CHAPTER 1

INTRODUCTION
DIRECT MARKETING

The seeds of direct marketing as we use it today were sown way back in the
nineteenth century at the birth of the US mail order industry, which served so
well the needs of remote farmers, ranchers,settlers and new townships.
Today, this geographical justification for direct marketing has been replaced by
our needs for much more cost-effective, measurable and reliable ways of
managing customers. Technology has made itso much easier for us to
communicate directly with our customers, while changes in tastes and media
fragmentation have made conventional mass marketing techniques less effective
in getting the response you want from your customers - though of course they
are still very powerful in developing and sustaining branding.
Direct marketing is a form of marketing that attempts to send its messages
directly to consumers,without the use of intervening media. The key principle of
direct marketing is that at least part of thecommunication you have with your
customer is direct - to named customers.
Direct marketing differs from regular advertising in that it does not place its
messages on a thirdparty medium such as a billboard or a radio commercial
would. Instead, the marketing of the serviceor commodity is pitched directly at
the consumer.
Most direct marketing is done by companies whose only function is to manage
and perform direct advertising, rather than by the advertised entity itself. Direct
marketers have been long time customers of computer databases, and they often
have very sophisticated criteria of inclusion andexclusion in their mailing lists.
Today Direct Marketing plays a broader role, that of building a long-term
relationship with the customer. Direct Marketers send birthday cards (e.g.
Kesari Tours), information material (e.g. Tata Telecom), small premiums (e.g.
Reader’s Digest) to selected members of their customer base. Airlines, Hotels,
and a number of other businesses build strong customer relationships through
characteristics
DEFINITION
1. Direct marketing is an interactive marketing system that uses one or more
advertising media to effect a measurable response & / or transaction at any
location.
2. Direct marketing is the planned implementation, recording, analysis and
tracking of customers' direct response behavior over time to derive future
marketing strategies, for developing long-term customer loyalty and ensuring
continued business growth.
3. Direct marketing is any activity that creates and exploits a direct relationship
between a firm and its individual customer.
4. Direct Marketing is the interactive use of advertising media to stimulate an
(immediate) behavior modification in such a way that this behavior can be
tracked, recorded, analyzed and stored on a database for future retrieval and use.
5. Any Promotional activity that creates and exploits a direct relationship
between an organization and its prospect and / or customer as an individual.
6. Selling via a promotion delivered individually to the prospective customer
7. Measurability of response : - The number of coupons indicates the response
rate to marketer’s communication.
8. Direct Marketing activities are not location specific: - It is not necessary for
the marketer to interact physically with the customer. He / She can establish
contact through mail, phone, fax, or Internet.
PRINCIPLES OF DIRECT MARKETING
There are eight key principles of direct marketing, as follows.
1. Planning your marketing activity: All direct marketing should form part of a
controlled marketing strategy, which has been produced as a result of market
and competitor analysis and in relation to achievable objectives.
2. Targeting your customer: Customer information should be stored and capable
of manipulation and retrieval from your customer database, to contact your
existing customers. Analysis of this also helps you to identify characteristics of
potential future customers.
3. Measuring your marketing activity: The results of direct marketing should be
measured to tell you what works and what doesn't.
4. Tracking This involves monitoring customers' responses over time, ideally
for as long as your relationship with them lasts. This enables you to measure
their value and understand how much of it is a result of how you marketed to
them.
5. Customer behavior: Tracking the spending patterns and general behavior of
your customer can help you establish which products are popular and which
aren't. This can help you determine future products and strategy.
6. Future strategies: One aim of marketing is to maximize the value of your
customers to you. So the previous steps will ensure you have the information to
plan effective and efficient marketing to achieve this aim.
7. Developing long-term loyalty: By targeting the right customers, offering
them what they want and encouraging them to take more of your products, you
will protect your customer database. Your customers will be more likely to stay
with you for longer.
8. Encouraging profitable business growth. Increasing the number of loyal and
valuable customers you have and limiting the number of customers with low
value and/or high risk achieve this. This increases turnover and profit, which
can be reinvested to ensure that service and product standards are maintained
and that your customers stay happy.

DIRECT MARKETING DRIVERS

 Environment has become very complex
 Bargaining power of the consumer has increased
 Market has become very competitive
 Costs of marketing a product have phenomenally increased
 Advertising costs are very high
 There is very little customer loyalty
 Direct marketing helps companies focus on their marketing efforts
 Market “de-massification” has resulted in a large number of market niches
 Higher cost of driving, traffic congestion, parking problems, lack of time,
queues at counters
are some of the reasons that encourage home shopping
 Toll free phones, willingness to accept orders at night & commitment to
customer service
have made consumers respond favorably to direct marketing
 Consumer life-styles have changed. Today consumers look out for
convenience in shopping,
tele shopping, home shopping & on-line shopping.
 Globalization has further promoted direct marketing

MAIN TYPES OF DIRECT MARKETING

Direct marketing can be applied to all three key business sectors:
• business to consumers;
• business to intermediaries;
• business to business.

