Stephen OngBSc(Hons)Econs (LSE), MBA (Bradford)

Visiting Professor, Shenzhen UniversityAcademic Fellow, Entrepreneurship & Innovation,

The Lord Ashcroft International Business School, Anglia Ruskin University Cambridge UK

MARKETING

•What is DIRECT MARKETING ?

1

•Direct Marketing Channels & Methods 2

•Case Discussion : TESCO Direct

3

1. To introduce direct marketing as a special form of marketing communications

2. To discuss the different channels and methods of direct marketing and their effectiveness

3. To discuss the use of direct marketing by business to consumers

Direct marketing is the use of consumer-direct

channels to reach and deliver goods and services

to customers without using market middlemen.

Direct MarketingviaDirect mailCataloguesInfomercials,

teleshopping other direct

response media

Any communication with a consumer or business recipient that is designed to generate a response in the form of:

1. An order

2. Request for further information

3. A visit to a store or other place of business

Building from Customer Relationship Management Identify customers and accumulate

detailed information about them Differentiate customers and rank them in

terms of their value to the company Interact with customers and develop more

cost efficient and effective forms of interaction

Customize the product/service offered to the customer

The world is full of people who are not Malaysians. Be sure not to treat them like they are.

Like politics, all marketing is local. Just because your direct mail campaign worked in Kuala Lumpur, do not assume it will work in Tokyo.

Although there may be a European Union, there is no such thing as a "European."

Pick your target, focus on one country, and do your homework.

Customers need to be able to return products locally or at least believe there are services available in their country.

Direct Marketing Association Prospecting 60%

Customer retention 40%

It works!

Customers respond Telephone

E-mail

Retail store

Personalised URL

Direct mail

Catalogues

Telemarketing

Interactive TV

Internet

Mobile

Other direct response

Methods of Direct Marketing

24%

16%

46%

55%

17%

22%

29%

8%

10%

21%

24%

16%

73%

77%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Outbound telemarketing

Inbound telemarketing

E-mail to prospects

E-mail to customers

Search engine optimization

Search engine marketing

Direct response-Internet

Direct response-TV

Direct response-radio

Direct response-promotions

Catalogs

Statement stuffers

Direct mail to prospects

Direct mail to customers

% of Companies Using Particular DM Methodology

Source: Based on Richard H. Levy, “Prospects Look Good,” Direct, Vol. 16 (December 1, 2004), pp. 1-5.

A vehicle for delivering a personally addressed offer to a prospect targeted by a marketer

Popular with banks, insurance co., other financial service providers

U.S. direct mail lists are easy to rent; Europe and Japan lists are lower in quality

Germans spend the most, US$500 per capita, in mail-order shopping

Most common form of direct marketing

Types of lists Response list

Compiled list

Digital direct-to-press

Advantages Target mailings

(consumer, B-to-B)

Measurable

Driver of online sales

Disadvantages Clutter

Costs

•Catalogue: magazine-stylepublication that featuresphotographs, illustrations, andextensive information about acompany’s products•U.S. 1/3 of world market, 17billion mailed in 2008•EU: Elimination of barriers hasled to a boom•Hong Kong and Singapore haveefficient postal systems andhighly educated consumerswith credit cards

Long-term impact

Low-pressure sales tactics

First stage in buying cycle

Database

Specialty catalogues

Business-to-business

Television

Radio

Magazines

Newspapers

An infomercial is a form of paid TV in which a particular product is demonstrated, explained, and offered for sale to viewers who call a toll-free number on the screen

In Asia, infomercials make $100s of millions in sales. Low penetration rates of private phones, credit cards create difficulties

Teleshopping on channels like HSN and QVC is exclusively devoted to demonstration and selling

ITV allows viewers to interact with the programming content they are viewing

In the U.K., more than half of pay-TV subscribers use ITV

Remote controls have buttons to push to order products shown on screen

Direct response to ads

Cost-effective

Builds relationships

Personalization of communication

Customization of offer

Search engine ads

Consumer direct sales

Host parties

Amway, Mary Kay, Avon

Inbound telemarketing

Cross-selling

Outbound telemarketing

Cold calling

Database

Prospects

Irritation

Unfairness

Deception/fraud

Invasion of privacy

Environmental

Background Founded in 2006, Tesco Direct retails a wide range of non-

food products via the Internet and catalogues. In 2008, the organisationissued 11.5 million catalogues, attracted around 1.5 million visits to itswebsite each week and increased sales by more than 50% in the year.

Group Discussion 30 mins discussion in Groups of 7

5 mins presentation by Group representative

► Individual Assignment

Individual coursework (contributes to 15% overall mark of course)

2 pages written in English in WORD format

►Summary

► Issues discussed

►Solutions proposed

“Sell good merchandise at a reasonable profit, treat your customers like human beings, and they will come back for more.” Leon Leonwood (L.L.) Bean

Keegan, W.J. and Green, M.C. (2014) Global Marketing, Pearson 8th edition

Kotler, P. and Keller, K. (2012) Marketing Management, Pearson, 14th edition

Timm, P.R. (2014) Customer Service: Career Success Through Customer Loyalty, Pearson 6th edition

Clow, K.E. and Baack, D.E. (2014) Integrated Advertising, Promotion, and Marketing Communications , Pearson 6th edition

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