Download Chapter 16

chapter sixteen
Relationship
Building:
Direct Marketing,
Personal Selling,
and Sales
Promotion
McGraw-Hill/Irwin
Essentials of Contemporary Advertising
Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Objectives_1
 Discuss the importance of relationship
marketing and IMC
 Define direct marketing and discuss its
role in IMC
 Explain the importance of databases to
direct marketers
 Discuss the role of personal selling in an
IMC program
16-2
Objectives_2
 Describe the advantages and
drawbacks of personal selling
 Define sales promotion and discuss its
importance as a communications tool
 Identify the benefits and drawbacks of
sales promotion
 Explain the difference between push
and pull strategies
16-3
Direct Marketing
Any direct communication to a
consumer or business recipient that is
designed to generate a response in the
form of an order, a request for further
information, and/or a visit to a store or
other place of business for the purchase
of a specific product(s) or services.
16-4
Largest Direct-Response Agencies
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Draft Worldwide
Rapp Collins
Wunderman
Ogilvy One
McCann
Relationship
Marketing
 Brann
 Grey Direct
 Targetbase
Marketing
 Devon Direct
 Protocol Marketing
Services
16-5
Database Marketing
The development and maintenance of a
data pool on current and prospective
customers used to target, segment, and
grade customers
16-6
Databases and Direct Marketing
 Enables calculation of customer lifetime
value
 Utilizes loyalty programs to build
customer relationships
 Includes response to offers and offer
details as new data points in database
 Enables use of RFM formula to identify
best customers
16-7
Exhibit 16-2 RFM Formula
The RFM formula is a model that provides marketers with
a method for determining the most valuable customers in
a database based on recency, frequency, and monetary
value. The larger a customer’s cumulative point score, the
more likely they are to make additional purchases.
16-8
Advantages of Direct Marketing
 Development of a
good database
 Relationship
approach to
marketing
 Segmentation
 Highly targeted
messages
 Accountability
 Measurability
 Efficient
 Unlikely to draw
competitive attention
16-9
Drawbacks to Direct Marketing
 Bad reputation
 No physical store
experience
 Lack of prestige
associated with
medium

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
Cost per contact
Clutter
Privacy concerns
Lack of information
control for
consumers
16-10
Types of Direct Response Advertising
Direct
Mail
Interactive
Broadcast
Catalog
Sales
Print
16-11
Profile of Buyers from
Infomercials
 Female
 Middle aged
 Caucasian
 Employed full-time
 Married with children
 Suburbanite
 $55,000 mean household income
16-12
Personal Selling
The interpersonal communication
process by which a seller ascertains
and then satisfies the needs of a buyer
to the mutual, long-term benefit of both
parties
16-13
Advantages of Personal Selling
 Personal nature
 Persuasion power
 Ability to deal with
objections
 Instant feedback
 Tailored marketing
messages
 Demonstration
ability
 Relationship-based
 Ability to ask for the
close
 Effectiveness
16-14
Drawbacks of Personal Selling

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Labor intensive
High cost per contact
Low reach
Few economies of scale
Poor reputation
Dependence upon salespeople
16-15
Functions of Salespeople
Information
Gathering
Information
Providing
Order
Fulfillment
Relationship
Building
16-16
Sales Promotion
A direct inducement that offers an
incentive anywhere along the marketing
route to enhance or accelerate the
product’s movement from producer to
consumer
16-17
Sales Promotion Elements
 May be used anywhere in the marketing
channel (trade and consumer)
 Involves a direct inducement for the
target to take some specific action
 Designed to change the timing of a
purchase or to shift inventory another
channel member
 Used as a value-added tool
16-18
Effective Sales Promotions
 Set specific
objectives
 Set a relevant
theme
 Involve the trade
 Coordinate with
campaign
 Understand roles of
basic techniques
 Use simple copy
 Use contemporary
graphics
 Clearly
communicate
concept
 Pretest and
measure response
 Reinforce brand
message and image
16-19
Sales Promotion Strategies
Push Strategy
Producer
Marketing
communications
Marketing
communications
Producer
Reseller
Marketing
communications
End
user
Pull Strategy
Request product Reseller
Request product
End
user
16-20
Types of Trade Sales Promotions
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Slotting allowances
Trade deals
Display allowances
Buyback allowances
Ad allowances
Co-op advertising
Dealer premiums
Conventions/ meetings
16-21
Types of Consumer Sales
Promotions
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POP materials
Coupons
Convenience cards
Cents-off promotions
Refunds/rebates
Premiums
Sampling
Combination offers
Contests/sweepstakes
16-22
Key Terms_1
 Advertising
allowance
 Buyback allowance
 Catalog
 Cents-off promotion
 Combination offer
 Company
convention
 Consumer sales
promotion
 Contest
 Convenience card
 Cooperative
advertising
 Coupon
 Customer lifetime
value
16-23
Key Terms_2
 Database
 Database marketing
 Database
management
 Database query
 Dealer meeting
 Direct marketing
 Direct-response
advertising
 Direct sales
 Direct selling
 Display allowance
 Diverting
 Electronic coupon
 Forward buying
16-24
Key Terms_3
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Freestanding inserts
Game
In-store sampling
Linkage media
Loyalty program
Personal selling
Point-of-purchase
materials
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Polybagging
Premium
Pull strategies
Push money
Push strategies
Rebate
RFM formula
Sales promotion
16-25
Key Terms_4
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Sampling
Slippage
Slotting allowance
Spiff
Sweepstakes
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Telemarketing
Trade advertising
Trade concentration
Trade deal
Trade promotion
16-26