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  1. 2. Chapter 20 Direct Marketing Communications McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 3. <ul><li>Understand the objectives of direct marketing communications, and describe its distinguishing characteristics. </li></ul><ul><li>Discuss the factors driving the growth in direct marketing communications. </li></ul><ul><li>Understand traditional direct marketing communications techniques such as direct mail, broadcast and print media, and telemarketing. </li></ul>After studying this chapter you should be able to:
  3. 4. <ul><li>Recall examples of the use of technology such as electronic media in direct marketing. </li></ul><ul><li>Understand some of the ethical and legal issues facing marketers who use direct marketing communications. </li></ul>After studying this chapter you should be able to:
  4. 5. The Role of Direct Marketing Communications <ul><li>Marketing Communications has two primary objectives: </li></ul><ul><ul><li>To establish relationships by soliciting a direct and immediate response from prospects or customers. </li></ul></ul><ul><ul><li>To maintain and enhance customer relationships, whether those relationships have been established by direct marketing communications or by some other means. </li></ul></ul>
  5. 6. Characteristics 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.
  6. 7. Customer Databases
  7. 8. Benefits of Direct Marketing Communications Offers Immediate-Response Orientation Measurable Action Objectives
  8. 9. The Growth of Direct Marketing Communications <ul><li>Global direct marketing communications increased because of saturated domestic markets. </li></ul>
  9. 10. Growth Catalysts <ul><li>Increase in Customized Products </li></ul><ul><li>Fragmented Markets </li></ul><ul><li>Product Price Sensitivity </li></ul><ul><li>Shrinking Audiences for Network TV and Newspapers </li></ul><ul><li>Emphasis on Immediate Sales </li></ul>
  10. 11. Growth Catalysts <ul><li>Lifestyles Changes Create a Need for Convenience: </li></ul><ul><ul><li>Two-worker families have more discretionary income but less time </li></ul></ul><ul><ul><li>Ease of communication </li></ul></ul><ul><ul><li>Increased use of credit cards </li></ul></ul><ul><ul><li>Advancing Technology: </li></ul></ul><ul><ul><ul><li>Predictive modeling </li></ul></ul></ul><ul><ul><ul><li>Neural networks </li></ul></ul></ul>
  11. 12. Direct Marketing Techniques <ul><li>Direct Mail </li></ul><ul><li>Broadcast Media </li></ul><ul><li>Print Media </li></ul><ul><li>Telemarketing </li></ul><ul><li>Electronic Media </li></ul>
  12. 13. Advantages 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
  13. 14. Types of Direct Mail <ul><li>Sales letter </li></ul><ul><li>Postcards </li></ul><ul><li>Catalogs </li></ul><ul><li>Video catalogs </li></ul><ul><li>Promotional videocassettes and audiocassettes </li></ul><ul><li>Promotional interactive computer disks </li></ul><ul><li>Leaflets and flyers </li></ul><ul><li>Statement stuffers </li></ul>
  14. 15. Business-to-Business Direct Mail B-to-B marketing uses the same forms of direct mail!
  15. 16. Broadcast Media infomercials Direct-Response Radio Advertising Direct-Response Television Advertising
  16. 17. Print Media <ul><li>Consumers Can Respond To: </li></ul><ul><ul><li>Ads Carrying an Address </li></ul></ul><ul><ul><li>Order Form </li></ul></ul><ul><ul><li>Coupon </li></ul></ul><ul><ul><li>Telephone Number </li></ul></ul><ul><ul><li>Freestanding Insert (FSI) </li></ul></ul><ul><ul><li>Reader-Response Cards </li></ul></ul>
  17. 18. Telemarketing <ul><li>Telemarketing: </li></ul><ul><ul><li>An interactive direct marketing communications approach that uses telephone calls to initiate, develop, and enhance relationships with customers. </li></ul></ul><ul><ul><ul><li>Outbound telemarketing, also called “teleselling” </li></ul></ul></ul><ul><ul><ul><li>Business-to-business telemarketing </li></ul></ul></ul><ul><ul><ul><li>Predictive dialing systems </li></ul></ul></ul>
  18. 19. National Consumers League’s Top 10 Telemarketing Frauds List <ul><li>Work-at-Home Schemes </li></ul><ul><li>Prizes / Sweepstakes </li></ul><ul><li>Credit Card Offers </li></ul><ul><li>Advance Fee Loans </li></ul><ul><li>Magazine Sales </li></ul>
  19. 20. National Consumers League’s Top 10 Telemarketing Frauds List <ul><li>Telephone Slamming </li></ul><ul><li>Buyers Clubs </li></ul><ul><li>Credit Card Loss Protection </li></ul><ul><li>Nigerian Money Offers </li></ul><ul><li>Telephone Pay-per-Call Services </li></ul>
  20. 21. Electronic Media <ul><li>Interactive Computer Services </li></ul><ul><li>Interactive Computer Kiosks </li></ul><ul><li>FAX Machines – FAX-on-Demand Systems </li></ul>
  21. 22. Ethical and Legal Issues in Direct Marketing Communications <ul><li>Invasion of Privacy </li></ul><ul><li>Deceptive Practices: </li></ul><ul><ul><li>Automatic Number Identification </li></ul></ul><ul><ul><li>Caller ID Intrusion Systems </li></ul></ul><ul><li>Wasteful Practices </li></ul>