marketing - chapter 17

Direct and Online Marketing: Building

Direct Customer Relationships

A Global A Global PerspectivePerspective

1717Philip KotlerPhilip Kotler

Gary ArmstrongGary ArmstrongSwee Hoon AngSwee Hoon Ang

Siew Meng LeongSiew Meng LeongChin Tiong TanChin Tiong Tan

Oliver Yau Hon-Oliver Yau Hon-MingMingPowerPoint slides adapted by

Peggy Su

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-1

17-2Copyright © 2009 Pearson Education South Asia Pte Ltd

Learning ObjectivesAfter studying this chapter, you should be able to:1. Define direct marketing and discuss its benefits to

customers and companies2. Identify and discuss the major forms of direct

marketing3. Explain how companies have responded to the

Internet and other powerful new technologies with online marketing strategies

4. Discuss how companies go about conducting online marketing to profitably deliver more value to customers

5. Overview the public policy and ethical issues presented by direct marketing


Chapter Outline1. The New Direct-Marketing Model2. Growth and Benefits of Direct Marketing3. Customer Databases and Direct Marketing4. Forms of Direct Marketing5. Online Marketing6. Integrated Direct Marketing7. Public Policy Issues in Direct Marketing


The New Direct Marketing Model• Direct marketing consists of direct

connection with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships.• No intermediaries

• An element of the promotion mix

• Fastest-growing form of marketing


Growth and Benefits of Direct Marketing

Benefits to Buyers• Convenience

• Ready access to many products

• Access to comparative information about companies, products, and competitors

• Interactive and immediate


Growth and Benefits of Direct Marketing

Benefits to Sellers• Tool to build customer relationships

• Low-cost, efficient, fast alternative to reach markets

• Flexible

• Access to buyers not reachable through other channels

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Customer Databases and Direct Marketing

Customer Database• A customer database is an organized

collection of comprehensive data about individual customers or prospects, including geographical, demographic, psychographic, and behavioral data.


Customer DatabaseUses:• Locate good and potential customers

• Generate sales leads

• Learn about customers

• Develop strong long-term relationships

Customer Databases and Direct Marketing


Forms of Direct Marketing• Personal selling

• Direct-mail marketing

• Catalog marketing

• Telephone marketing

• Direct-response television marketing

• Kiosk marketing

• Digital direct marketing

• Online marketing


Forms of Direct MarketingDirect-Mail Marketing• Direct-mail marketing involves an offer,

announcement, reminder, or other item to a person at a particular address.• Personalized

• Easy-to measure results

• Costs more than mass media

• Provides better results than mass media


Forms of Direct MarketingCatalog Direct MarketingCatalog direct marketing involves printed and

Web-based catalogs.• Benefits of Web-based catalogs

• Lower cost than printed catalogs• Unlimited amount of merchandise• Real-time merchandising• Interactive content• Promotional features


Forms of Direct MarketingCatalog Direct Marketing• Challenges of Web-based catalogs

• Require marketing

• Difficulties in attracting new customers


Forms of Direct MarketingTelephone Direct Marketing• Telephone direct marketing involves using

the telephone to sell directly to consumers and business customers.

• Outbound telephone marketing sells directly to consumers and businesses.

• Inbound telephone marketing uses toll-free numbers to received orders from television and print ads, direct mail, and catalogs.


Forms of Direct MarketingTelephone Direct Marketing• Benefits of telephone direct marketing

• Purchasing convenience

• Increased product service and information

• Challenges of telephone direct marketing• Unsolicited outbound telephone marketing

• Do-Not-Call Registry


Forms of Direct MarketingDirect-Response Television Marketing• Direct-response television (DRTV) marketing

involves 60- to 120-second advertisements that describe products or give customers a toll-free number or Web site to purchase products, and 30-minute infomercials such as home shopping channels.• Less expensive than other forms of promotion

• Easier to track results


Forms of Direct MarketingKiosk Marketing• Kiosk marketing involves

placing information and ordering machines in stores, airports, trade shows, and other locations.


Forms of Direct MarketingDigital Direct Marketing Technologies• Mobile phone marketing

• Podcasts

• Vodcasts

• Interactive TV


Forms of Direct MarketingDigital Direct Marketing Technologies• Mobile phone marketing includes:

• Ring-tone giveaways

• Mobile games

• Ad-supported content

• Contests and sweepstakes


Forms of Direct MarketingDigital Direct Marketing Technologies• Podcasts and vodcasts involve the

downloading of audio and video files via the Internet to a handheld device such as a PDA or portable media player and listening to them at the consumer’s convenience.


Forms of Direct MarketingDigital Direct Marketing Technologies• Interactive TV (ITV) lets viewers interact with

television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences.


Online MarketingMarketing and the Internet• The Internet is a vast public web of computer

networks that connects users of all types around the world to each other and to a large information repository.


Online MarketingOnline Marketing Domains• Business to consumer (B2C)

• Business to business (B2B)

• Consumer to consumer (C2C)

• Consumer to business (C2B)


Online MarketingOnline Marketing Domains


Online MarketingOnline Marketing Domains• Business to consumer (B2C) involves

selling goods and services online to final consumers.

• Business to business (B2B) involves selling goods and services, providing information online to businesses and building customer relationships.


Online MarketingOnline Marketing Domains• Consumer to consumer (C2C) occurs on

the Web between interested parties over a wide range of products and subjects.

• Blogs• Offer a fresh, original, and inexpensive way to

reach fragmented audiences

• Difficult to control


Online MarketingOnline Marketing Domains• Consumer to business (C2B) involves

consumers communicating with companies to send suggestions and questions via company Web sites.


