Lecture Advertising and promotion: An integrated marketing communications perspective (10/e): Chapter 14 - George E. Belch, Michael A. Belch

Chapter 14
Direct 
Marketing

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McGraw-Hill 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 direct­response media
 Direct­response 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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Direct­Marketing 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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Direct­Marketing Approaches
 One­step approach: Medium is used directly to 
obtain an order
 Two­step approach: Uses more than one medium
 First effort ­ Screens potential buyers
 Second effort ­ Generates the response

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Direct­Marketing Media
Direct Mail

Catalogs

E-mail

Broadcast
Media

TV Spots

Infomercials

Print Media

Telemarketin
g

Home
Shopping

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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 E­mail
 Catalogs
 Number of catalogs mailed is decreasing
 Available on the Internet for consumer and 
business­to­business customers

 E­mail: 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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Broadcast media and TV spots
 Broadcast media
 Categories ­ Television and radio
 Direct­response 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

 Short­form programs, include direct­response 
commercials seen on TV
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Infomercial and Home Shopping
 Infomercial: Long commercial designed for 30­
minute or 1­hour time slot
 Designed to be viewed as a regular TV show
 Effective with a broad demographic base

 Home shopping
 Substantial growth due to toll­free 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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Direct Selling
 Direct, personal presentation, and sales in 
consumers’ homes
 Repetitive person­to­person selling ­ Salesperson 
visits the buyer’s location to sell frequently 
purchased products
 Nonrepetitive person­to­person 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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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 long­term 
relationship with a customer
 Helps determine if a customer should be acquired
 Optimizes existing customers’ service levels 
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Advantages and Disadvantages of 
Direct Marketing
Advantages

Disadvantages

• Selective reach

• Image factors

• Segmentation capabilities

• Accuracy

• Frequency

• Content support

• Testing

• Rising costs

• Timing

• Do Not Contact lists

• Personalization
• Costs
• Measures of effectiveness
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