Marketing Management
4th of July 2011
Direct and Online Marketing
Building Direct Customer
Relationships
Direct Marketing – Growth and
Benefits
• Direct Marketing: Directly connecting with
carefully targeted individual consumers to obtain
both an immediate response and build lasting
customer relationships
• Direct marketing is growing and becoming more
web based as result of internet growth
• Many modern companies use direct internet
marketing as a business model
• Direct marketing has benefits for both buyers
and sellers
Direct Marketing – Growth and
Benefits
• Buyer Benefits
– Convenient, Easy and Private
• No need to drive, can do it at home, any time of day
– Ready Access to Numerous Products
• Unrestrained boundaries and unlimited selection
– Wealth of Information and Easy to Compare
• Variety in catalogues, companies, products and competitors
– Interactive and Immediate
• Buyers interact with sellers by phone or website
– Greater Control
• Buyer determines which sites and catalogues to browse
Direct Marketing – Growth and
Benefits
• Seller Benefits
– Customer Relationship Building Tool
• Database marketing with personalised communications
– Low Cost,, Cheaper than employing sales force to
cover all areas and target markets
– Improved Efficiency
• Quicker order processing
– Speedy Alternative
• Inventory handing and delivery
– Greater Flexibility
• Ongoing adjustments to prices and programs
– Wider Access to Buyers
• Access to customers outside of local markets
Customer Database and Direct
Marketing
• Customer Database: An organised collection of
comprehensive data about individual customers or prospects
• A good customer database can be potent relationship building
tool
• It gives companies a 360 degree view of customers and their
behaviour
• Consumer marketing database contains geographic,
demographic, psychographic and behavioural data
• Business-to-Business profiles may contain past products and
services bought, past volumes and prices, key contacts,
estimated spending etc
• Companies use their databases to locate good customers and
to generate sales leads
• Large investments in hardware, software, analytical programs,
communication links and skilled labour
Forms of Direct Marketing
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Direct Mail Marketing
Catalog Marketing
Telephone Marketing
Direct – Response TV Marketing
Kiosk Marketing
New Digital Direct Marketing Technology
– Mobile Phone Marketing
– Podcasts and Vodcasts
– Interact TV
Online Marketing
• Online Marketing: company efforts to market
products and services and to build customer
relationships over the internet
• Online marketing is the fastest growing form of
direct marketing
• Technological advances have created a
blossoming digital age
• Widespread use of the internet has dramatic
impact on both buyers and marketers
• Roughly 20% of direct marketing driven sales is
now we based
Online Marketing
• Marketing and the Internet
– Internet: A vast public web of computer networks that connect
users of all types around the world to each other and to an
information repository
– The web has changed people’s notions of convenience, speed,
price, product information, and service
– It’s given marketers a new way to create value and to build
relationships
– Click-only companies operate only on the internet e.g. Amazon
and Google
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E-tailers e.g. Amazon and Expedia
Search Engines and Portals e.g. Yahoo and Google
Transaction Sites e.g. eBay
Content Sites e.g. Encyclopaedia Britannica Online
Online Marketing
• Marketing and the Internet
– Brick and Mortar manufacturers and retailers have reexamined how they serve their markets
– They’ve set up their own online sales and
communications channels becoming click and mortar
companies
– Companies are also becoming multi-channel retailers
– Difficult today to find a company without a substantial
online presence
Online Marketing
• Online Marketing Domains
– Four Major Online Marketing Domains include: Business to
Consumer, Business to Business, Consumer to Consumer, and
Consumer to Business
– Business to Consumer (B2C) Online Marketing: businesses
selling goods and services online to final consumers
– Business to Business (B2B) Online Marketing: businesses
using B2B websites, email, online catalogs and other online
resources to reach new business customers, serve current
customers more effectively, and obtain buying efficiencies and
better prices
– Consumer to Consumer (C2C) Online Marketing: online
exchanges of goods and information between final consumers
– Consumer to Business (C2B) Online Marketing: online
exchanges where consumers search for sellers, learn about
offers and initiate purchases
Online Marketing
• Setting Up an Online Marketing Presence
– Companies can set up a web presence in one
of four ways:
