week 9 Flashcards
define direct marketing and examples
Direct marketing involves using a message to encourage some type of immediate response or behavior:
o Generate sales/orders
o Stimulate sales leads
o Entries into a competition
o Registrations for events, loyalty cards etc.
o Build traffic at website
o Stimulate product trial with incentives/coupons
o Deliver product-relevant information
o Gather information for a databasererrr
advantages of direct marketing
Targetability – Targeting a precisely defined group of people
Measurability – Determine exactly how effective the effort was, because the
marketer knows how many mailings were sent and how many people responded
Accountability – Every businesses decision must be held accountable for results. Marketing communications increasingly are being required to justify the results of their communication efforts
Efficiency – Possible to direct communications efforts only to a highly-targeted group. The cost-efficiency resulting from such targeting is considerable compared with mass advertising efforts
Personalization – Tailor messages to the individual customer’s interest and needs
Speed – Can send emails quickly, print media can be printed and delivered in a few days
disadvantages of digital marketing
Cost: High CPM (particularly for print/postal-mail), but generally better efficiency at generating behavior
Clutter – Lots of direct postal mail and spam e-mails means people ignore it, delete it or throw it away
Requires established customer knowledge: More efficient when you have a specific target market or database
Safety + Ethics: People are reluctant to open letters from emails/senders they don’t recognise / postal mail is environmentally wasteful (and costly)
components of direct marketing campaigns
- Objective
- Media channels
- Creative messaging
- Database
- Fulfillment
media channel examples
- Postal mail
- E-mail/digital
- Television
- Door-to-door
- Phone
explain data bases
o An up-to-date database provide organisations with a number of assets, including the ability to:
o Aim direct marketing efforts to those people who represent the best prospects for the company’s products or services
o Offer varied messages to different groups of customers
o Create long-term relationships with customers enhance advertising productivity
o Calculate the lifetime value of a customer or prospect (customer lifetime value)
what is meant by ‘fulfilment’
o Fulfillment is the execution of direct marketing and contains the front-end (getting material to the audience) to the back-end (managing responses). It includes: Recording responses Providing a point of contact for communication Storage of marketing materials Picking, packing and dispatching Invoicing Forecasting Analyzing and reporting Filling of envelopes and postage
define sales promotion
Refers to any incentive used by a manufacturer to encourage distributors (such as wholesalers, retailers or other channel members) or consumers to buy a brand
sales promotion objectives
o Invigorate sales of a mature brand
o Facilitate the introduction of new products to the trade
o Increase on and off shelf merchanding space (out of date)
o Neutralize competitive adverting and sales promotion
o obtain trial purchases from consumers
o Stimulate sales force enthusiasm for a new, improved or mature product
o Encourage loyal costumers by repeat purchases
o Pre-empt competition
o Reinforce advertising
sales promotion should not be used to
o Compensate for poorly trained sales force or lack of advertising
o Give consumer any compelling long-term reason to continue purchasing a brand
o Permanently stop an established brand’s declining sales trend
o Change the basic non acceptance of an undesired product
o Increase Profit
define push stratergy
A manufacturer’s selling and other promotional efforts directed at gaining trade support from wholesalers and retailers for the manufacturer’s product
e.g. coke paying McDonalds to use coke not Pepsi
define pull stratergy
Efforts directed to ultimate consumers with the intent of influencing their acceptance of the manufacturer’s brand. Manufacturers hope that the consumers will then encourage retailers to handle the brand
e.g. coke coupons given directly to consumers
price and quality
o People tend to view things that have a higher price as being of higher quality
o This is especially true for products that provide symbolic benefits (e.g. status and prestige) or where the functionality is hard to evaluate
o Firms can use high price to signal high the perception of ‘high quality’ – regardless of whether they are functionally better than other less expensive products.
o Lowering the price (e.g. sales) can hurt the perception that your brand is high quality
Promotions and Consumer Responsiveness:
Do sales increase profit?
Promotions are good at increasing sales/revenue but may not increase profit,
Particularly in the long-term
• Sales reduce profit per item sold
• People may only buy when on-sale
• May hurt brand equity (Price – Quality Heuristic – what they think a product is really worth)
The Sales promotion trap:
o 2 coffee shops – one with sales promotion takes customer of other firm, next time other firm does the same thing creating a price war
- game theory = see diagram
types of consumer promtions
- Sampling
- Special prices/sales
- Contests
- Coupons and vouchers
- Bonus packs
- Continually/loyalty
- Purchase premiums
- Rebates
- Overlay & tie in
types of promotions: trade promotions
- Trade allowance
- Forward buying and diverting
- Trade contests
- Trade shows
- Cooperative advertising
trade promotions = Target promotions wholesales, retailers, and other marketing intermediaries
define trade promotions
Target promotions wholesales, retailers, and other marketing intermediaries
define trade allowances
Also called trade deals, these allowances are used by
manufacturers to reward wholesalers and retailers for performing
activities in support of the manufacturer’s brand, such as featuring the
brand in retail advertisements or providing special display space.
define foward buying
The practice whereby retailers take advantage of
manufacturers’ trade deals by buying larger quantities than needed for
normal inventory. Retailers often buy enough product on one deal to
carry them over until the manufacturer’s next scheduled deal
define diverting
Occurs when a manufacturer restricts a deal to a limited
geographical area rather than making it available nationally, which
results in retailers buying abnormally large quantities at the deal price
and then selling off, at a small profit margin, the excess quantities
through brokers in other geographical areas
define operate advertising
An arrangement between a manufacturer and
reseller (either a retailer or an industrial distributor) whereby the
manufacturer pays for all or some of the advertising costs undertaken by
the reseller on behalf of the manufacturer’s products.
define trade contests and incentives
A contest or incentives directed at store level
or department managers, and generally based on managers meeting a sales goal established by the manufacturer
define trade show
A temporary forum for sellers of a product category to exhibit and demonstrate their produces to present and prospective buyers
objectives of trade promotions
to introduce new or revised products
• to increase distribution of new packages or sizes
• to build retail inventories
• to maintain or increase the manufacturer’s share of shelf space
• to obtain displays outside normal shelf locations
• to reduce excess inventories and increase turnover
• to achieve product features in retailers’ advertisements
• to counter competitive activity
• ultimately, to sell as much as possible to final consumers
