Module - 5

Direct Marketing
 Direct Marketing
• Other names are:
- Dialogue Marketing
- Personal Marketing
- Relationship Marketing
- Database Marketing.
• It is a selling method that establishes a one-to-
on relationship with the customer.
• Eg CRY, Reader Digest, Outlook, Newsweek
 Features
• Goes directly to an identified person
• Its goal is different action- return mail, sending
a coupon, requesting more info etc.
• Result can be measured
• It is interactive
• Makes use of customer data base
 Functions
• To get sales
• Build new customer
• Retain or increase the business
• Improve selection of market segment
• To stimulate repeat purchase
• To generate goodwill
 Components
• Front end
– Deals with communication and media mix
– Explains and deliver the offer
• Back end
– Deals with responses to offers
– Inventory control
– Invoicing
– Customer care
 Growth of Direct Marketing
• Change in lifestyle
• Technological advancement
• More women in work force
• Credit card
• Toll free numbers
• Avoiding wastes
 Difference
Direct Marketing Advertising

• Selling to individuals • Mass selling

• Can build personal • Cannot build personal
relationship with customers relationship
• Copy is “you” + “Benefits” • Copy is “Me” and “it”
• Market place- email, • Market place- Retailer
telephone etc • Marketers lose control over
• Marketer controls the the product as it enter
product until delivery distribution channel
• Used to motivate • Used to build image,
immediate order or enquiry awareness, recall, loyalty
• Can be measured accurately • Difficult to measure
 Advantages
• Selective reach
• Segmentation capability
• Personalization
• Costs
• Effectiveness can be measured
• Timing – can be organizes quickly
 Disadvantages
• Image factor- mails might be taken as junk,
people may feel disturbed
• Accuracy- effectiveness depends upon
accuracy of the list prepared. People might
relocate or change profession
 DM- Strategies and Media
• Types of media strategies used:
a. Direct mail
- catalogues
- mail packages
- letters, Brochures etc
b. Broadcast media
c. Infomercial
d. Teleshopping
Sales Promotion
 Sales Promotion
• Includes those sales activities which
supplement personal selling and advertising.
• It is direct inducement that offer extra value or
incentive for the product.
• It stimulates the customer to make prompt
decision to purchase the product.
 Difference
Sales Promotion Advertising
• Direct inducement that • Non personal form of
motivates customers to buy communication used for
promoting a product
• • Has long term implication
Has short term implication
• • Uses pull strategy
Uses push strategy
• • Uses print or electronic
Uses outdoor media
media
• Has direct impact on sales
• Boost image of the brand or
create awareness
• Frequent sales promotion
• Displaying same ad again
create ill reputation and
and again irritate potential
boost illogical expectation
customers
 Importance of Sales Promotion
• For introducing new product or service
• To face unique competition
• To unload accumulated inventory- sale, sale
• To overcome seasonal slump in sales e.g.
discount on AC during winters
• To retain lost customer
• To support and complement advertising
• To support and complement sales force
• To motivate distribution channel to buy/ stock/
promotion e.g. Dealers contest by Maruti,
Hyundai
 Reasons for Sales Promotion
1. Growing power of retailers
2. Declining brand loyalty
3. Short term focus
4. Overcoming competition
5. Increased accountability
6. Fragmentation of consumer market
 Sales Promotion can be divided
into
• Franchising building promotion –
- aims at communicating specific feature and
benefits
-it is long term brand building
-e.g. credit card company encouraging repeat
purchase
• Non- franchising building promotion –
– Desired to seed up purchase decision
– Seldom communicate about feature or benefits
– E.g. price off, bonus packs, refunds
 Sales Promotion Objectives
• To increase demand
• To bolster distribution
• To support promotion mix elements such as
advertising, personal selling, etc.
 Sales Promotion Risks
• Financial risk
• Functional risk
• Social risk
• Physical risk
 Tools and techniques- conventional
methods
Consumer oriented Trade oriented
• Catalogues • Dealer incentive
• Samples • Volume discount
• Coupons • Training programme to
• Contests dealers
• Demonstration at different • Trade show
places • Road show
• Discounts • Exhibition
• Bonus packs • Best display award and
• Price off – 25% reward
• Event sponsorship • Trips abroad
• Easy installment schemes • Free gifts
• Exchange offer
 Tools and techniques- Non conventional

