Direct Marketing by mmcsx

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									CRM




                                                                              Aims
                                                                               To understand the history behind its development
                                                                               To consider the definitions of Direct Marketing
                                                                               To examine the objectives of Direct Marketing
             Direct Marketing                                                  To understand the importance of targeting (Pareto’s Principal)
                                                                               To examine the four features of the Direct Marketing Mix
                                                                               The understand the Direct Marketing database
                                                                               To explore the types of media used for Direct Marketing
                                                                               To consider examples of Direct Marketing
                                                                               Summary

                                  Dr. Paurav Shukla




         Evolution of Marketing                                               The Modern Marketing Concept
                                                                                              Starting     Focus        Means          End
                                                                                               Point
                                      Primitive                                              Factory                  Selling and   Profits through
                                      Marketing
                                                                              Old                         Products    Promotion     Sales Volume




             One to One                                           Mass                       Target       Customer    Integrated    Profits through customer
                                                                              Classical      Market       needs       Marketing
             Marketing                                           Marketing                                                          satisfaction




                                                                                             Individual   Customer                  Profits through
                                                                             Contemporary                 Experienc      CRM
                 Direct & Database                     STP                                   Customer                               Customer loyalty
                                                                                                          e
                     Marketing                       Marketing
                                                                                                                                                  Kotler, 2003




         Mass marketing vs. One-to-One
         marketing                                                              Development & Growth of DM
            Mass Marketing                    One-to-One Marketing                  Development
             Average Consumer                     Individual Customer                 Direct Mail: Freeman’s Catalogue launched 1905
            Customer Anonymity                     Customer Profile                   Large growth 1950 to 1970
              Standard Product              Customized Market Offering                Problems in early 1980s due to recession
              Mass Production                 Customized Production                   Late 1980s renewal
             Mass Distribution               Individualized Distribution              Direct Marketing: Early 1990s Heinz Campaign
              Mass Advertising                Individualized Message                  1996 UK DM expenditure £5.5 Billion
              Mass Promotion                  Individualized Incentives             Growth
             One-Way Message                      Two-Way Messages                    Movements in Technology
            Economies of Scale                    Economies of Scope                  Declining Effectiveness of Traditional Media
              Share of Mind                        Share of Customer                  Changes in Market Information
               All Customers                      Profitable Customers                Need for Better Targeting
            Customer Attraction                   Customer Retention




Dr. Paurav Shukla                                                                                                                                                1
CRM




         UK Spending through DM                                                  Definitions of DM
              Total spending £27bn in 2004-05                                     ‘Direct marketing is a method of distribution in which
                   2.3% increase over 2003                                        transactions are completed between buyer and seller
                                                                                  without the intervention of a salesperson or retail outlet’
              30-45 years old spend the most
                                                                                                                        Stan Rapp
              Average consumer spending £590
              Clothes account 41% of the market                                   ‘any advertising which creates and exploits a direct
              Travel saw the highest rise (260%) with 3.3bn turnover              relationship between you and your prospect or customer
              DIY products up by (162%) with 0.5bn turnover                       as an individual’
                                                                                                                        Drayton Bird
              73% of all UK consumer buying through DM live in
              Northern region of UK



        DM Bulletin, Marketing Direct, 31st Dec 2004




            A Different Approach                                                 Objectives of Direct Marketing
                Mass Marketing                                                    Generating repeat purchase
                Market Segmentation                                               Introduction of a new product
                Direct Marketing                                                  A platform for cross selling
                Integrated Direct Marketing                                       Provision of a new distribution channel
                                                                                  Targeting minority markets
                                                                                  Establishing loyalty
                                                                                  Identification of prime prospects




         Types of DM                                                             Precision Targeting

                                                Face-to-Face                                               Suspects
                                                   Selling
                                                                                                           Prospects
                 Online
                                                                 Telemarketing
                Marketing
                                                                                                            Trialists
                  Kiosk                                              Direct
                 Marketing                                            Mail                              Repeat Buyers

                         Direct-Response
                                                           Catalog
                          TV Marketing




Dr. Paurav Shukla                                                                                                                               2
CRM




         Pareto’s Principal                                             The 4 Features of Direct Marketing
                                                                          Targeting
                       Top 20% Market = 80% of Sales                         Enables precision targeting
                                                                          Interaction
                                             Sales                           Generates direct enquiries and orders from prospects and
                                                                             customers
          80:20 Rule                                                      Control
                                                                             Accountable since direct enquiries and orders are easily
                                                                             measurable
                             Market
                                                                          Continuity
                                                                             Develops the seller-buyer relationship and ultimately results in
                                                                             customer loyalty




        The Importance of the Database                                  The Use of Media
          Who?                                       Who?                 Direct Mail
          What?                                                           Door-to-door Drops
          Where?                      Why?                  How much?     Newspapers
          How much?                                                       Magazines
          When?                                                           The Broadcast Media
          Why?                                                            The Telephone
                                                                          Posters


                                      Where?                  What?

                                                 When?




         Integrated direct marketing campaign                           Examples of Direct Mail
                                                                         Direct Mailing
            Paid ad with a                                               Direct Marketing (No middle men)
          response channel                                               Direct Response Press Ads
                                                                         Websites
                  Direct Mail                                            Charity Appeals
                                                                         Catalogues
                           Outbound
                          Telemarketing                                  Some Credit Cards
                                                                         Store Chargecards
                                       Face-to-face                      Loyalty Cards
                                        sales call
                                                       Continuing
                                                     Communication




Dr. Paurav Shukla                                                                                                                               3
CRM




         Issues with DM


                Irritation             Unfairness,
                     to                Deception,
               Consumers                   or
                  DMA?                   Fraud
                            Invasion
                               of
                          Privacy and
                        “Online Profiling”




Dr. Paurav Shukla                                    4

								
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