Business Administration: Managing Direct Marketing

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Table of Contents

Introduction
Direct Marketing Growth
Direct Marketing Benefits
Direct Marketing Public Issues
Direct Marketing Channels
Conclusion
References

Introduction

Nowadays rapid development of media leads to the increase of direct sales without any intermediaries. A lot of companies strive to sell their services and products with the help of traditional media directly to their consumers. Besides, the development of media opportunities influenced the growth of the direct marketing providing it with new effective offers which help to attract more and more customers to its sphere. Direct marketing involves a great amount of new clients and, thus, increases its sales.

Companies promoting direct marketing ideas have an opportunity to present their individualized offers through the media. Such presentations help to improve companies’ position at the market and increase the number of patrons. Direct marketing development is merely caused by its benefits and convenient terms for the customers.

Direct Marketing Growth

Directs marketing can be defined as a marketing system using several advertising area in order to effect transaction or measurable response. If refer to the scholars Philip J. Kitchen and Patrick De Pelsmacker, then the direct marketing is, “An interactive system of personal and intermediary-free dialogue which uses one or more communications media to effect a measurable behavioural response at any location, forming a basis for creating and further developing an ongoing direct relationship between an organization and each of its customers individually” (Kitchen, Pelsmacker, 2004, pp, 64 – 65).

In other words, direct marketing is considered to be direct-order marketing. Nowadays this kind of marketing plays a significant role for establishment long term relationships with consumers. Companies got used to organize different programs for their customers to maintain effective and promising relationships with them.

According to Daniel R. Shiman, credible and recognized scholar in the marketing studies, “In the last thirty years of the twentieth century, the volume of direct marketing received through the traditional channels of mail and telephone increased rapidly” (Shiman, 2006, p. 321). More recently, there appeared such communication devices as: “…fax, e-mail, and instant messaging…wireless phones … have made communications [with clients] easier, cheaper, and more immediate” (Shiman, 2006, p. 321). Therefore, one may conclude that the direct marketing growth was caused by the rapid development of such marketing channels as telemarketing and direct mail.

Nowadays, these channels may be used as means of sales to business partners and existing consumers as well. They usually bring billions of dollars to the company annually. The rapid development of direct marketing is closely connected with different factors influencing social view on the sales. It should be mentioned that such niches as lack of time and increasing costs of traffic and parking are the reasons for the development of direct sales growth.

People are not provided with sufficient retail sales help that is why they are eager to make at-home shopping through the phone or just browsing the internet. Such ways of shopping make the process easy and more convenient for the customers. Modern marketing development created special conditions for direct marketers to promote their services and products directly to those buyers who are interested in particular goods. If refer to Joseph E. Phelps, the researcher in the field of the direct marketing, “The growth of unsolicited advertising in the traditional channels of direct mail and telemarketing, and the new channels of advertising [by fax, e-mail, Internet forums, and electronic messaging], has attracted public attention and concern” (Pheleps, 1994, p.15 – 16).

It might be noted that this sphere got the computer power and has an opportunity to outline the best product prospects. Besides a lot of companies are interested in direct marketing, to be more exact in the usage of direct mail or telemarketing, because of the rising costs increase.

It is important to stress that the growth of electronic communication contributed a lot to the direct marketing growth. Business companies have an opportunity to use millions of professional web sites which can be helpful for the sales growth. In accordance with Api Ruzdic, the scholar who discusses the influence of the computer – aided systems on the direct marketing, various firms have introduced “computer-aided direct marketing systems to reduce costs of selling to the small customers, small accounts, or regular customers re-ordering their products or services” (Rizdic, 1999, p.13).They fulfill functions which are important for the development of company growth:

They provide the information about the services and products of the company;
Customers have an opportunity to find the data they are interested in and read all the prices for the goods;
Web sites allow the customers to pay for their orders with the help of credit card.

People can compare the prices of different companies and select the most appropriate one. Such methods of direct management are very convenient; customers are provided with their orders at home either physically or by means of internet (music or software).

Direct Marketing Benefits

Direct marketing growth is caused by the great variety of its benefits. Firstly, it is important to stress that this type of marketing is one of the most hassle-free and convenient means of shopping. It gives an opportunity to save a lot of time and select the necessary product from the great variety of others. Direct marketing services provide catalogues with all the goods and prices for them. Direct marketers appoint special meeting with the customers in order to promote the best products of their company. Direct marketing is quite beneficial not only for the customers but also for the marketers:

Direct marketers can have access to the mailing list with all the names from different groups such as overweight, left-handed people or millionaires. It gives an opportunity to establish relationships with them by means of customizing messages;
Direct marketing provides its marketers with special media testing in order to find the most effective one;
Direct marketing allows gaining prospects at the definite period of time.