• Game show
• Quiz programme
• Surprise visit of celebrities to consumer house
• Domestic tour
• Foreign trips
• Surprise gifts to existing customer
 Pull and Push Strategy
• Manufacturer resorting to Pull strategy
– When there is product differentiation
– When Brand loyalty is high
– It involves going through the retailers
– Retailer may give discounts
• Manufacturer resorting to Push strategy
– When brand loyalty is low
– When alternatives are available in market
– When the product is new
– When purchase depends upon shelf display
 Co-operative Advertising
• Horizontal mode
– Common advertising sponsored by a group of
retailers
– E.g. Dussehara and Diwali
• Vertical mode
– Most common is Trade oriented form of vertical
modes
– Manufacturer pays a portion of advertising, retailer
pays the rest
• Ingredient sponsored mode
– Supported by raw material manufacturers
– E.g. Intel
Public Relation
 Meaning
• Is a management function which deals with
public issues
• Important component is Publicity
• It is a systematic act of building an image of a
product/ service/ idea/ among the target
group through a well designed promotion on a
regular basis
 Objectives
1. Promoting goodwill
2. Promoting a product or service
3. Give information to employees
4. Helps to overcome negative publicity
5. Lobbying
6. Give advise and council
 Tools of Public relation
a) Press release
b) Exclusive stories
c) Company newsletter
d) Interviews and Press Conference
e) Sponsored events
 Public Relation Strategies
• Proactive Public Relation Strategy
– Public relation Audit
– Public relation plan
• Situation Analysis
• Programme objectives
• Purpose
• Communication
• Message
• Reactive Public Relation Strategy
– Public relation Audit
– Weak area identification
 Publicity
• Refers to generation of new ideas about a
person, product or service
• It is a form of non personal unpaid, mass
communication
• Subset of public relation
• It builds awareness of the customers
• When information is positive, credibility
increases substantially
 Differences
Publicity Public Relation
• It is a short term strategy • It is long term strategy
• May be positive or negative • Always positive
• Not always under the • Under the control of the
control of the person whom firm and its agent
publicity is made • It is paid by the organization
• Need not be paid by the • Creates impact by
organization proclamation
• Creates impact by deeds • Uses sponsored events to
• Uses press release to achieve the purpose
achieve the purpose • The company is under the
• Controlled by the firm. obligation to the press for
the release of information
 Goals of Publicity
• Merchandising or sales orientation
• Entertainment orientation
• Educational orientation
 Publicity
• Advantages
– Credibility
– Has a news value
– Significant word of mouth communication takes
place
– Perception endorsed by media
• Disadvantages
– Can be negative publicity
– Timing not under control
– Accuracy missing at times
 Corporate Advertising
• Done not for product but to promote
favorable attitude towards the company.
• Business magazines or TV be used
 Objectives
• To build a positive image of the company
• To boost the morale of the employees
• To attract new employees
• To inform the public, about the corporate
views with respect to environment issues
• Positioning the company’s product and service
 Reasons for failure
• Fails to define the purpose of campaign
• Fails to measure results
• Not aware about the pros and cons
• Lack of agencies knowledge
 It is controversial:
• Consumers not interested in this form of
advertising
• It is treated as an item to satisfy the top mgt
• Adopted only when the firm is in trouble
• Is a waste of money
 Role
• Provide value addition to product services
• Build trust among stake holders
• Holds decreasing consumer uncertainty
• Keeps employees morale and maintains labour
relations
 Types of corporate advertising
• Image advertising
– Aims at generating resources both human and financial
– General positioning of the ad
– Sponsorship
– Recruitment
• Advocacy advertising
– Addresses social and environment issues with theme
– E.g. if you drink, don’t drive by McDowell company
• Cause related advertising
– Publicity for charitable job
– E.g. fight against dowry related offence
 Corporate advertising
• Advantages
– Excellent vehicle for positioning the firm
– Reaches the select target audience
• Disadvantages
– Ethics- Control the public opinion
– Attitude survey- only company name is recalled
but not its product or service
Personal Selling
 Personal selling involves
• Selling through person to person selling
• Emphasis on personal selling varies from firm
to firm
• Plays a dominant role in industrial firms
• Role is minimum in consumer goods
 Nature of Personal selling
• Provider stage
• Persuader stage
• Prospector stage
• Problem solving stage
• Procreator stage
 Personal selling
• Advantages communication
– Allow two way communication
– Tailoring of the message
– Lack of distraction
– Involvement in the decision process
• Disadvantages
– High cost
– Poor reach
– Sales force/ management conflicts
 Role of Personal selling
• Market analysis
• New product
• Customer service
• Buyer behavior analysis
• Customer relation mgt
• Sales forcasting
 Steps in Personal selling
• Prospecting and qualifying
• Pre-Approach
• Approach
• Presentation and Demonstration
• Overcoming objectives
• Closing
• Follow up
• Negotiation
 Integration and promotion mix
• Personal selling and advertising
– Spreading awareness
• Personal selling and Public relation
– Salesman is the best person for it
• Personal selling and direct marketing
– E.g. telemarketing department gets the lead,
screens and prepares a list of potential customer
• Personal selling sales promotion
– E.g. FMCG products follow this procedure
Thank you