Summary
Direct marketing is an interactive marketing system that uses one or more media to affect a measurable response or transaction. Major direct marketing channels involve face-to-face selling, direct mail, catalog marketing, telemarketing, interactive TV, kiosks, web sites, and mobile devices such as a cell phone or smart phone. Word of mouth marketing finds ways to engage customers so they talk with other people about products, services and brands. Social media is driving word of mouth by use of online communities and forums, blogs, and social networks. A strong sales force is very important toa company. Designing a strong sales force requires choosing objectives, strategy, structure, size, and compensation.
A. Direct Marketing
1. Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen.
2. One example of direct marketing is when you suddenly become besieged with offers for life insurance after you’ve inquired online for quotes. Or, getting mailed flyers and advertisements for dish network or satellite TV because you live in a rural area and can’t get cable.
3. Direct marketing helps consumers who are short on time by promoting products directly to them. Direct marketers can by mailing lists for almost any group, customize and personalize messages to build customer relationships, reach interested consumers at the right time, and test alternative media and messages, and measure responses. Direct mail means sending an offer, announcement, reminder, or other item to an individual consumer. Successful direct mail marketing means: 1) choosing objectives - for order response, generating leads, strengthening customer relationships, reinforcing purchasing decisions; 2) target market and prospects – recency, frequency, and monetary amount formula; 3) offer elements; 4) testing elements; and 5) measuring success: lifetime value. Marketers may also use catalog marketing – sending full line merchandise catalogs, specialty catalogs, and business catalogs or telemarketing – using the telephone and call centers to attract prospects. Direct marketers use all the major media such as newspapers, magazines, radio, infomercials, and television shopping channels. There are some drawbacks to using direct marketing, however. Many people don’t like hard sell, direct marketing solicitations and many marketers take advantage of vulnerable consumers, like the elderly. The Federal Trade Commission receives many complaints each year about marketers who have crossed the ethical line.
B. Interactive Marketing
1. Interactive marketing is using an online component such as the Internet to communicate and sell directly to consumers and provides opportunities for much greater interaction and individualization.
2. An example of interactive marketing is when you pull up Yahoo to login to your email account. Recently, they have started placing advertisements for movies or TV shows on the webpage background that is full-page size. You can’t help but read them when they are taking up so much space.
3. With interactive marketing, marketers can reach people who’ve actually started the buying process and they can build or tap into online communities, inviting customer participation. A disadvantage is that consumers can easily screen out most online messages. Online messages are also vulnerable to hackers and vandals. Some main categories of interactive marketing are: 1) websites; 2) search ads; 3) display ads; 4) e-mail; and 5) mobile marketing. Websites should be attractive, easy to use and navigate and encourage repeat visits. Search ads are either paid search or pay-per-click ads – marketers bid on search terms that serve as a proxy for the consumer’s product or consumption interest. The highest bidder gets the best placement in search engines Google, Yahoo! or Bing. Display ads or banner ads are text and image boxes that advertisers pay to place on relevant webpages. E-mail allows marketers to communicate directly with consumers without the expense of direct mail. Mobile marketing is sending text messages and ads to cell phones and smart phones.
C. Word of Mouth
1. Word of mouth advertising is when consumers talk about many brands and products every day. It may be generated organically with little advertising, but can be managed and facilitated.
2. Examples of word of mouth advertising through social networks can be Facebook, LinkedIn and Twitter through posts to blogs, etc. On a smaller local scale, many restaurants and stores benefit from so much word of mouth advertising that they rarely need to advertise by any other method.
3. Word of mouth is an important advertising method. Paid media results from press coverage of company-generated advertising or other promotional efforts. Earned media (free media) is all the PR benefits a firm receives without having directly paid for anything from things such as news stories, blogs, and social conversations that deal with the brand. Social media promotes the flow of word of mouth. Social media are a means for consumers to share text, images, audio, and video information with each other, with companies and vice versa. Social media are useful but they can’t become the sole source of marketing communications. The three main platforms for social media are online communities and forums, blogs, and social networks. Two other forms of word of mouth are buzz and viral marketing. Buzz marketing generates excitement, creates publicity, and conveys new, relevant, brand-related information through unexpected of outrageous means. Viral marketing encourages consumers to pass along company-developed products and services or audio, video, or written information to others online. Opinion leaders are those who influence cliques – small groups whose members interact frequently. Marketers concentrate on online effects by tracking them through advertising, PR, or digital agencies. Through demographic information or proxies and cookies, firms can monitor when customers blog, comment, post, share, link, upload, friend, stream, write on a wall, or update a profile (REALLY?!?!)
D. Personal Selling and the Sales Force
1. Personal selling and sales force are representatives and agents that companies hire to locate prospects, develop them into customers, and grow the business.
2. Some examples of companies that use a sales force are copier and print management companies that represent manufacturers such as Canon, Kyocera, Lanier; personal and home decorating companies such as Premier Jewelry, Mary Kay, or Home Interior.
3. Many companies, primarily industrial and consumer companies hire a sales force to use as a direct-selling force. There are six different types of sales representatives: 1) deliver – major task is to deliver the product; 2) order taker – either behind-the-counter or outside calling on store managers; 3) missionary – salesperson expected to build goodwill or educate the user; 4) technician – has a high level of technical knowledge about the product; 5) demand creator – relies on creative methods for selling tangible and intangible products; 6) solution vendor – salesperson whose expertise is solving a customer’s problem. Professional sales people must be trained in methods of analysis and customer management. Many times the company wants to build a long-term customer-supplier relationship with their customers. This enables them to be ready to respond to their customers’ needs and wants. It’s not effective in all situations but when it is the right strategy the organization will focus on managing its customers as well as its products. When designing its sales force, the company should focus on developing sales force objectives, strategy, structure, size and compensation. A direct sales force consists of paid employees who work exclusively for the company. A contractual sales force consists of manufacturers’ reps, sales agents, and brokers who earn a commission based on sales. Sales forces can vary in structure and size and many companies offer attractive compensation packages to get and retain top sales representatives.
E. Managing the Sales Force
1. Managing the sales force involves various policies and procedures to guide the firm in recruiting, selecting, training, supervising, motivating, and evaluating representatives.
2. Gillette is a company that uses testing to hire sales reps that are suited to sales. They say tests have reduced turnover and scores correlated well with the progress of new reps.
3. Hiring the right people to be sales representatives is crucial. Surveys reveal that the top 25 percent of the sales force brought in more than half the sales and that there is a 20 percent turnover rate of sales forces reps industry wide. Many companies are now using prolonged testing and interviewing to try to ensure hiring the best people. The sales force will need to be well-trained and have deep product knowledge, be able to add ideas to improve operations, and be efficient and reliable. Firms need to specify how much time sales reps need to spend prospecting for new accounts and which companies to focus on. They should make use of computer and telecommunications innovations, as this can help cut costs. Using smart phones or laptops, salespeople can access valuable product and customer information. Many sales reps require encouragement, motivation and special incentives to put forth greater effort. Studies found that pay is a much better incentive for sales people than complements and security. Sales reps need to be evaluated regularly on their performance. Information about the reps can come from sales reports and self-reports, personal observation, customer comments, customer surveys, and conversations with other reps.
No comments:
Post a Comment