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Electronic Commerce and Direct Marketing

MKT 6870-01. Electronic Commerce and Direct Marketing. Direct Marketing. Once the ugly stepchild of marketing, DM now garners 25% of US marketer’s budgets surpassing newspapers and broadcast TV

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Electronic Commerce and Direct Marketing

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  1. MKT 6870-01 Electronic Commerceand Direct Marketing

  2. Direct Marketing • Once the ugly stepchild of marketing, DM now garners 25% of US marketer’s budgets surpassing newspapers and broadcast TV • Direct marketing started fairly simply with early American colonists ordering seeds and other products not available in the Colonies. • Rural America has always favored direct marketing to enable access to everything from prefab homes and barns to clothing.

  3. Direct Marketing • Direct Marketing today is at the center of a communications revolution • The Internet is now the essential tool and an essential part of everyday living • Marketer’s now demand their funds are used efficiently to provide customer centric communications • ROI is demanded

  4. Direct Marketing Growth • Recent growth in non traditional businesses • Credit card companies, banks, investment firms, insurance companies • Telecom, cable, utilities now heavily involved • Airlines, automobile manufacturers and the travel industry are all users • Very few industries are not touched by direct marketing

  5. Direct Marketing Defined • So what is direct marketing exactly? • 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 use and retrieval.

  6. Fundamental Definition Components • Interactive – One on one communications between the marketer and prospective customers/customers. Two way interactions are the building block of DM • Use of Advertising Media • Combination of various media complements the overall effectiveness of the marketing efforts • Track, Record, and Analyze • Measurability is the hallmark of DM. Marketers now demand it! • Stored in a Database for Future Use and Retrieval

  7. Basics of Direct Marketing • Seeks to generate a measurable response to an offer • A call back, an order, website research • The organization wants to generate leads and encourage relationship building • Elements of Promotion • Copy 15% List/Media 40% • Timing 10% Offer 20% • Layout/format 15%

  8. Components of Promotion • Media/List • One of the keys to producing a response • All a matter of exposure • Segmenting and targeting vital • Getting together the buyers/sellers • Media mix vital – TV, radio, Internet, newspapers Geography, demos, psychographics • Offers • Relevance to TM vital; motivation important • Expenses lower than advertising so offers and incentives can be more generous • Creativity • Copy - compel me to respond • Benefits, description, support copy and facilitators or sweeteners • Layout – enhance eye flow patterns, easy to read and process, highlight significant items and tell the story

  9. Efficiency in Direct Marketing • Do you attempt to capture a certain % of the market share or a % of your segment? • Many direct marketing products experience different product life cycles • Changes media and offer strategies  • New Objectives • Building and maintaining customer loyalty • Costs 5-10x more to generate a new customer than retain • 90% of profits from 10% of customers – Olgilvy • Reducing customer defections by 5% could increase profits 25-85%

  10. One to One and Customer Relationship Marketing • One to One – • Direct interaction with the individual customer • Mass Customized treatment of the consumer • Difference with Direct Marketing is how solutions are approached • Enables information collection and insight • Enables creation of products for the consumer • Direct Marketing • Traditionally behaviorists • Results oriented (the sooner the better) • If you buy outdoor equipment, sell the lists, bombarded with catalogs!

  11. Integrating Communications • Phase One – moving away from mass marketing messages … one commercial for everyone watching a particular program (TM) • Identifying customer segments and sending messages per segments • Integrating DM into an overall communications program • First understand insights and consumer motivations • Matching audiences, media and technologies avail • Generate effective messages per audience

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