HOW THE INTERNET CHANGES DIRECT MAIL

James R. Rosenfield

May 2000

"The Internet changes everything."

That's been the buzz for a few years now, and you know what? I'm starting to believe it.

That doesn't mean that it's changing everything for the better, of course. Powerful new
technologies crash through the world like an out-of-control lawn-mower. The grass gets cut, but
watch out for the flowers! It's the iron law of unintended consequences. No one knew that
television would make us dumb, passive, and asocial, but there you are. Cars give us freedom
undreamt of 150 years ago, but at the price of ruined cities and polluted air.

Email is irresistibly seductive. It puts us in touch, but also keeps us apart. Why phone when you
can email? But I just had a conversation with a guy I've only dealt with previously via email, and
we concluded long-protracted negotiations in minutes. So abstract can email be, in fact, that until
we spoke I had no idea that he lives in England.

On the other hand, I discovered while voting in the March California primary that a writer I
knew 30 years ago was running for President as a minor party candidate. I found the party's
Website, got to his page, clicked on his email, and was instantly in touch with someone who
seconds before had been separated by a near infinitude of time and space.

The Internet itself is a wonderland of joy and terror. Everything is there. It can nurture and it can
poison. The Web connects, and the Web ensnares. Will it make us more human or less human?
Will it redefine what being "human" means? A software tycoon I met recently on a plane said
"We began with batch processing because that's what life is like - we batch things. The Internet
has no concept of batching. There's a conflict between the organic world of batching and the real
time world of the Internet."

Will the conflict be resolved? And if so, how? The resolution (or lack of same) may be the great
drama of the 21st Century.
How will the Internet change media? It seems clear that the Internet will be the most significant
direct marketing medium ever. As a result, it's not unusual these days to hear people predicting
direct mail's imminent demise. These predictions are based on a common fallacy, that new
technologies make old technologies obsolete. That's seldom true. What really happens is that
new technologies change the role of old technologies.

When television first came about, for example, folks predicted that moves and radio would die
off. In reality, television became a prime distribution mode for movies, and there are new
theaters springing up everywhere all the time. (The disappearance of drive-ins has more to do
with the sexual revolution than with technology.) And when was the last time you saw a
newsreel in a movie theater?

Radio is bigger than ever, but it has changed into an interactive call-in medium, facilitated by the
ubiquity of cell-phones in cars. Apropos of that, Marshall McLuhan made the observation that
when a new technology interpenetrates an old technology, important things will happen. The
Internet is already interpenetrating other media. What are the implications for direct mail?

MACRO LEVEL: WILL THE INTERNET SHRINK DIRECT MAIL QUANTITIES?

The great copywriter Chris Stagg used to say that direct mail was a small medium. That changed
in the 1990s. Direct mail last decade turned into a mass medium, with the vast, hugely
competitive credit card and telecommunications industries leading the way. This, of course, was
absolutely contrary to the predictions I made (as well as my fellow prophets) in the 1980s, when
we all figured that database marketing would shrink the quantity of the mail channel by giving
marketers a laser-like precision. Au contraire! With companies like Citibank, First USA, and
AT&T leading the way, it's been a game of enormous numbers for the past few years.

The afore-mentioned Marshall McLuhan makes an interesting point in a posthumous book, The
Global Village (Oxford University Press, 1989). He observes that one of the consequences of a
new technology is the retrieval of something earlier obsolesced. An example of this is the
hackneyed but true observation that direct marketing brings back the old one-to-one relationship
people used to have with storekeepers.

It's my feeling that the Internet will bring us back to the direct mail of the 1960s and 1970s,
when it was a non-mass medium.

Will this put direct mail companies out of work?

It will, if you define yourself as a "direct mailer." If, on the other hand, you define yourself as a
"direct marketer," you should be OK. The Internet, more than anything before, absolutely
clarifies the differences between direct mail and direct marketing, between direct marketing and
mail order, differences that have been frustratingly confused over the years, not least by the
Direct Marketing Association, one of whose leaders a few years back defined direct marketing as
shopping in the home. That's mail order, a distribution channel, not direct marketing, a
methodology that exists independent of any specific channel or medium.
MICRO-LEVEL: WILL THE INTERNET SHRINK DIRECT MAIL PACKAGES?

