1
Introduction to Direct Marketing
DIRECT MARKETING CHAPTER 1
Ass.Prof.Dr. Tuğçe Ozansoy Çadırcı
INTRODUCTION TO DIRECT MARKETING
Marketing
Basics 101
PART 1
Introduction to Direct Marketing
3
What is Marketing???
Marketing is is engaging customers and managing profitable customer
relationships.
Goals of Marketing
•Attract new customers by promising superior value
•Keep and grow current customers by delivering satisfaction
Introduction to Direct Marketing
4
Forms of Marketing
Traditional
•Making a sale
•Abundance of products in the nearby shopping centers
•Television, magazine, and direct-mail ads
Contemporary
•Satisfying customer needs
•Imaginative Web sites and mobile phone apps, blogs, online videos, and social
media
•Reach customers directly, personally, and interactively
Introduction to Direct Marketing
5
The Marketing Process: Creating and Capturing Customer Value
Create value for customers and build Capture value from
customer relationships customers in return
Construct an
Understand the Integrated Build Profitable Capture Value From
Design a Customer- Relationships and Customers to Create
Marketplace Marketing Program
Driven Create Customer Profits and Customer
and That Delivers
Marketing Strategy Delight Equity
Consumer Needs Superior Value
Introduction to Direct Marketing
6
Understanding The Marketplace and Consumer Needs-1
Five core customer and marketplace concepts:
•Needs, wants, and demands
•Market offerings
•Value and satisfaction
•Exchanges and relationships
•Markets
Introduction to Direct Marketing
7
Customer Needs, Wants, and Demands
NEEDS WANTS DEMANDS
States of deprivation Form that human Human wants
physical - food, needs take as they backed by buying
clothing, warmth are shaped by power
and safety culture and
social - belonging individual
and affection personality
individual
-knowledge and
self-expression
Introduction to Direct Marketing
8
Market Offerings
Market offerings are some combination of
products, services, information, or experiences
offered to a market to satisfy a need or want.
Marketing myopia is focusing only on existing
wants and loosing sight of underlying consumer
needs.
Introduction to Direct Marketing
9
Customer Value and Satisfaction
Customers form expectations about the value and satisfaction of market
offerings.
•Satisfied customers buy again
•Dissatisfied customers switch to competitors
Setting the right level of expectations
•Low expectations may fail to attract buyers
•High expectations may disappoint buyers
Introduction to Direct Marketing
10
Exchanges and Relationships
Exchange is the act of obtaining a desired object
by offering something in return.
Marketing consists of creating, maintaining, and
growing desirable exchange relationships.
•Strong relationships are built by consistently delivering superior customer
value.
Introduction to Direct Marketing
11
Markets
•All actual and potential buyers of a product
•Sellers and Consumers market
•Customer-managed relationships
Introduction to Direct Marketing
12
Designing a Customer-Oriented Marketing Strategy
Market segmentation refers to dividing the
markets into segments of customers.
Target marketing refers to which segments to go
after.
The value proposition is the set of benefits or
values a company promises to deliver to
customers to satisfy their needs.
Introduction to Direct Marketing
13
Preparing an Integrated Marketing Plan and Program
The marketing mix is the set of tools (4Ps) the firm uses to
implement its marketing strategy.It includes:
Product
Price
Place
Promotion
Integrated marketing program is a comprehensive plan that
communicates and delivers the intended value to choosen
customers.
INTRODUCTION TO DIRECT MARKETING
Direct
Marketing
Basics
PART 2
15
Introduction to Direct Marketing
16
Why Direct Marketing is Important
Customer do not want to receive marketing
messages.
Marketers always looking for new ways to
engage with customers.
Introduction to Direct Marketing
17
What Marketers Do Wrong???
Size doesn’t matter; quality does.
Embracing the shotgun approach
The myopia created by mass media
Introduction to Direct Marketing
18
Direct Marketing as a Solution to Marketing Quagmire???
Direct Marketing
Market
Larger segments attract the segments
most competition.
Smaller segments may have
Mass Market
more distinct needs that can Niches
be satisfied profitably. Micro
Market
Targeting larger segments
cost more, and those costs
may reduce margins more
drastically than targeting
smaller segments. Figure'1.1."Marke(ng"Segments,"Niches," Individual
Market
and"Micromarkets"
Introduction to Direct Marketing
19
Concepts Related to Direct Marketing
Permission-based marketing: Marketing applications which
offer the customer an opportunity to volunteer to be
marketed to.
Permission-based marketing guarantees that consumers pay
more attention to the marketing messages.
The new digital business landscape
Consumer created content
Consumers have the opportunity to discuss and learn about
products
eWOM activities
These changes in the marketplace creates a need for customized
and customer-oriented messages.
Introduction to Direct Marketing
20
Concepts Related to Direct Marketing
Direct marketing is a database-driven interactive process of directly
communicating with targeted customers or prospects using any
medium to obtain a measurable response or transaction via one
or multiple channels.
Direct marketing is a way of acquiring, keeping and developing
customers, in doing so, meeting the needs both of customers and
the organization serving them. It does this by providing a
framework for three activities: analysis of individual customer
information, strategy formation and implementation such that
customers respond directly.
Database marketing
Interactive marketing
CRM
Introduction to Direct Marketing
21
The Distinctions Between Direct and Database Marketing
Database marketing: This is using a database to hold and
analyze customer information, thereby helping create
strategies for marketing.There is a big overlap with ‘direct
marketing’.
