Direct Response

Part 5: Integration and Evaluation

Chapter 15

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Chapter Outline

I. Chapter Key Points

II. The Practice of Direct Marketing

III. Database Marketing

IV. The Key Players

V. The Tools of Direct Marketing

VI. Integrated Direct Marketing

VII. Global Considerations in Direct Marketing

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Key Points• Define and distinguish between direct

marketing and direct-response advertising• Explain the types of direct marketing• Name the players in direct marketing• Evaluate the various media that direct-

response programs can use• Explain how databases are used in direct

marketing• Discuss the role of direct marketing in

integrated marketing programs

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The Practice of Direct Marketing

• Occurs when a seller and customers deal with each other directly

• Four tools of direct marketing– Catalog

– Direct mail

– Telemarketing

– Direct response advertising

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Advantages of Direct Marketing

• Collection of relevant customer information

• Purchase not restricted to a location

• The marketer controls product until delivery

• Easier to evaluate

• Flexibility in form and timing

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Disadvantages of Direct Marketing

• Consumers are still reluctant to purchase a product they have not seen or touched

• Annoyances associated with direct marketing

• Unable to reach everyone in the marketplace

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Direct-Response Advertising

• Combines the characteristics of advertising with a contact element

• The direct-marketing process– Objectives and strategies– The offer– Message and media strategy– The response/order– Fulfillment and customer maintenance– Evaluation

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Database Marketing

• A practice that uses databases to predict trends and monitor consumers

Four primary objectives1. Record names of

customers

2. Store and measure results of advertising

3. Store and measure purchasing performance

4. Vehicle for continuing direct communication

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The Database Marketing Process

1. Collection point

2. Data entry

3. Data assessment

4. Data clustering

5. Data application

6. Data sharing

7. Data refinement

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The Key Players

• Advertisers

• Agencies

• Media Companies

• Customers

• Companies whose primary business is selling products and services by mail or telephone

• Retail stores who use direct marketing as a supplement to other forms of marketing communication

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The Key Players

• Advertisers

• Agencies

• Media Companies

• Customers

• Advertising agencies• Independent agencies• Service firms• Fulfillment houses

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The Key Players

• Advertisers

• Agencies

• Media Companies

• Customers

• The media that deliver messages by phone, mail, or the Web

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The Key Players

• Advertisers

• Agencies

• Media Companies

• Customers

• Recipients of the information and sometimes the initiator of the contact– Push-button shopper

– Mouse-clicking shopper

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The Tools of Direct Marketing:Direct Mail

• A print advertising message for a product or service that is delivered by mail

Practical Tips• Get attention• Create a need• Answer questions• Provide critical

information• Inspire confidence,

minimize risks• Make the sale• Use an incentive

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The Tools of Direct Marketing:Direct Mail

Advantages• Tells a story• Engages attention• Personalizes message• Builds in feedback• Reaches the unreachable

Disadvantages• Negative perceptions• Cost• Mailing list• Response rate• Vulnerability

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The Tools of Direct Marketing:Catalogs

• A multi-page direct-mail publication that shows a variety of merchandise

• Growth in this field is in the area of specialty catalogs

• Video catalogs provide more information about products

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The Tools of Direct Marketing:Catalogs

Advantages• Targeted• Engages attention• Complete information• Convenience

Disadvantages• Negative perceptions• Costs• Response rate• Mailing list

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Tools of Direct Marketing:Telemarketing

• Types of telemarketing

• Criticisms of telemarketing

• Telemarketing messaging design

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The Tools of Direct Marketing:Direct-Response Advertising

• All direct-response advertising moves the consumer to action

• Well-targeted

• Reaches prime audience

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The Internet and Direct Response

• Same components as direct mail and telemarketing

• Greater sampling opportunities

• New ways to gather info

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Integrated Direct Marketing

• The challenge is to integrate direct mail, catalogs, telemarketing, Web sites, e-mail, text messaging, and instant messaging with other marketing communication– Integrated direct marketing (IDM)

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Global Considerations in Direct Marketing

• Fueled by the same technological forces as in the U.S.

• Particularly important in countries with tight restrictions on advertising

• Potential restrictions on direct marketing– Privacy issues more intense– Governmental regulation of postal service