c


c



„
„
 „


A. Defining Direct Marketing² 
  involves a total set of activities by which the
seller attempts to elicit a direct action response²for example, a purchase. As such, it employs
many aspects of marketing, including marketing research, segmentation, advertising, evaluation,
etc. A distinction is made between direct marketing and direct marketing media. The former
includes the total set of marketing activities involved in obtaining a direct response. Direct
marketing media are the tools that direct marketers use in the communications process.

B.p The Growth of Direct Marketing²Direct marketing has grown tremendously in the past few
years as a result of a number of contributing factors:

3p the catalog
3p the use of consumer credit cards
3p direct-marketing syndicates
3p the changing structure of the American market
3p technological advances
3p various other factors.

C. The Role of Direct Marketing in the IMC Program²Direct marketing activities support and are
supported by other elements of the promotional mix.

1. Combining direct marketing with advertising²Direct marketing is in itself a form of

advertising. Whether through mail, print, or TV, the direct-response offer is an ad. Sometimes
the ad supports the direct selling effort (i.e. Victoria Secret runs image ads to support its store
and catalog sales.)

2. Combining direct marketing with public relations²Private companies may use telemarketing
activities to solicit funds for charities or cosponsor charities that use these and other direct
response techniques to solicit funds.

3. Combining direct marketing with personal selling²Nonprofit organizations often use

telemarketing to solicit funds. Companies use telemarketing to screen and qualify potential
prospects.

4. Combining direct marketing with sales promotions²For example, many local merchants
send out mailers announcing sales and promotional offers.

D. Direct-Marketing Objectives²Direct marketers most often seek a direct response. This response
need not necessarily be a behavioral response, as direct marketing is now used for other purposes:
 to build an image, maintain customer satisfaction, and inform and/or educate customers in an
attempt to lead to future actions (see Exhibit 14-1.)

E. Developing a Database²One of the most important parts of the direct marketing program is the
development of a database. The database is the foundation from which direct marketing decisions
evolve. Figure 14-2 demonstrates how database marketing works, while Figure 14-3 demonstrates
factors to be included in both consumer and business to business databases. Databases are used
to perform the following functions:
3p Improving the selection of market segments
3p Stimulate repeat purchases
3p Cross-sell
Sources of database information are listed on pages 453.

F. Direct Marketing Strategies and Media²Direct marketers generally pursue either a (1) ×

 × or a (2)
×
 × in developing media strategies. In the one-step approach,
the medium is used to directly obtain an order (for example, direct response television ads). In the
two-step approach, more than one medium may be used, with the first effort designed to screen or
qualify buyers and the second designed to generate the response. A number of direct response
media are available to the marketer including:

1. Direct mail²Mail order sales exceeded $52 billion in 2004, meaning that more monies have
been spent in this medium than any other. Keys to the success of direct mail are the mailing
list and the ability to segment markets.

2. Catalogs²Catalog sales are projected to reach $19 billion by the year 2007. The text lists
some interesting examples of articles available through catalogs on page 457.

3. Broadcast media²Two broadcast media are available to direct marketers: TV and radio. The
majority of direct marketing broadcast advertising now occurs on TV, which receives the
bulk of our attention in the text

4. Infomercials²The lower cost of commercials on cable and satellite channels has led
advertisers to a new and very effective form of advertising. Exhibit 14-10 shows some of the
many companies employing this medium.

5. Teleshopping²The major shopping channels in the United States²QVC, and the Home
Shopping Network, are now being joined by others. Together they account for billions of
dollars in sales, and there seems to be no indications that this medium is reaching maturity.

6. Print media²Magazines and newspapers are difficult media to use for direct marketing
because of clutter and the relative expense. In addition, the benefit of an immediate response
is not as apparent.
 7. Telemarketing²Over $654 billion dollars worth of sales took place through telemarketing
phone calls in 2004, a decrease from 2001. Telemarketing has been hurt by the do not call
lists, though the business to business sector remains strong.
8. Electronic teleshopping²an on-line shopping and information retrieval service accessed
through personal computers.

„„
„
„


Direct selling involves the direct, personal presentation, demonstration and sales of products and services
to consumers in their homes. The text discusses three forms of direct selling including:

1. Repetitive person-to-person selling²Amway/Mary Kay

2. Non-repetitive person-to-person selling ± Encyclopedia Brittanica
3. Party plans²Tupperware/PartyLite Gifts
A demographic profile of the direct salesperson is provided on page 463.
p
„„„

„


 „

!

„
 „

"!

In addition to some of the effectiveness measures employed by other marketers, direct marketers also
employ a measure based on cost per order (CPO). Using CPO the marketer knows almost instantly
whether or not the advertisement is working.

A. Advantages of direct marketing are cited including: (1) selective reach; (2) segmentation
capabilities; (3) frequency; (4) flexibility; (5) timing; (6) personalization; (7) cost efficiencies;
and (8) ability to measure effectiveness.

B. Disadvantages include: (1) image factors; (2) accuracy; and (3) content support.
p