When direct mail was a non-mass medium, packages were elaborate: long letters, multi-panel
brochures, etc. Production costs on a unit basis were a significant part of the budget.

Proportions changed in the 1990s, as direct mail became a mass medium. Packages became
leaner, thinner, cheaper, and production costs declined on a unit basis (aided by greater
economies of scale, also). Production elegance was traded off for frequency and reach, qualities
a mass medium has to have.
These two approaches have been mutually exclusive in the past, save for the efforts of stubbornly
naïve direct mailers such as the automobile industry. It's been either non-mass/expensive
packages (most appropriate for customer mailings) or mass/non-expensive packages (most
appropriate for acquisition mailings, at least in mass industries).

The Internet, as is frequently its wont, resolves this conflict. And the resolution is firmly in favor
of the marketer, rather than the vendor or agency. With the Internet you can chop direct mail
down to maximum efficiency because all mailings will be cheap mailings.

Why? Because the purpose of direct mail will be to drive people into Websites. I suspect in a few
years, when broad-band and non-computer Internet access become universal, this will be the
only purpose of direct mail, with only a few exceptions.

If the information, offer details, and response mechanism are housed on the Website, all direct
mail becomes two-step, and follows the basic principles of lead-generating programs: Keep it
cheap, and sell the offer. By cheap, I mean a much larger proportion of self-mailers than we have
at present, and a greatly increased number of simple cards.

And these mailings, I think, will be acquisition mailings. Customer communications will end up
primarily done by email, which of course is much cheaper than direct mail. Customer
communications direct mail will be used to deliver physical "love letters," for example the coffee
mugs Amazon.com sends its customers. Direct mail also can be used to communicate with
customers who haven't given you their email addresses.

This acquisition scenario is completely opposite to the predictions we used to make a few years
ago, that direct mail would end up primarily as a customer communications medium. Go figure!

THE INTERNET AND DIRECT MAIL DESIGN

What about the appearance of direct mail? Should letters begin looking like email? Should
graphics echo computer graphics?

Right now, I'd proceed cautiously on this, unless you're addressing a quite high-tech
marketplace. And even then I'd be careful.

Perhaps at some point a direct mail letter will start "Hi, Mr. Rosenfield," and look like email, but
not yet.
Contrary to popular cant (promulgated mostly by ad agencies), it's very difficult to translate the
same messages across different media. "The medium is the message," to quote McLuhan again.
Try including stills from your TV commercial in a direct mail package. You'll probably suppress
response, and almost certainly won't increase it. Why? TV is a left-hemisphere medium, direct
mail is right-hemisphere.

I suspect Internet imagery can be more successfully translated into direct mail than television,
since the Internet, like direct mail, is left-hemisphere, tactile, and interactive. But, again proceed
cautiously.

And pay attention to the mail that you get. You're likely to start seeing some fundamental
changes fairly soon