3 APPROACHES TO DIRECT MARKETING

1. Stand-Alone Direct Marketing
This could be regarded as the “ultimate" Direct marketing approach.
Organizations that employ this
type of approach employ no other means to manage the relationship with their
customers.
Companies such as ‘First Direct’, ‘Direct Life insurance’ or Bazee.com fall
under this category.
Here the customers are directly recruited via direct response press advertising,
direct mail or the
internet. There after, the relationship is managed using a combination of
telephone, mail, e-mail etc.
2. Integrated Direct Marketing
In this approach Direct Marketing is viewed as a part of an integrated marketing
mix. Organizations such as 'Save the child', 'Readers Digest', ‘Pizza-Hut’ are
seen to adopt this approach.
Peripheral Direct Marketing
In this type of approach, Direct Marketing is employed as only an occasional,
tactical marketing tool. Here direct marketing could be initiated as a short-term
response to decreasing sales or competitive pressures. Hindustan Lever and
many other FMCG companies adopt this form.

BENEFITS OF DIRECT MARKETING

1. Home shopping is fun, convenient & hassle free.
2. Saves time
3. Introduces customer to a large variety of products at a time.
4. Comparative shopping is possible by browsing through mail catalogues & on
line shopping.
5. Customers can order goods for themselves & for others also.
6. Sellers also benefit, as they can personalize & customize messages.
7. Direct marketers can build a continuous relationship with each customer e.g.
Parents of new born babies may receive a periodic mailings describing new
clothes, toys & other goods as the child grows. For e.g. Nestles baby food
division continuously builds a database of new mothers & sends personalized
packages of gifts & advice at the key stages in the baby's life.
8. Direct marketing strategies can be timed to reach prospects at the right time
& moments & therefore it receives a higher readership because it is sent to more
interested prospects.
9. Direct marketing also makes the direct marketers’ offer & strategy less
visible to competitors.
10. Direct Marketers can measure the responses to their campaigns to decide
which of them have been more profitable.
11. Tracking performance allows direct marketing to analyze relationship
between customer characteristics & buyer behavior in their database
12. DM activities have an advantage over general marketing activities in the
area of performance tracking. Campaigns can be monitored to determine if they
are successful, knowing precisely what worked & what did not. This allows
selling goods effectively and leads to a more efficient allocation of resources.
13. DM attempts to elicit response. In the process, the communication performs
both,advertising & selling function without an intermediary
14. Because no intermediaries are needed, they reduce the intermediary mark
ups & increase profit

15. Precision Targeting – Direct marketing activities are aimed at individuals.

This reduces the waste inherent in many other types of communications.
16. The prospect is encouraged to place an order or trust information more as he
is calling a number or sending a card

Types of direct marketing

Direct mail

Direct mail is posted mail that advertises your business and its products and
services. There are several different types of direct mail (e.g. catalogues,
postcards, envelope mailers). Direct mail campaigns are usually sent to all
postal customers in an area or to all customers on a marketing list. Learn more
about direct mail.

Telemarketing

Telemarketing involves contacting potential customers over the phone to sell

products or services. It is capable of generating new customer prospects in large
volumes and is also a useful tool for following up on direct marketing
campaigns. However, a successful telemarketing involves planning and using
accurate and well-researched customer data to match customer profiles to
product profiles. Find out about telemarketing.
Email marketing

Email marketing is a simple, cost-effective and measurable way of reaching

your customers. It can include enewsletters, promotional emails to generate new
leads or offers for existing customers, or ads that can appear in other business's
emails. Learn more about email marketing.

Text (SMS) marketing

Text messaging allows businesses to reach individual customers and send

messages to large groups of people at a low cost. You could use short message
service (SMS) messaging to send customers sales alerts, links to website
updates, appointment or delivery reminders, or personalised messaging. Find
out about text (SMS) marketing.

Leaflet marketing using letterbox drops and handouts

Distributing well-designed leaflets or flyers through letterbox drops and

handouts can work well for a local business whose products or services appeal
to a broad audience. It is a simple, inexpensive and effective way of reaching
customers, although it is a less targeted form of direct marketing. Learn more
about leaflet marketing using letterbox drops and handouts.

