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Direct Marketing

Direct Marketing. Direct Marketing Defined. “When sellers use one or more media for the purpose of soliciting an immediate response by phone, mail, web or personal visit from a prospective customer.”. Changing Structure of Society. Changing Shopping Patterns: doing business at a distance.

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Direct Marketing

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  1. Direct Marketing

  2. Direct Marketing Defined “When sellers use one or more media for the purpose of soliciting an immediate response by phone, mail, web or personal visit from a prospective customer.”

  3. Changing Structure of Society Changing Shopping Patterns: doing business at a distance Direct Marketing Syndicates Direct Marketing List Developers & Brokers Technological Advances Technological Advances (Internet, secure payments, “one click”, etc.) Retail Experience Flaws Growth of Direct Marketing Consumer Credit Cards Consumer Credit Cards & Other Electronic Payment Gateways

  4. Advertising Internet Public Relations Support Media Personal Selling Sales Promotion Direct Marketing Combines With . . . Advertising Public Relations Direct Marketing Personal Selling Support Media Sales Promotion

  5. Overall Direct Marketing Pros & Cons Advantages Disadvantages Selective Reach Selective Reach Image Factors Image Factors, some low response rates (e-mail) Segmentation Capability “Successive Segmentation” Capability Accuracy Accuracy High CPM Content Support Frequency Potential Micro-targeted Frequency Rising Mail Costs Flexibility Ad Presentation Flexibility Timing Adaptability based on prior transaction / response history Personalization Personalization “Medium-neutral” Economy Measurement of Effectiveness Measurement of Effectiveness

  6. Direct Mail Catalogs Telemarketing Broadcast Media Print Media TV Spots Homeshopping Infomercials Direct-Marketing Media Direct Mail Catalogs Broadcast Media Media Print Media TV Spots Web/E-mail Infomercials

  7. Database Marketing: How It Works

  8. A Comprehensive Consumer Data Base Gender Name Name Gender Occupation Occupation Address/ Zip Code Address/ Zip Code Marital Status Marital Status Transaction History Transaction History Telephone Number Telephone Number Family Data Family Data Promotion History Promotion History Length of Residence Length of Residence Education Education Inquiring History Inquiring History Age Age Income Income Unique Identifier

  9. A Comprehensive Business to Business Data Base Comp. Contact or Decision Makers Comp. Contact or Decision Makers Industrial Classification Industrial Classification Headquarter, Multiple Location Headquarter, Multiple Location Title of Contact Title of Contact Size of Business Size of Business Purchase History Purchase History Telephone Number Telephone Number Revenues Revenues Promotional History Promotional History Source of Order/inquiry or Referral Source of Order/inquiry or Referral Number of Employees Number of Employees Inquiry History Inquiry History Credit History Credit History Time in Business Time in Business Unique Identifier

  10. The R-F-M Model and Propensity Scores RECENCY – When did consumer last purchase? FREQUENCY – How often does consumer purchase? MONETARY – How much did the consumer spend? The Propensity Score – a measure of ideal profile match Demographic Data vs. Purchase Pattern Data

  11. One-Step Two-Step/Indirect One-Step Versus Two-Step Approach One-Step/Direct • The medium is used directly to obtain an order or generate action • Often use 800 number phone orders and credit card payment • May use one medium to obtain inquiry and qualify prospect (web) • Typically follow up with a second medium to complete the sale (i.e. mailer)

  12. House lists Inclusions Types of Direct Mail “All forms of advertising sent directly to prospects through the U.S. Postal Service or through private services.” House lists Inclusions Broadsides Postcards Broker Lists Postcards Catalogs Reprints Catalogs Reprints Flyers Sales letters Flyers Sales letters Folders Self-mailers Folders

  13. Porsche Targets Prospects with Direct Mail

  14. A Direct Response Print Ad

  15. Control Coverage Exclusivity Exclusivity Response Flexibility Reach Impact Direct Mail Advantages Control Coverage Selectivity Advantages Response Flexibility Reach Impact

  16. Clutter Negative Image of Medium Delays in Delivery High Cost Per Exposure List Quality Uncertainty No Content Support Response Potential: Demographic Limitations (lesser-known brands only) Direct Mail Disadvantages Disadvantages Clutter: Junk Mail Negative Image of Medium Delays in Delivery High Cost Per Impression List Quality Uncertainty Rising Mail Costs

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