(404)DIRECT MARKETING

1. Direct Marketing & Interactive Marketing: Direct marketing- Concept, growth &
benefits, limitations – variants of Direct Marketing- Main tasks – lead generation,
customer acquisition, development and retention. The key principles of targeting,
interaction, control and continuity- Catalysts of change in modern marketing –
From distance selling to interactive marketing. Direct marketing in real-time –
interactive marketing, Direct marketing vs. marketing thru. Channels (3)
2. Traditional Methods of Direct Marketing: a) Telemarketing b) Multi Level
Marketing (MLM) c) Personal Selling d) Automatic Vending Machines e)
Exhibition - Trade fares f) Catalogue Marketing g) Direct Mail h) Company
showrooms- factory outlets-own distribution- Increasing use of Web-based
retailing (4)
3. Technology that enables Direct & Interactive Marketing: Core marketing
technology components; data warehousing, business intelligence appliances,
campaign management applications, sales force automation, customer interaction
and contact centre applications. Customer data, different types, its value and
management.
Data-driven marketing planning – Introduction to CRM and e-CRM. The Impact
of Databases - Consumer and Business Mailing Lists- Data fusion – marketing
research and the customer database -Setting up a customer database - structure,
function, data sources, software, processors, Real-time data collection for the
website. (4)
4. Integrating Direct Marketing Media: The role of brands and personalized
marketing communications - Media channels in a multi media age - Building
brands through response and optimizing integrated communications –
Differences between direct marketing media and non-direct media- Unique
characteristics of addressable media (direct mail, email, fax, phone, SMS) - lists,
costs, duplications, privacy - Press, inserts and door-to-door - formats, costs and
response. (4)
5. Technology mediated marketing channels - Interactive TV, mobile and SMS - the
advance in digital marketing - Automatic vending machines- kiosk marketing (3)
6. Direct mailing- Direct response methods- Home shopping/ teleshoping network-
Creating Direct Mail Advertising - Online web advertising and email/permission
marketing (3)
7. Data Protection and Privacy-self-regulation and codes of practice (2)
Note:
Cases/ Caselets to be discussed in the class & incorporated in Question Paper
Numbers in brackets indicate number of sessions of 60 minutes each.

Books Recommended:
1. Successful Direct Marketing Methods-Bob Stone and Ron Jacobs.
2. Hillstrom's Database Marketing by Kevin Hillstrom
3. The Engaged Customer-The New Rules of Internet Direct Marketing by Hans
Peter Brondmo

The significance of Direct Marketing Lists

Nowadays the definition and concept of advertising has undergone a sea change. If you want to
advertise your company, you will find multiple options available. Direct marketing has become a
trend today for most businesses around the world. It enables you to communicate directly with
your consumers without any interference of the media. Direct marketing entails different forms
of commercial communication such as e-mail, telemarketing as well as direct mail and is
generally unsolicited. If you want to reach your target audience directly, then you can purchase
direct marketing lists of mails. You can also buy mailing lists that are business oriented and
increase the impact of your company’s marketing campaign.

There are multiple companies around the world who buy mailing lists in order to boost their
advertising. Usually, these mailing lists target the consumers by their purchasing behavior and
demographic lifestyles. They seek to target businesses by a special standard classification or SIC
code, sales size, or volume. If you do a bit of search on the World Wide Web, you will find
several mailing list vendors or brokers who sell or even rent their direct marketing lists. Most
often, these lists that are put on sale are rented from the owners. The transaction of this rent is
based on agreements for a single time use as well unlimited usage for a specific period of time.
You can choose your option for renting accordingly.
If you want to buy mailing lists then make sure that the company specializes in providing such
confidential information and is reputed and reliable as well. You will have to take special care
that you do not seek to use them beyond the agreement parameters. Most list owners generally
prefer to review the telemarketing script or direct mail piece before they agree to rent their direct
marketing lists. If you want to get the most out these lists, you should make a statement in terms
of your market and consider the following factors:

•    Who are the people that you are seeking to sell your product or service to?
•    Are there any special considerations that you must take into account while evaluating your
market?
•    Where does your target audience live?

After tapping your market you will be able to generate greater leads in terms of sale and
therefore increase your profits.

You will also find several categories of direct marketing lists that can assist you in narrowing
down the scope of your own marketing campaign. These are the mortgage leads, business lists,
and consumer lists. You can thus buy mailing lists according to your specific requirements.
Direct mailing lists can be very useful in augmenting the success of your marketing plan. Always
keep in mind that no matter what type of mailing list your company requires, the most significant
step to be taken prior to its purchase is to narrowly and strictly get your market defined and
outlined. In this way you will definitely be assured of better results when you target your
prospects on the basis of the demographics of your already existing customers.

Read more: http://www.articlesbase.com/business-articles/the-significance-of-direct-marketing-

lists-920627.html#ixzz19xcon4X4
Under Creative Commons License: Attribution

Direct Mail or Email Marketing?

It's an emerging debate that looks set to become more widespread in the future - which direct
marketing method is most effective: traditional direct mail campaigns, or new generation email
marketing?

