D. Direct Marketing
Direct marketing consists of direct communications with carefully
targeted individual consumers
to obtain an immediate response. Interactivity is essential to this
process. The marketing manager
must remember that direct marketing is not new. Catalog companies,
direct mailers, and
telemarketers have been using the approach for years. However, improved
and new media (computers, modems, fax machines, e-mail, the Internet,
and online services) have
changed the direction and nature of direct marketing. Most direct
marketers see direct marketing
as playing an even broader role than simply selling products and
services. Mass marketing is
targeting broadly with standardized messages and marketing offers
intermediaries. Today, there is a trend toward more narrowly targeted or
(called direct marketing). This approach is being
accepted as both a primary and supplemental
a. What is Direct Marketing?
Mass marketers have typically sought to reach millions of buyers with
a single product and a
standard message delivered through the mass media. Under this
mass-marketing model, most
marketing involved one-way Communications aimed at consumers, not
two-way interactions with
Direct marketing consists of direct communication with carefully
targeted individual consumers to
both obtain an immediate response and cultivate lasting
Customer relationships. Direct marketers communicate directly with
consumers, often on a oneto-
one, interactive basis. Today, improved databases permit more
sophisticated direct marketing
and tailoring of marketing efforts. Beyond brand and image building,
direct marketers seek a
direct, immediate, and measurable consumer response.
b. The New Direct Marketing Model
Early direct marketers--catalog companies, direct mailers, and
names and sold goods mainly through the mail and by telephone. Today,
advancement in database
technologies and new marketing media—especially the Internet and other
direct marketing has undergone a dramatic transformation. Direct
marketing may be perceived as
being a distribution function (direct distribution) and a communication
function (direct contact
with the consumer). Some firms use direct marketing as a supplemental
medium. However, for
many companies today, direct marketing is more than just a supplemental
channel or medium.
The Internet and electronic commerce now constitute a new and complete
model for doing
business. Some say the Internet is the foundation for a new industrial
order. Some firms (and the
number is growing) use the new direct model as their only approach.
Experts envision the day
when all buying and selling will involve direct connections between
companies and their
customers. The new model will change customer’s expectations about
comparability, price, and service.
c. Benefits and Growth of Direct Marketing
Direct marketing brings many benefits to both buyers and sellers. As
a result, direct marketing is growing very rapidly.
i. Benefits to Buyers
Direct marketing benefits buyers in many ways:
1). It is convenient.
2). Buying is easy and private.
3). Greater product access and selection.
4). Provides a wealth of comparative information.
5). Online buying is interactive and immediate.
ii. Benefits to Sellers
Sellers benefit by:
1). Direct marketing is a powerful tool for customer relationship
2). Direct marketing can also be timed to reach prospects at just the
3). Because of its one-to-one, interactive nature, the Internet is an
especially potent marketing tool. Continuous relationships can be
4). Reduce costs and increase speed and efficiency.
5). Online marketing offers greater flexibility.
6). The Internet is a truly global medium.
d. The Growth of Direct Marketing
Sales through traditional direct marketing channels have been growing
Sales through direct marketing channels are growing at about 8 percent
annually (as compared to
only 6 percent overall sales growths). Online marketing is growing
explosively. Sales on the
Internet have been growing at about 60 percent per year for the last
five years. Trends that seem to moving our society toward even more
direct marketing include:
a). Degasification--focus is toward mini markets.
b). Lack of time and congestion. Higher costs of driving.
c).Growth of delivery services and the support infrastructure.
d). Growth of computer power and databases.
e) Growth has also occurred in the business-to-business sector.
e. Forms of Direct Marketing
Major forms of direct marketing are summarized below:
i. Face-to-Face Selling
The original and oldest form of direct marketing is the sales. Today,
many companies’ still use salespersons or representatives to reach their
prospects, develop them into customers, build lasting relationships, and
grow the business.
In telemarketing telephone is used to sell directly to consumers. Two
general types of telemarketing include:
1). Outbound telephone marketing to sell directly to consumers.
2). Inbound toll-free 800 numbers to receive orders from television and
radio ads, direct mail, or catalogs. 900 numbers are used to sell
consumers’ information, entertainment, or the opportunity to voice
an opinion on a pay-per-call basis. Many customers appreciate the offers
they receive by telephone, however, because of the recent explosion in
unsolicited telephone marketing, lawmakers are responding with efforts
to control unsolicited telemarketing during certain hours of the day.
Most telemarketers support some form of legislation.
iii. Direct-Mail Marketing
Direct mail marketing involves sending an offer, announcement,
reminder, or other item to a
person at a particular address. Direct mail is well suited to direct,
1). High target-market selection
4). Allows easy measurement of results.
Even though the cost per thousand can be high, the people who reached
through direct marketing
are better prospects than those who reached with other media. New forms
of direct mail include:
1). Fax mail.
