MARK2038 Data Base Marketing Strategies II

1. MARK2038 Data Base Marketing Strategies II Week 2 Instructor: Santo Ligotti Email: sligotti@gbrownc.on.ca

2. Today’s Agenda • Housekeeping • Review Course Outline • Reminder: Assignment #1 • Distribute Assignment #2 • Distribute Self Study Assignment #1 • Distribute Self Study Assignment #2 • Lecture: • Creative Strategy and Direct Mail • Direct Mail section will be self study

3. Creative Strategy and Direct Mail

4. Learning Objectives At the end of today, you should be able to: • Creative Strategy-Understanding the creative development process • The Art of the Creative Brief • Direct Mail packages/design/basics • Writing copy for high response

5. Recall: Database Marketing

6. Recall: The 3 Direct Marketing Variables Creative Media Offer

7. Creative: the “packaging” of the offer in terms of: Theme Copy Layout Recall: Creative Strategy

8. CREATIVE MEDIA Communication Variables WHAT do you say? HOW do you say it? WHERE do you say it? WHEN do you say it?

9. Successful Creative • Breaks through clutter • Communicates benefits clearly • Supports image/positioning • Makes it easy and compelling to respond • Has staying power

10. Creative Brief • Creative brief: a living document that summarizes the creative strategy of a firm.

11. Creative Brief Five general components: • Customer insight or Target Audience • Communication objectives • Positioning statement • Key messages • Corporate requirements

12. Customer Insight • Who buys? • What do they buy? • Where do they buy? • When do they buy? • How do they buy? • What motivates them to buy? • How much is the customer willing to pay (e.g., competitive parity)

13. Target Audience • Who you are Advertising to • Made up of • Demographics • Psychographic • Geographics • Media Use Patterns • Purchase/ Use Patterns

14. Demographics • Who they are (married, job type, age, education, recreation, etc.) • Example: • Our target audience will be men, ages 16 to 25. These men either are in school or beginning their first job. If they are in High School or College, many of them are working part-time, service oriented jobs. Once they have completed school, most of them enter the professional world. They are living at home or alone for the first time. Paying bills is a new thing to them. Their income varies from as little are nothing, to $30,000 a year. These men are very active, participating in extra-curricular activities (especially sports), these tendencies carry on into their later lives. As target audience=s age increases, so does their likelihood to own a car, and other material goods. Most of these young men are either dating or in some form of relationship, nothing too serious however. Few of these men are seeking marriage, but they are looking for something long lasting.

15. Customer Insight

16. Psychographics • What they think and Feel • Values, Attitudes, and Lifestyles (VALS) • Example: • The target audience is very focused on their lives. They are at a point where they are creating their future, and are very intent on it being enjoyable. They do well in school, but their friends are more important. They go out with them two or more times a week. These men are also concerned with their looks. They need to feel attractive to the opposite sex, and spend a lot of their time and money in that pursuit. Religion is not a big issue in their lives. Most of them were raised with some form of belief, but they don=t feel a strong commitment to it. The target audience believes that the world in at their fingertips, and in most cases it is.

17. Geographics • Where they live • Example: • These men live in Suburban areas, usually larger cities of 40,000 or more. These towns are spread nation wide.

18. Media Use Patterns • What media they expose themselves to and how often • Example: • The television is a staple of these men. They spend a lot of time watching ESPN and other sports shows. They also tune into Jerry Springer, South Park, Seinfield, and other cereal comedies. Placing ads during these shows in early evening and night slots would be the best way to reach our target audiences through the television. Magazines and newspapers are not very big among this population group. They don=t spend a lot of time reading because they would rather be doing something active. If they do subscribe or purchase magazines they would prefer reading Men=s Health, Sports Illustrated, or other similar magazines. Placing ads in these magazines would be a good way to promote Certs Powerful Mints.

19. Media Use Example Con. • Many of these magazines are fitness or health oriented this product would fit in well with the content. Since these men tend to drive quite often, placing outdoor advertisements on the way into the downtown area of the city would be a good way to reach these men. Advertising on buses would be best if they were placed on the outside. The target audience may travel the same routes as the buses, but are not likely to actually ride them. If there is a form of subway, however, in that particular city advertisements around or on the trains would reach many of our older target audience members. The best form of media to use would be the radio. These men listen to alternative or rock stations. They tune in quite frequently when driving, at home, or even when they are playing sports or working out. Our target audience makes themselves available to almost all of the medias, making them easy to reach.

20. Purchase and Use Patterns • Where, why, and how often they will use the product • Where, why, and how often they will buy the product • Example: • Since impressions are important to these men, they will use this product often. They will use it when they are on a date or out with their friends. They can use it anywhere when they are in a situations where they can=t brush their teeth but still want fresh breath. They will buy one of two boxes of Certs Powerful Mints a week. They will pick them up at grocery or convenience stores where they are displayed near the register.

21. Positioning Statement • A unique selling proposition (USP) helps to clearly position the brand in the consumer mind. “When I _________________, I will ____________________ because _________________.” (Desired Action) (Benefit) (Support)

22. USP Defined • The USP is a statement that defines your business. It explains what makes you unique and why people should buy from you. When chooses to buy from you for the first time, they’re thinking; “With 50 other companies selling the same products and services as you, why should I do business with you rather than one of your competitors” • The USP is statement that defines your business. It explains what makes you unique and why people should buy from you

23. Key Messages The USP should have three qualities: • important • unique • believable This USP facilitates response in two ways: • Creating a need • Competitive selling

24. USP Examples • BMW- Sheer Driving Pleasure • IKEA- Affordable Solutions for Better Living • FEDEX- When it absolutely, positively has to get there overnight • SUBWAY- Eat Fresh

25. Message Strategies: NO USP • When there is no USP or major benefit to highlight: • Describe the product effectively • Stress superior offer or service you provide • Point out benefits of dealing with your organization compared to others

26. Brainstorming: A process using groups of people to identify creative solutions to complex problems. Developing Effective Positioning

27. The Brainstorming Process • Define the problem clearly. • Form a group • Select a leader: takes notes, manages agenda and time, only allow positive comments, keeps everyone involved • Set quotas for ideas and time limits for each agenda item. • Review house rules with participants before each session.