Direct mail is sent to businesses and consumers every day and is used by a very wide range of
organisations and industries. A mailing in the post, often accompanied by a letter, has become a
proven and accepted way of targeting your audience, with consistent conversion rates of about 1-
5%. However in recent years direct mail has attracted criticism over the environmental impact it
can have, and the annoyance caused by misdirected mailings.
Email marketing using opt in data is less widely used at the moment, but is growing more rapidly
in popularity than almost any other direct marketing tool. A growing range of good quality opt
in, and in some cases double opt in lists are becoming available, as are a wide range of email
broadcast services. But this new marketing medium has already been tainted by abuse and
association with the practice of spamming or junk mailing.

So what are the relative merits of each of these contrasting direct marketing methods?

The Benefits of Email Marketing

Email marketing is direct marketing at its most impactful. Your message lands directly in the
inbox of your recipient, your message can be personalised, and even targeted to individual
recipients. Email marketing can be timed not just to the day, but to the hour and minute, in order
to reach consumers just when they are likely to make a buying decision. Email marketing can
also be tracked in detail, even to the amount of people who open and read your email, or who
forward it to a friend. Because it is solely a digital medium, email marketing is more
environmentally friendly, and has a far lower carbon footprint than other marketing methods.
Email marketing can be very cost effective as it does not need costly mailing houses, production,
postage and so on. However data costs can be higher that traditional list rental for direct mail,
and email campaigns also require the use of a broadcasting partner. Email marketing is highly
effective in growing online sales for e-commerce sites - in just a few clicks the recipient can act
on impulse and buy from your site. It can also be used to drive traffic to b2b sites that aim to
collect leads and enquiries.

The Benefits of Direct Mail

Direct mailshots are a tangible and physical representative of your brand, which can be held in
the recipient's hands. A mailer with high production values can say much about your brand, just
through its size, feel and texture. Direct mail is well established and proven as a marketing tool.
Consumers and businesses are used to sending and receiving marketing messages in the post, and
are receptive to the messages they convey. Direct mail can also be used to increase your online
sales from your website - increasing numbers of mail order companies are finding that their
offline catalogues sent in the post are becoming increasingly effective at driving consumers
online to order, instead of by mail or phone. Quality direct mail data is generally more affordable
and more widespread, and does not come with fixed broadcast costs and fewer issues over the
opt in procedure. The direct mail industry is also far more mature with a wider range of lists and
suppliers available. Direct mail does not have to fight its way through complex spam and junk
mail filters used in many email programs.

One fact is universal - any direct marketing campaign using direct mail, email marketing, or for
that matter telemarketing, needs great quality data that is accurate and well targeted.
The Advantages of Direct Mail as a
Marketing Tool

Direct mail is a marketing technique in which the seller sends marketing messages directly to the
buyer. Direct mail is a unique blend of advertising and sales. It is sometimes referred to as direct
marketing or direct response marketing. Direct mail is, as the term implies, a marketing message
that's delivered to prospects by mail. It is opened one piece at a time and read one piece at a time.

Direct mail is a way of advertising in which advertisers mail printed ads, letters or other
solicitations to large groups of consumers. It is used in many different situations, limited
primarily by the imagination of the advertiser. The term direct marketing is believed to have
been first used in 1961 in a speech by Lester Wunderman, who pioneered direct marketing
techniques with brands such as American Express and Columbia Records.

There are two main definitional characteristics which distinguish direct mail from other types of
marketing or advertising. This involves commercial communication (direct mail, e-mail, tele-
marketing) with consumers or businesses, usually unsolicited. This aspect of direct marketing
involves an emphasis on traceable, measurable positive responses from consumers regardless of
medium.

The most common form of direct marketing is direct mail sometimes called junk mail, used by
advertisers who send paper mail to all postal customers in an area or to all customers on a list.
While many marketers like this form of marketing, some direct marketing efforts using particular
media have been criticized for generating unwanted solicitations. Some consumers are
demanding an end to direct marketing for privacy and environmental reasons, which direct
marketers, are able to provide by using "opt out" lists, variable printing and more targeted
mailing lists.

