Direct marketing is a channel through which an organisation communicates With its customers on one-to-one basis and sells its goods and services directly to them. Traditionally in marketing, organisations use indirect methods to reach large number of customers. Direct marketing approaches its existing customers who have participated in different events, on one-to-one basis using various techniques like mail, internet or telephone. For this, organisers prepare a list of individuals who appeared at the event earlier and attain information regarding their demographic profile and preferences. In order to encourage and motivate consumers to share their information, the organisations provide incentives like free entry ticket for an event or competition, etc. The list of potential event consumers can be purchased by the organisers from direct marketing agencies. While gathering customers’ information to create a database, an organisation follows certain rules and guidelines to maintain the consumers’ privacy and gain their approval and hust. Thus, a clear understanding of regulations related to direct marketing is essential. Organisers believe that direct marketing is the most effective method to approach their potential customers for marketing their events. Mostly, event organisers prefer those individuals with whom they had business relationship and their information is readily available with them. Whereas in some cases, a specific industry in a particular area is targeted by the event organiser and direct marketing is applied to focus on all the targeted industries in that particular area. Thus, direct marketing is considered the best way ill both of the above situation. Moreover, it is the most economical way to reach the targeted event audience.
Functions of Direct Marketing
Functions of directing marketing are as follows:
Communicating Quality: Direct marketing helps the marketers in communicating the benefits and attributes of the product or services in detail to the customer. Unlike advertising media (like print or broadcast media), direct marketing provides more support and tools to the marketers to promote their products. Hence, with direct marketing, a company is likely to efficiently communicate the reason why a product or a brand is better than the other, thus improving the quality image. The meanings of ‘value’ and ‘quality’ are different for different customers. Therefore, targeted direct marketing communication is far better than mass media options which are less targeted. A direct marketer’s job is to stress on those characteristics and advantages which are valued the most by the audience, increasing the level of quality and value communicated.
Achieving Credibility: It is easy for a marketer to make claims about superior product quality, but it is hard to be believed. Direct marketing communication is better than that of mass media, as the direct marketer is in better position to understand and resolve customer objections and provide guarantee for satisfaction. This kind of interaction cannot be made with limited scope of mass media.
Frequency of Post-Sales Contact: An image for better quality products is attained through the frequent after-sales contact. Direct marketing helps the firms in cutting down the cost on after-sales calls to observe and enhance consumer satisfaction. All these post-sale activities help the company in making it a leader in quality and technology (for example, through database-mailing Of newsletters).
Forms/Tools for Direct Marketing
The number Of tools used by direct marketers to approach the customers is as follows:
- Mail Order Marketing/
- Marketing
- Telemarketing
- Direct Response Marketing
- Direct Mail Marketing
- Direct (Face-to-face) Selling
- Tele-shopping/Htnne S htM3Ping
- Database Marketing
Mail Order Marketing/Catalogue Marketing: Mail Order Marketing (MOM) or Catalogue Marketing is a well-known method of direct marketing and is also referred as Mail Order Business (MOB). In this type of marketing, catalogues of products and services are used by the marketers to communicate with the customers. These catalogues are also delivered to the customers via mail order to provide them information about the product.
Direct Mail Marketing: Direct Mail Marketing (DMM) is alike Mail Order Marketing (MOM). When a trading house markets its products via mail order, it is known as MOM. Whereas, When a manufacturing company markets its products or services by using mail order, it is termed as DMM. In DMM, along with brochu/letters various other Items are also mailed to the potential customers such as gifts and compliments, free product samples, etc. Direct mail is less costly and less offensive than any other direct marketing promotional methods.
Telemarketing: Telemarketing is a marketing process of selling products and services via telephone. It deals with two types of markets, i.e., Business to Business (B2B) and Business to Customer (B2C). The main function of teleoperators is to contact existing customers and to attract new customers for taking orders or ascertaining their satisfaction level. If orders are taken on a daily basis then this is called ‘Telesales’. There are many customers who make orders for certain goods and services in routine. In order to handle routine calls, several companies have opened their call centers for inbound and outbound telemarketing. Inbound telemarketing is a process of receiving calls from the customers and outbound telemarketing involves making calls to existing and potential customers for taking their orders.
