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17. Principles of Marketing. Direct and Online Marketing: Building Direct Customer Relationships. Learning Objectives. After studying this chapter, you should be able to: Define direct marketing and discuss its benefits to customers and companies

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principles of marketing

17

Principles of Marketing

Direct and Online Marketing: Building Direct Customer Relationships

learning objectives
Learning Objectives

After studying this chapter, you should be able to:

  • Define direct marketing and discuss its benefits to customers and companies
  • Identify and discuss the major forms of direct marketing
  • Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies
  • Discuss how companies go about conducting online marketing to profitably deliver more value to customers
  • Overview the public policy and ethical issues presented by direct marketing

17-2

chapter outline
Chapter Outline
  • The New Direct-Marketing Model
  • Growth and Benefits of Direct Marketing
  • Customer Databases and Direct Marketing
  • Forms of Direct Marketing
  • Online Marketing
  • Integrated Direct Marketing
  • Public Policy Issues in Direct Marketing

17-3

the new direct marketing model
The New Direct-Marketing Model

Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships

  • No intermediaries
  • An element of the promotion mix
  • Fastest-growing form of marketing

17-4

growth and benefits of direct marketing
Growth and Benefits of Direct Marketing

Benefits to Buyers

  • Convenience
  • Ready access to many products
  • Access to comparative information about companies, products, and competitors
  • Interactive and immediate

17-5

growth and benefits of direct marketing1
Growth and Benefits of Direct Marketing

Benefits to Sellers

  • Tool to build customer relationships
  • Low-cost, efficient, fast alternative to reach markets
  • Flexible
  • Access to buyers not reachable through other channels

17-6

customer databases and direct marketing
Customer Databases and Direct Marketing

Customer Database

Customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data

17-7

customer databases and direct marketing1
Customer Databases and Direct Marketing

Customer Databases

Uses:

  • Locate good and potential customers
  • Generate sales leads
  • Learn about customers
  • Develop strong long-term relationships

17-8

forms of direct marketing
Forms of Direct Marketing
  • Personal selling direct marketing
  • Direct-mail direct marketing
  • Catalog direct marketing
  • Telephone marketing
  • Direct-response television marketing
  • Kiosk marketing
  • Digital direct marketing
  • Online marketing

17-9

forms of direct marketing1
Forms of Direct 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

17-10

forms of direct marketing2
Benefits of Web-based catalogs

Lower cost than printed catalogs

Unlimited amount of merchandise

Real-time merchandising

Interactive content

Promotional features

Challenges of Web-based catalogs

Require marketing

Difficulties in attracting new customers

Forms of Direct Marketing

Catalog direct marketing involves printed and Web-based catalogs

17-11

forms of direct marketing3
Forms of 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 receive orders from television and print ads, direct mail, and catalogs

17-12

forms of direct marketing4
Benefits of telephone direct marketing

Purchasing convenience

Increased product service and information

Challenges of Web-based catalogs

Unsolicited outbound telephone marketing

Do-Not-Call Registry

Forms of Direct Marketing

17-13

forms of direct marketing5
Forms of Direct Marketing

Direct-response television (DRTV) marketing involves 60- to 120-second advertisements that describe products or give customers a toll-free number or Web site to purchase and 30-minute infomercials such as home shopping channels

  • Less expensive than other forms of promotion
  • Easier to track results

17-14

forms of direct marketing6
Forms of Direct Marketing

Kiosk marketing involves placing information and ordering machines in stores, airports, trade shows, and other locations

17-15

forms of direct marketing7
Forms of Direct Marketing

Digital direct marketing technologies

  • Mobile phone marketing
  • Podcasts
  • Vodcasts
  • Interactive TV

17-16

forms of direct marketing8
Forms of Direct Marketing

Mobile phone marketing includes:

  • Ring-tone giveaways
  • Mobile games
  • Ad-supported content
  • Contests and sweepstakes

17-17

forms of direct marketing9
Forms of Direct Marketing

Podcasts and Vodcasts involve the downloading of audio and video files via the Internet to a handheld device such as a PDA or iPod and listening to them at the consumer’s convenience

17-18

forms of direct marketing10
Forms of Direct Marketing

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

17-19

online marketing
Online Marketing

Marketing and the Internet

Internet is a vast public web of computer networks that connects users of all types around the worldto each other and to a large information repository

