Marketing Management 2nd Edition

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Marketing Management2nd Edition
Michael R. Czinkota and Masaaki Kotabe

• Chapter 13
• Direct Marketing, Sales Promotion and Public
  Relations

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Precision MarketingKey Detailed Information
about Individual CustomersTheory Matches the
Requisite Marketing Approach to Individuals

• Precision marketing is possible because of
• Availability consolidation of secondary data
• Point of sale data
• Electronic point-of-sale (EPOS)
• Coupled with payment data provides individual
  profile
• Customer loyalty cards (e.g., Kroger, CVS, etc.)
• Identify what customers buy and dont buy
• Manipulation of data
• Expert systems (e.g., American Express)

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Direct Marketing Delivery Systems

• Advantages
• Specific targeting
• Personalization
• Variation of promotional offer
• Consumer information
• Flexibility
• Circumvention of barriers (e.g., distribution
  channels)

• Disadvantages
• High cost
• Poor quality lists
• Image problems
• Privacy Issues

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Structuring the Direct Mail Campaign

• To whom you mail
• In house list
• Mailing house lists
• Lists from scratch
• The direct mail offer
• Clear-cut offer/action
• Keep offer simple
• The letter
• Personalization Best
• Timing
• Avoid July, August, holidays
• Response rates
• 1 2
• Trackable
• Measurable

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Internet, Door-to-Door Publications

• Internet-Based Communications
• Crucial Component of Marketing Outreach Efforts
• Enjoying Exponential Growth
• Allows small firms and individuals to compete
  with large firms.
• Daily users account for the vast majority of the
  money spent online
• Also Used to Capture Consumer Data
• Privacy Issues
• Direct Marketing Association (DMA) telephone,
  mail, email preference service
• - National Do Not Call List
• Ethical Issues (e.g., Targeting Children to
  Provide Information sometimes marketed as Kids
  Clubs)
• Door-to-Door
• Tailored Publications

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Telemarketing

• Advantages
• Speed up to hundreds per day by experienced
  telesales personnel
• Cost 17 per hr. vs. 300 per hr. for
  face-to-face representatives (1990)
• Can be first step to face-to-face sales call
• High Success Rates compared to Direct Mail 10
  not unusual
• Disadvantages Compared to Face-to-Face
• No visual stimuli for either party
• Unable to Demonstrate Product
• Calls must be much shorter
• More difficult to be persuasive

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Telemarketing

• Telemarketing agencies
• Prison labor available to private enterprise in
  30 states
• Inbound telemarketing
• Handling Inquiries
• Handling Complaints
• Taking Orders
• Network marketing (e.g., Avon, Amway)

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Sales Promotion

• Advantages
• Short-term sales increase
• Defined target audience
• Defined role/objectives
• Indirect roles (e.g., wider distribution, shelf
  space)

• Disadvantages
• Only short-term
• Hidden costs
• Confusion
• Price cutting
• Postponement effect
• Significant government regulation
• Lack of effectiveness sometimes

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Sales Promotion

• Costs 5 7 times more to find new customers than
  to retain current customers.
• Totally satisfied customers are 6 times more
  likely to repurchase a companies products over a
  span of 1-2 years than merely satisfied customers.

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Types of Sales Promotion
Promotional pricing
Nonprice promotions
Sampling
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Sales PromotionPromotional Pricing

• Price reductions
• Free goods
• Tied offers
• Coupons and virtual coupons
• Cash refund
• Money off next purchase
• Loss leader pricing
• Cheap credit

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Sales PromotionNonprice Promotions

• Contests
• Free gifts
• Self-supporting offers
• Multibrand promotions
• Guarantees and services

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Sales PromotionSampling

• Most effective in the early stages of a new
  product launch
• Important for food products
• Very expensive
• Most effective, direct, and immediate way to
  obtain consumer trial.
• Shaping Behavior

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Sponsorships

• Can be very expensive.
• Can be very productive.
• Typically found in arts, sports and causes.
• Rapidly growing form of marketing communications.

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Trade Shows
Selling objectives
Nonselling objectives
Maintain relationship Transmit messages to key
accounts Remedy problems Add-on sales
Maintain image Test products Gather competitive
intelligence Widen exposure
Current customers
Contact prospects Determine needs Transmit
messages Commit to call back or sale
Contact prospects Foster image building Test
products Gather competitive intelligence
Potential customers
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Public Relations

• Media contact cultivate relationships with
  journalists
• News stories
• Press office
• Corporate public relations
• Defensive
• Proactive
• Whats the doughboy afraid of?