Direct mail is one of the most measurable methods of marketing. It is attractive to many
marketers, because in many cases its positive effect can be measured directly. Yet since the start
of the Internet-age the challenge of Marketing Executives is tracking direct marketing responses
and measuring results. Response rates are generally higher when the response device is separate
from, rather than part of, the brochure or letter. Response rates to prospects (non-customers)
average around 1%.

One of the most important parts of your direct mail piece is the response mechanism. For
example, if a marketer sends out one million solicitations by mail, and ten thousand customers
can be tracked as having responded to the promotion, the marketer can say with some confidence
that the campaign led directly to the responses. By contrast, measurement of other media must
often be indirect, since there is no direct response from a consumer. With direct mail marketing
you can code your mail pieces to determine the exact number of responses you received from
each campaign.

Direct mail is one of the most common forms of direct marketing in use today. Direct mail is a
dynamic, versatile marketing tool and is the most heavily used direct marketing medium, and its
popularity continues to grow despite postage increases.

Newspapers. Newspapers are one of the traditional mediums used by businesses, both big
and small alike, to advertise their businesses.

Advantages

 Allows you to reach a huge number of people in a given geographic area 

 You have the flexibility in deciding the ad size and placement within the newspaper 
 Your ad can be as large as necessary to communicate as much of a story as you care to
tell 
 Exposure to your ad is not limited; readers can go back to your message again and again
if so desired. 
 Free help in creating and producing ad copy is usually available 
 Quick turn-around helps your ad reflect the changing market conditions. The ad you
decide to run today can be in your customers' hands in one to two days.

Disadvantages

 Ad space can be expensive 

 Your ad has to compete against the clutter of other advertisers, including the giants ads
run by supermarkets and department stores as well as the ads of your competitors 
 Poor photo reproduction limits creativity 
 Newspapers are a price-oriented medium; most ads are for sales 
 Expect your ad to have a short shelf life, as newspapers are usually read once and then
discarded. 
 You may be paying to send your message to a lot of people who will probably never be in
 the market to buy from you. 
 Newspapers are a highly visible medium, so your competitors can quickly react to your
prices 
 With the increasing popularity of the Internet, newspapers face declining readership and
market penetration. A growing number of readers now skip the print version of the
newspaper (and hence the print ads) and instead read the online version of the
publication.

Magazines. Magazines are a more focused, albeit more expensive, alternative to newspaper
advertising. This medium allows you to reach highly targeted audiences.

Advantages

 Allows for better targeting of audience, as you can choose magazine publications that
cater to your specific audience or whose editorial content specializes in topics of interest
to your audience. 
 High reader involvement means that more attention will be paid to your advertisement 
 Better quality paper permits better color reproduction and full-color ads 
 The smaller page (generally 8 ½ by 11 inches) permits even small ads to stand out

Disadvantages

 Long lead times mean that you have to make plans weeks or months in advance 
 The slower lead time heightens the risk of your ad getting overtaken by events 
 There is limited flexibility in terms of ad placement and format. 
 Space and ad layout costs are higher

Yellow Pages. There are several forms of Yellow Pages that you can use to promote and
advertise your business. Aside from the traditional Yellow Pages supplied by phone companies,
you can also check out specialized directories targeted to specific markets (e.g. Hispanic Yellow
Pages, Blacks, etc.); interactive or consumer search databases; Audiotex or talking yellow pages;
Internet directories containing national, local and regional listings; and other services classified as
Yellow Pages.

Advantages

 Wide availability, as mostly everyone uses the Yellow Pages 

 Non-intrusive 
 Action-oriented, as the audience is actually looking for the ads 
 Ads are reasonably inexpensive 
 Responses are easily tracked and measured 
 Frequency

Disadvantages

 Pages can look cluttered, and your ad can easily get lost in the clutter 
 Your ad is placed together with all your competitors 
 Limited creativity in the ads, given the need to follow a pre-determined format 
 Ads slow to reflect market changes
Radio

Advantages

 Radio is a universal medium enjoyed by people at one time or another during the day, at
home, at work, and even in the car. 
 The vast array of radio program formats offers to efficiently target your advertising dollars
to narrowly defined segments of consumers most likely to respond to your offer. 
 Gives your business personality through the creation of campaigns using sounds and
voices 
 Free creative help is often available 
 Rates can generally be negotiated 
 During the past ten years, radio rates have seen less inflation than those for other media