Social media marketing

Social media can be used effectively as a marketing tool for business as it gives
you the opportunity to interact directly with your customers and regularly share
relevant product or service information. Social media platforms also make it
very easy for your customers to share your content with their entire network,
increasing your reach exponentially. Consider developing a profile for your
business that allows you to promote your products and services while also
encouraging customers to provide feedback by leaving comments. Find out
about social media marketing.

Direct selling

Direct selling is an effective way to grow a flexible, low-cost business. Direct

selling involves an independent salesperson selling products or services directly
to customers, often at a customer's home or workplace. Traditional direct selling
methods include door-to-door sales, party plans and network marketing
Advantages of Direct Marketing
There is a range of advantages of direct marketing, these are summarised below:

1. Builds Loyalty
A well-run direct marketing campaign can build brand loyalty by continual
brand messaging on direct marketing channels. This is particularly effective
where multi-channel messaging is used, e.g. email, direct mail, SMS, etc. all in
one consistent joined-up coherent campaign.

2. Direct
As the name suggests, this technique is direct. This engagement directly with
the customer eliminates price hikes due to “middlemen” and provides a direct
approach. This has benefits as the organisation is totally in charge of the contact
and can apply in-house CRM techniques to effectively manage the relationship.

3. Effective
Direct marketing, when managed well, has a long-standing reputation for high
profitability and great ROI.

4. Monitorable
Tracking and monitoring can be put in place to effectively analyse the results of
a campaign. Strengths can be accentuated and weaknesses eliminated with a
view that through continual tweaks/enhancements campaign ROI and metrics
will only continue to grow in the medium-long term.

5. Personalised and Targeted

Direct marketing can be personalised based on the actual experience of working
with a customer and/or socio-economic factors. Even for prospects,
personalisation can be achieved through techniques such as customer
segmentation and data profiling.
6. Reduced Competitor Awareness
Competitors will have a much lower level of awareness with direct marketing as
it is direct to the customer. Other marketing techniques such as TV, radio,
internet advertising, etc. are public and open to counter-moves by competition.

Disadvantages of Direct Marketing

There are some disadvantages of direct marketing, these are summarised below:

1. Environmental Impact
Some of the direct marketing channels are associated with having an
environmental impact (most noticeably direct mail). This can be reduced by
targeted direct mail campaigns and using environmentally friendly materials.
This marketing technique is no worse than many indirect marketing methods
(e.g. billboard posters).

2. Image Impact
It’s a common perception that image can be adversely affected by some direct
marketing campaigns (direct mail and telemarketing in particular). Whilst this is
true for poorly managed campaigns, the effects can be avoided by ensuring
contacts are opted-in and happy to receive marketing messages (which is best
practice anyway!).

3. Limited Reach
This is a “perceived” disadvantage of direct marketing to many. The limited
reach is due to the fact that mass broadcast techniques (e.g. TV, radio, internet
advertising, etc.) are not used. Although it’s true that the reach is less, the reach
achieved is more specific and targeted. Reach can be extended by buying high-
quality targeted opt-in additional contacts from reputable sources such as Baker
Goodchild.

4. Privacy Intrusion
The main drawback of direct marketing is its links with privacy intrusion (this is
particularly related to telemarketing and direct mail). This is definitely the case
with badly managed campaigns and links closely to the image impact above.
Once again, with true opt-in consent and best practice campaign management,
privacy would not be an issue.
NEED FOR THE STUDY

Direct marketing is considered as most tactic activity. Marketing activities

done without any media or middlemen, products should be move production
centre to production centre. Need of the study is to be find the issues or causes
in direct marketing a correct the issues. Find out the what are all the
challenges in the direct marketing, make measurements to overcome the
challenges in the direct marketing.

STATEMENTOF
PROBLEM

Demographic variables like gender, age, marital status, monthly income,

education, and employment status of the distributers may influence on their
perception level towards direct marketing system. Papulation and
demographic factors, economic factors, technological factors, natural
factors, political factors, cultural and social factors or some external factors
stimuli consumer purchasing behaviour. There are many causes and
problems in direct marketing. Direct selling is still not perfect in India.
Following is the major problems encountered by the direct marketing

➢ Lack of clarity about direct marketing in mass people.

➢ People misunderstand the direct marketing.

➢ All direct sellers are not well educated.

➢ Most of direct marketing companies don’t have proper infrastructure

facilities.

CHAPTER 2
RESARCH METHODOLOGY
RESEARCH METHODOLOGY:-

Research methodology is a way to systematically show the research

problem. It may be understood as a science of studying how research is done
scientifically. It is necessary for the researcher to know not only the research
methods but also the methodology.
This Section includes the methodology which includes. The research design,
objectives of study, scope of study along with research methodology and
limitations of study etc.