The convenience of the direct marketing can be also explained by the development of database marketing. It means that marketers can build and use their own databases of customers in order to contact and transact them. Customer database is considered to be individual customer’s data used for the purpose of the marketing in order to know qualification or sale of a service (product).

Database marketing is widely used by service retailers and some business marketers. For the better understanding, one may propose the following explanation, “The data are provided by a major investment brokerage firm that buys and sells financial instruments such as stocks, bonds, and mutual funds for their customers. Revenues are generated as a percentage of the trade amount.” (Allenby, Leone, Jen, 1999, p. 365). The information provided in the database gives an opportunity to rich more precision of the target market. It should be mentioned that there are some cases when companies stick to databases. They are the following:

Companies want to point out the customers who are to receive their offer;

Companies work out offers which are ideal for a certain type of clients. They use their database in order to decide the group of clients who suit their characteristics and meet all the requirements of an ideal target customer. The company can estimate the budget running from their customers.

Databases are merely used by the companies for the deepening of customers’ loyalty;

Companies use databases in order to show their care about their clients. They study personal information and send some gifts celebrating on birthday party or something else. Special information allows the companies to send their coupons or catalogues with new products together with presents. Thus, it can help to improve relationships between the company and its clients.

The companies use databases for the purpose of prospects identification;

Databases are used by companies for advertising purposes. It means that information about the customers helps to build perfect advertising campaign regarding the interests of their clients.

Databases are used for customer purchases reactivation in order to increase the sales level;

A lot of companies stick to databases in order to make use of their mailing programs which are usually sent to their customers and contain off-season promotions, birthday cards or shopping reminders.

Direct Marketing Public Issues

Regarding all the benefits of the direct marketing it is important to stress that it stands out among all other marketing types. Nevertheless it should be mentioned that even the direct marketing has its dark side. For example, Shiman considers that, “The growth of direct marketing in traditional and new media has raised concerns about an important privacy issue…” (Shiman, 2006, p. 322). And here are some cases when customers are not satisfied with the direct marketing conditions.

Sometimes people may feel a level of irritation, because the hard-sell increasing number may seem to cause discomfort;
Direct marketers can express unfair attitude towards their inexperienced buyers and take advantage of their impulsiveness. Marketers may present some offers of easy purchasing in order to capture new clients, though their offers are not so effective as they promote them;
A lot of complaints can be received by the Trade Commission because of scams. Sometimes direct marketers can exaggerate the quality of their service or products in order to grab attention of new clients and increase the sales rate;
Databases which disclose the personal information about the customers can be used by marketers unfairly. Companies can take advantage of some personal facts from life of their customers for the purpose of their own benefits.

Thus, the negative side of the direct marketing is broad enough and sometimes it can slow down the development of this sphere. Very often professional marketers stick to these points in order to avoid misunderstandings on the part of existing clients. They try to organize their sales honesty and well-designed to make their clients be convinced in the effectiveness of their offers and veracity of the information they present.

Direct Marketing Channels

Direct marketing covers a great variety of channels which make it convenient for the customers and beneficial for the companies. The main principle generally used here is that “the direct marketing’s main aim is to put manufacturers directly in touch with consumers” (Steinbock, 2000, p. 123). Therefore, one may suggest regarding and analyzing the direct marketing channels.

The first channel through which direct marketing can operate is face-to-face selling. This channel is one of the oldest and is considered to be a traditional one. This channel is one of the most reliable for the customers. They usually hire professional trade sellers in order to fulfill face-to-face selling. Direct selling tasks are usually carried out by manufacturers’ representatives. This channel is widely known among the great developing companies and is very frequently experienced by such companies as Avon, Mary Kay and others.

Direct Mail is considered to be the second channel of direct marketing operation. It covers such processes as sending offers to the customers, different reminders or announcements at a definite address. Companies usually select the most effective and interesting lists and offers in order to attract attention of the customers and increase the sales level. The marketers can send not only information, presentation and catalogues; their offer can be sent in the form of disks, audiotapes or CDs.