Disadvantages

 Because radio listeners are spread over many stations, you may have to advertise
simultaneously on several stations to reach your target audience 
 Listeners cannot go back to your ads to go over important points 
 Ads are an interruption in the entertainment. Because of this, a radio ad may require
multiple exposure to break through the listener's "tune-out" factor and ensure message
retention 
 Radio is a background medium. Most listeners are doing something else while listening,
which means that your ad has to work hard to get their attention

Television

Advantages

 Television permits you to reach large numbers of people on a national or regional level in
a short period of time 
 Independent stations and cable offer new opportunities to pinpoint local audiences 
 Television being an image-building and visual medium, it offers the ability to convey your
message with sight, sound and motion

Disadvantages

 Message is temporary, and may require multiple exposure for the ad to rise above the
clutter 
 Ads on network affiliates are concentrated in local news broadcasts and station breaks 
 Preferred ad times are often sold out far in advance 
 Limited length of exposure, as most ads are only thirty seconds long or less, which limits
the amount of information you can communicate 
 Relatively expensive in terms of creative, production and airtime costs

Direct Mail. Direct mail, often called direct marketing or direct response marketing, is a
marketing technique in which the seller sends marketing messages directly to the buyer.
Direct mail include catalogs or other product literature with ordering opportunities; sales
letters; and sales letters with brochures.
Advantages

 Your advertising message is targeted to those most likely to buy your product or service. 
 Marketing message can be personalized, thus helping increase positive response. 
 Your message can be as long as is necessary to fully tell your story. 
 Effectiveness of response to the campaign can be easily measured. 
 You have total control over the presentation of your advertising message. 
 Your ad campaign is hidden from your competitors until it's too late for them to react 
 Active involvement - the act of opening the mail and reading it -- can be elicited from the
target market.

Disadvantages

 Some people do not like receiving offers in their mail, and throw them immediately
without even opening the mail. 
 Resources need to be allocated in the maintenance of lists, as the success of this kind of
promotional campaign depends on the quality of your mailing list. 
 Long lead times are required for creative printing and mailing 
 Producing direct mail materials entail the expense of using various professionals -
copywriter, artists, photographers, printers, etc. 
 Can be expensive, depending on your target market, quality of your list and size of the
campaign.

Telemarketing. Telephone sales, or telemarketing, is an effective system for introducing a

company to a prospect and setting up appointments.

Advantages

 Provides a venue where you can easily interact with the prospect, answering any
questions or concerns they may have about your product or service. 
 It's easy to prospect and find the right person to talk to. 
 It's cost-effective compared to direct sales. 
 Results are highly measurable. 
 You can get a lot of information across if your script is properly structured. 
 If outsourcing, set-up cost is minimal 
 Increased efficiency since you can reach many more prospects by phone than you can
with in-person sales calls. 
 Great tool to improve relationship and maintain contact with existing customers, as well
as to introduce new products to them 
 Makes it easy to expand sales territory as the phone allows you to call local, national and
even global prospects.

Disadvantages

 An increasing number of people have become averse to telemarketing. 

 More people are using technology to screen out unwanted callers, particularly
telemarketers 
 Government is implementing tougher measures to curb unscrupulous telemarketers 
 Lots of businesses use telemarketing. 
 If hiring an outside firm to do telemarketing, there is lesser control in the process given
that the people doing the calls are not your employees 
  May need to hire a professional to prepare a well-crafted and effective script 
 It can be extremely expensive, particularly if the telemarketing is outsourced to an
outside firm 
 It is most appropriate for high-ticket retail items or professional services.

Specialty Advertising. This kind of advertising entails the use of imprinted, useful, or
decorative products called advertising specialties, such as key chains, computer mouse, mugs,
etc. These articles are distributed for free; recipients need not purchase or make a contribution to
receive these items.