OBJECTIVES

➢ To study the challenges in direct marketing.

➢ To analyse the prospect.

SOURCES OF DATA COLLECTION

Source of information is collected through only secondary
data.

SECONDARY
DATA
Secondary data are those which have been collected by some one else and
which have already been through the statistical process. Related
information of this project collected through sources like internet, print
media.

PLAN OF ANALYSIS

Since the study is based on secondary data. The analysis will be according to
qualitative techniques content analysis is prescribed as on of the techniques to
analyse qualitative method research.

CHAPTER 3
SWOT ANALYSIS
SWOT Analysis

When we use SWOT analysis, Its often for strategic planning. It prepares

for decisions and gives an overall look at the strengths, weaknesses,
opportunities, and threats of business. But SWOT analysis can also be
used to increase and build upon customer satisfaction.
To give a well-rounded overview of  how to use SWOT analysis for a
boost in customer satisfaction, we’ll start with the Strengths
and Weaknesses first.
 SWOT analysis, for any who may be unfamiliar, is a planning
method typically used in business strategy to identify
the Strengths, Weaknesses, Opportunities and Threats that may face a
business or project.  
A number of us have likely had the opportunity to either observe or
participate in this exercise for the broader business in which we work.  A
quick overview of the core concepts:

Strengths and weaknesses

Strengths and weaknesses internal to the organization.  Strengths
represent positive attributes or characteristics, factors that provide an
advantage.  Weaknesses are attributes or characteristics that place the
business at a disadvantage relative to others.

Opportunities and threats

Opportunities and threats are external to the organization.  Opportunities
represent external trends and chances to improve performance –
something happening in the outside environment that presents positive
 potential.  Threats are elements or trends in the outside environment that
could cause trouble for the business,  place it at risk.

STRENGTH :

–          Easy to target and reach more audience at a cheaper price.

–          Campaigns can be easily customized and made more targeted as per our
business requirements.

–          As the world is more dependent on the internet, it helps the business to
reach out and connect with the people on a larger scale.

–          Saves a lot of money as compared to the traditional way of marketing as

it is cheaper and efficient.

–          Being recognized as a brand has become much easier.

–          The options are not confined to one or two, there are many options and
people can choose to switch from one to the other if PLAN A doesn’t work and
that does not cost a great loss of money.

–          Promotion of small business is easy as it is cost effective.

–          Entrepreneurs find it very useful as they do not need a huge budget for
this and it gives them huge platform to make a mark on the digital world.

–          You do not require a large team to do digital marketing campaigns

unlike the traditional manner which in turn saves money, time and labor and
also increases the ROI.

WEAKNESS:

–          A challenge to reach the population which is still not using the internet.

–          High chances of failure of digital marketing campaigns because of

confusion due to the availability of many different marketing options.

–          Keeping pace with new trends and technology.

–          Need of deep understanding of changing human behavior and
requirements.

–          If your brand or product is not justifying the users need, then the chance
of getting bad reviews in public is very high, which in turn might damage the
reputation.

–          Damage control of bad reviews or complaints on social media or digital

platform is a huge task and can even lead to the closing of businesses.

–          Data Analysis is still a very big concern and very few people are
professional in it as not many are able to understand what data actually says.

OPPORTUNITY:

–          More and More employment for the youth as this field is just growing
and number of professionals are less.

–          Increase the reach of your brand, therefore, leading to direct profit.

–          There are lot of ways through which owners earn money apart from their
primary business, eg- giving space for ads on website, affiliate marketing in e
commerce etc.

–          If the digital marketing comes everywhere in a full-fledged manner it

will help the country itself to become digital that means major chunk of our
population will start leading a life which will be smarter and faster.

–          It will help our Indian Government Organizations to become digital.

–          All the operation from railways, municipal organization etc. will become
faster and smoother.

–          Storing of valuable and confidential data of the government

organizations will be easy and secured.

–          The Dream of making “Digital India” can become true.

THREAT:

–          If it doesn’t work perfectly then chances of back fire is higher i.e. it
might damage the brand name.
–          Due to ever changing trends of different marketing areas and ever
changing rules of search engine for optimizing the content, continuous
awareness is required, which is very difficult.

–          Storage of data with full security is still a big question mark.

–          Analyzing the data in a wrong way can lead to damaging results which
is found in a lot of companies.

–          With the growth of this digital platforms, customers have become more
vocal about their feelings and opinions, and with the availability of this platform
they have the power to damage as well as advocate for any brand, which is a
high risk for the marketers.

–          Day by day it is engulfing all the traditional ways of marketing, which
ultimately might even lead to Television being left as the only source of
traditional marketing