Slide 1Direct MarketingThe New Direct-Marketing ModelGrowth of Direct MarketingForms of Direct MarketingForms of Direct MarketingForms of Direct MarketingForms of Direct MarketingForms of Direct MarketingForms of Direct MarketingOnline MarketingHere are some interesting stats:Online MarketingOnline MarketingOnline MarketingBig problem for retailers: “Showrooming”Online MarketingOnline MarketingOnline MarketingPublic Policy and Ethical Issues in Direct MarketingPublic Policy and Ethical Issues in Direct MarketingDirect and Online Marketing: Building Direct Customer RelationshipsChapter 1414 - 2Direct MarketingConnecting directly with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationshipsThe New Direct-Marketing ModelThe new direct-marketing model:Direct marketing has undergone a dramatic transformation.Most firms use direct marketing as a supplemental channel or medium.For many companies, direct marketing constitutes a new and complete model for doing business.Some firms employ the direct model as their only approachGrowth of Direct MarketingDirect marketing:Fastest growing form of marketing.10% of U. S. economy ($ 2.1 trillion) is generated by direct marketing sales.Direct marketing sales are expected to grow at 5.3% annually through 2015.Direct marketing continues to become more Web-oriented and Internet marketing is the fast-growing form of direct sales.Forms of Direct MarketingForms of Direct MarketingDirect-mail marketing:Involves sending an offer, announcement, reminder, or other item to a person at a particular physical or virtual address.Largest direct marketing medium.Well-suited to one-to-one communication.Use of traditional forms may decline as marketers switch to newer digital forms.Can be used effectively in combination with other media, such as web sites.Often perceived as “junk mail”.Forms of Direct MarketingCatalog marketing:Direct marketing through print, video, or digital catalogs that are mailed to select customers, made available in stores, or presented online.Ex. Grainger website/online catalogeForms of Direct MarketingCatalog marketing trends:More and more catalogs are going digital:Minimizes costs, and web space is unlimited.Allows real-time merchandising.Print catalogs are still the primary medium.Drives web traffic and can create an emotional connection to the consumer.Expected catalog sales in 2014 = $182 billion.Forms of Direct MarketingTelephone marketing:Accounts for 17% of all direct-marketing driven sales.Used in both consumer and B2B markets.Marketers use outbound and inbound calls.Outbound: sell directly to consumers Inbound: Do-not-call legislation has impacted the telemarketing industry.Many telemarketers have shifted to other forms of direct marketing.14 - 9Forms of Direct MarketingNew digital direct marketing technologies:Mobile phone marketing:Mobile ad spending is expected to grow.Online MarketingCompany efforts to market products and services and build customer relationships over the Internet.Here are some interesting stats:Online MarketingClick-only companies: So-called dot-coms, which operate only online without any brick-and-mortar presence.Types of click-only firms: e-tailers (amazon) Search engines and portalsTransaction sites (eBay) Content sites. (Amazon)Online MarketingClick-and-mortar companies:Traditional brick and mortar companies that have added online marketingOnline MarketingClick-and-mortar business trends:Almost all traditional companies have set up their own online sales and communication presence.Many click-and-mortar firms are having more online success than their click-only competitors.Big problem for retailers: “Showrooming”Online MarketingBusiness-to-business (B2B) online marketing:Businesses using B2B Web sites, e-mail, online catalogs, online trading networks, and other online resources to reach new business customers, serve current customers more effectively, and obtain buying efficiencies and better prices. Most major B2B marketers offer online product information, purchasing, and support. Many firms use the Internet to build stronger customer relationships.Online MarketingConsumer-to-consumer (C2C) online marketing:Online exchanges of goods and information between final consumers.Auction sites such as eBay offer marketplaces to buy or exchange goods.Blogs and forums facilitate information interchanges.Marketers are tapping into blogs as a medium for reaching carefully targeted consumers.Firms should monitor blogs for what is being said Ex: GM used social media to manage customers and its reputationOnline MarketingCorporate web sites:Designed to build customer goodwill, collect customer feedback, and supplement other sales channels, rather than to sell the company’s products directly.Marketing web sites:A web site that engages consumers in interactions that move them closer to a direct purchase or other marketing outcome.Public Policy and Ethical Issues in Direct MarketingIrritation, unfairness, deception, and fraud:Direct marketing excesses may offend consumers Direct marketing has been accused of taking unfair advantage of impulsive or less sophisticated buyers.Internet fraud and phishing are growing concerns.Internet shoppers have online security concerns Marketers often find it difficult to restrict access by vulnerable or unauthorized groups.Public Policy and Ethical Issues in Direct MarketingInvasion of privacy:Database marketing allows customers to receive offers closely matched to their interests.critics worry whether marketers know TOO much about consumers Online privacy (particularly for children) is of particular concern. if marketers don’t prevent privacy abuse legislators may step