Direct Marketing Strategies

1. C H A P T E R - 2
DIRECT MARKETING
STRATEGIES

2. STRATEGIC DIRECT MARKETING
• This is long-term planning process usually spans
more than 2 or more years.
• Designed to help companies cope with
competition and marketplace change over a span
of several years.
• Purpose to achieve specific goals, allocate
resources and coordinate activities.

3. STRATEGIC MARKETING DECISIONS
COMPLEXITY
1. A large number of factors influence market
outcomes.
• Competitive reactions.
• Changing economic conditions.
• Willingness of consumers to try something new.
• All influence ultimate sales and profitability.
2. Many factors that influence market outcomes are
not controllable by marketing management.
• Changes in consumer preference.
• Increased competition both affects marketing plans.
• Changes in national or international economic conditions,
affects product sales and profitability.

4. STRATEGIC MARKETING DECISIONS
COMPLEXITY
3. Factors affecting the outcome of marketing plans
lack stability.
• Uncontrollable factors can change rapidly.
• Technology changes quickly in some markets i.e PC’s,
Smartphones etc.
• Impact of these are on sales and profitability.
4. Responses to allocation of marketing resources
are not linear.

5. LANDS’ END
• Company founded in 1963
• Its sales grew to about $992 million.
• Making lands’ End nation’s largest merchants.
• Sales growth was driven primarily by increases in
catalog circulation.
• The centerpiece of lands’ end brand identity is its
catalog.
• Contains half or full page descriptions.
• Essays and commentary about product usage and lifestyles.

6. LANDS’ END FOCUS
• Lands’ end reinforces its brand identity by being a
customer-service-oriented company.
• Prompt service and personal attention from a
dedicated staff.
• Fast shipping.
• Sophisticated computerized operating system.
• Huge distribution center to handle customer orders

7. LANDS’ END PRINCIPLE OF DOING
BUSINESS
• Principle 1. We do everything to make our products
better.
• Principle 2. We price our products fairly and honestly.
• Principle 3. We accept return, for any reason, at any
time.
• Principle 4. We ship faster than anyone we know of.
• Principle 5. We believe that what is best for our
customers is best for all of us.
• Principle 6. We are able to sell at lower prices because
we have eliminated middlemen.
• Principle 7. We are able to sell at lower prices because
we operate efficiently.
• Principle 8. We are able to sell at lower prices because
we support no fancy emporiums with high overhead.

9. SUSTAINABLE COMPETITIVE
ADVANTAGE
• Competitive edge is a factor that make a firm’s
offering unique in eyes of customer.
• Strategic marketing involves achieving and
sustaining a competitive advantage.
• Where long-run above-average performance is
achieved by satisfying customers better than
competition does.
• Developing distinctive competencies is not optional
but is mandatory in competition.

10. STRATEGIC MARKETING PLANNING
PROCESS
1. Situation analysis
A. Extent of demand.
B. Nature of demand.
C. Strategy analysis.
D. Life-cycle image.
E. Macro environmental trends.
F. International issues.
G. Strengths and weaknesses.
H. Nature of competition.
2. Problem, Opportunities and threats
A. Problems.
B. Opportunities.
C. Threats
3. Objectives
4. Alternatives
A. Marketing alternatives.
B. Evaluation of alternatives
5. Decision
A. Recommendations.
B. Implementation.
C. Monitoring.

11. 1. SITUATION ANALYSIS
A. Extent of Demand:
• Defining the potential the actual or potential size of that market.
• This is a quantitative exercise because it provides information on
the unit and dollar sales demand for a category of products or
services.
B. Nature of Demand:
• Firm identifies buyers and their purchase decision-making
process.
• Segmentation:
• Segmenting market by homogeneous groups with respect to
what they want and how they buy.
• Estimating the size and potential of each segments.