This channel is very convenient for both sides because the marketers have an opportunity to present detail information about their services and products with all the equipment they use for the customers to be aware of what they are going to buy. Besides CDs can present not only dry texts about the products quality but also can contain attractive pictures and graphics which can grab more attention than usual data. It should be mentioned that this channel covers the following types of direct mail:

Fax mail;
Voice mail;
E-mail.

In this context, it would be relevant to present the opinion of Lester Wunderman, the developer of the numerous marketing techniques, concerning the internet as the base of the direct mailing and the entire direct marketing: “The Internet seemed like what I had been looking for all my life…Prior to the Web, there was no real medium for the public. Whatever the advertisers choose to do, the Internet is the consumer’s media.” (Wunderman, 1996, p. 4).

To achieve the beneficial results in the direct marketing, it is necessary to develop the successful campaign or strategy: “A successful direct – marketing campaign requires close adherence to five essential components: planning, data gathering, mailing, telephone follow-up and tracking. Effective follow-through on all of these steps can lead to a significant return on your investment.” (Bildstein, 2007, p. 38). Direct marketers who use direct mail channel usually follow particular steps in developing their marketing campaign.

Firstly they are to set objectives for the orders production. It is very important for them to identify prospects and target markets in order to present effective orders for their customers. The next step lies in offer definition and elements testing. Evaluation of the product efficiency results in the effective advertising campaign and sales growth. And the last step in campaign development is measurement the results. This point allows companies to understand their pluses and minuses in order to use this experience for future direct mail campaigns.

Catalog marketing takes place not as often as face-to-face selling or direct mail marketing. It is used when the company wants to present its products through the catalogs; it can be either business catalogs or special consumer catalogs. This type can be effective but only in case if the company thoroughly test the marketing demand.

Sometimes different companies spend a lot of costs for catalog business development; they make expensive raw materials and send gifts to their customers. It should be pointed out that such steps can attract attention of many clients but it can lead to great debts of the company in case of small income from the sales. Thus, companies are to work out detail plan of their campaign and compare the costs with the possible income. Companies have an opportunity to put their catalogs in the internet and not print them; it will be not so expensive and take not so long time. But there were some cases when the companies failed trying to promote their brand only by means of the internet and mail.

Telemarketing is considered to be the channel of direct marketing which is fulfilled through telephone operators who try to attract new customers or just take different orders. This channel is quite convenient for the customers as they can order services and goods they are interested in through the phone. The effectiveness of this marketing type depends on the telemarketers’ skills and experience. They should be well trained and switch to their improvisation. Besides it is very important to make calls at a given time and have pleasant voices.

Thus, one can underline the fact that all the direct marketing channels are widely used in modern marketing and can bring increase of the customers’ number and sales growth.

Conclusion

So, the research carried out showed that direct marketing sphere attract more and more companies annually. This interactive marketing system covers a lot of media channel which help to operate effective business and reach sales growth. Besides as it was stressed this marketing is very convenient for the customers and it is the main reason for its rapid development. Direct marketing allows its clients to save a lot of time and select the product at the most appropriate price. The companies using direct marketing watch constant customers’ increase and the development of their brand.

References

Allenby, G. M., Leone, R. P., & Jen, L. (1999). A Dynamic Model of Purchase Timing with Application to Direct Marketing. Journal of the American Statistical Association, 94(446), 365.

Bildstein, L. (2007). Make Direct Marketing Pay Off: Practical Tips and Real-Life Results to Guide Your Campaigns. Journal of Accountancy, 204(6), 38+.

Kitchen, P. J., & De Pelsmacker, P. (2004). Integrated Marketing Communications: A Primer. New York: Routledge.

Kotler, P. (2000). Marketing Management. The millenium Ed. New Jersey: Prentice Hall.

Phelps, J. E. (1994) Press Coverage and Public Perception of Direct Marketing and Consumer Privacy. J. DIRECT MKTG, 9, 15-16.

Ruzdic, A. A. (1999). Potential Barriers to the Implementation of Computer-Aided Direct Marketing Systems. Review of Business, 11(2), 13+.

Shiman, D. R. (2006). An Economic Approach to the Regulation of Direct Marketing. Federal Communications Law Journal, 58(2), 321+.

Steinbock, D. (2000). The Birth of Internet Marketing Communications. Westport, CT: Quorum Books.

Wunderman, L. (1996). Being Direct. Making Advertising Pay. New York: Random House.

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