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1-2McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 20Chapter 20

Direct Marketing CommunicationsDirect Marketing CommunicationsDirect Marketing CommunicationsDirect Marketing Communications

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Understand the objectives of direct marketing communications, and describe its distinguishing characteristics.

Discuss the factors driving the growth in direct marketing communications.

Understand traditional direct marketing communications techniques such as direct mail, broadcast and print media, and telemarketing.

After studying this chapter you should be able to:

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Recall examples of the use of technology such as electronic media in direct marketing.

Understand some of the ethical and legal issues facing marketers who use direct marketing communications.

After studying this chapter you should be able to:

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The Role of Direct Marketing Communications

Marketing Communications has two primary objectives:

1. To establish relationships by soliciting a direct and immediate response from prospects or customers.

2. To maintain and enhance customer relationships, whether those relationships have been established by direct marketing communications or by some other means.

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Characteristics of Direct Marketing CommunicationsCharacteristics of Direct Marketing Communications

Direct marketing targets a carefully selected audience, as opposed to a mass audience.

It typically involves two-way communications; direct responses from customers make it interactive.

Direct-response results are quite measurable-marketers can determine what works

and what does not.

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Customer DatabasesCustomer Databases

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Benefits of Direct Marketing Communications OffersBenefits of Direct Marketing Communications Offers

Immediate-ResponseOrientation

Measurable ActionObjectives

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The Growth of Direct Marketing CommunicationsThe Growth of Direct Marketing Communications

Global direct marketing communications increased because of saturated domestic markets.

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Growth CatalystsGrowth Catalysts

Increase in Customized Products

Fragmented Markets

Product Price Sensitivity

Shrinking Audiences for Network TV and Newspapers

Emphasis on Immediate Sales

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Growth CatalystsGrowth Catalysts

Lifestyles Changes Create a Need for Convenience:Two-worker families have more discretionary

income but less timeEase of communicationIncreased use of credit cardsAdvancing Technology:

• Predictive modeling• Neural networks

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Direct Marketing TechniquesDirect Marketing Techniques

Direct Mail Broadcast

Media Print Media Telemarketing Electronic

Media

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Advantages and Disadvantages of Direct MailAdvantages and Disadvantages of Direct Mail

Advantages: Disadvantages:

Self-contained message

Flexibility in message content and form of delivery

Thorough coverage of target market

Fewer distractions from other media

Large numbers of consumers prefer mail-order purchases

High cost per exposure

Potential delivery delays

Lack of support from other media

“Junk mail” in easy to ignore

Seen as wasteful, harmful to the environment

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Types of Direct MailTypes of Direct Mail

Sales letter Postcards Catalogs Video catalogs Promotional

videocassettes and audiocassettes

Sales letter Postcards Catalogs Video catalogs Promotional

videocassettes and audiocassettes

Promotional interactive computer disks

Leaflets and flyers Statement stuffers

Promotional interactive computer disks

Leaflets and flyers Statement stuffers

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Business-to-Business Direct MailBusiness-to-Business Direct Mail

B-to-Bmarketing uses the same forms of direct mail!

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Broadcast MediaBroadcast Media

infomercials

Direct-ResponseRadio Advertising

Direct-ResponseTelevision Advertising

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Print MediaPrint Media

Consumers Can Respond To: Ads Carrying an Address Order Form Coupon Telephone Number Freestanding Insert (FSI) Reader-Response Cards

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TelemarketingTelemarketing

Telemarketing: An interactive direct marketing

communications approach that uses telephone calls to initiate, develop, and enhance relationships with customers.• Outbound telemarketing, also called

“teleselling”

• Business-to-business telemarketing

• Predictive dialing systems

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National Consumers League’s Top 10 Telemarketing Frauds ListNational Consumers League’s Top 10 Telemarketing Frauds List

1. Work-at-Home Schemes

2. Prizes / Sweepstakes

3. Credit Card Offers

4. Advance Fee Loans

5. Magazine Sales

1. Work-at-Home Schemes

2. Prizes / Sweepstakes

3. Credit Card Offers

4. Advance Fee Loans

5. Magazine Sales

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National Consumers League’s Top 10 Telemarketing Frauds ListNational Consumers League’s Top 10 Telemarketing Frauds List

6. Telephone Slamming

7. Buyers Clubs

8. Credit Card Loss Protection

9. Nigerian Money Offers

10. Telephone Pay-per-Call Services

6. Telephone Slamming

7. Buyers Clubs

8. Credit Card Loss Protection

9. Nigerian Money Offers

10. Telephone Pay-per-Call Services

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Electronic MediaElectronic Media

Interactive Computer Services Interactive Computer Kiosks FAX Machines – FAX-on-Demand

Systems

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Ethical and Legal Issues in Direct Marketing CommunicationsEthical and Legal Issues in Direct Marketing Communications

Invasion of Privacy

Deceptive Practices: Automatic Number

Identification Caller ID Intrusion

Systems

Wasteful Practices