Chapter 10 - Direct Marketing and Sales Promotion

Transcription

1 Chapter 10 - Direct Marketing and Sales Promotion Direct Marketing is the process by which organizations communicate directly with target customers to generate a response or transaction. Direct marketing companies are called direct sellers, and generally sell to consumers at their homes or jobs. Facebook - when used for advertising Between 2009 and 2014, the largest growth was seen in mobile direct marketing strategies at 29.1 percent, followed by social media networking at 14.7 percent. Commercial direct marketing strategies (13.1 percent) and other Internet direct marketing strategies (13.2 percent) have also shown significant growth.

2 Direct Marketing and other Promotion Mix Tools Direct marketing is a form of advertising. It is a sponsored message, delivered through traditional or new media platforms, that requires consumers to respond by making a call, going to a website, or visiting a store. Direct marketing is also a form of public relations. Although many direct marketing programs are implemented to generate sales, some seek primarily to build a company s image, maintain customer satisfaction, or educate consumers. Direct marketing is a form of personal selling (through telemarketing and direct sales) and sales promotion (through couponing and other tactics.) Advantages of Direct Marketing Shopping convenience Instant payment by credit card Selective reach and segmentation Frequency Effectiveness Disadvantages of Direct Marketing Image Accuracy

3 Direct Response Media Direct response media provide information to an audience and provide advertisers with an environment to reach that audience with their promotion message. Direct response media techniques include direct mail, catalogs (a type of direct mail), telemarketing, and broadcast media. Advantages to using direct mail: Audience - offers the audience an opportunity to reread the message Ideal for merchandise that is easy to visualize Consumers use printed materials as one way to judge credibility of an establishment Direct mail adds to the sponsor s trustworthiness Direct mail has a relatively low cost per piece produced. Disadvantages associated with direct mail: Relatively impersonal sales approach No opportunity for immediate feedback to the sponsoring company Do not always spark a sense of urgency and excitement Rate of return is often low Possibility that the direct mail piece will be discarded without even being read

4 Catalogs A published list of items for sale, usually including descriptive information or illustrations. Catalogs that come in the mail are opened and read more often than other types of unsolicited mail. Telemarketing Solicitation by telephone. The advantages of telemarketing include a personal approach by the caller, instantaneous feedback, and the opportunity for add-on sales. Disadvantages of telemarketing include higher costs as compared to direct mail, difficulty in reaching potential customers, and Do Not Call lists. Broadcast Media An infomercial is a 30- to 60-minute television commercial that looks like a television program. Home shopping is a direct response medium in which consumers shop via their television set from home.

5 DATABASE MANAGEMENT The key to successful direct marketing is targeting the audience. A database is a collection of data, a record of each previous buyer and/or potential prospect, arranged for ease and speed of search and retrieval. Cross-selling - the sale of additional products and services to the same customer In-house lists are developed, owned, and maintained by the direct marketing company. Brokered lists are offered to companies for sale or rent in return for a fee or a commission. Model customers : Common characteristics of high-volume users

6 SALES PROMOTION Sales promotion refers to those activities that provide extra value or incentives to customers, employees, or distributors to generate immediate sales. CONSUMER-ORIENTED SALES PROMOTION Trial purchase of a new or improved product. Sampling - a small quantity of a product is given to a consumer at no charge to encourage trial use. Coupons are vouchers that entitle the bearer to benefits, such as a cash refund or a gift when redeemed. Direct premiums are attached or placed inside the promoted item and available immediately to the consumer upon purchase. Mail-in premiums require the consumer to send in a proof of purchase to receive the gift. Gift-with-purchase or purchase-with-purchase : Customers are offered a special gift or bonus package if

7 they buy merchandise over a certain dollar amount. Contests are promotions in which consumers compete for a prize based on skill and ability. Sweepstakes are promotions in which winners are determined solely by chance. A refund is money given directly to the consumer at the point of sale. A rebate is a price deduction given upon proof of purchase. Bonus packs are extra amounts of a product given in addition to what is expected. Price-off deals reduce the price of an item, offering an immediate incentive to the consumer. Reward programs, also known as loyalty programs, reward frequent buyers for their purchases with incentives such as money-off coupons, gifts, invitations to special members-only events, or other benefits. Deferred billing allows the consumer to postpone or delay payment for a purchase.

8 TRADE-ORIENTED SALES PROMOTION Trade allowances offer retailers monetary discounts on the price of merchandise as an incentive to stock and display merchandise from a specific vendor. A buying allowance is a price reduction on merchandise purchased during a limited time period. Promotional allowances are: Incentives from brands to retailers for performing certain promotional activities to support their brand Location of a floor display Directions for an in-store promotional program Using specific products in advertising The retailer receives a fixed amount per case or percentage deduction.

9 Slotting allowances - fees paid to retailers to provide a position or slot to accommodate the new product. Incentive programs are motivational tools designed to increase the productivity of retail sales associates. Point of purchase (POP) display : fixtures created by brands and distributed to retailers - displays, signs, structures, and devices