What is Direct Marketing ?

Direct marketing is one of the types of marketing wherein the messages are sent
directly to the consumers with the usage direct mails, phone calls etc. It is basically
focused on a single type of a person depending on his buying capabilities, age, gender
etc. Positive response from the consumer can be tracked whereas negative ones
cannot be measured. Some examples of direct marketing can be telemarketing and
telesales, direct mail, brochures, catalogs, flyers etc. Mass marketing however would
mean targeting everyone regardless of the possible future interest in the
product/service.
Direct Marketing is the interactive use of advertising media to stimuli a behaviour
modification in such a way that this can be tracked, recorded and stored on a database
for future retrieval & use
 Interactive – One to one interaction from markets to T.A.
 Advertising Media – Use of combination of Media –Direct Mail, T.V. , Newspaper
 Track, Record & Analyse – Track spending, response and rate of return.
The basic purpose of any DM program is to get measurable response that will produce
an immediate or ultimate profit.
Advantages & Disadvantages of DM
-DM involves an offer to sell a product or a service direct to customers
-DM involves an offers that creates customer leads for SRs to follow.
-Builds traffic to retail store
-Impels people to take the desired sales action
Final goal of DM is to build the long term or lifetime customer value.
In other words, individualizing the total customer experience.

Direct Marketers are all the time looking to add value to product/ service, keeping
their current customers happy and get new customers coming in.

Direct Marketers is the easiest and most cost effective way to form
a relationship with present customers and that is what keeps their
current customers happy and get new customers coming in.
 More benefits :
Reach a large universe of T.A.
 It is the only promotional element that is measurable.
 Capable of building up and scaling up a business immediately
 DM is cost efficient over a long run as it has less wastage.
 DM tools creates a strong bond with customers as if the marketing to them personally.
 Matching up of prospect to current customer profile.
 D Mailers- Anything u mail out to people in which u r asking them to order something
from u. e.g. Pizza hut, American express credit cards.
 D Response print ad- Any ad that includes a toll free order number, a coupon, an order form
for response. e.g. reader’s digest subscription cards.
 D Response T.V. ad- Any ad that includes a toll free number or address to contact for orders.
This also includes infomercials. e.g. Rudraksh or Slimming Belt.
 D Response Radio ad- Any ad that includes a toll free number or address to contact for
orders. The response can be to the radio channel or directly to the sponsor of the ad. e.g.
education or selling events, movies.
 Tele Marketing - Any phone call in which people are asked to make a purchase or give an
appointment to meet one to one for an order. e.g. computer accessories, mutual funds,
mobile services, credit cards, DTH.
 Online Marketing - Any website in which people are asked to place an order. e.g. computer
accessories, gifts, books, music, financial services.
 Benefits of Direct Marketing

To Customers To Companies
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21-4
 Direct Marketing Channels

Face-to-Face
Face-to-Face
Selling
Selling

Online
Online Direct-Mail
Direct-Mail
Marketing
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Marketing

Kiosk Catalog
Catalog
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Direct-Response
Direct-Response Telemarketing
TV Telemarketing
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Marketing
 UNIT#6
Benefits of Online Marketing

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Information
Information Lower
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Audience
AudienceSizing
Sizing
 UNIT#6
Online Marketing Channels

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Advertising
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21-10
 Class#5-10

Business, Strategic, and Direct Marketing Planning

Traditional Marketing Planning Process + Internet acting as a marketing
Distribution and Media channel.
What do you want the DM to do for you
e.g. Build traffic to store- DM to aim at increasing footfalls (Big Bazar budhwar)
- Build customer database- DM to aim Feedback based article / radio prog
- Introduce a new product nationwide
- Bata , the swiss shoe maker sells 45 million pairs of footware to 1.2 lakh customers everyday. DTH
sales of products like Bata - 24 hour home delivery service.
Introduction
Executive Summary
Situation Analysis
 A. Analysis
 Distribution Analysis
 Product Macro environment
 Competitive Situation
 Target Situation
Research
Opportunity and Issue Analysis
 Class#5-10

Coals and Objectives

 Click Homes
 New Customers per month
 Generates leads product for next 6-8 weeks.
The Marketing Strategy
Statement of marketing segment and how company
Internals to serve those segments. Who are prospects.
End users and what is buyer behaviour.
Physical mail
D Mail + Brochure +B. reply the mail
35% special discount in membership
Service to include 30 more client base – FAQ or tax advisor tips
 Class#5-10

Tactics
 Choice of media and mailing list
 Separate tactics for acquisition, relation, activation, up sell,
cross sell or any other program communication plan follows.

