FAQ: Goals of Marketing
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1 Question 1: How are technology tools used by marketing departments? Answer 1: Marketing relies on technology tools to document and build client relationships; design, deliver, and direct marketing programs; and conduct market research. These technology tools can help organizations fulfill privacy regulations. Consumer concerns regarding the unauthorized use of their personal information can be neutralized by using technology to protect and enforce privacy policies. Registration for permission-based s and opt-in or -out choices for third-party promotions are only two of such methods used today. Question 2: What is a customer relationship management (CRM) system? Answer 2: A CRM is an enterprise approach to understanding and influencing customer behavior through meaningful communications to improve customer acquisition, retention, loyalty, and profitability. CRM can be implemented as a sophisticated software package or a simple spreadsheet. The purpose of CRM is to collect and store customer information for fast retrieval for multiple purposes. With CRM, organizations can identify client traits such as demographics, profitability, and buying frequency. CRM arms marketing with better research data to plan product or service offerings, to target a sales promotion, and to ascertain the appropriate distribution channel (Swift, 2000). Question 3: What is one example of a CRM system within an organization? Answer 3: An service provider recently advertised free marketing booklets in an e-newsletter targeted to the business-to-business (B2B) segment. The service required personal contact data before providing the Web link to those booklets. Clicking on the ad and reaching the registration screen activates the CRM system to automatically capture the contact data and send it to the salesperson covering the state in which the prospect lives. Within 24 hours of receiving a contact s data, the salesperson calls to gauge the business opportunity and successfully closes sales with more than 15% of the leads. From this one promotion, the service provider was able to use the CRM system to determine that the B2B market was a primary target for its products; obtain qualified leads and send them to the sales force for 1
2 immediate investigation; and use the most effective promotion free how-to guides via the most direct distribution channel, which is . Question 4: What technology tools can be integrated with CRM, and how do they augment the CRM system? Answer 4: Other technology tools can be integrated with a CRM system. Linking CRM with sales automation tools results in a real-time data collection system with the most current client activity, whether it is a phone call, Web site visit, or salesperson s personal visit. This activity information is useful for marketing to know by which channel clients prefer to contact the organization, what product or service information they are requesting, and how much they have purchased. Marketing can use this data to evaluate whether a particular product should be promoted using a specific channel. In addition, special promotions can be created to generate additional sales for high volume purchasers. The ultimate marketing use of CRM is to increase customer loyalty through repetitive purchases and then generate customer referrals to generate new business and new customers. By knowing what clients are buying, when they purchase, and how often they purchase, marketing can adapt market plans to meet and exceed client and management s expectations (Swift, 2000). Question 5: What is direct marketing? Answer 5: Direct marketing is significantly different today than even 2 years ago. With new technology tools to produce customized promotions for a more targeted audience, direct marketing can deliver the marketing message faster, cheaper, and with improved results. All direct marketing online and offline requires targeted lists of prospective and current clients to achieve positive results. By mining the CRM data for specific client attributes, direct marketing promotions can be used for the following purposes: Identify the best opportunities (by age, geography, seasons, etc.) Test different messages with different clients (one message for the United States, another for the United Kingdom, a third for Asia, etc.). Capture the results to update the database to modify products or modify the promotion message 2
3 Question 6: What are the different types of offline direct marketing tools? Answer 6: The types of direct marketing (DM) used today are numerous. Offline DM options are primarily printed materials and premiums (pens, coffee mugs, key rings, etc.). Printed materials for a mass mailing to a general audience are the best known and usually a cost-effective method. For example, one magazine mails its annual sweepstakes materials to millions of consumers. Through this enticing mailing, the magazine can achieve the following: Validate the name and address data for use in future mailings Sell subscriptions of its magazine Sell subscriptions to other specialized magazines (skiing, parenting, scrapbooking, and others) Through this process, this company improves the list of names, which it can sell as another product, to mass marketers or those with specialized needs. Premiums also offer mass marketers the opportunity to send prospective clients a gift offer or the gift itself, embossed with the organization s name and logo. Pens are always popular because people need and use them. By using the gift pen with the organization s name printed on it, the prospect is reminded of the organization each time. Prospects may throw away a printed mail piece, but they always keep the pen. With targeted lists, offline direct marketing can leverage printing technologies to personalize content and to create customized on-demand materials for an individual. Targeted lists are built based on the types of prospects being sought, such as new parents, tennis players, chemists, and so on. Personalized content can range from inserting a person s name and address to including past buying preferences (e.g., your last birthday order for your dog Spot). Letters addressed to a person versus "The Residents at 123 Main Street" have a much better chance of being read and acted upon. Customers appreciate the helpful reminders when personalized content also includes past buying preferences especially when a special celebration date is coming up. On-demand materials are used to directly market a product or service specifically requested by a consumer. For example, financial advisors can use on-demand electronic templates to create a sophisticated workbook with your 3
