DIRECT MARKETING Chapter-1

1. DIRECT MARKETINGChapter-1 Definition Of Direct Marketing Direct Marketing is the interactive use of advertising media to stimulate an (immediate) behavior modification in such a way that this behavior can be tracked , recorded , analyzed and stored on a database for future retrieval and use.

2. Lets Elaborate On The Chosen Definition • DIRECT MARKETING Interactive Track Record & Analyze Stored in database for future retrieval & use Use of advertising media

3. Interactive: Two way interaction is a fundamental building block of direct marketing (two way interaction) • Use of advertising media: Using a combination of media is often more productive than using a single medium. Eg: Direct Mail/Magazines/Newspapers/TV/ Radio/Telephone/Internet/E-mail/broadcasting • Track, Record & Analyze: Every form of direct marketing activity, with rare exceptions is measurable. (Spending, response, and return on investment) • Stored in database for Future Retrieval & Use: Database are used to store: a) History of purchase b) Sources of Response c) Credit rating etc The use of a database is another fundamental building block of direct marketing This detention is media based

4. The Basics Of Direct Marketing The basic purpose of any direct marketing program is to get a measurable response that will produce an immediate or ultimate profit. To create a measurable response ,there must be an offer – a call to action. An offer to sell a product or service direct to a customer or a business is but one way to create a measurable response. Offers that create leads for: Sales representatives Get people to enquire for information Build traffic in retail stores and Impel people to give to causes can also be measured

5. Components of Response • Lists Media • Creative Response • Offer These decisions variables can be divided into four parts which we call it the Elements of response: and ranked by importance: • Media lists 40% • Offer 30% • Copy 15% • Layout 15%

6. Media List Choosing the best media lists is the key to reaching the right target group. Many media forms can be selected Geographically Demographically or Psychographically[by life style] Media Forms Direct mail – To reach the best target groups Newspaper – By day of week Television – By Program type Internet

7. The Offer , also known as the proposition , is another key to success. It is the terms under which a specific product , service or brand is promoted i.e. the promise of the transaction includes mix factors that motivate customers e.g. price, payment,gurantee,services

8. Creative executions or the two elements of copy and layout or design, is not ranked as high as media or the offer. But creative thinking must always be about how • How the customers lives will be better • How the product or service solves their problems or • Will make them more successful at some endeavor (attempt). A creative should • Involve the Customer • Stimulating emotions that can evoke response

9. Most direct response copy falls into four categories • Benefits • Descriptions • Support copy and • Sweeteners and Facilitators

10. Benefits are the most important kind of copy, showing how the product or service will improve the potential responder’s life. Descriptive copy replaces personal examination(i.e the ability to touch , feel or try out a product or service) before purchase. Support copy validates the claimed benefits (e.g., data, statistics, research case studies, testimonials etc.,) Sweeteners and facilitators give the reader more reasons to take the offer by using incentives, offering choices reducing anxiety and making it easier to respond or pay

11. Measuring Customer Value The ultimate objective of a successful direct marketing program is to build the long term or life time value of a customer. Direct marketers often avail themselves of four terms to summarize the financial dimensions of direct marketing. Lifetime value (also called long-term value) The total of financial transactions with a customer over the life of a relationship. Regency The amount of time since a person or firm last purchased. Frequency The number of times a customer buys within a season or a year. Monetary The amount of money a customer spends within a season or a year.

12. Building Customer Loyalty Another of direct marketing uses is in growing and maintaining customer loyalty. Maintaining customer loyalty is important for all companies. It can cost five to ten times more to create a customer than it does to keep one

13. One–to-One Marketing Using information in customer database about customer behavior or demographics , companies can target the wants and needs of individual customers building stronger customer loyalty and individualizing the total customer experience. This kind of marketing has become known as one-to-one marketing. One-to-one marketing often involves direct interaction with an individual customer and then some form of mass customized treatment of that customer. Peppers points that One-to-one marketer create or find products for customer rather than finding customer for product

14. Customer Relationship Marketing (CRM) CRM practitioners use many of the same data technologies used in direct and database marketing. But they use this technology to seamlessly integrate every area of business that affects customers, including marketing , sales and customer service. CRM strives to make information a driving force within the organization not just within the marketing department. Recovering ,managing and using information from legacy or from new systems becomes a goal of CRM. Successful CRM concepts echoed by many of the ideas explored, CRM uses contact strategies based on identifying customers needs ,values of relationship ,investing in customers according to their worth ,integrating all contacts channels in one campaign, supported with sophisticated information's system ,capable staff, and measuring results

15. Customer Relationship Marketing (CRM) Successful CRM programs are a convergence of traditional direct marketing techniques, database marketing decision support tools and digital marketing capabilities. This convergence is creating new genres of direct marketing that approaches the individual communications promised by customer relationship marketing.

16. Mass Customization:Key to One-to-one Marketing One –to- one marketers are increasingly using mass customization to provide customers with products and services that meet their needs. In mass customization ,mass-market goods and services are individualized to satisfy a customer need at a reasonable price. E.g.: Motorola- Pagers different cases, colors and storage technologies Dell-for computers

17. Mass customized communications combine information technology and creativity of advertising with the skill and focus of manufacturing and industrial engineering. Combining these tools and techniques enables low-cost totally customized messaging to deliver the “right message to the right person at the right time". This can be done with Direct mail E-mail Banner ads and Print ads

18. Integrated Communications When direct marketing is combined as part of an overall campaign strategy with advertising ,Internet marketing ,sales promotion, public relations and/or personal selling ,it can be highly successful. The term most used to describe this is Integrated Marketing Communication

19. Definition – Integrated Communications The American Association of Advertising Agencies define Integrated Communications as A Concept of marketing communication planning that recognizes the added value in a program that integrates a variety of strategic disciplines e.g., advertising, direct response, sales promotion and public relations and combines these disciplines to provide clarity, consistency and maximum communications impact.

20. Much progress has been made in the last decade in Integrated Marketing Communications. However integrated marketing is still hard to co-ordinate, whether there are many unaffiliated specialty firms or one large communications network involved. Issues of who takes the lead in planning , how budgets are divided and how profits are distributed continues to be an internal problem for the success of Integrated marketing