Budgets
The creative strategy plan
T.A.
Why are we doing this promotion consumer problem that this creative
Advertising objective creative strategy
 Class#5-10

Design a Marketing Plan

 Background

 Objective

 Strategy – Big idea

 Tactics – Tactics are the action steps that accomplish the strategy

 Ballpark Estimates – what will DM cost the company

 Contingency plan

 Time table – Decide the deadline for

 Class#5-10

The Customer Database

Customer Centric approach enable companies to break a set of customers into
smaller groups based an similarity of behaviour, attitudes, demographics or
psychographic variables.
The groups called segments are identified to serve them thru special offers,
promotions and rewards.
The knowledge behind these goals is database.
What is a marketing database?
 Marketing databases enables companies to use tools of DM.
 Database information can be used to offer products, impel actions from
channels and drive marketing communication programs.
Flat File
Customer Records – As entries become many data retrieval takes longer time.
 Class#5-10

Relational File – Large database when fields are added data becomes unwieldy.
Reduced Processing Time as data is put into files, and than files are linked into
tables.
Source of information for generating database
Types of Data maintained by companies.
Internally generated Data (Customer) External Data
 Purchases  Address (street, telephone, E-mail)
 Customer transactions  Household
 Amount spent  Demographics
 Transaction dates  Socioeconomic data
 Promotion history  Lifestyle psychographics
 Customer services  Profitability
 Lifetime value
 Class#5-10

Data warehouse – a storage facility that takes data from a number of transaction
systems and brings it together into a central repository.
The job of the data warehouse is to create a set of standardized fields for all of the
different data elements in the various legacy systems.
Advantages & Disadvantages-The data warehouse is a good data storage and
reporting system, but it is not easy or flexible to use for heavy data processing or
modeling. A better solution is to extract information from the data warehouse and
put it into a data mart : a database system designed for a smaller number of users
with more specialized data uses.
A comprehensive, customer-centric data warehouse is the optimal approach to
handling the data and transforming it into useful information for developing
customer-focused strategies and programs. In a data warehouse environment,
marketers combine large amounts of information and then use data mining
tehchniques to learn more about current and potential customers. Many software
products are available to help manage the knowledge discovery phase.
 Class#5-10

Data mining is a process for discovering patterns and trends in large database sets to
find useful decision-making information. There are a number of data mining tools and
techniques. Some are used to identify significant relationships that exit among
variables. Such tools are useful when there are many possible relationships. Once
these relationships are identified, other types of tools are then used to understand the
nature of the relationships.
Data mining is an automated analytical process, processing large databases,
searching for global patterns of behaviour, customer attributes, content history or
campaign response analysis across million of Consumer behavioural data.
Customer data can be processed into segment groups or clusters of customers
displaying similar characterstic e.g.
SB with frequent withdrawals
Bank segments SB A/c holders into SB with FD Potential
SB with HNI
Online Trading
Use of predefined algorithm or business rules to segment customers into
 Class#5-10

Types of Data Analysis

 Study of purchase behavior with respect to products can given

analysis like retention, attribution, churn

 Consumer Behavior Analysis over the past month can give

analysis like life cycle pattern of Consumer Behavior.
 Class#5-10

Role of DA in Successful direct marketing activities

 “Making the Connection” with the customer. With businesses assuming global
scales the biggest challenge that the companies are facing is “Lack of
Personal Touch” How to bring in Intimacy into transactions- readily
accessible timely flow of data about customer behavior, preferences, perceived
needs, beliefs and attributes to be gathered and maintained at central location.
 “Confidence in the accuracy” or quality of customer data. Collection,
storage, modification and maintenance of customer information goes a long
way in customer relationship programs. Six Sigma aims at error free data
storage and usage.
 “Right time availability” of quality customer information provides companies
with actionable information used to recognize the need for innovative ways to
continue to satisfy customer and stay profitable.
 Class#5-10

CRLV (LTV)
Use of database in classifying the customer into
 loyal customers
 Repeat Purchases
 One time buyers
Customers can be treated as measurable assets and will soon find their way
into company Balance sheets.
 Class#5-10

Mailing List
House List – Organizations own list of current and former
customers + prospects
Response List – House list of other organizations
Buyer list
Members /seminar attendee list
 Circulation list – controlled/paid
 Credit card holders
 Mobile customers
 Utility bills
 Voter ID – list by Election Commission
 Class#5-10

Compiled List – Consumer compiled lists

 Census of India
 NCAER demographics and lifestyle data
on Indian Consumer
Business Compiled List
 Registrar of Companies
 PHD Chambers of Commerce/FICCI/
ASSOCHEM/Directory of Trade Association/
Industrial Estate e.g. Noida/Udyog Vihar/Okhla
Trade Journal / periodical Subscriber List
 Management Consultants/HR consultants
 Class#5-10