Direct marketing: This focuses on using a database to
communicate (and sometimes distribute) directly to
customers so as to attract a direct response. There is a big
overlap with ‘database marketing’.
Introduction to Direct Marketing
22
Direct Marketing and CRM
There is a natural alignment between direct marketing and
CRM.
Two differences
The database
Direct marketing acts with the aim of “attracting a direct
response”
Introduction to Direct Marketing
23
Traditional Marketing vs. Direct Marketing
Traditional Marketing Cycle Direct Marketing Cycle
Database
Manufacturer Manufacturer
Marketer
Wholesaler
Retailer Response Customer
Direct Response and/or Service/
transaction Fulfillment
Target Customer Target Customer
Indirect Channel Direct Channel Target Customer
Introduction to Direct Marketing
24
Traditional Marketing vs. General Marketing
Traditional Marketing Direct Marketing
Reaches a mass audience through mass media Communicates directly with the customer or prospect
Communica ons are impersonal Can personalize communica on by name/ tle and/or with
variable messages
Communica on is one-way- adver ser to prospect Communica on can be interac ve
Promo onal programs are highly visible Promo onal programs (especially tests) rela vely “invisible”
Amount of promo on controlled by size of budget Size of budget can be determined by success of test/promo on
Desired ac on is either delayed or unclear Speci c ac on always requested by inquiry or purchase
Incomplete/sample data for decision making purposes are taken Comprehensive database drives marke ng programs
from marke ng research and/or sales call reports
Data must be collected separately from the sales processes Marke ng data are produced as integral part of the sales process
Analysis conducted at segment level Analysis conducted at individual/ rm level
Uses surrogate variables such as adver sing awareness or Measurable and therefore highly controllable
inten on to buy to measure e ec veness
ti
fi
ti
ti
ti
ti
ti
ti
ti
ti
ti
ti
ti
ff
ti
fi
ti
ti
ti
ti
ti
ti
ti
Introduction to Direct Marketing
25
Is Direct Marketing is Based on Relationship Marketing or the 4Ps?
In early applications DM was concentrated on prompting
action from customers to make “a sale”. – 4P’s approach
influence
Throughout the years DM has developed as a powerful tool
in customer loyalty strategies.
Relationship marketing starts with the premise that
customer retention is critical to a company’s profitability,
which is also the starting point of today’s direct marketing.
Introduction to Direct Marketing
26
Is Direct Marketing is Based on Relationship Marketing or the 4Ps?-2
Place
Mailing lists, database, market segments
Promotion
DM can present offerings in a variety of formats with the use of different
channels.
Direct marketing is definitely an extension of traditional marketing; but
it’s ultimate goal is to achieve a direct response.
Introduction to Direct Marketing
27
In Brief
Both general and direct marketing starts out from the
same place.
Direct marketing is a discipline within marketing and
has its goal the same as general marketing
“Championing the customer as the primary focus of
business.”
Direct marketing adds leverage to overall marketing
efforts, and often working alongside with other
disciplines in an integrated fashion.
Introduction to Direct Marketing
28
Attributes of Direct Marketing
Direct marketing
is multi-channel: It’s marketing everything to everybody.
is global: It sells from anywhere to anywhere at any time.
is performance-based: It’s measurability ensures
accountability.
builds relationships: It’s driven by the expressed needs of
customers.
is customized: It targets markets of one or more.
Introduction to Direct Marketing
29
Special Competencies of Direct Marketing
(1)Direct marketing facilitates focused, targeted customer
communications.
(2)Direct marketing allows communications to be
personalized.
(3)Direct marketing encourages the prospective customer to
take immediate and specific actions.
(4)Direct marketing can make marketing strategies less
visible to competitors.
(5)Direct marketing is measurable, providing a degree of
accountability for marketing expenditures that is not
presented in traditional marketing.
Introduction to Direct Marketing
30
Clearing Misconceptions…
Direct marketing is part of the communications mix
Before the internet this was true. But the internet
technologies have affected DM’s scope greatly.
In time direct marketing has left its scope as a
communications tool and became an important aspect
acquiring and retaining the best customers.
With the help of database analysis and the generation
of management information and customer insight DM
plays a key role in strategy creation.
Introduction to Direct Marketing
31
Clearing Misconceptions…-2
Direct marketing equals direct mail
DM is a system of marketing.
It is not a medium that is used as an advertising tool.
Direct mail is just one of many media used by DM.
DM is also practiced on-line, through the press and
telecommunication devices…
Introduction to Direct Marketing
32
Clearing Misconceptions…-3
Direct marketing equals JUNK mail
Junk mail is direct mail that is poorly targeted and of
low quality.
Although direct mail efforts of many industries annoy
customers there are also very well targeted and
relevant direct mailing programs which are described
as “letters from the company” by the customers.
Introduction to Direct Marketing
33
Social/Technological Reasons for Growth
The Internet
Fragmentation of Society
Proliferation of media
Greater customer sophistication
Customers’ want for control
Introduction to Direct Marketing
34
Business Reasons for Growth
Ever more competition
Criticism of traditional marketing efforts
Interest in customer retention and loyalty
Introduction to Direct Marketing
35
How to Succeed in Direct Marketing
Big data overwhelms companies
Embracing a tactical approach
DM should highly be focused and interactive
