Chapter 17 Textbook Summary.docx

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Management and Organizational Studies
Management and Organizational Studies 2320A/B
Kevin Thompson

Chapter 17 Textbook Summary Direct and Online Marketing  Direct marketing: consists of connecting directly with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships o Communicate directly with customers, often on a one to one interactive basis  The New Direct Marketing Model o Direct marketing has undergone a dramatic transformation o For many companies today, first marketing is more than just a supplementary channel or advertising medium o For these companies, direct marketing – especially in its most recent transformation, online marketing – constitutes a complete model for doing business o Firms employing this new direct model use it as the only approach  Growth and Benefits of Direct Marketing o Direct marketing has become the fastest growing form of marketing o More web-oriented, and Internet marketing is claiming a fast-growing share of direct-marketing spending and sales o Direct marketing brings many benefits to both buyers and sellers  Benefits to Buyers o Convenient, easy, private o Never close their doors, and customers don’t have to battle traffic, find parking spaces, and trek through stores to find products o Gives buyers ready access to a wealth of products o Gives buyers access to a wealth of comparative information about companies, products, and competitors o More information in more useful forms than even the most helpful retail salesperson o Direct marketing is interactive and immediate – buyers can interact with sellers website to create exactly the configuration of information, products, or services they desire and then order them on the spot o Greater measure of control  Benefits to Sellers o Direct marketing is a powerful tool for building customer relationships o Target small groups or individual consumers and promote their offers through personalized communications o Interact with customers o Offers sellers a low-cost, efficient, speedy alternative for reaching their markets o Grown rapidly in business-to-business marketing o Online direct marketing results in lower costs, improved efficiencies, and speedier handling of channel and logistics functions, such as order processing, inventory handling, and delivery o Direct marketing gives sellers across to buyers that they could not reach through other channels o Smaller firms can mail catalogues to customers outside their local markets  Customer Databases and Direct Marketing o Customer database: an organized collection of comprehensive data about individual customers of prospects, including geographic, demographic, psychographic, and behavioural data o Gives companies a 360 degree view of its customers an dhow they behave o The customer database might contain a customer’s demographics, psychographics, and buying behaviour o In business-to-business marketing, the customer profile might contain the products and services the customer has bought, past volume and prices, key contacts, competing suppliers, status of current contacts, estimated customer spending for the next few years, and assessments of competitive strengths and weaknesses in selling and servicing the account o Use databases to locate good potential customers and to generate sales leads o Mine their databases to learn about customers in detail, and then fine tune their market offerings and communications to the special preferences and behaviours of target segments or individuals o Can be an important tool for building stronger long-term customer relationships o Database marketing requires a special investment o Must invest in computer hardware, database software, analytical programs, communication links, and skilled personnel o Must be user friendly and available to various marketing groups  Forms of Direct Marketing o Direct-Mail Marketing  Sending an offer, announcement, reminder, or other item to a person at a particular physical or virtual address  Well suited to direct, one-to-one communication  High target market selectivity, can be personalized, and allows easy measurement of results o Catalogue Marketing  Direct marketing through print, video, or digital catalogues that are mailed to select customers, made available in stores, or presented online  Despite the advantages of web-based catalogues, as our overstuffed mailbox may suggest, printed catalogues are still thriving  One of the best ways to drive online sales  Paper catalogues can also create emotional connections with customers that web-based sales spaces simply can’t  Catalogue marketing – printed and online – has grown explosively during the past 25 years o Telephone Marketing  Using the telephone to sell directly to customers  Marketers use outbound telephone marketing to sell directly to consumers and businesses  They use inbound toll-free numbers to receive orders from television and print ads, direct mail, or catalogues  Purchasing convenience and increased product and service information  Two major forms of telemarketing – inbound consumer telemarketing and outbound business-to-business telemarketing – remain strong, and growing  Do Not Call List appears to be helping most direct marketers more than hurting them  Many of these marketers are shifting their call centre activity form making cold calls on the resentful customers to managing existing customer relationships o Direct Response Television Marketing  Takes one of two forms  Direct response television advertising (DRTV) – direct marketers air television spots, often 60 or 120 seconds long, which persuasively describe a product and give customers a toll-free number for ordered (infomercials)  Home Shopping Channels – television programs or entire channels dedicated to selling goods and services (the Shopping Channel) o Kiosk Marketing  Many companies are placing information and ordering machines – called kiosks – in stores, airports, and other locations o New Digital Direct-Marketing Technologies  Direct marketers can reach and interact with consumers just about anywhere, at any time, about almost anything  Mobile phone marketing  Now integrating mobile phones into their direct marketing  Cellphone promotions  Companies must use mobile marketing responsibly or risk angering already ad-weary customers  Podcasts and Vodcasts  The latest on-the-go, on demand technologies  With podcasting, consumers can download audio files or video files via the internet to any iPod or other handheld device and then listen to or view them whenever and wherever they wish  Interactive TV (ITV)  Lets viewers interact with television programming and advertising using their remote controls  Gives
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