A Global Philip Kotler Perspective
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Direct and Online Marketing: Building Direct Customer Relationships
Copyright © 2009 Pearson Education South Asia Pte Ltd
Gary Armstrong Swee Hoon Ang Siew Meng Leong Chin Tiong Tan Oliver Yau HonMing PowerPoint slides adapted by Peggy Su
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Learning Objectives After studying this chapter, you should be able to: 1. Define direct marketing and discuss its benefits to customers and companies 2. Identify and discuss the major forms of direct marketing 3. Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies 4. Discuss how companies go about conducting online marketing to profitably deliver more value to customers 5. Overview the public policy and ethical issues presented by direct marketing
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Chapter Outline 1. The New Direct-Marketing Model 2. Growth and Benefits of Direct Marketing 3. Customer Databases and Direct Marketing 4. Forms of Direct Marketing 5. Online Marketing 6. Integrated Direct Marketing 7. Public Policy Issues in Direct Marketing
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The New Direct Marketing Model • Direct marketing consists of direct connection with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. • No intermediaries • An element of the promotion mix • Fastest-growing form of marketing
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Growth and Benefits of Direct Marketing Benefits to Buyers •
Convenience
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Ready access to many products
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Access to comparative information about companies, products, and competitors
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Interactive and immediate
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Growth and Benefits of Direct Marketing Benefits to Sellers •
Tool to build customer relationships
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Low-cost, efficient, fast alternative to reach markets
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Flexible
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Access to buyers not reachable through other channels
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Customer Databases and Direct Marketing Customer Database • A customer database is an organized collection of comprehensive data about individual customers or prospects, including geographical, demographic, psychographic, and behavioral data.
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Customer Databases and Direct Marketing Customer Database Uses: •
Locate good and potential customers
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Generate sales leads
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Learn about customers
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Develop strong long-term relationships
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Forms of Direct Marketing • Personal selling • Direct-mail marketing • Catalog marketing • Telephone marketing • Direct-response television marketing • Kiosk marketing • Digital direct marketing • Online marketing
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Forms of Direct Marketing Direct-Mail Marketing • Direct-mail marketing involves an offer, announcement, reminder, or other item to a person at a particular address. • Personalized • Easy-to measure results • Costs more than mass media • Provides better results than mass media
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Forms of Direct Marketing Catalog Direct Marketing Catalog direct marketing involves printed and Web-based catalogs. • Benefits of Web-based catalogs • Lower cost than printed catalogs • Unlimited amount of merchandise • Real-time merchandising • Interactive content • Promotional features Copyright © 2009 Pearson Education South Asia Pte Ltd
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Forms of Direct Marketing Catalog Direct Marketing • Challenges of Web-based catalogs • Require marketing • Difficulties in attracting new customers
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Forms of Direct Marketing Telephone Direct Marketing • Telephone direct marketing involves using the telephone to sell directly to consumers and business customers. • Outbound telephone marketing sells directly to consumers and businesses. • Inbound telephone marketing uses toll-free numbers to received orders from television and print ads, direct mail, and catalogs. Copyright © 2009 Pearson Education South Asia Pte Ltd
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Forms of Direct Marketing Telephone Direct Marketing • Benefits of telephone direct marketing • Purchasing convenience • Increased product service and information
• Challenges of telephone direct marketing • Unsolicited outbound telephone marketing • Do-Not-Call Registry
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Forms of Direct Marketing Direct-Response Television Marketing • Direct-response television (DRTV) marketing involves 60- to 120-second ments that describe products or give customers a toll-free number or Web site to purchase products, and 30-minute infomercials such as home shopping channels. • Less expensive than other forms of promotion • Easier to track results
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Forms of Direct Marketing Kiosk Marketing • Kiosk marketing involves placing information and ordering machines in stores, airports, trade shows, and other locations.
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Forms of Direct Marketing Digital Direct Marketing Technologies • Mobile phone marketing • Podcasts • Vodcasts • Interactive TV
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Forms of Direct Marketing Digital Direct Marketing Technologies • Mobile phone marketing includes: • Ring-tone giveaways • Mobile games • Ad-ed content • Contests and sweepstakes
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Forms of Direct Marketing Digital Direct Marketing Technologies • Podcasts and vodcasts involve the ing of audio and video files via the Internet to a handheld device such as a PDA or portable media player and listening to them at the consumer’s convenience.
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Forms of Direct Marketing Digital Direct Marketing Technologies • Interactive TV (ITV) lets viewers interact with television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences.
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Online Marketing Marketing and the Internet • The Internet is a vast public web of computer networks that connects s of all types around the world to each other and to a large information repository.
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Online Marketing Online Marketing Domains • Business to consumer (B2C) • Business to business (B2B) • Consumer to consumer (C2C) • Consumer to business (C2B)
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Online Marketing Online Marketing Domains
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Online Marketing Online Marketing Domains • Business to consumer (B2C) involves selling goods and services online to final consumers. • Business to business (B2B) involves selling goods and services, providing information online to businesses and building customer relationships.
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Online Marketing Online Marketing Domains • Consumer to consumer (C2C) occurs on the Web between interested parties over a wide range of products and subjects. • Blogs • Offer a fresh, original, and inexpensive way to reach fragmented audiences • Difficult to control
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Online Marketing Online Marketing Domains • Consumer to business (C2B) involves consumers communicating with companies to send suggestions and questions via company Web sites.
