chapter 14-2e slides

Examining Direct & Interactive Marketing Applications in a Variety of Sectors

Chapter 14Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Opening Vignette

DuPont Personal ProtectionCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


The Nature Of Industrial MarketsBusiness-to-Business direct marketing involves the process of providing goods and services to industrial market intermediaries, as opposed to ultimate (final) consumers Industrial goods are differentiated from final consumer goods based on their ultimate useCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Types of Industrial GoodsRaw Materials These are products destined to become part of another product.

Fabricated Materials In contrast to raw materials, these have already been processed but may require further processing.

Installations Major equipment with long lives such as buildings and major equipment.

Accessory Equipment Such equipment is used to aid and implement production and includes office machines as well as machine tools.

Operating Supplies Materials used in producing goods & services.(Are similar to convenience goods in that they are consumable)



The Characteristics of Industrial DemandDerived DemandInelastic DemandWidely Fluctuating DemandKnowledgeable DemandThese characteristics/types of demand distinguish industrial demand from consumer demandCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


B2B ApplicationsDevelop leads for salesperson follow-upAchieve direct salesReinforce sales effortsIntroduce new productsDevelop new markets and applicationsBuilds goodwillConduct market researchCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Notable Users of the Tools of Direct Marketing are Providers of:Office productsIndustrial plant suppliesComputers (& their peripherals)Building equipmentAircraft partsANDdont forget SERVICES!!



Federal Express (FedEx)A direct mail program designed to expand its market, increase its penetration & hold onto its current customers.DM was aimed at 3 different segments:Frequent users of Priority 1 Infrequent users of Priority 1Other FedEx customers who had never used Priority 1See text for results!



Challenges for B2B Direct MarketingMarketing costs are increasing while the audience reached is decreasingFace-to-face selling, down in efficiency, is up in costCustomer relationship managers often do not integrate an analytical approach to combining operations with marketing programs and campaignsStandard Industry Classification is not as predictive in the current business environment Communication clutter is at an all time highCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


How to Identify B2B Market SegmentsIndustrial markets are much smaller in numbers but not in sales volumeStandard Industrial ClassificationA common means of industrial market segmentation has been through the SIC coding system developed by the federal governmentBases for statistical dataused by the government, trade associations, and business enterprisesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


NAICSImproved on the SIC Code system by increasing focus on information technology, service industries & international comparability6-digit code: identifies over 350 new industries and 9 new service sectorsUsed in US, Canada, MexicoReview chapter 14 for more detailsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Input-Output Analysis of Industrial MarketsInput-output matrices derived basically from Census Bureau data, trace the distribution of goods from their origin to their destinationDetermines the impact that specific industries have on the total economy, not just in what they sell but also in what they buy (supplies)Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


The Census Bureaus TIGER SystemThe Global Positioning System (GPS) and the Census Bureaus TIGER system, both associate latitude and longitude coordinates with street addresses.Used to pinpoint locations, establish business sites, locate competition, measure distance, and generate data about the demographics of a business locationGreat for mapping capabilities with the information in a companys databaseCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Other Industrial Market Segmentation CriteriaIndustrial organization can be categorized by financial strength, size, number of employees, sales volume and/or geographic locationOther criteria differentiate whether the enterprise is a head quarters or branch office.Most important basis for B2B market segmentation is an industrial organizations own customer list!Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Why Direct Marketing Works for Non-Profit OrganizationsDirect/interactive market is:MeasurableAccountableTargetedCost-EffectiveRequires a Direct ResponseCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Nonprofit Direct Marketing UsersHealth concerned organizationsEnvironmental organizationsEducational institutionsReligious institutionsPolitical organizationsThe government



Uses of Nonprofit Direct MarketingGaining awareness & supportersDriving membershipsSecuring volunteersRaising funds



Customer Relationship BuildingFor nonprofit organizations, customer relationship management (CRM) simply means developing a relationship with donors, thus ensuring their future support.Most nonprofit organizations do NOT use the word customers Preferred terms are donors, volunteers, clients, board members, etc.



Customer Relationship MaintenanceNonprofit organizations can effectively maintain and strengthen relationships with their customers by adding a feedback element to each form of communicationThe most important thing non-profits can do is to listen to their customers



Corporate PartnershipsCause-related marketing is defined as a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product, or service for mutual benefitSee Figure 14-6 for a good exampleCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Basic Fundraising Principles (Bob Stone)Form a committee of influentials with the charge to make contacts with potential contributors, establishing a targeted contribution amount for each potential donorMount a direct response campaign to a list of identified prospective contributorsOrganize a follow up campaign to support the direct response campaign



8 Step Fundraising PlanListen to your donorsKeep your mission in mindTell your story vividlyGo high-tech, but keep people focusedLet your donors fund projectsTarget your audienceInvolve the CEO and boardLaunch a fundraising campaignCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Non-Profits Seek Volunteers as well as FundsDo you work for a non-profit organization?More than 60 million people in America do! Are you a volunteer?26.2% of all adults volunteer (36.5 hours per year average)Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Media strategies and Award Winning CampaignsDirect MailThe stellar medium for nonprofitsUsed to maintain contact, build and sustain donor/member relationsTelephoneExample- Ohio Special Olympics = added Telephone to Direct Mail



Media strategies and Award winning CampaignsTelevisionExample: Jerry Lewis Telethon for Muscular DystrophyOften used in the form of infomercialsThe Internet The Internet has not been overly successful as a fundraising medium for most nonprofit organizations; however, since 9-11 donate here buttons are no longer idleCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Political Campaign Direct Marketing ObjectivesRaising moneyGaining support for their cause Securing new membersObtaining votes



Political Micro-TargetingAlso referred to narrowcasting, this technique aggregates groups of voters, based on data about them from databases and on the Internet

Political parties gather personal information about voters to target them with messages intended to influence their votesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Political CampaignsThe ultimate question is just how successful are political direct marketing efforts?Unlike most nonprofit organizations, political parties dont measure their success by response rates or dollars. They measure it by votesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Governmental OrganizationsMany government organizations rely on direct marketing to promote their own products and services, for exampleUS Post Office (USPS) Internal Revenue Service (IRS)US MilitaryConvention and Visitors Bureaus



Sports OrganizationsObjectives of sports organizations using direct marketing:Selling tickets/filling seats both for single events and for the seasonGetting corporate sponsorsProspecting for new fansCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


Direct Marketing Activities of Sports OrganizationsFor good Customer Relationship Management (CRM) and Partner Relationship Management (PRM), useNewslettersE-newslettersDirect mailOutbound telephoningTo reach Business Sponsors, useDirect MailRadio and Television direct response adsAds in local newspapers, magazines local programs and other publications



Case Study Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall


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