Direct marketing is a form of advertising that reaches Its audience without using traditional formal channels of advertising, such as TV, newspapers or radio. Businesses communicate straight to the consumer with advertising techniques such as fliers, catalogue distribution, promotional letters, and street advertising. Direct marketing differs from regular advertising in that it does not place its messages on a third party medium such as a billboard or a radio commercial would. Instead, the marketing of the service or commodity is pitched directly at the consumer.
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A well- executed direct advertising campaign can offer a positive return on Investment as the message Is not hidden with overcomplicated branding. Instead, direct advertising Is straight to the point; offers a product, service, or event; and explains how to get the offered product, service, or event. Direct marketing does have some negative aspects, however. Many people are unaware of how the personal information they include on an order form or survey may be used for targeted advertising later.
Direct marketing is different from the traditional advertising techniques through contemporary channels Like Newspaper, Television or radio. Direct mall marketing Is one type of marketing strategy which if lucratively conceded out acquires vast booty for the business. Direct mail marketing is said to be the most excellent approach to get in touch with new customers. With this direct mail marketing, companies have got to know that they can get in touch with their customers directly. Most direct marketing is done by companies whose only function is to manage and perform direct advertising, rather than by the advertised entity Itself.
Direct marketers have been long time customers of computer databases, and they often have very sophisticated arterial of inclusion and exclusion in their mailing lists. Definition of Direct Marketing Direct marketing is an interactive marketing system that uses one or more advertising media to effect a measurable response & / or transaction at any location. 2. Direct marketing is the planned implementation, recording, analysis and tracking of customers’ direct response behavior over time to derive future marketing strategies, for developing long-term customer loyalty and ensuring continued business growth. . Direct marketing Is any activity that creates and exploits a direct relationship between a firm and its individual customer. . 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. 5. Any Promotional activity that creates and exploits a direct relationship between an organization and Its prospect and / or customer as an Individual. Growing Importance of Direct Marketing.
Today Direct Marketing plays a broader role, that of building a long-term relationship with the customer. Direct Marketers send birthday cards (e. G. Kisser Tours), information material (e. . Data Telecoms), small premiums (e. G. Reader’s Digest) to selected members of their customer base. Alertness, Hotels, and a number of other and club programs. Different Channels of Direct Marketing. Following are the different channels of direct marketing: 1. Face-To-Face Selling The original and oldest form of direct marketing is the field sales call e. G. Eureka Forbes, Real Value – Ceasefire.
Today most industrial companies rely heavily on a professional sales force to locate prospects, develop them into customers, and grow the business; or they hire manufacturers’ representatives and agents to carry out the erect-selling task addition, many consumer companies use a direct-selling force: insurance agents, stockbrokers, and distributors working for direct-sales organizations such as, Airframe, Avon etc. 2. Group Selling A. Exhibitions and Trade Shows Exhibitions are a hybrid medium. Some exhibitions are like broadcast media advertising.
The aim is merely to put products on show to a large number of customers and excite their interest. There may be a direct marketing component. These can then be distributed to local dealers for follow-up, or customers may receive a mail-shot to sustain their interest and trigger a visit to an outlet where they an buy. Increasingly, especially in business to business, exhibitions are used as an integral part of the contact strategy. Prospective or existing customers are targeted through your database or rented lists. They are invited to the exhibition and perhaps asked to confirm their attendance.
An appointment with stand staff may even be booked. After the exhibition, depending on the success of the visit, there may be a follow-up contact (sales force, telephone or mail). You should use exhibitions when: Sales calls are expensive and you want to get many customers visiting you rather than you visiting them; * You want to attract new customers and the exhibition has proven quality attendance. In this respect, the exhibition functions like a rented list; * Complex concepts are being demonstrated, so instead of individual demonstrations having to be mounted all over the country, many customers can see the demonstration in one location. . G. People, Honda, Data, Consumer Durables B. Sales seminars and other company-sponsored special events These include the following: * The straightforward sales seminar, where a concept is described and perhaps audio-visual techniques are used to demonstrate it in action; the physical demonstration of the product, often held in your sales office or at the factory; Awareness and training events, where your aim is to educate customers so that they can appreciate the value of your company offering. This is the ‘soft sell’ approach; * Entertainment, e. G. Sits to sporting and cultural events. Here your aim is to reward your customer for loyalty and to further cement the relationship. All these have much in common with exhibitions from a direct marketing view point. The difference is that, being sponsored by you; all those attending must be invited by you ensure the right quality of attendee, direct marketing is the medium most commonly used to market such events. E. G. British Airways, Time-share Club selling. 3. Direct Matt Direct-mail marketing involves sending an offer, announcement, reminder, or other item to a person.