3). Voice mail.
iv. Catalog Marketing
Catalog marketing involves selling through catalogs mailed to a
selected list of customers or made
available in stores. A catalog is a printed, bound
piece of at least eight pages, selling multiple
products, and offering a direct ordering mechanism. Some stores offer a
complete line of goods
through their catalogs. Most direct retailers have put their catalogs on
the World Wide Web. Web
catalogs are passive and must be marketed themselves.
v. Direct-Response Television Marketing
Direct-response television marketing takes one of two major forms.
1). Direct-response advertising occurs when marketers
air television spots or
2). Home shopping channels are entire programs or
channels dedicated to selling goods
In the near future, two-way interactive television and linkages with
Internet technology will make
television shopping much different from what it is today and it will
become one of the major
forms of direct marketing.
i. Kiosk Marketing
Some companies place information and ordering machines (called
kiosks) in stores, airports, and
other locations (in contrast to machines which dispense
products--vending machines). Business
marketers can also use kiosks (such as at trade shows). Kiosks are also
going online as companies
merge real-world and virtual worlds of commerce. The Gap interactive
kiosk is a great example of
vii. Online Marketing and Electronic Commerce
Online marketing is conducted through interactive online computer
systems, which link
consumers with sellers electronically.
There are two types of online channels:
1). Commercial online services offer information and marketing services
to subscribers who
pay a monthly fee. The best known is America Online.
2). The commercial online services are now being overtaken by the
Internet as the primary
online marketing channel. The Internet is a vast and burgeoning global
web of computer
networks. The World Wide Web is a popular meeting place for consumer and
• Rapid Growth of Online Marketing
Although still in their infancy, Internet usage and online marketing
are growing explosively.
Electronic commerce is the general term for a buying and selling process
that is supported by
electronic means. This would include electronic marketplaces
(these are “market spaces” in
which sellers offer their products and services electronically, and
buyers search for information,
identify what they want, and place orders using a credit card or other
means of electronic
• The Online Consumer
The Internet user is not a pasty-faced computer nerd. As a whole,
Internet users are an elite
group. They tend to be younger, more affluent, better educated, and more
male than the general
population. However, female usage almost equals males. Net users come
from all age groups,
about half are 40 years or older, they differ psycho graphically from
the general population, and
they differ in their approaches to buying and in their responses to
marketing. Teens are still a
targeted group. The seniors group is also expected to grow in the next
• Creating Online Marketing
Marketers can conduct online marketing in four ways:
1).By creating an electronic online presence.
Using this method, a company can:
a). Buy space on a commercial online service.
b).Company can open its own Web site.
2). Web sites vary in purpose and content.
a).The most basic type is a corporate Web site. These sites are designed
interactive communication initiated by the consumer. They seek to build
customer good will and
to supplement other sales channels rather than to sell the company’s
b).The marketing Web site is designed to engage consumers in an
interaction that will
move them closer to a purchase or other marketing outcome.
With this form of site, the marketer initiates communication and
3).Creating a Web site is one thing; getting people to visit
the site is another. The key is to
create enough value and excitement to get consumers to come to the site,
stick around, and come
back again. High involvement products (such as new cars, computers, or
financial services) have
greater success than do lower involvement products.
The second method is to place advertisements online.
Companies can place online
advertisement in several ways:
1) The company can put online ads that pop up while subscribers are
surfing online services
or Web sites.
2). Content sponsorship allows a company to sponsor a specific report on
one of the
The third method is to participate in Forums, Newsgroups, and
1). Forums are discussion groups located on commercial
2). Newsgroups are the Internet version of forums.
3). A Bulletin board system (BBS) is specialized online
services that center on a specific
topic or group.
4). Web communities are sites that provide a place
where members can congregate online
and exchange views on issues of common interest. Visitors to these Net
neighborhoods develop a
strong sense of community. Web communities can be either social or
The final method is to use E-mail and Web casting.
The normal method used is to encourage prospects and customers to send
and even complaints to the company via e-mail. Quick response to such
messages is a key.
The Promise and Challenges of Online Marketing
Online marketing offers great promise for the future but is still
years away from reaching its
potential. Online marketing is still just one important approach to the
marketplace. The Web is
still not a moneymaking proposition for many firms.
Challenges that online marketers face include:
1). Limited consumer exposure and buying.
2). Skewed user demographics and psychographics.
3). Chaos and clutter.
5). Ethical concerns.
f. Customer Databases and Direct Marketing
There are differences between mass marketing and
so-called one-to-one marketing. A
customer database is an organized collection of
comprehensive data about individual customers
or prospects, including geographic, demographic, psychographics, and
behavioral data. The
database can be used to locate potential customers, tailor products and
services to the special needs
of targeted customers or/and maintain long-term customer relationships.
Database marketing is the process of building,
maintaining, and using customer database and
other database for the purposes of contacting and transacting with
customers. A customer
database is much more than just a list of names (i.e., customer mailing
marketers and service retailers most frequently use database marketing.
Companies use their databases in four ways:
1). Identifying prospects.
2). Deciding which customers should receive a particular offer.
3). Deepening customer loyalty.
4). Reactivating customer purchases.
Like many other marketing tools, database marketing requires a special