Database & Direct Response

Marketing
Chapter 11

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 2 broad categories of evaluation tools
 The secrets to building loyalty
 Recognition
 Relationships
 Rewards

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 Data Warehouse
 Hold all the customer data
 Operational Database
 Transactions the individuals have with the firm - Accounting
 Marketing Database
 Current Customers, Former Customers, Prospects

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 Step 1 -Building a Data Warehouse
 Customers names and Addresses
 Email Addresses
 History of every purchase transaction
 History of customer interactions
 Inquiries, Complaints, Returns
 Customer Survey Results
 Preferences & Profiles updated by the customer
 Marketing Promotions & Response History\
 Geocoding
 Geographic codes to each customers records- plot on a map

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 Step 2 –Database Coding & Analysis
 Lifetime Value Analysis
 Calculated through Revenues, Cost, Retention Rates, Purchase
per visit/per year,
 RFM
 Scale of 5-1 for each R-F-M
 Corresponding code is then assigned

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 Step 3 – Data Mining
 A program used to develop a profile of the company’s
best customers

 2 steps
 Building profiles of customer segments
 Preparing models that predict future purchase behaviors based
on past purchases

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 Step 4 – Data Driven Marketing
Communications
 The very reason why a database is so priceless

 Use personalized communication

 Move the company from brand parity to brand equity

 Identification Codes
 Cookies
 Customer Profile Information
 In-Bound Telemarketing
 Data Trawling
 Lifetime Value Segments

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 Step 5 – Data Driven Marketing Programs
 Permission Marketing
 Promotional Offers are only sent to customers who give the
company permission to do so

 Permission is obtained using gifts, incentives, participation

in a sweepstake

 Permissions are increased by obtaining more in-depth info

 Hobbies, Attitudes, Opinions

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 Step 5 – Data Driven Marketing Programs
 Keys to success in permission marketing
 Do not trick customers into joining
 Online purchase
 High quality & High value of content
 Empowerment
 Reciprocity
 Reasons why customers opted into a email freq. program
 Sweepstakes 41%
 Randomly 37%
 Email Id required to surf website 38%
 Already a customer 40%
 Friend Recommended 24%

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 Step 5 – Data Driven Marketing Programs
 Keys to success in permission marketing
 Do not trick customers into joining
 Online purchase
 High quality & High value of content
 Empowerment
 Reciprocity
 Reasons why customers opted into a email freq. program
 Sweepstakes 41%
 Randomly 37%
 Email Id required to surf website 38%
 Already a customer 40%
 Friend Recommended 24%

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 Steps in building a permission marketing
program
 Obtain permission

 Offer something meaningful

 Reinforce the incentive to continue the relationship

 Increase the level of permission

 Leverage the permission to benefit both parties

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 Frequency Programs
 AKA loyalty program
 Goals
 Developing Customer Loyalty
 Matching / Preempting the competition
 High level income individuals tend to join loyalty program
more
 Principles
 Design the program to add value / be something unique
 Calculate the full cost of the program
 Maximize motivation to make the next purchase

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 Other Points
 CRM
 Why do most fail?
 Most fail because the focus is to increase sales
 Two important measures in CRM to test effectiveness
 Life Time Value
 Share of Customer
 % of expenditure a customer makes with one particular firm compared to
the total expenditures made in that product’s category
 Direct Response Marketing
 Direct Mail
 Response List vs. Compiled List

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 Other Points
 Alternative Media
 Package Insert Programs (PIPs)
 CD & a CD player
 Ride-alongs
 Materials that are placed with another company’s catalog or direct-
mail piece
 Statement Stuffers
 Placed with bills
 Card Packs

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 Regulations & Ethical Concerns

Chapter 14

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 Deception Vs. Puffery
 Substantiation of Marketing Claims
 Prove that it is not puffery
 Generally
 Fine print is not accepted as substantiation
 Evidence has to be for the exact product
 Evidence from experts
 Totality of evidence
 Corrective Advertising

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 Ethics and Social Responsibility
Complaints against Advertising
 Morals Vs. Ethics
 Complaints against advertising
 I buy more than I can afford
 Overemphasizes Materialism
 Increases MAD costs
 Perpetuating Stereotyping
 Race, Gender
 Projection of people
 Advertising Unsafe Products
 Offensive Advertising
 Advertising to Children

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 Brand Infringement
 Brand Infringement
 When a company comes out with a name closely resembling a
popular brand
 Domain Squatting