4 investment information and the advisor s recommendations and deliver it to you within 24 hours. Other offline direct marketing media includes newsletters, magazines, newspaper wrappers, coupons, and invitations to special events. Question 7: What are the different types of online direct marketing tools? Answer 7: Online direct marketing has expanded from and banner ads to virtual product demonstrations. Organizations build or supplement their own DM database using opt-in registration systems for information that customers need and prospects value. Prospects or clients grant permission to an organization to send them information when a prospect or client agrees to opt-in. For example, newsletter updates and white papers on current product trends are valued DM enticements. Road shows are online financial advisor-approved infomercials that give financial services companies broader access to the brokerage community, a group that is always seeking investment ideas for their clients. One example of virtual product demonstration is Webinars, or Web-based presentations. Webinars are becoming increasingly popular for hands-on demonstrations, training classes, and a company s quarterly performance update. They offer several market advantages for an organization, as follows: Product presentations can be scheduled faster and easier (no special room set-up requirements). More people can attend. More product experts can participate. Travel expenses are eliminated, and online costs are minimal. Presentations often are saved and can be replayed at the customer s convenience. Client behavior can be monitored to determine the presentation s effectiveness. Question 8: What research tools are available to marketers? Answer 8: CRM is critical to targeting audiences, thus helping to guide the selection of DM promotions and electronic research tools enable tracking industry trends and market opportunities. 4
5 Government agencies, professional and industry associations, research firms, and universities have volumes of information accessible for free on the Web. Many commercial data providers sell affordable subscription packages. All are electronically available and usually include helpful search engines with which to locate materials. Industry and professional organizations Web sites also keep marketers current on the latest tools to use to expedite research and reporting projects. Most offer free trials of market and business planning tools that can cut preparation time by 50%. Question 9: What are the different marketing functions of marketing within an organization? Answer 9: The marketing function within an organization is often viewed as sales, communications, or product development. The marketing function is actually all three and more. Some firms interchangeably use sales and marketing. Both are defined as selling functions; however, sales and marketing are unique. Kim Gordon's article Defining Sales and Marketing (2001) describes sales as consisting of " interpersonal interaction the one-on-one meetings, telephone sales and networking that you engage in with prospects and customers" (par. 1). A salesperson engages prospects and customers to sell them a product or service. Marketing engages prospects and customers to learn what they want (product), how they want to receive it (distribution), and what value they assign to it (price). Marketing uses communication tools and techniques to promote products or services. Sometimes, this facet of marketing becomes "the" marketing function at organizations. When the creation and production of brochures, ads, press releases, and s become marketing s only responsibility, the department is not marketing, it is performing sales support. Marketing is also viewed as product management. Product managers research market opportunities for products and services, define market targets and customer segments, create the pricing strategy, design promotion programs, and write the market plans. Today, product managers also need to be customer equity managers and sometimes systems integrators. As customer equity managers, they must test product or service concepts with clients and ascertain if anyone wants or would pay for the offering. As system 5
6 integrators, they need to work with information technology (IT) departments to coordinate construction of new and expanded toolsets especially those delivered on the Web site. Marketing management works to ensure that marketing communications and product management support the organization s brand and business objectives. This critical function provides the strategic marketing perspective analyzing global markets, economic conditions, industry innovations, and consumer market indicators to guide the organization s business opportunities. The organization is positioned to be a market leader when marketing is positioned as an organization s key to successful client relationships based on products or services clients want and value. Through effective marketing management, the marketing communications and product management roles join with sales to achieve the organization s business objectives. References Gordon, K. T. (2001, November 5). Defining sales and marketing: Build your business with the right combination of the two. Retrieved from on/article46086.html Swift, R. S. (2000). Accelerating customer relationships: Using CRM and relationship technologies. Upper Saddle River, NJ: Prentice Hall. 6
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