Online MarketingTypes of Online Marketers• Click-only marketers

• Click-and-mortar marketers


Online MarketingClick-Only Marketers• Click-only marketers operate only online without

any brick and mortar presence.• E-tailers

• Search engines and portals

• Shopping or price comparison sites

• Internet service providers

• Transaction sites

• Content sites

http://www.dell.com/content/default.aspx?c=us&cs=19&l=en&s=gen


Click-Only Marketers• E-tailers are dot coms that sell products and

services directly to final buyers via the Internet.• Amazon

• Expedia

• Search engines and portals are ports of entry to the Internet.• Yahoo!

• Google

Online Marketing


Online MarketingClick-Only Marketers• Internet service providers (ISP) provide Internet

connections for a fee.• Starhub

• Jaring

• Shopping or price comparison sites provide product and price comparison information• Yahoo! Shopping


Online MarketingClick-Only Marketers• Transaction sites take commissions for

transactions on their sites.• eBay

• Content sites provide financial, news, research, and other information• Cna.com (Channel NewsAsia)

• ESPN.com


Online MarketingClick-and-Mortar Marketers• Click-and-mortar companies are brick-and-mortar

companies with an online presence.• Advantages of click-and-mortar companies include

• Known and trusted brand names• Strong financial resources• Large customer bases• Industry knowledge• Reputation• Strong supplier relationships• More options for customers


Online MarketingSetting Up an Online Presence• Creating a Web site requires designing an

attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site.

• Types of Web sites• Corporate Web site

• Marketing Web site


Online MarketingSetting Up an Online Presence• A corporate Web site is designed to build

customer goodwill and to supplement other channels, rather than to sell the company’s products directly to• Provide information

• Create excitement

• Build relationships


Online MarketingSetting Up an Online Presence• A marketing Web site is designed to engage

consumers in interaction that will move them closer to a direct purchase or other marketing outcome.


Online MarketingDesigning Effective Web Sites• To attract visitors, companies must

• Promote in offline promotion and online links

• Create value and excitement

• Constantly update the site

• Make the site useful


Online MarketingDesigning Effective Web Sites• The seven Cs of effective Web site design

• Context

• Content

• Community

• Customization

• Communication

• Connection

• Commerce


Online MarketingDesigning Effective Web Sites• Context is the site’s layout.

• Content is the site’s pictures, sound, and video.

• Community is the site’s means to enable user-to-user communication.

• Customization is the site’s ability to tailor itself to different users or to allow users to personalize the site.


Online MarketingDesigning Effective Web Sites• Communication is the way the site enables

user-to-user, user-to-site, or two-way communication.

• Connection is the degree that the site is linked to other sites.

• Commerce is the site’s capabilities to enable commercial transactions.


Online MarketingDesigning Effective Web Sites• The eighth C

• To keep customers coming back, the site needs to constantly change.


Online MarketingPlacing Ads and Promotions Online• Forms of online advertising

• Display ads

• Search-related ads

• Online classifieds


Online MarketingPlacing Ads and Promotions Online• Display ads

• Banners are banner-shaped ads found on a Web site.

• Interstitials are ads that appear between screen changes.

• Pop-ups are ads that suddenly appear in a new window in front of the window being viewed.

• Rich media ads incorporate animation, video, sound, and interactivity.


Online MarketingPlacing Ads and Promotions Online• Search-related ads are ads in which text-

based ads and links appear alongside search engine results on sites such as Google and Yahoo! are effective in linking consumers to other forms of online promotion.

- Will effectively attract online customers to promote new products


Online MarketingPlacing Ads and Promotions Online• Other forms of online promotion include

• Content sponsorships

• Alliances

• Affiliate programs

• Viral advertising


Online MarketingPlacing Ads and Promotions Online• Content sponsorships provide companies with

name exposure through the sponsorship of special content such as news or financial information.

• Alliances and affiliate programs are relationships where online companies promote each other.

• Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends.

Viral marketing is more known as spam (unwanted e-mails), in facebook


Online MarketingThe Future of Online Advertising• Online advertising provides a useful

purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix.


Online MarketingCreating or Participating in Web

Communities• Web communities allow members to

congregate online and exchange views on issues of common interest.

Congregate = mass


Online MarketingUsing E-mail• Marketers are developing enriched messages

that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered e-mail environment.

Clutter = untidy


Integrated Direct Marketing• Integrated direct marketing involves

the user of carefully coordinated multiple-media, multiple-stage campaigns.

Various mode of marketing..


Public Policy Issues in Direct Marketing• Customer irritation, unfairness, deception,

and fraud

• Privacy

• Security

Junk e-mails, spam, pop-up, fraud


Irritation, Unfairness, Deception, and Fraud• Irritation includes annoying and offending

customers.

• Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers.

Public Policy Issues in Direct Marketing


Public Policy Issues in Direct MarketingIrritation, Unfairness, Deception, and Fraud• Deception includes “heat merchants” who

design mailers and write copy designed to mislead consumers.

• Internet fraud includes identity theft and financial scams.


Public Policy Issues in Direct MarketingInvasion of Privacy• The concern is that marketers may know too

much about the consumers and use this information to take unfair advantage.• Sale of databases

• Microsoft

marketing - chapter 17

Documents

direct marketing copyright

integrated direct marketing

direct mail

new directmarketing

marketing difficulties

direct connection

inbound telephone marketing

online marketing strategies