 Medical Marketing

 Gifts (Bribery) in B2B

 Internet Advertising
 Interstitial Advertising
 Cookies

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 Ethical Framework
 Utilitarianism
 Calculus of pain
 Overlook the needs of the minority
 Individualism
 Degree to which society values personal goals, privacy etc.
 Decisions are based on self-interest so long as one’s actions don’t
harm others
 Rights Approach
 Each individual has his own rights
 Justice Approach
 Distributive Justice – Fairness of rewards, punishments
 Procedural Justice – Consistency in application of rules &
applications

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 Social Responsibility
 Obligation of the org. to be ethical to all stakeholders
 Doing positives
 Beyond altruistic behavior
 Perspectives
 Invisible hand of the marketplace
 Govt. duty perspective
 Enlightened Management
 Managers can & should be trusted to create an ethical environment

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 Evaluating an IMC Program

Chapter 15

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 2 broad categories of evaluation tools
 Message Evaluation Techniques
 Examines the message and the physical design of the
advertisement, coupon or direct marketing piece

 Respondent Behavior
 Address visible customer actions, including store visits,
inquiries and actual purchases

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Matching Methods with IMC objectives
 Pre Tests & Post Tests
 Several Levels used to analyze an advertisement or IMC
program
 Short Term Outcome (sales, redemption rates)
 Long Term Outcome (brand awareness, brand loyalty or
equity)
 Product Specific Awareness
 Awareness of the overall Company
 Affective Responses (liking towards the company)

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 Message Evaluation
 Message Evaluation
 When the test is used
 Concept Testing
 Prior to Ad Development
 Copy Testing
 Final stages of a development or a finished ad
 Recall Tests
 Primarily after the ad is launched
 Recognition Tests
 After Ad launch
 Attitude and Opinion
 Anytime during or after the ad development
 Emotional Reaction Tests
 Anytime during or after the ad development
 Physiological Tests
 Anytime during or after the ad development
 Persuasion Analysis
 Primarily after the ad launch

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 Concept Testing
 Examines the proposed content of the ad
 What can be tested
 Copy or Verbal
 Message and its meaning
 Translation of copy in an international ad
 Effectiveness of cues – e.g. props
 Value associated with a prize

 Focus group discussions

 Comprehension Tests
 Tell me the meaning
 Reaction Test
 Overall positive feelings about a marketing piece

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 Copytesting
 Used when the marketing piece is over or final stages
 2 tests
 Portfolio Test
 A set of print ads
 Theater Test
 Used for AV ads
 Mall intercept technique

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 Recall Testing
 Asking an individual to recall what ads he or she has viewed in
a given setting or time frame
 DAR-Day After Recall
 Unaided Recall
 Aided Recall
 Items Tested
 Product and Firm name
 Theme Music
 Spokesperson
 Tagline
 Incentive Being Offered
 Product Attributes
 Primary Selling Point of the communication piece
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 Researchers must watch out for
 Respondent’s attitude towards advertising in general
 Familiarity of the brand to the respondent
 Prominence of the brand name in the ad
 Age of the respondent

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 Recognition Tests
 Individuals are given copies of the ad
 Recognition measures a person's interest not memory
 Recognition scores do not decline over time

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 Attitude and Opinion Tests
 Measures the cognitive and affective reaction to ads
 Gathered from
 Surveys
 FGDs

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 Emotional Reaction Tests
 Simplest way to measure is ASK post the ad being shown
 Warmth Monitor
 Manipulate a joystick
 Absence of warmth
 Neutral
 Warmhearted or Tender
 Emotional

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 Physiological Arousal Tests
 Fluctuations is a person’s body functions
 3 tests
 Psychogalvanometer
 Perspiration Levels
 Pupillometric Meter
 Dilation of pupil
 Psychophysiology
 Brain image measurement process
 Tracks the flow of electrical currents in the brain

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 Persuasion Analysis
 Gather individuals
 Measure brand attitude, purchase intention
 Check the change post exposure to a series of commercials

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 Behavioral Tests
 Sales and Response Rates
 Sales, Redemption Rate of coupons
 Responses to Marketing
 Telephone inquiries, Response Cards, Internet Responses
 Watch out for:
 Influence of other factors
 Delayed Impact
 Consumers changing their minds in the store
 Level of brand equity
 Whether the brand is in the Evoked set

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 Behavioral Tests
 Test Market
 Cost effective
 Competition is made aware
 Give discounts
 Prepare a counter campaign

 Purchase Simulation

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 Evaluation of Public Relations
 Clipping Service
 No. of clippings vs. No. of news releases
 Clippings should be divided into +’ive and –’tive
 Impressions
 Subscribers + Purchasers
 Advertisement Equivalence Technique
 Comparison to Public Relations Objective

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