Marketing Management

4th of July 2011

Direct and Online MarketingBuilding 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

• 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

• 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 re-

examined 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:• 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

• 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!