This document summarizes key aspects of direct marketing. It discusses direct marketing as an interactive system using advertising media to elicit a measurable response. Various direct marketing media are covered, including direct mail, catalogs, email, broadcast media, telemarketing and direct selling. Factors in the growth of direct marketing and how it fits into integrated marketing communications are also summarized. The document concludes with evaluating direct marketing effectiveness and advantages and disadvantages.

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Chapter 14
Direct
Marketing

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Education.
Direct Marketing
 Interactive system of marketing
 Uses one or more advertising media to effect a
measurable response and/or transaction at any
location
 Uses a set of direct-response media
 Direct-response media: Tools by which direct
marketers implement the communication process
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Factors that Led to the Growth of Direct
Marketing
Development and expansion of the Postal Service
Consumer credit cards
Changing structure of American society and the market
Technological advances
Changing values and lifestyles
More sophisticated marketing techniques
The industry’s improved image
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Role of Direct Marketing in the IMC
Program
 Combines:
 Advertising and public relations
 Personal selling and sales promotions
 Support media
 Companies decide:
 Program objectives
 Which markets to target and the strategies to use
 How to evaluate the program’s effectiveness
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Direct-Marketing Objectives
To seek a behavioral response
To build an image
To maintain customer satisfaction
To inform and/or educate customers in an
attempt to lead to future actions
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Direct-Marketing Approaches
 One-step approach: Medium is used directly to
obtain an order
 Two-step approach: Uses more than one medium
 First effort - Screens potential buyers
 Second effort - Generates the response
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Direct-Marketing Media
Direct Mail Catalogs E-mail
Broadcast
Media
TV Spots Infomercials
Home
Shopping
Print Media
Telemarketin
g
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Direct Mail
 Unsolicited mail
 Advertisers spend substantially on this medium
 Keys to success
 Mailing list: Database from which names are
generated
 Ability to segment markets and offers
 Threat - The Internet
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Catalogs and E-mail
 Catalogs
 Number of catalogs mailed is decreasing
 Available on the Internet for consumer and business-
to-business customers
 E-mail: Electronic version of regular mail
 Direct mail on the Internet
 Lower cost and higher effectiveness than traditional
direct mail
 Spam: Electronic equivalent of junk mail
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Education.
Broadcast media and TV spots
 Broadcast media
 Categories - Television and radio
 Direct-response advertising: Sales response for the
offered product is solicited, through the one- or two-
step approach
 Support advertising: Supports other forms of
advertising
 TV spots
 Short-form programs, include direct-response
commercials seen on TV
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Infomercial and Home Shopping
 Infomercial: Long commercial designed for 30-
minute or 1-hour time slot
 Designed to be viewed as a regular TV show
 Effective with a broad demographic base
 Home shopping
 Substantial growth due to toll-free telephone
numbers and widespread use of credit cards
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Print Media and Telemarketing
 Print media
 Difficult to use for direct marketing
 Ads compete with the clutter of other ads
 Space is relatively expensive
 Response rates and profits are low
 Telemarketing: Sales by telephone
 Declined due to its potential for fraud and deception,
and for annoyance
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Education.
Direct Selling
 Direct, personal presentation, and sales in
consumers’ homes
 Repetitive person-to-person selling - Salesperson
visits the buyer’s location to sell frequently
purchased products
 Nonrepetitive person-to-person selling - Salesperson
visits the buyer’s location to sell infrequently
purchased products
 Party plans - Salesperson offers products to groups
of people through parties and demonstrations
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Figure 14.2 - Sales Strategy (Methods Used to
Generate Sales, Reported as a 2012 of Sales Dollars)
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Education.
Evaluating the Effectiveness of Direct
Marketing
 Cost per order (CPO): Evaluates the relative
effectiveness of an ad based on the number of calls
generated
 Customer Lifetime Value (CLTV): Determines
the dollar value associated with a long-term
relationship with a customer
 Helps determine if a customer should be acquired
 Optimizes existing customers’ service levels
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Education.
Advantages and Disadvantages of
Direct Marketing
Advantages
• Selective reach
• Segmentation capabilities
• Frequency
• Testing
• Timing
• Personalization
• Costs
• Measures of effectiveness
Disadvantages
• Image factors
• Accuracy
• Content support
• Rising costs
• Do Not Contact lists
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