company and its products. As well a non-paid media presentation about a product or organization.

Direct marketing – A form of non-store retailing that uses non-personal media to contact customers, for example, mail, telephone, fax, e-mail, or the Internet to solicit response or dialogue from specific customers and prospects that, in turn purchase products without visiting retail stores.

Interactive marketing – Online activities and program designed to engage consumers.

Word of Mouth marketing – people-to-people oral, written, or electronic communications.

Personal selling – Personal presentation by the firm’s sales force for making personally interaction with one or more prospective purchasers, and building customer relationships.

2. Name four common criticisms of direct marketing.

The aggressive and sometimes shady tactics of a few direct marketers can bother or harm consumers. Abuses range from simple excesses that irritate consumers to instances of unfair practices or even outright deception and fraud. The direct marketing industry has also faced growing concerns about invasion of privacy issues.

Irritation – as most of us dislike TV commercials that are too long and insistent. Especially bothersome are the dinner time or late night phone calls.

Unfairness – some direct market taking unfair advantages of impulsive or fewer sophisticated buyers, TV shopping shows and program-long “infomercial” featuring smooth-talking hosts, elaborately staged demonstrations, claims of drastic price reductions, “while they last” time limitations, and unequalled ease of purchase to inflame buyers who have low sales resistance.

Deception and fraud – some merchant design mailers and write copy intended to mislead buyers. Sweepstake promoter Publishers Clearing House recently paid $52M to settle accusations that its high pressure mailings confused or misled consumers, especially the elderly, into believing that they had won prizes or would win if they bought the company’s magazines. (The New York Times, June 2001 – Sweepstakes Group Settles with States)

Invasion of privacy – One of the most troublesome issues facing marketers relates to the behavior that threatens the customer’s right to privacy. Today, companies are collecting information on customers from a number of sources and storing the data on databases to be used for marketing purposes. Some consumers object to businesses having the information in the first place and to their use of it to sell them things. The point is that the technology is available to permit the integration of databases, making it possible to obtain information about the characteristics of consumers and their households and to match the information with the data bout purchases, credit card usage, and other consumption behavior.

3. List and discuss three elements that explain how many exposures, E, will produce a level of audience awareness, A.

The effect of exposures on audience awareness depends on the exposures’ reach, frequency, and impact:

Reach (R) – The number of different persons or households exposed to a particular media schedule at least once during a specified time period.

Frequency (F) – The number of times within the specified time period that an average person or household is exposed to the message.

Impact (I) – The qualitative value of an exposure through a given medium.

Deciding On Reach, Frequency, and Impact

• Media selection is finding the most cost-effective media to deliver the desired number and type of exposures to the target audience.

• Reach

• Frequency

• Impact

• Exposure

Total number of exposures (E) is reach times the average

frequency: E = R x F

Weighted number of exposures (WE) is the reach times average

frequency times average impact: WE = R x F x I

4. What are the five major decisions, known as “the five M’s” that marketing managers must make in developing an advertising campaign?

During the developing process of an advertisement program, marketing executives must always begin by determining the target segment and consumer motives. The five – Ms decision model could assist through this process:

Mission: This refers to the purpose/goals of advertising strategy. The main purposes are to keeping customer informed through sales promotion, establishing brand awareness and loyalty, effect managing market competition, and introduce new products or services successfully. Other decisions are to be adjusted according to the decided advertising mission.

Money: This refers to the advertising budget allocation made by the company. Budget constraints are common in business and advertising and marketing can sometimes be ignored due to the lack of the immediate outcome. However, some resources should be allocated to build a brand and image of business in order to grow. To avoid losing market share, making marketing a priority and having a reasonable budget funding is a key part of the process.

Message: The created slogans, pictures, words, themes and so on that try to lure the customer is the message of advertising; they are the creative outcome of the advertising process. Attractive and meaningful messages give positive results, and the advertising becomes result-oriented. Furthermore, as long as the messages are in line with what the business stands for, any manner of theme could be implemented.

For example, the advertising message should be plain and easy to understand as the buyers are mainly children for product like chocolate and candies. The message is important. The buyers are mainly children and others of lower age groups or for the benefit (pleasure and satisfaction) of younger generation.

Media: This is about deciding which media will be used to carry the message. For example, radio broadcast, TV advertisements, mail drops, the internet,, telemarketing and face-to-face (in person) contact. Most media have measurable metrics to access their efficiency and the costs’ effectiveness. The selection of the right media can be the key to a successful or failure of the advertising program.

For example, the media for consumer items like chocolate; advertising in the TV children cartoon channel, advertising in children books or newspaper supplements, giving out the sample to children at the grocery stores, etc.

Measure: the company must measure the effects of the program / campaign. This can be accomplished by tracking and measuring sales or trying to access interest through research. Often, it is tricky to determine how much advertisements actually impacted by the interest of customer vs. other external factors that played a part.

For example, post advertising sale can be use as the measuring effectiveness of chocolate advertising. New demand in new market segments or in new consumer age groups could also be use for the measuring of advertising campaign effectiveness.

In short, the 5Ms helping business to meet its strategic goals; by develop and maintain best-practice demand development programs that provide sustainable and measurable results.

5. What are the seven design elements that effective Web sites feature? Define each of these.

Consumers shop online because it is a convenience,, save time, easy price comparison, good selection and the allure of purchase control. As long as there’s internet connection, consumer can easily shop from anywhere. This provides business an even greater imperative to create a website that will drive traffic to their website, and by creating a positive experience that will generate returning customers.

The seven design elements that effective Web site features are:

Context – A website’s layout and overall visual design need to be uncluttered, easy to read and navigate, the color scheme needs to be appropriate for the marketing design.

Commerce – A made safe website for commercial transactions.

Connection – the number of links that lead the customer away from the website.

Communication – the site allows two way communications (business and customer). For example a live chat with business representatives.

Content – The text, graphics, sound, music, and/or videos that are presented.

Community – The website may allow interaction between customers through message boards and live chat.

Customization – the site has the ability to allow customers to personalize the website, or it may tailor itself to different users, for example, having different background colors and graphics for different language speaking customers around the world.