C H A P T E R

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Direct Marketing Communications
2007 The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Learning Objectives
After studying this chapter, you should be able to:

Understand the objectives of direct marketing communications, and describe their distinguishing characteristics. Discuss the factors driving the growth in direct marketing communications. Understand traditional direct marketing communications techniques such as direct mail, broadcast and print media, and telemarketing. Recall examples of the use of technology such as electronic media in direct marketing communications. Understand some of the ethical and legal issues facing marketers who use direct marketing communications.

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2007 The McGraw-Hill Companies, Inc. All rights reserved.

Skechers USA, Inc

Skechers USA, Inc., is a global powerhouse in the lifestyle footwear industry, doing business in 100 countries, including Australia, Chile, China, India, and Japan. Skechers has always had popular products, with current offerings in 20 product lines with 200 styles. A multichannel international marketer, Skechers sells through a wide variety of outlets, including department stores, specialty and athletic stores, the Internet, and company-owned stores. In the United States Skechers operates 125 of its own stores. Outside the United States the company goes to market through 30 global distributors and has 22 company-owned stores.
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2007 The McGraw-Hill Companies, Inc. All rights reserved.

Direct Marketing Communications

Direct Marketing Communications (DMC) have two primary objectives.
Establish Relationships Soliciting a direct and immediate response from prospects or customers.
Whether those relationships have been established by direct marketing communications or by some other means.
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Maintain and Enhance Relationships

Bearden Marketing 5th Ed

Direct Marketing Communications

Several characteristics distinguish direct marketing from other marketing communications methods:
Direct marketing targets a carefully selected audience, as opposed to a mass audience. It typically involves two-way communication; direct responses from customers make it interactive. Direct-response results are quite measurable marketers can determine what works.
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Customer Database

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DMC Benefits
Immediate Response Orientation Direct marketing communications often have deadlines for action and offer special incentives for taking immediate action. Although all marketing communications should try to achieve measurable results, their objectives are generally not as action-specific as those of direct marketing.

Measurable Action Objectives

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2007 The McGraw-Hill Companies, Inc. All rights reserved.

The Growth of DMC

Direct marketing communications have become a larger part of the total marketing communications picture in recent years.
From 2002 to 2007, direct marketing is forecast to increase in efficiency with annual sales growing steadily at more than 9 percent. Total direct marketing expenditures will reach an estimated $255 billion by 2007, split fairly evenly between business and consumer markets. Expenditures on direct marketing are growing at a healthy rate, with the 20022007 growth rate expected to be 12 percent.
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2007 The McGraw-Hill Companies, Inc. All rights reserved.

Growth Catalysts
1. Increase in Customized Products

2. Fragmented Markets
3. Product Price Sensitivity

4. Shrinking Audiences for Network TV and Newspapers

5. Emphasis on Immediate Sales

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2007 The McGraw-Hill Companies, Inc. All rights reserved.

Direct Marketing Techniques

Direct Mail

Electronic Media

Direct Marketing Techniques

Print Media

Broadcast Media

Telemarketing

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2007 The McGraw-Hill Companies, Inc. All rights reserved.

Direct Mail
Advantages
Self-contained message.
Flexibility in message content and form of delivery. Thorough coverage of target market. Fewer distractions from other media.

Disadvantages
High cost per exposure.
Potential delivery delays. Lack of support from other media. Junk mail easy to ignore. Seen as wasteful, harmful to environment.

A large number of consumers like to make mail-order purchases.

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Types of Direct Mail

Typically includes recipients name; may be mailed with brochures, price lists, reply cards, and envelopes. Generally used to offer discounts, announce sales, or generate customer traffic.

Sales Letter

Postcards

Catalogs

Describe and often picture the product sold.

more

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Types of Direct Mail

Video Catalogs

Serve same purpose as print catalog, but are on videocassettes or CDs. Promotional videocassettes, audiocassettes, and CDs: used to send product information to selected audiences.

Promotional Cassettes

Promotional Disks

Promotional interactive computer disks: allow the recipient to select information of interest.
more
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5th

Ed

Types of Direct Mail

Leaflets and Flyers Typically single pages that can be folded and included with sales letters.

Statement Stuffers

Ads included in other mail such as bank or credit card statements or shipped with catalog orders.

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Broadcast Media

Infomercials

Broadcast Media
Direct Response Radio Ads
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Direct Response Television Ads

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Print Media
Although not so tightly targeted as other direct marketing communications media, newspapers and magazines can also provide an opportunity for direct response. Consumers can respond to:

Ads carrying an address Order form Coupon Telephone number.

The response can be either to purchase or to request additional information.

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2007 The McGraw-Hill Companies, Inc. All rights reserved.

Telemarketing
Telemarketing is an interactive direct marketing communications approach that uses telephone calls to initiate, develop, and enhance relationships with customers.

The publics irritation with telemarketers and unethical practices by some telemarketers prompted the Federal Trade Commission (FTC) to enact a national do not call list that prohibits telemarketing calls to consumers who register with the FTC.
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Telemarketing Fraud
National Consumers Leagues top 10 telemarketing frauds list:

Work-at-home schemesKits sold with false promises of profits. Prizes/sweepstakesPhony prize awards requiring payment of fees first. Credit card offersPhony promises of credit cards requiring payment of fees in advance. Advance fee loansEmpty promises of loans requiring payment of fees in advance. Magazine salesFake sales or renewals for magazine subscriptions that are never received.
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Bearden Marketing 5th Ed

Telemarketing Fraud

Telephone slammingConsumers phone service is switched without their knowledge or consent. Buyers clubsConsumers credit card and bank accounts may be charged with unauthorized purchases. Credit card loss protectionUnnecessary insurance sold using scare tactics or misrepresentations. Nigerian money offersConsumers are lured into revealing their bank account numbers, against which fraudulent checks are written. Telephone pay-per-call servicesSome 900 number and other pay-per-call services are not worth the price of the call.
2007 The McGraw-Hill Companies, Inc. All rights reserved.

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Summary
After studying this chapter, you should be able to:

Understand the objectives of direct marketing communications, and describe their distinguishing characteristics. Discuss the factors driving the growth in direct marketing communications. Understand traditional direct marketing communications techniques such as direct mail, broadcast and print media, and telemarketing. Recall examples of the use of technology such as electronic media in direct marketing communications. Understand some of the ethical and legal issues facing marketers who use direct marketing communications.

Bearden Marketing 5th Ed

20-20

2007 The McGraw-Hill Companies, Inc. All rights reserved.