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Integrated Marketing Communications

Lecture 9: Direct marketing & Sales Promotion
 Chapter 11

Direct marketing &

Sales Promotion

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Learning objectives

Understand Know Relate

the characteristics the role of copy the different types of
of direct marketing and the creative consumer promotions
messages used in
direct marketing
the different experiential marketing
media available for and crowd sourcing
direct-marketing the role of approaches
activity databases, data
mining and
proximity the objectives of trade-
marketing oriented promotions
Today’s lecture content

1. Direct marketing definition

2. Media available for direct marketing
3. Copy & creative messages
4. Database, data mining and proximity
marketing
5. Different types of consumer promotions
6. Experiential marketing & crowd sourcing
7. Trade-oriented promotions
 1. Direct marketing
• The objective of direct marketing (DM) is to
encourage purchases (or other immediate
responses).
• DM aims to seek out the ‘best prospects’ to
achieve the objective.
• DM is an interactive process that does not
merely pass on information.
• In DM, when frequency increases, awareness
falls dramatically (unlike other forms of
advertising).
 How direct marketing works
• Marketing material is sent directly to the customer.
• Mail (post and email) is synonymous with DM.
• Responses to DM are most likely to be the purchase of the brand, but other forms of
responses exist, such as attending an event or providing personal information.

Objective The purpose; what is to be achieved (the measurable)

Media The vehicle to be used

Creative The way in which the message is presented

Database The system that holds the information on the audience

Fulfilment Implementation of the campaign through to delivery

 Objectives of a direct marketing campaign
• Objectives will vary from campaign to
campaign, but general objectives exist to
receive:
üorders for a product
üentries in a competition
üenquiries
üregistrations for a launch event
üvisits to the company website
üexpression of interest.
 Crowdsourcing
• Crowdsourcing is a recent phenomenon that involves
the audience functioning in roles that would normally
be assigned to employees.
• Crowdsourcing involves two-way engagement with the audience.
• Activities could include:
o designing the product
o offering their story about the product’s value
o creating a promotional campaign.
 Crowdsourcing examples

Casella Wines used crowdsourcing to

create the perfect beer.
Direct marketing media
Different forms of media exist for
direct marketing:
üpostal mail (p-mail) advertising
(delivered by the postal service)
üelectronic messaging (email, blogs and
social media)
ütelevision
üprint media
üdoor-to-door.
 Features of DM media
Types of DM media Description

P-mail targeting, measurability, accountability, flexibility and efficiency.

Electronic messaging targeting, personalisation, efficiency, effectiveness, measurability/accountability,
speed and safety.
Television less personalisation than mail-outs; infomercials are part of the landscape; large
exposure; excitement can be generated through (non-static) celebrities; benefits can
be easily displayed (demonstrations); can be expensive.
Print large exposure; comfortable (less invasive); creative approaches; synonymous with
clutter; difficult to pass on the excitement factor; magazine readership is not always
in an opportune location to respond (dentist’s office, car servicing shop); less
targeted than direct mail so acts more as a broad-brush approach.

Door-to-door leaflet/brochure/sample; delivered to the door; reduces waste; often used as a

follow-up to television advertising; door-to-door becoming less common because it
has been perceived as aggressive.
 Creative for direct marketing
Direct marketing has two basic creative elements:

Copy (The word) Overall look

Aim to: • Does it conform to the existing brand

• get attention design guidelines?
• develop interest • Is the style in keeping with the
• offer proof brand’s positioning?
• motivate consumers • Does the visual reflect the quality of
the product?
• Does it fit to the restrictions (size,
weight, colour, etc.)?
• Does the style reinforce the key copy
messages?
• Does the design aid attention,
interest, proof and action?
 Databases and fulfilment
• Databases are a fundamental ingredient of direct mailing advertising.
• Databases can contain information related to:

ücurrent customers
üprospective customers
übuying behaviour
ügeographic segmentation
üdemographic segmentation
üpsychographic segmentation.
 Database objectives
Databases need to be kept up-to-date to ensure the advertising can

optimally target
allow for create long-term
current and
customised relationships with
prospective
messages customers
customers

calculate the
enhance
lifetime value of a
advertising
customer or
productivity
prospect.
 Lifetime value analysis
• Each entry in the database should be considered a long-term asset.
• Each asset has an associated net present value (NPV), which
translates into the profit a company can expect from the average new
customer over an expected number of years that customer is retained
on the list.
• Two functional elements of NPV are the retention rate and average
yearly sales.
 Mailing lists
• For both postal mail and electronic mailing, the maintenance of lists is
critical.
• Lists help in segmenting customers for specific messages.
• Data can be acquired from various sources, including internal or
external (such as purchasing from other companies or purchasing lists
from companies dedicated to creating and maintaining mailing lists).