17-20

online marketing1
Online Marketing

Online Marketing Domains

  • Business to consumer (B2C)
  • Business to business (B2B)
  • Consumer to consumer (C2C)
  • Consumer to business (C2B)

17-21

online marketing2
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

17-22

online marketing3
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

17-23

online marketing4
Online Marketing

Online Marketing Domains

Consumer to business (C2B) involves consumers communicating with companies to send suggestions and questions via company Web sites

17-24

online marketing5
Online Marketing

Types of Online Marketers

  • Click-only marketers
  • Click-and-mortar marketers

17-25

online marketing6
Online Marketing

Types of Online 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 (ISP)
  • Transaction sites
  • Content sites

17-26

online marketing7
Online Marketing

Types of Online 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

17-27

online marketing8
Online Marketing

Types of Online Marketers

Internet service providers(ISP) provide Internet connections for a fee

  • AOL
  • Earthlink

Shopping or price comparison sites provide product and price comparison information

  • Yahoo! shopping

17-28

online marketing9
Online Marketing

Types of Online Marketers

Transaction sites take commissions for transactions on their sites

  • eBay

Content sites provide financial, news, research, and other information

  • New York Times.com
  • ESPN.com

17-29

online marketing10
Online Marketing

Types of Online 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

17-30

online marketing11
Online Marketing

Setting Up an Online Presence

Creating a Web site requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site

17-31

online marketing12
Online Marketing

Setting Up an Online Presence

Types of sites

  • Corporate Web site
  • Marketing Web site

17-32

online marketing13
Online Marketing

Setting up an Online Presence

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

17-33

online marketing14
Online Marketing

Setting Up an Online Presence

Marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome

17-34

online marketing15
Online Marketing

Designing 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

17-35

online marketing16
Online Marketing

Designing Effective Web Sites

The seven Cs of effective Web site design

  • Context
  • Content
  • Community
  • Customization
  • Communication
  • Connection
  • Commerce

17-36

online marketing17
Online Marketing

Designing 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 user-to-user communication

Customization is the site’s ability to tailor itself to different users or to allow users to personalize the site

17-37

online marketing18
Online Marketing

Designing Effective Web Sites

Communication is the way the site enables user-to-user, user-to-site, or two-way communication

Connection is the degree that the site is lined to other sites

Commerce is the site’s capabilities to enable commercial transactions

17-38

online marketing19
Online Marketing

Designing Effective Web Sites

The eighth C

To keep customers coming back, the site needs to constantly change

17-39

online marketing20
Online Marketing

Placing Ads and Promotions Online

Forms of online advertising

  • Display ads
  • Search-related ads
  • Online classifieds

17-40

online marketing21
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

17-41

online marketing22
Online Marketing

Placing Ads and Promotions Online

Search-related ads are ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo! and are effective in linking consumers to other forms of online promotion

17-42

online marketing23
Online Marketing

Placing Ads and Promotions Online

Other forms of online promotion include:

  • Content sponsorships
  • Alliances
  • Affiliate programs
  • Viral advertising

17-43

online marketing24
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 affiliate programs are relationships where online companies promote each other

Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends

17-44

online marketing25
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

17-45

online marketing26
Online Marketing

Creating or Participating in Web Communities

Web communities allow members to congregate online and exchange views on issues of common interest

  • iVillage.com
  • MyFamily.com

17-46

online marketing27
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

17-47

integrated direct marketing
Integrated Direct Marketing

Integrated direct marketing involves the use of carefully coordinated multiple-media, multiple-stage campaigns

17-48

public policy issues in direct marketing
Public Policy Issues in Direct Marketing
  • Customer irritation, unfairness, deception, and fraud
  • Privacy
  • Security

17-49

public policy issues in direct marketing1
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

Deception includes “heat merchants” who design mailers and write copy designed to mislead consumers

Internet fraud includes identity theft and financial scams

17-50

public policy issues in direct marketing2
Public Policy Issues in Direct Marketing

Invasion of Privacy

The concern is that markers may know too much about consumers and use this information to take unfair advantage

  • Sale of databases
  • Microsoft

17-51

public policy issues in direct marketing3
Public Policy Issues in Direct Marketing

A Need for Action

  • California Online Privacy Protection Act (OPPA)
  • Children’s Online Privacy Protection Act (COPPA)
  • TRUSTe

17-52