Direct (Face-to-Face) Selling: Direct selling is different from direct marketing. In direct selling, a sales agent directly sells its product and services to customers door to door or at retail Outlets through personal presentation, demonstrations, etc. Whereas, direct marketing does not involve any sales agent, instead it is a process of establishing direct relationship with Its customers. In direct selling, various sales personnel are appointed like stock insurance agents, distributors working for direct-sales organisations such as Oriflame and Amway.
Direct Response Marketing (DRM): Another tool used by marketers for direct marketing is direct response marketing. It is different from direct mail marketing only in terms of techniques used. Various direct response marketing campaigns depend majorly on TV infomercials. Infomercials are the commercials which provide information regarding the product, its uses and benefits. Other techniques of direct response marketing are radio ads, print ads, flyers, or e-mail.
Tele-shopping/Home Shopping: Tele-shopping is the latest direct marketing tool, which is also known as home shopping. Here, the marketer commercialises its product or services via broadcast media mainly TV and the consumers can view them on their TV and place orders for the required product(s) by calling up at the given contact number. It is the easiest retail format where a product is demonstrated on television and the sale it made by placing orders on telephone.
Database Marketing: Database marketing is also a method of direct marketing where databases of existing and potential customers are used to generate personalised communication. It helps in the promotion Of products and services for marketing purpose. Database marketing is also considered as an important element of Analytical CRM.
Importance of Direct Marketing
The importance of direct marketing is as follows:
Concentrated Approach: Through direct marketing, a marketer can easily identify a particular target market. For niche products, it is the most effective promotional tool because it targets only those products which respond promptly towards promotion. It involves less wastage of promotional efforts compared to others.
Economical: It is a very economical method for niche products. However, it proves to be costly compared to mass marketing promotional techniques.
Immediate and Flexible: One of the major advantages of direct marketing is its flexibility and immediate impact towards customer responses as it involves short lead time. While, other promotional methods consume a lot of time to reach their final execution stage, e.g„ TV commercials.
Easy International Reach: If it is an international target market, then direct marketing is the most suitable method for promoting the products.
Tailored Messages: Direct marketing provides huge opportunities for designing personalised messages which are focused towards specific target customers.
Quick Delivery: Directing marketing is quick in attaining results which is most relevant for telemarketing. Telemarketing is one of the tools of direct marketing where the feedback collected from customer is considered sincerely to improve company’s services and performance.
Multiple Uses: Apart from selling, direct marketing can also be used for other purposes like testing new markets, trail of new products, managing new customers’ needs, collecting information for future use, segmenting customer base or rewarding existing customers to build loyalty.
Easy to Manage and Control: It is relatively easy to manage and control marketing activities in direct marketing than in other promotional tools. Marketers can accurately evaluate the results as they know the number of customers that have been contacted in totality. On the basis of evaluation, can also take corrective steps to improve their results in order to succeed. In addition, it also enables the marketer to plan, budget and forecast direct marketing campaigns for future.
Testing Capability: In direct marketing, promotional tools can be tested time and again, until the best combination of marketing tool is found out. For this, the marketing variables like list of information, schemes or offers, timing, messages, etc. can be retested, modified and evaluated to find out the optimum direct marketing programme.
Building and Maintaining Relationships: It is a very useful promotional technique to develop and maintain direct relationship with its potential or new customers. Moreover, this will help the marketers to generate demand for retailers by adopting it as a push-pull strategy.
Issues in Direct Marketing
Consumers and direct marketers generally have mutually rewarding relationships, but few complex issues are also involved. These are as follows:
Irritation: A large number of consumers may not prefer aggressive direct marketing practices. The most common are late night calls, calls by untrained callers, computerised calls, etc.
Unfairness: Often direct marketers exploit the impulsive and less clewer customers, especially people of old age.
Deception and Fraud: A number of marketers create mailers and develop misleading copies. False prices, quality claims, exaggerated size of items, etc., are some examples of the deceptive means used by the direct marketers to lure the customers. There are several complaints registered every year with the Consumer Forum regarding sales frauds or false claims.
Invasion of Privacy: Every time a customer orders over phone or Web, applies for credit card or subscribes for a magazine, his/her personal and banking details are revealed and may be attached to other companies’ databases. In this way, the marketers get personal details of the customers and their way of living, and the same may often be used for wrong purposes.