5.direct and online marketing
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Direct and Online Marketing
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What is Direct Marketing?
Direct marketing is the use of
consumer-direct channels to reach anddeliver goods and services to customerswithout using market middlemen.
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DIRECT MARKETING
The Net, Telemarketing, Mailers are all channels ofDirect Marketing Direct Contact between a company &its customers
Effectiveness can be measured because direct feedbackavailable from customers; eg. how many respond to acall/mailer/net
A database is maintained; main requirement for
competitive advantage
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DIRECT MARKETING
Growth and Benefits
Phenomenal growth with latest technologies being used; globalscale, web-based marketing, e mail marketing
In traditional media, a lot of wastage & cost effectiveness issuspect : DM zeroes in on target
Now products are continuously being launched & these have toreach customers quickly
Customers want companies to design products according tospecifications, so they want to interact directly
There are issues of information privacy & physical privacy
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Direct Marketing Channels
Direct mail
Catalogs
Telemarketing
Other direct response
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Constructing a Direct-Mail Campaign
Establish objectives
Select target prospects
Develop offer elements
Test elements
Execute
Measure success
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DATABASE MARKETING
Marketing by effective use of consumerinformation
e.g.
age of car, banks offer loans,
age of children educational loans, creditcards, educational software
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DATABASE MARKETING
Helps customers evaluate markets
identify customer segments & prospects
search for other customer segments with wants &
needse.g.
Holiday Company can market Puri as honeymoondestination or for old people
identifies tastes & needs whether company is getting maximum business from a
customer
opportunities to provide insight into various markets
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RFM Formula forSelecting Prospects
Recency
Frequency
Monetary value
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Elements of the Offer Strategy
Product
Offer
Medium Distribution method
Creative strategy
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FORMS OF DATABASEMARKETING
Catalog Marketing : Companies send catalogs givingdetails of products, and expects response byphone/post
Retailers use it Charagh Din, Burlingtons, Amazon
Company
Marketer has to consider whether a product is pricedright in catalog, whether customers would buy a
product through catalog, whether it can be depictedproperly, whether it can be shipped properly;
Costs are reduced $ 14 vs $ 34
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Telemarketing
Communicates with customers through telephones;needs highly trained staff; aimed at people who areprospective customers for building long-termrelationships rather than immediate sales (tele sales)
Makes calls at customers convenient time; makesappointments for sales people to follow up; improve
in telecommunication; results in companies beingintegrated with telephones; use of third party service
providers (call centres)
FORMS OF DATABASEMARKETING
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Types of Telemarketing
Telesales
Telecoverage
Teleprospecting Customer service and technical
support
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Kiosk Marketing
Kiosks or electronic touch screens which sure
customers information about products/services ofcompany; requires small space 4 sq. ft., operate24/7, eg. Railways, Infosys, ATMs
Convenient for shoppers in retail
FORMS OF DATABASE MARKETING
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FORMS OF DATABASE MARKETING
Television
Direct Response Advertising
At-home shopping channelsTV programmes where various products aredisplayed, demonstrated & tries to obtain orders;customers can shop from convenience of their
home; very popular in the US
Videotext
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Other Media
Newpapers, Magazines, Journals, PCs, leaflet etc.Unlike in other Media, customers cannot be addressed
individually; eg. in magazines sports are targeted forwide audience, so targeting may be lost. Coupons getbetter response whether in magazines/paper; mobilephones are becoming popular media
FORMS OF DATABASE MARKETING
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Components of the Mailing
Outside envelope
Sales letter Circular
Reply form
Reply envelope
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Interactive Marketing
Tailored messages possible
Easy to track responsiveness
Contextual ad placement possible
Search engine advertising possible
Subject to click fraud
Consumers develop selective attention
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Public Issues in Direct Marketing
Irritation
Unfairness
Deception/fraud
Invasion of privacy
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Direct Marketing in India
Cosmetic companies use Direct Marketing 70% ofsales force are women; AMWAY is a big name inDirect Marketing
Major areas of growth : financial services, telecom,credit cards, insurance, automobile, homeappliances, entertainers, (Happy Zone), Foodproducts, holiday sharing
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Direct Marketing in India
Fair response in urban areas; resistance in ruralareas
TV home shopping catching on
Mail order not very popular; delivery in damagedcondition, delays
Popularity of telemarketing in generating sales leads
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ONLINE MARKETING
Internet has revolutionized business
Goods / services / products can cross
international barriers at click of mouse Powerful technologies : Data mining,
Satellite telecom, Mobile telecom, IVR
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Online Promotional Opportunities
Websites
Microsites
Search ads
Display ads
Interstitials
Internet-specific
ads and videos
Sponsorships
Alliances andaffiliate programs
Online communities Email
Mobile marketing
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Advantages of OnlineMarketing
Disadvantages
a) reach large customer base
globally
a) people not accustomed
onlineb) can shop fromhome/workplace; convenient
b) reluctance to give creditcard details
c) can compare to competitors
c) customers want to touch
& feel good
d) direct interaction betweenuser & seller
e) no traditional stores costs
f ) can count exact number ofcustomers visiting site
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e-Marketing Guidelines
Give the customer a reason to respond
Personalize the content of your emails
Offer something the customer could notget via direct mail
Make it easy for customers tounsubscribe
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Online Advertising
Forums : discussion group on commercial website thatlink users to libraries, chatrooms
Newsgroups : Customers can praise/expressdiscontent about a product (Yahoo)
Bulettin Boards : Electronic notice board where mailssent, discussions held
Web Communities : Users who want to shareinformation online through message boards (eg. yahoogroups)
E-mails : Should be targeted carefully
Web Casting : Broadcasting through Internet; usersent information after his consent
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