Chapter 17
Direct and Online Marketing: The
New Marketing Model
1
Mass Marketing and Direct
Marketing
Most Mass Marketing
Involves One-Way
Communications
Aimed At Consumers.
Direct Marketing
Involves Two-Way
Interactions With
Customers.
2
What is Direct Marketing?
Direct Marketing Consists of
Direct Connections With Carefully
Targeted Individual Consumers to
Both Obtain an Immediate
Response and Cultivate Lasting
Customer Relationships.
3
The New Direct Marketing
Model
Some firms use direct marketing as a
supplemental medium.
For many companies, direct marketing especially Internet and e-commerce companies constitutes a new and complete model for doing
business.
Some firms use the new direct model as their
only approach.
Experts envision a day when all buying and
selling will involve direct connections between
companies and their customers.
4
Benefits and Growth of Direct
Marketing
Buyers Benefits
Sellers Benefits
Convenient
Consumer
Relationship Building
Easy & Private
Reduces Costs
Product Access &
Selection
Abundance of
Information
Increases Speed &
Efficiency
Interactive &
Immediate
Global Medium
Provides Flexibility
5
The Growth of Direct
Marketing
Demassification – Focus is
Toward Minimarkets
Higher Costs of Driving, Traffic
and Parking Congestion
Consumers Lack of Time
Convenience of Ordering
From Direct Marketers
Growth of Customer Databases
6
Mass Marketing Vs. One-toOne Marketing (Tab. 17.1)
Mass Marketing
Average Consumer
One-to-One Marketing
Customer Anonymity
Standard Product
Mass Production
Mass Distribution
Mass Advertising
Mass Promotion
One-Way Message
Economies of Scale
Share of Mind
Individual Customer
Customer Profile
Customized Market Offering
Customized Production
Individualized Distribution
Individualized Message
Individualized Incentives
Two-Way Messages
Economies of Scope
Share of Customer
All Customers
Profitable Customers
Customer Attraction
Customer Retention
7
Customer Databases
Customer Databases are
an Organized Collection
of Comprehensive Data
About Individual
Customers or Prospects
Including:




Geographic,
Demographic,
Psychographic, and
Behavioral Data.
8
Database Marketing
Database Marketing is the Process of Building,
Maintaining, and Using Customer Databases and
Other Databases for the Purposes of Contacting and
Transacting With Customers. How Companies Use
Their Databases:
Identifying Prospects
Deciding Which Customers Should
Receive a Particular Offer
Deepening Customer Loyalty
Reactivating Customer Purchases
9
Forms of Direct Marketing
Face-to-Face
Selling
Online
Marketing
Telemarketing
Kiosk
Marketing
Direct-Response
TV Marketing
Direct
Mail
Catalog
10
Discussion Connections
When was the last time you bought
something via direct marketing?




How did you buy it?
What did you buy and why did you buy it
direct?
When was the last time that you rejected a
direct marketing offer? Why did you reject it?
Based on these experiences, what advice
would you give to direct marketers?
11
Online Marketing
Online Marketing is conducted through
interactive online computer systems, which
link consumers with sellers electronically.
Two types of online marketing channels:


Commercial Online Services offer information
and marketing services to subscribers who pay
a monthly fee. (i.e. American Online)
The Internet (the Net) is the vast global and
public web of computer networks.
12
Who is the Online Customer?
They tend to be younger, more affluent,
better educated, and more male than the
general population; female usage almost
equals males.
Other characteristic of net users:


Half are 40 years or older,
Differ psychographically, in approaches to
buying and responses to marketing.
13
Creating Online Marketing
Create an Electronic Online Presence
Buy Space on a Commercial Online
Service
Company Can Open It’s Own Corporate
or Marketing Web Page
Place Advertisements Online
What is the focus of
Web pages for companies
like Butterball?
Are they more for selling,
or for information?
Place Ads in to Build Internet Brands or
Attract Visitors to Web Site
Buy Online Ads That Pop Up While
Consumers are Surfing, “Banners”
Content Sponsorships
What information could a
site like this provide?
•Cooking help
•Recipes
•Cooking
Safety
14
Creating Online Marketing
Participate in Forums, Newsgroups &
Web Communities
Forums: Discussion Groups on
Commercial Online Services
Newsgroups: Internet Version of Forums
Web Communities: Sites Where
Members Exchange Views Online
Use E-Mail and Webcasting
Customers Send Questions,
Suggestions & Complaints Via E-Mail
Webcasting: Automatic Downloading of
Information to PC’s
15
Promise and Challenge of
Online Marketing
Limited Consumer Exposure and Buying
Skewed User Demographics and Psychographics
Chaos and Clutter
Security
Ethical Concerns
16
Integrated Direct Marketing
Direct marketing campaigns that use
multiple vehicles and multiple stages to
improve response rates and profits.
Marketers seek to improve response rates
and profits by adding media and stages
that contribute more to additional sales
than to additional costs.
17
An Integrated Direct-Marketing
Campaign (Fig. 17.2)
Paid ad with a
response channel
Direct Mail
Outbound
Telemarketing
Face-to-face
sales call
Continuing
Communication
18
Public Policy and Ethical
Issues in Direct Marketing
Unfairness,
Deception,
or
Fraud
Irritation
to
Consumers
Invasion
of
Privacy
19
Review of Concept
Connections
Discuss the benefits of direct marketing to customers
and companies and the trends fueling its rapid growth.
Define a customer database and list the four ways
companies use databases in direct marketing.
Identify the major forms of direct marketing.
Compare the two types of online marketing channels
and explain the effect of the Internet on electronic
commerce.
Identify the benefits of online marketing to consumers
and marketers and the four ways marketers can conduct
online marketing.
Discuss the public policy and ethical issues facing direct
20
marketers.