Disney (US) has a list of 31 million customers,

gathered from the company’s various entities
 Mailing list population (internal)

• Different internal sources can be used to

gather information to populate mailing lists:
o feedback from promotions
o information from warranty cards
o data from registration programs
o participation in rebate programs
o telemarketing efforts.
• For both postal mail and electronic mailing, the
maintenance of the mailing list is critical.
 Data mining

• Data mining is the technique of using customer data to deliver a high

level of segmentation.
• Data mining involves using the information in databases to form
relationships.
• Example: a credit card company can use data from purchases to
estimate when a repeat purchase is needed. This data can be sold to
companies, which can then use direct marketing to those prospects.
 Fulfilment
• Fulfilment is often the final link in the DM chain.
• It is the logistical act of serving a response, and includes:
ürecording responses
üproviding contact information
üpicking, packing and despatching
üinvoicing
üforecasting
üanalysing and reporting
üfilling of envelopes and postage.
 2. Sales promotion

• Interchangeable with the word ‘promotion’.

• Two type of sales promotions:

franchise building: creates loyalty and non-franchise building: short-term

long-term activity; e.g. loyalty cards strategy, no time for customers to build
loyalty; e.g. sale price on a product.

• Manufacturers use this technique to encourage purchasing of the

brand.
• Can be directed at trade, retailers or distributors.
 Push versus pull strategies

• encourages wholesalers and retailers to

increase inventories
A push strategy • through promotional activities
• personal selling, trade advertising and trade-
orientated

• is directed to consumers with the intent of

influencing their behaviour.
A pull strategy • The goal is to have consumers seek out
retailers who sell the brand
An example of different emphases
 Responsiveness to promotional deals

Loyalists – Consumers
Consumers Consumers Switchers –
consistent Consumers only
mostly with some even when all
purchase loyal to one responsive
loyalty to a loyalty to a brands are on
patterns; will
brand to sale, they may
buy the brand brand brand
regardless of promotions switch brands
whether the
brand is on
special
Most consumers fall somewhere between
the two extremes
 Promotional effectiveness
Putting a brand on special

• when the market
contains deal seekers
and stockpiling
loyalists
Profitable
• may or may not be
profitable if the market
• when the market consists of non-
contains non-deal- stockpiling or stockpiling
only consumers deal seekers.

Unprofitable Either/Neither
Sales promotion trap
 Increased sales do not mean increased profits

• Consumers are generally highly responsive

to deals.
• During periods of discounting and coupons,
sales will increase (revenues increase), but
this may not lead to an increase in profits.
• The increase in promotional costs can
outweigh the increase in revenue.
• The profitability of the promotion lies in the
consumers’ responsiveness.
 Types of consumer promotions

Experiential Coupons and Purchase

Sampling
marketing vouchers premiums

Special prices Bonus packs Rebates Sweepstakes

Overlay and
Continuity Retailer
tie-in
programs promotions
promotions
 Special prices Continuity programs Rebate

Purchase premiums

Sweepstakes Bonus pack

 Experiential marketing
• Experiential marketing is marketing that the consumer wants to get
involved in.
• Often involves giving the opportunity to try the product.
• Often used in
conjunction with sales
promotion and sampling.
• Example: Crust Pizza
Banquet Bike.
 Trade promotions

• Directed to intermediaries in the distribution channel.

• The purpose of trade promotions is to:
üintroduce new or revised products
üincrease distribution of new package or sizes
übuild retail inventories
üincrease or maintain shelf space
üincrease display space outside normal shelf space
ücounter competitors’ promotions.
 Types of trade promotions

Cooperative
Forward buying & advertising &
Trade allowances
diverting vendor support
programs

Trade contest and

Trade shows
incentives