Using highly selective mailing lists, direct marketers send out millions of mail pieces each year-?letters, flyers, foldouts. Direct mail can be used effectively in both acquisition ; retention. Direct mail personalization is very common. Today, nearly every mailing to a-firm’s prospects and customers has the name of the target person, along with his or her address. Direct mail is flexible because of its ability to customize a message based on the audience it is appealing to and the circumstances under which that appeal is being made. As a medium, the mails have no fixed audience parameters.
Unlike other media, such as television, radio, magazines, and newspapers, direct mail is not constrained in how it defines the scope and location of its target audience. Thus, the mailer, not the medium, determines the nature and size of any direct-mail effort. Direct mail has no editorial environment. Some mailings look like offers, while others are disguised to appear to be something else. Direct mail obtains higher response rates than any other medium used in direct marketing due to its ability to be personal, selective, and flexible and to deliver a custom message free of competing advertising to a specific individual or household.
Although many direct mail pieces are discarded because they are seen as junk, what is read still pulls a larger response than that of any other medium. Thus, the advantages of direct mail are as follows: * Selectivity * Personalization * Flexibility * Isolation * Response rates . Direct- Response Television Commercials Today’s revolution in direct marketing is most evident in the way direct-response commercials look, implying that the audiences react mainly to the creative approach of what they see.
However, like any other form of advertising, direct-response commercials seek to communicate with members or target markets. Direct-response advertisements are designed to provoke a specific action from the prospects. The object may to be the viewer to place an order by calling a number or, less frequently, to write for more information, e. G. Asian Shop, TTS. Most direct-response elevation advertisements are 60 seconds long, but some are only 30 seconds. The most successful commercials offer a bargain, guarantee satisfaction and make the product easy to order.
Each of these reduces the risk the consumer may perceive in placing the order by making the shopping experience easy, convenient, safe and economical. Direct-response television offers produce 60-to-80 percent of the-orders via toll-free phone, with the rest coming in by mail. Toll-free numbers connect the caller with phone centers that handle incoming calls they generally operate seven days a week and are staffed to handle the anticipated phone volume. Magazines and newspapers convey messages on printed pages to mass audiences or highly segmented audiences, depending on which specific publication is selected.
Direct marketers benefit from prints in the following ways ; Longer shelf life compared to direct mail ; Pass-along readership potential ; Regional and demographic segmentation ; Print also allows direct marketers to widen their customers base to non-mall order buyers. Making magazine and newspapers advertising work. Direct-response magazine and newspapers space advertising must ask the reader to do something. To make a sale, he advertisement must present enough information to stimulate a purchase decision or generate an inquiry, which will be followed up by mail or a personal sales call. E. G.
Asian Paints, Berger Paints, McDonald’s, Domino’s, Outlook, The Week. 6. Catalogs The word catalog has been derived from the Greek word ‘Catalogs’, meaning ‘to list’, the use of the word list may seem rudimentary, but even today catalogs are most often both visual and verbal listings of products for sale. Products are pictured with informational copy designed and worded to entice the reader to buy. Sophistication f design, photographs, art, ink, and glossy paper have transformed the original unadorned ‘list” into one that is fully customized and ready to entertain, educate, and sell with the flip off page. . E-mail and the Internet The Internet provides marketers with the ability to interact with people far more. Its main benefits to the direct marketer include the complementary use besides other more classic direct marketing methods to supply further information. It can be refreshed regularly and cheaply, which can be far more efficient than updating a catalogue. The Internet, due to its progressive and innovative nature, lends itself well o similar approaches. Therefore creativity and interactivity are key to achieving and maintaining cut-through in this highly competitive medium. . G. Amazon. Com, Baize. Com, Reedier, Yahoo. Telemarketing and m-commerce 8. Telemarketing helps companies increase revenue, reduce selling costs, and improve customer satisfaction. Telemarketing can be an important part of an integrated marketing communication program. The telemarketing objective is to reach customers in a personalized, cost-effective interaction that meets customer needs. The scope of telemarketing is limited only by the imagination of the direct marketer.
