CHAPTER 17: DIRECT AND ONLINE MARKETING

DIRECT AND ONLINE MARKETING

Building Direct Customer Relationships
Direct Marketing – consist of connecting directly with carefully targeted customers, often on a one-on-
one, interactive basis.
THE NEW DIRECT MARKETING MODEL
 Most department stores sell the majority of their merchandise off their store shelves, but they
also sell through direct mail and online catalogs.
 Mass-media advertising and high-quality dealer network.
 Promotional videos and other materials mailed or e-mailed directly to prospective buyers.
 Brand websites providing prospective customers with information about various models,
competitive comparisons, financing, and dealer locations.
 Drivers Web site, YouTube channel, and Facebook page assist and build community among
current and future owners.
GROWTH AND BENEFITS OF DIRECT MARKETING
 Benefits to Buyers
o Convenient, easy, and private.
o Ready access to a wealth of products.
o Give buyers to a wealth of comparative information about companies, products, and
competitors.
o Immediate and interactive.
 Benefits to Sellers
o Powerful tool for building customer relationships.
o Offers sellers low cost, efficient, speedy alternative for reaching their markets.
o Offer greater flexibility.
o Gives sellers access to buyers that they could not reach through other channels.

CUSTOMER DATABASE AND DIRECT MARKETING

 Customer Database – an organized collection of comprehensive data about individual
customers or prospects.
A good customer database can be a good potent relationship-building tool. Database gives
companies a 360-degree view of their customers and how they behave.

FORMS OF DIRECT MARKETING

1. Direct-Mail Marketing - Marketing that occurs by sending an offer, announcement, reminder, or
other item directly to a person at a particular address. Direct mail is by far the largest direct
marketing medium.
2. Catalog Marketing – Direct marketing through print, video, or digital catalog that are mailed to
selected customers, made available in stores, or presented online.
3. Telemarketing – Using the telephone to sell directly to customers.
4. Direct-Response Television Marketing (DRTV) – Direct marketing via television, including direct-
response television advertising (or infomercials) and interactive television (iTV) advertising.

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5. Kiosk Marketing – Information and ordering machines such as good old-fashioned vending
machines.
6. Online Marketing – Efforts to market products and services and build customer relationship
over the internet.
7. Face-to-Face Marketing – The act of directly marketing to prospective customers through in-
person communication.

Figure 17.1 Forms of Direct Marketing

ONLINE MARKETING
 Marketing and the Internet
1. Internet – A vast public web of computer networks that connects users of all types
around the world to each other and an amazingly large information repository.
2. Click-only companies – The so-called dot coms, which operate online only and have no
brick-and-mortar market presence.
3. Click-and-mortar companies – Traditional brick-and-mortar companies that have added
online marketing to their operations.

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 Online Marketing Domains

1. Business-to-consumer (B-to-C) online marketing – Business selling goods and services
online to final consumers.
2. Business-to-business (B-to-B) online marketing – Business using online marketing to
reach new business customers, serve current customers more effectively, and obtain
buying efficiencies and better prices.
3. Consumer-to-consumer (C-to-C) online marketing – Online exchanges of goods and
information between final consumers.
Blogs – Online journals where people post their thoughts, usually on a narrowly defined
topic.
4. Consumer-to Business – Online exchanges in which consumers search out sellers, learn
about their offers, initiate purchases, and sometimes even drive transaction terms.

 Setting Up an Online Marketing Presence

1. Creating Web Sites

Corporate (or brand) Web site – The most basic type of Web site. A Web site designed
to build customer goodwill, collect customer feedback, and supplement other sales
channels rather than sell the company’s products directly.

Marketing Web site – A Web site that intercepts with consumers to move them closer
to a direct purchase or other marketing outcome.

2. Placing Ads and Promotions Online

Online Advertising – Advertising that appears while consumers are browsing the
Internet, including display ads, search-related ads, online classifieds, and other forms.

Viral Marketing – The Internet version of word-of-mouth marketing: a Web site, video,
e-mail message, or other marketing event that is so infectious that customers will seek it
out or pass it along to friends.

3. Creating or Participating in Online Social Networks

Online Social Networks – Online communities where people congregate, socialize, and
exchange views and information.

4. Sending E-Mail

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E-mail Marketing – Sending highly targeted, highly personalized, relationship-building

marketing messages via e-mail.

5. Using Mobile Banking

Mobile Marketing – Marketing to on-the-go consumers through mobile phones,

smartphones, tablets, and other mobile communication devices.

Figure 17.3 Setting Up for Online Marketing

PUBLIC POLICY ISSUES IN DIRECT MARKETING

 Irritation – Direct marketing excesses sometimes annoy or offend consumers.

 Unfairness – Smooth-talking hosts, elaborate staged demonstrations, claims of drastic price
reductions, “while they last” time limitations, and un-equaled ease of purchase to inflame
buyers who have low sales resistance.
 Fraud – Schemes such as investment scams or phony collections for charity, identity theft and
financial scams.
One common form of Internet fraud is phishing, a type of identity theft that uses
deceptive e-mails and fraudulent Web sites to fool users into divulging their personal data.
 Deception – Deceptive e-mails and fraudulent online sites to fool users into divulging their
personal data.

Consumer Privacy

Invasion of privacy is perhaps the toughest public policy issue now confronting the direct
marketing industry. Consumers often benefit from database marketing; they receive more offers that
are closely matched to their interests. However, many critics worry that marketers may know too much
about consumers’ lives and that they may use this knowledge to take unfair advantage of consumers. At
some point, they claim, the extensive use of databases intrudes on consumer privacy.

Consumers often benefit from such database marketing—they receive more offers that are
closely matched to their interests. However, many critics worry that marketers may know too much

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about consumers' lives and that they may use this knowledge to take unfair advantage of consumers. At
some point, they claim, the extensive use of databases intrudes on consumer privacy

A Need for Action

To curb direct marketing excesses, various government agencies are investigating not only do-
not-call lists but also do-not-mail lists, do-not-track online lists, and Can Spam legislation. In response to
online privacy and security concerns, the government has considered numerous legislative actions to
regulate how Internet and mobile operators obtain and use consumer information.