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Creating a Website,
Placing Ads and Promos Online,
Creating or Participating in Online Social Networks
Using E-mail
Online Marketing
Online Marketing
• Creating a Web Site
– Usually the 1st step in conducting online marketing
– Marketers need to design an attractive site, get
consumers to visit the site, and to come back
– Types of Websites:
• Corporate Websites – a site designed to build goodwill,
collect customer feedback and supplement other channels
rather than to sell company products
• Marketing Websites – a website which engages consumers
in interactions which move them closer to a direct purchase
or other marketing outcomes
Online Marketing
• Designing Effective Websites
– To attract visitors, marketers promote websites in offline print,
ads, links and other sites
– Consumers abandon sites which don’t live up to expectations
and which don’t measure up
– Key is to create excitement and value to get consumers to stick
and come back again
– Seven Cs of effective website design
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Context: layout and design of the site
Content: the text, pictures, sound and video which the site contains
Community: user to user communication enablement on the site
Customisation: user tailoring or how users can personalise the site
Communication: site-to-user, user-to-site, or two way
communication
• Connection: degree of which the site is linked to other sites
• Commerce: the sites ability to enable commercial transactions
Online Marketing
Online Marketing
• Placing Ads and Promos Online
– Online Advertising: advertising that appears while
consumers are surfing the web, including display
adverts, online classifieds etc
– Major Forms of Online Advertising
• Display ads e.g banners, pop-ups
• Search related ads or contextual advertising e.g on search
engines
• Online Classifieds
– Other Forms of Online Promotion
• Content Sponsorship – carefully targeted sites
• Alliance and Affiliate Programs – working with other
companies online and offline
• Viral Marketing – internet version of word-of-mouth
Online Marketing
Online Marketing
• Creating or Participating in Online Social
Networks
– Online Social Networks: these are online social
communities where people socialise or exchange
information and opinions e.g. blogs, social networking
websites
– Marketers engage with social networks in two ways:
• Participating in existing web communities e.g. MySpase, FB
• Creating their own web communities e.g. dedicated websites
– Challenges of Online Social Networks:
• They are new, hard to measure and difficult to use effectively
• User controlled and marketers don’t drive the conversations
• Consistently add value to consumers in the web community
to capture value in return
Online Marketing
• Using E-Mail Marketing
– It’s a growing and an important online tool
– More enriched email messages to compete effectively and to
overcome the clutter e.g. interactive messages and animation
– Dark side of email marketing is spam as it clogs up your
mailbox – causes irritation
– Spam: unsolicited, unwanted commercial email messages
– Permission-based marketing is now utilised address the spam
through customer’s opting in
– Email allows for highly targeted, direct, personalised
relationship building messages to be sent to consumers who
want to receive
– Advantages are low costs and effective targeting with high
return on investment
Online Marketing
Online Marketing
Public Policy Issues in Direct
Marketing
• Irritation, Unfairness, Deception and Fraud
– Excesses of direct marketing annoy or offend consumers
– Direct response TV commercials which are too loud, too long
and inconsistent annoy
– Unwanted junk mail, spam, banner and pop up ads also irritate
consumers
– Informercials take advantage of impulsive or less sophisticated
buyers with low resistance
– Internet fraud and investment schemes including identity theft
– Phishing which uses deceptive emails and fraudulent websites to
fool users to divulge personal data
– Online security when doing transaction related and intercepting
personal banking related numbers
– Access by unauthorised groups and vulnerable people
Public Policy Issues in Direct
Marketing
• Invasion of Privacy
– Extensive use of database information to take advantage of
consumers
– Names are spread to various groups whenever you apply or
enter company databases
– Availability of information leaves consumers open to abuse if
companies make unauthorised use of information
– Credit card companies and data of cardholders
– Credit bureaus for people with credit records and new
applications
– Cellphone companies and their customer usage and personal
information
– Many other companies with different divisions and subsidiaries
– How do we circumvent this??? A need for action pg 543
See you next time.
Cheers Guys!