Although no other marketing tool can match the cost-effectiveness, flexibility, control, and speed of the telephone, it takes more than Just good telephones to get good results. A telemarketing firm must have qualified telephone operators who have been well trained in the use of the telephone as a marketing tool. This includes training in proper voice inflections, listening skills, persistence, and patience. Companies use call centers for inbound telemarketing (receiving calls from customers) and outbound telemarketing (initiating calls to prospects and customers). E. G.
CHIC, Citibank, HISS, Many publications offer to place flyers, inserts for direct marketers. Some readers find it irritating but many respond well as they are the first thing in the Journal that they see & thus have an effective impact. Most inserts outperform sales advertisements but they tend to be three to six times more expensive depending on the quality of production. For a direct marketer it means that your message is isolated from the run of the Journal & has the opportunity to stand out more effectively, prepaid reply cards & free phone response numbers make it easy to or people to respond e. . Computer Institutes. 10. Videotape and interactive TV Here the consumer’s TV set is linked with a seller’s catalog by cable or telephone lines Consumers can place orders via a special keyboard device connected to the system Much research is now going on to combine TV, telephones, and computers into interactive TV 11. Short messaging service (SMS) SMS is the written text service, which is sent from mobile to mobile and also, though less widely used, from PC to mobile and from digital TV set-top box to mobile. This is often called ‘message to mobile’.
As this channel is fairly new, it has the benefit of increased cut-through and impact on its audience who may still be receiving marketing through SMS for the first time. With SMS comes the promise of personal and local marketing that is both interactive and immediate. However, because this is an incredibly personal channel, care should be taken to ensure the message is targeted to the right person, at the right time, with the right offer, or else the message can be lost and damage done. Results have shown that the more interaction you have with the receiver, and the more value you add, the better the response.
Mimic: integrated marketing communication A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation. Integrated Marketing Communications is a simple concept. It ensures that all forms of communications and messages are carefully linked together. At its most basic level, Integrated Marketing Communications, or MIMIC, as we’ll call it, means integrating all the promotional tools, so that they work together in harmony.
Promotion is one of the As in the marketing mix. Promotions have its own mix of communications tools. All of these communications tools work better if they work together in harmony rather than in isolation. Their sum is greater than their parts – providing they speak consistently with one voice all the time, every time. This is enhanced when integration goes beyond Just the basic communications tools. There are other levels of integration such as Horizontal, Vertical, Internal, External and Data integration. Here is how they help to strengthen Integrated Communications.
Benefits of Direct Marketing. Direct marketing involves direct business. So it is cost beneficial for consumers, as there is no price hike due to wholesalers or retailers. Marketing executives can state certainly of the exact response to their products. The profit or loss can be * There is a lot of control in it. * There is flexibility. * The impact of direct marketing is more than any other market. Specific public. * It gives proper response. * Home shopping is fun, convenient ; hassle free. * It saves time. * It reaches more * Introduces customer to a large variety of products at a time. Comparative hopping is possible by browsing through mail catalogues ; on line shopping. * Because no intermediaries are needed, they reduce the intermediary mark ups ; increase profits. * The prospect is encouraged to place an order or trust information more as he is calling a number or sending a card. * Sellers also benefit, as they can personalize ; customize messages. Disadvantages of Direct Marketing * Sometimes, direct mailing offends the customers and many do not endorse it as they say it inhibits their private lives. But most marketing managers are in support of this kind of business. The various forms in which direct business is made are: * Direct mailing: Here, paper mails are sent to the selected groups of people, who likely to give positive response e. G. The paper mails of latest food processor is sent to all homes where house wives are resident so that immediate response is seen. Also CDC can be used as demonstrating media. * Email Marketing: Here, emails are sent to all the selected customer categories with repeated intervals of time. But most of these are put into trash and spam.
So the effectiveness of this form cannot be predicted. * Telemarketing: In telemarketing, calls are made erectly to the consumers and the concerned product is advertised. People sit at call centers to sell products on behalf of their clients. But this form of direct business is quite unpopular and most people oppose the uninvited calls. It was initially made illegal but later on new laws were re-enforced and calls are now made only to those who don’t mind them. * Vocalism: Telemarketing created a lot of consumer opposition and consumers would abuse the ones advertising on the phones.