What is Profiling?
Matching of mailing list of consumer database with the appended database.
Format of Recruiting Mailing List
Magnetic tape, CDs, Zipped disks
A number of mailing lists may be ordered from different sources. Merge/
purge mailing lists so that lists are improved and put into standardized
formats to maximize deliverability.
Privacy of Data
Primary use – information used for purpose in hand
Information
Secondary use – used for a subsequent purposes.
Consumers are increasing becoming concerned about the need to protect and
maintain privacy of identity. This can be done by registering or messaging DND.
Also the receivers of DM list can ‘opt out’ of giving personal information.
 Class#5-10

Media Channel of Direct Marketing

Magazines
 Language
 Frequency and Timing ----- Bursts Vs. Continuous presence
 Fitment with the T.A. – positioning.
 Insert Card/Coupons
 Magazine Advertising Response Pattern
 Ad size and Ad Position
 Purpose of Advertising-leads, prospects, enquiries or orders.
 Buying Direct Response space
- Rate
- Section
- Discounts on repeat insertion
- Seasonal discount
- Umbrella contacts
 Class#5-10

Newspapers
 Analysis the newspapers in terms of reach and
- Courage
- Circulation
- H H penetration
- Advertising lineage
- Online version
 Consider the relevant section/Supplement/Column/Education/
Real Estate /City Section
 Language
 Weekday Vs Weekends
 Position
 Colour
 Class#5-10

T.V. Radio Issues are

 Program Rating
 Length of Commercial
 Reach and Frequency as an indicator or direct response rates
 Buying time
 Most successful are lead generate advertise
 Insurance/financial services/tourism/self help exercis equipment
 Home shopping using flash numbers
 Infomercials – measure the impact after
 Radio is apart for precise targeting
 Radio is portable, Casual and humorous.
 Class#5-10

Truly effective marketing must have the targeted, creative, customized qualities that
define direct marketing in the twenty-first century.

How direct marketing has changed the concept of marketing “channels” or the
means through which the firm gains access to customers.

The focus was on physical distribution and logistics that, by their very nature.

In a direct marketing channel strategy, the single, definitive word is relationship.

Call during dinner time has virtually made “direct” marketing synonymous with
“bothersome” marketing and those engaged in telemarketing have often done little
to dispel this image.

A good telemarketer will tell you success lies, in large part, in the ability to
empathize with your contact. Being able to “get inside” their mind is the first big
step in effectively employing telemarketing to access customers. Start by
considering the timing of the call or contact. Is the contact made at a time when
they are receptive to the offer?
 Class#5-10

Key to successful telemarketing revolves around these simple issues of timing and
receptivity. Financial services firms have discovered an evening call to the
customer’s home during the first few days of each month produces the best
success rate.
Combine this with the targeting and positioning principles already discussed, and
telemarketing can be a formidable weapon.
Direct Mail
 The ability to target, and
 The ability to convey lasting information
The address of a customer, however, can provide a wealth of information,
mostly demographic, which can be tremendously helpful in effectively segmenting a
market and then reaching the selected target or targets.
Direct mail, on the other hand, not only has the ability to provide a large
quantity of tangible, visible information, but also this tangibility provides a shelf life
for the offer that otherwise would not have existed.
 Class#5-10

Internet Direct Marketing

 As the Internet empowers customers to search, compare, and customize
products, and even set prices, marketers must build their business around
customer-centric strategies.
 The three multichannel E-business strategies are “clicks-and-mortar” (on-line
outposts for traditional “bricks-and-mortar” companies); “clicks and mail order”
(sites set up by companies that understand direct-to-consumer marketing); and
“clicks, bricks and mail order? (companies that include the Internet as one
among many sales channels).
 E-communications can build one-to-one relationships with prospects and
customers on the Web and target messages to individual users based on
geography, content, purchasing behaviors, and demographic or firmographic
information.
 E-care-Internet direct marketing used for customer service-that give customers
instant information about products and services, inventory levels, shipments,
and returns.
 Class#5-10

 Spasm, the ,quick, cheap mass contact –the challenge is how to bring in quality
results. How to establish credibility and relevance of selling proposition as a
part of customer strategy. Source identification must be immediate in the
Sender’s line and subject line must get the attention.
 Keep banner ads simple. Show people, use clear qualifying language, create a
sense of urgency, and include a strong call to action.
 Establish a goal for a banner ad campaign by specifying how many sales,
leads, members, subscribers, downloads, completed surveys, etc, are
expected for the program.
 While a Web presence may trigger channel conflict among sales forces,
distributors, and other channel partners, it is imperative to sell through
channels that customers would like to buy from.
 To achieve its business goals on-line, an organization must translate its
business processes into fast, easy-to-use processes that are Web-centric. To
do so, it should examine every aspect of these processes from a customer’s
point of view, and understand how interactions are triggered within the
organization.