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Online Marketing Types of Online Marketers • Click-only marketers • Click-and-mortar marketers
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Online Marketing Click-Only Marketers • Click-only marketers operate only online without any brick and mortar presence. • E-tailers • Search engines and portals • Shopping or price comparison sites • Internet service providers • Transaction sites • Content sites
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Online Marketing Click-Only Marketers • E-tailers are dot coms that sell products and services directly to final buyers via the Internet. • Amazon • Expedia
• Search engines and portals are ports of entry to the Internet. • Yahoo! • Google
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Online Marketing Click-Only Marketers • Internet service providers (ISP) provide Internet connections for a fee. • Starhub • Jaring
• Shopping or price comparison sites provide product and price comparison information • Yahoo! Shopping
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Online Marketing Click-Only Marketers • Transaction sites take commissions for transactions on their sites. • eBay
• Content sites provide financial, news, research, and other information • Cna.com (Channel NewsAsia) • ESPN.com
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Online Marketing Click-and-Mortar Marketers • Click-and-mortar companies are brick-and-mortar companies with an online presence. • Advantages of click-and-mortar companies include • Known and trusted brand names • Strong financial resources • Large customer bases • Industry knowledge • Reputation • Strong supplier relationships • More options for customers Copyright © 2009 Pearson Education South Asia Pte Ltd
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Online Marketing Setting Up an Online Presence • Creating a Web site requires deg an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site. • Types of Web sites • Corporate Web site • Marketing Web site
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Online Marketing Setting Up an Online Presence • A corporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the company’s products directly to • Provide information • Create excitement • Build relationships
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Online Marketing Setting Up an Online Presence • A marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome.
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Online Marketing Deg Effective Web Sites • To attract visitors, companies must • Promote in offline promotion and online links • Create value and excitement • Constantly update the site • Make the site useful
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Online Marketing Deg Effective Web Sites • The seven Cs of effective Web site design • Context • Content • Community • Customization • Communication • Connection • Commerce Copyright © 2009 Pearson Education South Asia Pte Ltd
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Online Marketing Deg Effective Web Sites • Context is the site’s layout. • Content is the site’s pictures, sound, and video. • Community is the site’s means to enable -to- communication. • Customization is the site’s ability to tailor itself to different s or to allow s to personalize the site. Copyright © 2009 Pearson Education South Asia Pte Ltd
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Online Marketing Deg Effective Web Sites • Communication is the way the site enables -to-, -to-site, or two-way communication. • Connection is the degree that the site is linked to other sites. • Commerce is the site’s capabilities to enable commercial transactions.
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Online Marketing Deg Effective Web Sites • The eighth C • To keep customers coming back, the site needs to constantly change.
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Online Marketing Placing Ads and Promotions Online • Forms of online advertising • Display ads • Search-related ads • Online classifieds
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Online Marketing Placing Ads and Promotions Online • Display ads • Banners are banner-shaped ads found on a Web site. • Interstitials are ads that appear between screen changes. • Pop-ups are ads that suddenly appear in a new window in front of the window being viewed. • Rich media ads incorporate animation, video, sound, and interactivity. Copyright © 2009 Pearson Education South Asia Pte Ltd
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Online Marketing Placing Ads and Promotions Online • Search-related ads are ads in which textbased ads and links appear alongside search engine results on sites such as Google and Yahoo! are effective in linking consumers to other forms of online promotion. - Will effectively attract online customers to promote new products
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Online Marketing Placing Ads and Promotions Online • Other forms of online promotion include • Content sponsorships • Alliances • programs • Viral advertising
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Online Marketing Placing Ads and Promotions Online • Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information. • Alliances and programs are relationships where online companies promote each other. • Viral marketing is the Internet version of word-ofmouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers along to friends. Viral marketing is more known as spam (unwanted e-mails), in facebook Copyright © 2009 Pearson Education South Asia Pte Ltd
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Online Marketing The Future of Online Advertising • Online advertising provides a useful purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix.
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Online Marketing Creating or Participating in Web Communities • Web communities allow to congregate online and exchange views on issues of common interest.
Congregate = mass
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Online Marketing Using E-mail • Marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered e-mail environment.
Clutter = untidy Copyright © 2009 Pearson Education South Asia Pte Ltd
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Integrated Direct Marketing • Integrated direct marketing involves the of carefully coordinated multiple-media, multiple-stage campaigns. Various mode of marketing..
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Public Policy Issues in Direct Marketing • Customer irritation, unfairness, deception, and fraud • Privacy • Security
Junk e-mails, spam, pop-up, fraud Copyright © 2009 Pearson Education South Asia Pte Ltd
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Public Policy Issues in Direct Marketing Irritation, Unfairness, Deception, and Fraud • Irritation includes annoying and offending customers. • Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers.
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Public Policy Issues in Direct Marketing Irritation, Unfairness, Deception, and Fraud • Deception includes “heat merchants” who design mailers and write copy designed to mislead consumers. • Internet fraud includes identity theft and financial scams.
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Public Policy Issues in Direct Marketing Invasion of Privacy • The concern is that marketers may know too much about the consumers and use this information to take unfair advantage. • Sale of databases • Microsoft
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