28. Creative Stimulators • Creative stimulators: a system used to stimulate people to think about creative new solutions to complex problems using free association.

29. S Substitute C Combine A Add or Adapt M Modify P Put to other uses E Eliminate R Reverse Creative Stimulators for DM

30. Substitute– replace the familiar theme/situation with another theme or perhaps an unfamiliar theme Combine – mix in popularized concepts to emphasize benefits of our product Add or Adapt – describe the added benefits of our product/in a new way S.C.A.M.P.E.R.

31. Modify – modifying time factors in the present offer Put to Other Use – link with unrelated things/situations to emphasize favourable associations S.C.A.M.P.E.R.

32. Eliminate or Simplify – taking away weight/complexity of message for appeal Reversal – reversing the usual situation, e.g. “man bites dog” S.C.A.M.P.E.R.

33. Examples: SPOON S.C.A.M.P.E.R.

34. In Class Exercise: Working in groups of 3-5, work with the assigned word and create alternate use using SCAMPER Take 20 minutes, assign a spokesperson, then present to the class S.C.A.M.P.E.R.

35. What is Direct Marketing Media? • Interactive marketing tools used to get the customer to respond to and/or stimulate a transaction directly with the advertiser (rather than through a retail setting) • Use different standards to evaluate media used for acquisition vs. retention … why? What types of Direct Marketing are you familiar with?

36. Types of Direct Marketing • Direct mail • Internet applications: e-mail, web, viral, e-commerce, extranet • Telemarketing • Print (e.g. magazine insert cards, newspapers with toll free #s) • DRTV – direct response TV / radio • Viral marketing • Catalogue

37. DM Media Response Rates MediumAvg. Response Rate* Direct Mail 1 – 2% Telemarketing – outbound 10 – 20% (retention only) Newspapers 0.01 – 0.1% Magazines 0.02 – 0.5% Inserts 0.1 – 1.0% DRTV 0.01 – 0.05% DR Radio 0.005% Websites n/a Email low – 2% * Acquisition programs

38. Basics of Direct Marketing • Purpose – to get a measurable response that will produce an immediate or ultimate profit • To get that measurable response there must be an offer - a “call to action” What are the 3 key components to producing a response? What’s the most important?

39. 3 Keys to producing a response • List/media – accounts for 40% of success • Offer (30%) • Creative execution (30%) • Copy (15%) • Layout (15%)

40. Reaching the Target: The List • Internal lists • The databases of an organization • Also called house lists • Includes current customers, former customers and inquiries (i.e. prospects)

41. Reaching the Target: The List • External lists • Rent from 3rd parties • 2 main types : • compiled and response

42. Reaching the Target: The List • Compiled lists • Rent from list specialists • prepared from telephone directory, public records etc. • Response lists • house lists of other companies • e.g.: credit card holder lists, donor lists (fund-raisers), magazine subscription lists, buyer lists, attendee/ membership/seminar lists

43. 3 Keys to Producing a Response The Offer • the totality of what is offered to the customer and what is expected in return for it • Includes a mix of factors that motivate the target audience to respond e.g. product/service, price, payment terms, incentives etc.

44. Augmented Product Actual Product Incentives Loyalty Programs Packaging Core Product Design The Benefit Guarantees Service Brand Name Dialogue Both offers and incentives are part of the DM message The Multi-layered Product

45. Elements of Promotion: Creative Execution Creative Execution • Creative execution = copy + layout (design) • Most direct response copy falls into four categories: • Benefits - how does the product improve the customer’s life? • Descriptive copy • Support copy • Sweeteners & facilitators - give more reasons to take the offer (e.g. incentives, choice, making it easier to respond/pay)

46. The Direct Marketing Agency • The specialist in direct marketing • Manages the program for the client from concept development through execution • Examples: • Draft Worldwide Canada • OgilvyOne Worldwide • Grey Direct • Brann Worldwide • Carlson Marketing Group • Rapp Collins Worldwide • http://directories.marketingmag.ca/bigBookSearch

47. Direct Marketing Creative Practice • AIDA MODEL • A-Awareness • I-Interest • D-Desire • A-Action • The simplest way for direct marketers to help in explained how we notice, internalize, and respond to advertising • Can be used to evaluate direct media such as direct mail

48. Direct Marketing Creative Practice • Awareness: How will I get someone to notice my direct piece of mail when it lands in a pile of bills and other competitors advertisements? • Outer envelope should play on curiosity, eye settles on middle of the page • Use of Headlines in the content of the letter • Interest: You need to make sure someone reads your letter past the first headline, HOW? • Relevant photographs that speak to a story, and the customer can identify with • Use of Headlines in the content of the letter

49. Direct Marketing Creative Practice • Desire: How do I get them to reach that emotional level towards my product, which will ultimately lead them to buy? Your creative should trigger and foster those feelings, so HOW? • Testimonials • Descriptions • Tone • Illustrations/Pictures • Action: The customer must be feel that they must act right away, and to minimize the effort on the part of the customer in doing so • MAKE IT EASY TO RESPOND

50. Direct Mail: Introduction & Key Components