Direct Marketing: Chapters 14-17

• Study guide for Exam 3, covering chapters 14-17

Chapter 14: Direct Marketing

• Organizations communicate directly with target customers to generate a response or transaction.
• Aspect of total marketing involving marketing research, segmentation, and evaluation.
• Direct-response media tools implement the communication process.
• These include direct mail, telemarketing, interactive TV, print, and the Internet.

Direct Marketing Strategies & Media

• Each medium performs specific functions, taking a one- or two-step approach.
• One-step approach uses a medium directly to obtain an order.
• Two-step approach uses more than one medium.
• First effort screens potential buyers.
• Second effort generates the response.

Direct Mail

• Can be unsolicited.
• Advertisers invest substantially in it.
• Keys to success include mailing lists with generated names, market segmentation, and a compelling offer.
• Faces a threat from the Internet.

Direct Selling

• Direct, personal presentation, and sales in consumers' homes.
• Three forms include repetitive person-to-person selling, nonrepetitive person-to-person selling, and party plans where products are offered to groups.

Methods for Evaluation

• Cost per Order (CPO) evaluates the effectiveness of an ad based on call volume.
• Customer Lifetime Value (CLTV) determines the dollar value associated with long-term customer relationships aiding in customer acquisition decisions and optimizing service levels.
• RFM analysis determines the most profitable customers quantitatively.
• Recency (R) reflects how recently a customer has purchased.
• Frequency (F) reflects how often he or she purchases.
• Monetary (M) reflects how much the customer spends.

Chapter 15: Digital and Social Media

Advertising on the Internet

• Banner ads create awareness, enter consumers into contests, and fulfill direct-marketing objectives.

• Banner ads may be static, animated, or in flash, and come in various forms such as leader boards, skyscrapers, or verticals.

• Sponsorships can be regular, where a company pays to sponsor a section of a site, or content-based, where a sponsor provides money and participates in content.

• Pop-ups are ads that appear when accessing certain sites.

• Pop-unders appear underneath and become visible when the user leaves the site.

• Interstitials are ads that appear while waiting for a site's content to load.

• Higher site placement on search pages increases visitors

• Organic search results appear due to relevance, while nonorganic are paid ads

• Pay-per-click advertising is utilized.

• SEO improves traffic through unpaid results, involving owned, earned, and paid media.

• Contextual ads are determined by web page content.

• Native advertising gains attention by providing valuable content relevant to user experience.

Ecommerce

• Direct selling of goods and services through the Internet.

• Sales through e-commerce reached over $517 billion in 2018, constituting 14.3 percent of all U.S. retail sales.

• Behavioral targeting targets consumers through tracking website surfing behaviors.

• Retargeting ads follow a website user and appear across participating websites.

Social Media Management Tools

• Companies provide management services for small, medium, and large enterprises.
• Including media management, content development, publishing, and environmental monitoring.
• For example, Hootsuite, Buffer, and Sprout Social.
• Internet-specific measures gauge commercial effectiveness in real time
• For example, Facebook Analytics (impressions, engagement, best posting times).
• Google Analytics (unique visitors, bounce rate, time on site, impressions, cost per click, conversion rate.

Chapter 16: Sales Promotions

• Direct inducements offering extra value or incentive for the sales force, distributors, or ultimate consumer.
• Primary objective is to create an immediate sale.
• Examples include premium offers that provides extra incentive to purchase Lucky Charms.
• A promotional tool for extra incentive to buy, such as coupons, price reductions, sweepstakes, rebates, or free samples.
• Used as an acceleration tool with limited-time offers.
• Targeted to consumer or trade. Consumer-oriented includes sales promotion and trade oriented.

Consumer-Oriented Sales Promotion Techniques

• Sampling involves giving some quantity of product at no charge to induce trial and is most effective for low-unit value, divisible products with a short purchase cycle.
• Sampling methods include door-to-door, mail, in-store (e.g., Costco), on-package, event, and Internet/social media sampling.
• Couponing is the oldest and most widely used sales promotion tool.
• 60% of consumers use coupons, with 13% using them regularly.
• $258 billion were distributed in the U.S. in 2018.
• Freestanding Inserts (FSIs) are advertising booklets containing consumer packaged-goods coupon offers delivered with newspapers/direct mail, and are efficient but may lead to clutter.
• Bonus packs offer consumers extra amounts of product at the regular price, providing value and defense against competitors but may require additional shelf space, appealing primarily to current/promo-sensitive consumers.
• Loyalty programs allow accumulation of points for continued purchases which can be redeemed for discounts, gifts, prizes, and more.
• These programs aim to encourage continual usage, develop strong customer loyalty, and build databases.
• Limitations include slow reward accumulation, app requirements, and program appeal.
• Event marketing connects a company or brand to an event by creating themed activities for consumer experiences and product promotion.
• Event sponsorship involves a financial support for the right to display brand name/logo/advertising, and being identified as a supporter.

Types of Trade-Oriented Sales Promotions Cont.

• Trade allowances encourage resellers to stock, promote, or display products.
• Buying allowances are price reductions on merchandise ordered during a fixed period.
• An Off-invoice allowance deducts a per-case amount or percentage from the invoice.
• Promotional allowances are given for certain activities supporting brands.
• Merchandising allowances can be given for in-store promotion or product inclusion in ads like special displays.
• Slotting allowances are fees for providing a slot, if the product fails they can charge failure fees to cover costs.

Chapter 17: Public Relations, Publicity, Corporate Advertising

Developing and Executing the PR Program

• Press releases are statements to media that must be factual, true and of interest to the medium and it's audiance.
• Press conferences involve delivering information by interacting directly with the media.
• Exclusives offer rights to one medium, where an interview is answering questions, and community involvement includes contributing.
• Internet use means disseminating information electronically, and digital public relations is the intersection between traditional activities and new digital marketing functions.

Advantages and Disadvantages of PR

• Advantages include enhanced credibility, cost savings, clutter avoidance, lead generation, selectivity, and positive image building.
• Disadvantages include potential for incomplete communication, lack of source connection, and mismanagement leading to inconsistent efforts.
• Publicity is more powerful than advertising, sales promotion, and other forms of public relations because it's highly credible.
• Information may be perceived as endorsed by the medium.
• Publicity has news value and generates exposure.

Objectives of Corporate Advertising

• Creating positive image for the firm, getting across views on social/business/environmental issues, boosting employee morale, helping newly deregulated industries ease consumer uncertainty, and helping diversified companies establish identity.

Types of Corporate Advertising

• Image advertising is designed to create goodwill, creating a position for the company and generating resources, both human and financial.
• General image ads create/change the image EX: Accenture wants viewers to think of the company as large and flexible by showing an elephant surfing.
• Sponsorship provides support.
• Recruitment creates an image to help recruit new employees.
• Financial support helps the corporation generate investments.

Types of Corporate Advertising Cont.

• Event sponsorships involve taking specific steps as a marketing strategy.
• Including building equity and affinity and sponsoring Nascar.
• Advocacy advertising spreads ideas and explains controversial social issues of public importance while indirectly supporting a sponsor's interests.
• Issue ads are sponsored by organizations to highlight what they consider important, while cause-related advertising links with nonprofit organizations as sponsors, but takes time/effort.