12. 1. SITUATION ANALYSIS
• Decision Making:
• The firm needs to determine the who, what, where, when, why
and how of the purchase decision.
• How do buyers go about purchasing products or services.
C. Strategy Analysis
• The way to start is by delineating the objectives and related
successes of each marketing strategy.
• Marketing Strategy
• Integrated marketing strategy is in place for marketing mix.
• Consistent with overall program objectives.
• Product Strategy
• Product caters the need of current market.
• Is the performance of each product is evaluated.

13. 1. SITUATION ANALYSIS
• Distribution Strategy
• Ways to distribute a product or service to a firm’s target
market.
• Selecting most suitable option i.e. catalogs, mail, direct
response television ads etc.
• Pricing Strategy
• Prices are set according to competition.
• Target consumers are price sensitive or not.
• Promotion Strategy
• Consistent message is delivered in promotional campaign.

14. 1. SITUATION ANALYSIS
D. Life-Cycle Stage
• Adopting strategies and tactic according to product’s life-
cycle stage.

16. 1. SITUATION ANALYSIS
E. Macro environmental Trends
• Impact of sociocultural, demographic, political, legal,
technological, economic and competitive environment.

17. 1. SITUATION ANALYSIS
F. International Issues
• Checking the standard disparities.
• Trade barriers i.e tariffs, levies and licensing etc.
G. Strengths and Weaknesses
• Strengths and weaknesses are internal.
• Like strengths of organization is its employees, dominating
market share.
• Should gauge them according to below mentioned
parameters.
• Marketing skills
• Production skills.
• Management skills.
• Financial skills.
• Research and development skills.

18. 1. SITUATION ANALYSIS
H. Nature of Competition
• Able to offer customers a distinctive features and services.
• Number of competitors are in the market.
• Able to maintain a sustainable competitive advantage.

19. 2. PROBLEMS, OPPORTUNITIES, AND
THREATS
A. Problems
• Symptoms of problems are declining sales, declining profits
and increasing costs.
• Problems are causes and symptoms are effects.
• Like firm list dropping sales as a problem but in fact it’s
symptom.
• Problem can only be identified by asking why sales are
dropped and you come to know that sales are dropping
because of low product quality, non-availability of a
product.
• Here problem is low product quality and non-availability of
a product.

20. 2. PROBLEMS, OPPORTUNITIES, AND
THREATS
B. Opportunities
• For firm any additional sales and an option to make added
profits is an opportunity.
• Exploring and entering new markets.
• Acquiring additional sales from existing opportunity.
• Catering new demands and wants of the consumer.

21. 2. PROBLEMS, OPPORTUNITIES, AND
THREATS
C. Threats
• For a firm threat is a challenge posed by an unfavorable
trend.
• Like increasing competition.
• Changing customer preferences and substitute products.
• Changes is demographics, changes in economic
conditions.

22. 3. OBJECTIVES
• Objective are the goals which organization tends to
achieve in the future and they plan their activities
according to their objectives.
• Quantifiable behavioral objectives are those which
can be easily counted such as number or order,
sales revenue.
• Unquantifiable non behavioral are those in which
firm wants to improve their image.

23. 4. ALTERNATIVES
• Alternatives are the strategic options or actions that
appear to be viable solutions to the problems.
• Alternatives should allow the firm to pursue
opportunities while avoiding threats.
• Marketing alternatives should address as many
topic areas as appropriate in terms of strategy-
related marketing mix and program.
• Evaluate the financial viability of alternatives.

24. 5. DECISIONS
A. Recommendations
• Address what actions should be taken and why, and they
include the main reason for believing that the
recommended courses of action are best.
B. Implementation
• Contains the specifics, including all elements in the
marketing mix, assigned tasks and resources allocations.
C. Monitoring
• Addresses strategy and control issues.

25. THANK YOU!

26. QUIZ#2
1. What do you understand by Sustainable
competitive advantage and how firms create
this?
2. What is strategic marketing?
3. List down Strategic Marketing Process?