In order to avoid this, vocalism marketing was introduced, wherein; the entire advertisement is digitally recorded and presented. Use of coupons: Coupons are attached to direct mails and sent to the consumers. These generally advertise and give cost benefit to the consumers. So they avail these coupons and respond fast. * Television marketing: Advertisements are given on the television and demos are with toll-free call back numbers or certain websites for the consumer to get in touch with the manufacturers. * Broadcast faxing: This is the least popular form of direct marketing.
The ads are directly faxed to the consumers. * Direct marketing can thus become successful only if the entanglements with the consumer are good. It can be BIB or BBC. It measures exact consumer response. Bayberries Motormen Worker GAG BMW (Bayberries Motormen Worker Existentialistic) was founded in 1916 and has been publicly traded since 1969. The company produces, and markets, a varied range of higher end sporty cars and motorcycles. BMW has also manufactured the first passenger car running on hydrogen ready for common use, although the production figures are limited by the lack of a respective filling station net.
In addition to cars and motorcycles, BMW operates an aircraft engine division under the brand name of Rolls Royce. The company has worldwide subsidiaries and manufacturing plants in Germany, Austria, the I-J, the USA, Mexico, Brazil, South Africa, Egypt, Thailand, Malaysia, Indonesia, the Philippines and Vietnam. The company also operates its own financing company, which offers financing for vehicles. Automobiles accounted for 78% of 2000 revenues; vehicle finance leasing, 18%; motorcycles, 3% and other, 1%.
History In the early sass, BMW began to restructure its business. It focused on strengthening its position as the market leader in the premium segment of automobiles across the world. In line with this, it adopted a product offensive treated which aimed at flooding the automobile market with new launches (I. E. A new product every three months). BMW increased its R&D expenditure by 53% to support this strategy. Some of the new cars launched as a part of this strategy were Mini One, Mini Cooper, new BMW 3 Series Compact, new BMW 7 Series and Z Roadster.
By 2002, BMW had overtaken Mercedes and stood second in the premium segment of the US automobile market, next only to Lexus THE STORY BEFORE 2001 Before 2001 the majority of Bum’s success is attributed to the development of consistent marketing policy, the “market niche” strategy. The company had four core values Technology, Quality, Performance, Exclusivity. The company used advertisements as a means of marketing and these advertisements evolved in response to economic, environmental and competitive changes. Promotion strategies before – 2001 -running point – 2001 In year 2001 , they launched Bowfin’s. Mom, “The Hire” (a film series consisting of five different short films) has been singled out as the first high profile, big-budget, celebrity-laden Internet marriage of advertising and entertainment. Traffic to the site was up 55% to 214,000 unique visitors compared to only 138,000 the previous week. Average work-hard, play-hard customer was 46 years old, with a median income of about $150,000. Two-thirds were male, married, and had no children. As BMW sliced and diced its market further, an interesting statistic surfaced: Roughly 85% of BMW purchasers used the Internet before purchasing a BMW.
In addition to the BMW Films series the promotional campaign consisted of TV spots that copied trailers, and print and online advertising, which were designed to drive consumers to the web site strong stance to drive consumers to the Web, and the results are compelling. More Han 10 million films have been viewed from Bowfin’s. Com. Nearly 2 million people registered on the site, with 60% of those registrants opting to receive more information via e-mail. An astonishing 94% of registrants recommended films to others, seeding the viral campaign, and more than 40,000 people voluntarily responded too survey.
The guerilla public relations campaign. The guerilla public relations campaign utilized several diverse promotion tactics including seeding news of the BMW Films at key Internet entertainment rumor sites and a radio DC program in 20 key metro markets. BMW sales increased by 12. % compared to 2000, surpassing the 200,000 mark for the first time in history. BMW Car maker uses web mostly to drive its brand. Car manufacturer BMW takes the phrase ‘beyond the banner’ seriously. In its ads for the BMW Compact, the car drives out of the banner ad and around the sides of the browser window, to show how much it “loves corners”.
