19th November 2007

Background

Eg. SMS, toll free numbers, lucky draws, etc.
-It is considered to be the most efficient way to supplement your advertising.Direct response-feedback
-Dual capacity-Visual, demonstration + immediate response ( eg. Calling up a toll free number)
-Although it was earlier considered only in case of niche products, today it is today thought of as one of the most effective ways to build up brand loyalty.
-One of the earliest attempts at direct marketing began with Asian Sky Shop-toll free numbers. Also Reader’s digest has always used direct marketing as it was more viable for them.
-Direct marketing is a very expensive method but it turns out to be cost effective since you tend to zero down on your target audience.( Cost per thousand )
-Direct marketing helps to build up and strengthen the relationship between the consumer and the company, thus building up on brand loyalty.
-Also, consumers, when addressed with their name by the marketer, don’t feel a part of the crowd anymore. Thus it is a more personalized and customized form.
-When the consumer shows interest, you as a marketer know that he has turned from a suspect to a prospect.
-Marketers reach their customers through a database which could be attained through post offices, Telephone directories, or the latest method- through list brokers. (People who sell database for a particular sum). However the marketer’s job is not to just procure the database, but also to segment it and update it properly, because these databases may become redundant over time. ( Eg. Change in address, people going abroad, etc.)
-In order to incur profits, the cost of the product is determined after fixing the cost of direct marketing for one consumer.


Defining Direct Marketing

• Direct Marketing is a system of marketing by which organisations directly communicate with target customers to generate a response or transaction. This response may take the form of an inquiry, a purchase, or even a vote.
• It is “the total of activities by which the seller, in effecting the exchange of goods or/and services with the buyer, directs efforts to target audience using one or more media (direct selling, direct mail,telemarketing,direct-action advertising, catalogue-selling, cable TV selling etc) for the purpose of soliciting a response by phone, mail, or personal visit from a prospect or customer.”- Peter Bennet

Direct Marketing – Total Marketing – involves-
• Marketing Research
• Segmentation
• Evaluation
• Uses a set of direct- response media-direct mail, telemarketing, interactive TV, print, the internet and other media.
• Media-Tools for direct marketers-communication process.

Growth of Direct Marketing: 15th Century – the era of Printing Press. Ben Franklin-early 1700s-successful direct marketer.
• In 1880s-Warren Sears & Montgomery Ward- started in a major way-development & expansion of the U.S. Postal Service-catalogues-rural & urban dwellers.

Other reasons:
• Consumer Credit Cards.
• Direct Marketing syndicates
• Changing structure of society
• Changing market scenario
• Technological advances

Miscellaneous Factors:
• Improved image of industry
• Sophisticated marketing techniques
• Direct Marketing-an interactive system of marketing which uses one or more advertising media to affect the measurable response or transaction at any level.
• Direct Marketing is used for-
-Niche Products
-Service Products/Programmes

Traditionally Direct Marketing was done by
• Catalogues
• Direct Mail
• Telemarketing

Basic Reasons for the Growth of Direct Marketing
1) Changing Market Place
• Growth of Delivery systems
• Affordable computing power & growth of databases (databases-used for future purpose)
2) Changing Role of Direct Marketing
• Building &maintaining Customer Relationship
• To maximize Sales
• To maximize Customer loyalty
3) Changing Cost Structures
• It is getting to be more expensive to use mass-media
• Advertising is done through line extensions
• (advertising is above the line expenditure )
• Increasing clutter in Media
4) Technological Development
• Changes in the market place- B2B selling-it has increased or had tremendous growth
• The change place of market –example-home, office etc.


The Three Key Elements of Direct Marketing
• Interactive System- Two way communication between the marketer & his/her target market. The response or non-response of the customer completes the communication leap-in the Direct Market process.
Example: Filling in the response coupon by the customer & mailing it
• Measurability of Response- The number of coupons indicates the response rate to marketer’s communication.
• Direct Marketing activities not Location specific-Marketer can interact with customer over phone,through mail, Internet.