© 2000 South-Western College Publishing Slide #1

Marketing ManagementMarketing Management2nd Edition2nd Edition

Chapter 13:Chapter 13:

Direct Marketing, Sales Direct Marketing, Sales Promotion and Public Promotion and Public RelationsRelations

Michael R. Czinkota and Masaaki Kotabe

© 2000 South-Western College Publishing Slide #2

Chapter OutlineChapter Outline

● PrePrecision Marketingcision Marketing● Direct Marketing Delivery SystemsDirect Marketing Delivery Systems● StructStructuring the Direct Mail Campaignuring the Direct Mail Campaign● TelemarketingTelemarketing● Sales Promotion: Advantages & DisadvantagesSales Promotion: Advantages & Disadvantages● Types of Sales PromotionTypes of Sales Promotion● Trade ShowsTrade Shows● Public RelationsPublic Relations

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Precision MarketingPrecision Marketing

Precision marketing is possible because of:Precision marketing is possible because of:● Availability & consolidation of secondary Availability & consolidation of secondary

datadata● Point of sale dataPoint of sale data

● Electronic point-of-saElectronic point-of-sale (EPOS)le (EPOS)

● Manipulation dataManipulation data● ExpExpert systemsert systems

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Direct Marketing Delivery SystemsDirect Marketing Delivery Systems

Advantages:Advantages:●Specific targetingSpecific targeting●PersonalizationPersonalization●Variation of Variation of promotional offerpromotional offer●Consumer informationConsumer information●FlexibilityFlexibility●Circumvention of Circumvention of barriersbarriers

Disadvantages:Disadvantages:●High costHigh cost●Poor quality listsPoor quality lists●Image problemsImage problems

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Structuring the Direct Mail CampaignStructuring the Direct Mail Campaign

● The direct mail offerThe direct mail offer● The letterThe letter● TimingTiming● Response ratesResponse rates

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TelemarketingTelemarketing

● Telemarketing Telemarketing agenciesagencies

● Inbound telemarketingInbound telemarketing● Network marketingNetwork marketing

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Sales PromotionSales Promotion

Advantages:Advantages:●Short-term sales Short-term sales increaseincrease●Defined target Defined target audienceaudience●Defined role/objectivesDefined role/objectives●Indirect roles (e.g., Indirect roles (e.g., wider distribution)wider distribution)

Disadvantages:Disadvantages:●Only short-termOnly short-term●Hidden costsHidden costs●ConfusionConfusion●Price cuttingPrice cutting●Postponement effectPostponement effect●Significant Significant government regulationgovernment regulation●Lack of effectiveness Lack of effectiveness sometimessometimes

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Types of Sales PromotionTypes of Sales Promotion

PromotionalPromotionalpricingpricing

NonpriceNonpricepromotionspromotions

SamplingSampling

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Sales PromotionSales PromotionPromotional PricingPromotional Pricing

● Price reductionsPrice reductions● Free goodsFree goods● Tied offersTied offers● Coupons and virtual Coupons and virtual

couponscoupons● Cash refundCash refund● Money off next Money off next

purchasepurchase● Loss leader pricingLoss leader pricing● Cheap creditCheap credit

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Sales Promotion:Sales Promotion:Nonprice PromotionsNonprice Promotions

● ContestsContests● Free giftsFree gifts● Self-supporting offersSelf-supporting offers● Multibrand promotionsMultibrand promotions● Guarantees and Guarantees and

servicesservices

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Sales Promotion:Sales Promotion:SamplingSampling

● Most effective in the Most effective in the early stages of a new early stages of a new product launchproduct launch

● Important for food Important for food productsproducts

● Very expensiveVery expensive

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Trade ShowsTrade Shows

Maintain relationshipMaintain relationshipTransmit messagesTransmit messages to key accountsto key accountsRemedy problemsRemedy problemsAdd-on salesAdd-on sales

Selling objectivesSelling objectives Nonselling objectivesNonselling objectives

CurrentCurrentcustomerscustomers

PotentialPotentialcustomerscustomers

Maintain imageMaintain imageTest productsTest productsGather competitiveGather competitive intelligenceintelligenceWiden exposureWiden exposure

Contact prospectsContact prospectsDetermine needsDetermine needsTransmit messagesTransmit messagesCommit to call backCommit to call back or saleor sale

Contact prospectsContact prospectsFoster image buildingFoster image buildingTest productsTest productsGather competitiveGather competitive intelligenceintelligence

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Public RelationsPublic Relations

● Media contactMedia contact● News storiesNews stories● Press officePress office● Corporate public Corporate public

relationsrelations● DefensiveDefensive● ProactiveProactive