Bum’s online strategy is highly brand-driven in the I-J, with click through considered to be a side benefit. The company has used traditional banners, banners with pull-down menus, Superstitious, transitional ads which appear between pages, pensioners and dynamic HTML ads like the one mentioned above to promote its brand message–the benefits of ownership in terms of the driving experience. The car company’s research shows that of the people who were exposed to its online advertising in a particular environment and then visited BMW. Co. K, more than 80 percent did not click through straightaway, but visited later. This shows, says BMW, that they had retained the brand message, even after leaving the banner. Marketing Overview The majority of Bum’s success is attributed to the development of a consistent marketing policy, the ‘market niche’ strategy. The company has built its brand on four core values, which are: Technology Quality Performance Exclusivity BMW has maintained these core values since the company’s inception. Coupled with WOWS (BMW advertising agency since 1979), the company has adopted a consistent advertising strategy.
In addition to the message of these values being portrayed in advertising campaigns, the company explicitly expresses one or more of these values in all BMW advertisements. However, it is important to point out that BMW also relies on its sensitively to the environment, which is clearly seen by how the company’s advertisements evolved in response to economic, environmental and competitive changes. This design philosophy, which runs through every BMW, has been communicated through a number of TV and print ads.
The brand image has been built up by using over 300 color press advertisements, and more recently through a total of 64 different its beliefs of focusing on the substance of the cars themselves. In addition to the high profile national color press and television advertising, individual dealers are encouraged to run their own local campaigns. Local press, radio and bus advertisements are all available from BMW dealer marketing. Additionally, brochures, price lists and dealership point-of-sale materials are made accessible through the corporate office. BMW encourages its dealers to make use of these services.
Providing the dealers with a central source for advertising, BMW ensures that all communications remain standardized as well as maintaining BMW brand values. BMW has embarked on a global advertising campaign. What differentiates this promotion is the fact that it remains consistent throughout the company’s international campaign across the European, USA, Asia, South Africa and the Middle East markets. In over 15 countries there will be: TV spots Print advertisements Mega-posters Radio spots Events In all three James Bond films BMW, MGM and EON Productions Ltd worked together on a cross promotion project.
This was accomplished worldwide with TV commercials, print ads as well as displays in BMW dealer showrooms. Marketing Channels Internet Auto manufacturers have taken some innovative approaches to draw Internet users to their web sites. However, it is surprising how quickly innovative becomes ordinary. Slide shows, flash animation, and surround video are now commonplace on most manufacturer’s sites. In addition, contests have become so common that the possibility of winning a free car may not be enough to hold a viewer for more than a few minutes. Xx banners are sold on a run-of-site (ROSS) basis, meaning, they will appear on every search results page and on an equal rotating basis with other advertisers’ banners. Advertising rates for 468×60 ad banners are computed on a cost-per- thousand (CPM) impression basis and are currently priced at US $10 to $1 5 CPM. Flashing banners and other methods cost slightly more based on the website and technology involved. For online ads, each advertiser is given password-protected access to Real-Time advertising statistics, including how many impressions were served, how many click-thorough were achieved, and what click-through rate was achieved.
The industry standard for the click through rate is anywhere from 0. 25% to 2%, for sites like CNN, ZED Net, or Yahoo. Your actual click-through rate will depend on the appearance of your ad, and what it offers in terms of a marketing message and call to action. Just like running a television commercial during prime time, or placing a full-page ad in “Time” magazine, these ads do not necessarily cause people to pick p the phone and order a product at that very moment.
Whereas a web-based process which guides the consumer through a systematic process is to make a company and establish it as a major force in the industry. Then, when consumers are ready to buy, your company will come to mind. Television The 1999 American Association of Advertising Agencies Commercial Production Costs Survey revealed that the average cost of a 30 second national commercial for an automobile was a whopping $389,000. The percentages of viewers of MASC. and Bravo who are in Bum’s target income bracket constitute 20. %.
The percentage of viewers in Bum’s target age group (25-34) is 26. 5%. Print The advertising rates in a periodical like Time Magazine ranges from $250,000 for a full-page mono to $360,000 for a full-page color ad. The average age of a Time Magazine subscriber is 45 and they have a median income of $69,000. This audience is of twice the age and half the income of Bum’s intended target market. Time Magazine is one of the premier periodicals on the market at this time. DVD ‘Promotions The cost of producing a DVD master is between $50,000 and the cost of producing any bonus materials.