Advantages

 Flexibility of use 
 High selectivity factor as these items can be distributed only to the target market. 
 If done well, target audience may decide to keep the items, hence promoting long
retention and constant exposure 
 Availability of wide range of inexpensive items that can be purchased at a low price. 
 They can create instant awareness. 
 They can generate goodwill in receiver 
 The items can be used to supplement other promotional efforts and media (e.g.
distributed during trade shows).

Disadvantages

 Targeting your market is difficult. 

 This can be an inappropriate medium for some businesses. 
 It is difficult to find items that are appropriate for certain businesses 
 Longer lead time in developing the message and promotional product
 Possibility of saturation in some items and audiences 
 Wrong choice of product or poor creative may cheapen the image of advertiser

Source: "How to Start and Operate a Successful Small Business: Winning the Entrepreneurial
Game" by David E. Rye; and contributions from PowerHomeBiz.com writers.

 
ab

MARKETING COMMUNICATION

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As the term suggests, marketing communication functions within a marketing framework.

Traditionally known as the promotional element of the four Ps of marketing (product, place,
price, and promotion), the primary goal of marketing communication is to reach a defined
audience to affect its behavior by informing, persuading, and reminding. Marketing
communication acquires new customers for brands by building awareness and encouraging trial.
Marketing communication also maintains a brand's current customer base by reinforcing their
purchase behavior by providing additional information about the brand's benefits. A secondary
goal of marketing communication is building and reinforcing relationships with customers,
prospects, retailers, and other important stakeholders.

Successful marketing communication relies on a combination of options called the promotional

mix. These options include advertising, sales promotion, public relations, direct marketing, and
personal selling. The Internet has also become a powerful tool for reaching certain important
audiences. The role each element takes in a marketing communication program relies in part on
whether a company employs a push strategy or a pull strategy. A pull strategy relies more on
consumer demand than personal selling for the product to travel from the manufacturer to the
end user. The demand generated by advertising, public relations, and sales promotion "pulls" the
good or service through the channels of distribution. A push strategy, on the other hand,
emphasizes personal selling to push the product through these channels.

Figure 1
Elements of Marketing Communication
For marketing communication to be successful, however, sound management decisions must be
made in the other three areas of the marketing mix: the product, service or idea itself; the price at
which the brand will be offered; and the places at or through which customers may purchase the
brand. The best promotion cannot overcome poor product quality, inordinately high prices, or
insufficient retail distribution.

Likewise, successful marketing communication relies on sound management decisions regarding

the coordination of the various elements of the promotional mix. To this end, a new way of
viewing marketing communication emerged in the 1990s. Called integrated marketing
communication, this perspective seeks to orchestrate the use of all forms of the promotional mix
to reach customers at different levels in new and better ways.

INTEGRATED MARKETING
COMMUNICATION

The evolution of this new perspective has two origins. Marketers began to realize that
advertising, public relations, and sales were often at odds regarding responsibilities, budgets,
management input and myriad other decisions affecting the successful marketing of a brand.
Executives in each area competed with the others for resources and a voice in decision making.
The outcome was inconsistent promotional efforts, wasted money, counterproductive
management decisions, and, perhaps worst of all, confusion among consumers.

Secondly, the marketing perspective itself began to shift from being market oriented to market
driven. Marketing communication was traditionally viewed as an inside-out way of presenting
the company's messages. Advertising was the dominant element in the promotional mix because
the mass media could effectively deliver a sales message to a mass audience. But then the mass
market began to fragment. Consumers became better educated and more skeptical about
advertising. A variety of sources, both controlled by the marketer and uncontrolled, became
important to consumers. News reports, word-of-mouth, experts' opinions, and financial reports
were just some of the "brand contacts" consumers began to use to learn about and form attitudes
and opinions about a brand or company, or make purchase decisions. Advertising began to lose
some of its luster in terms of its ability to deliver huge homogeneous audiences. Companies
began to seek new ways to coordinate the multiplicity of product and company messages being
issued and used by consumers and others.

Thus, two ideas permeate integrated marketing communication: relationship building and
synergy. Rather than the traditional inside-out view, IMC is seen as an outside-in perspective.
Customers are viewed not as targets but as partners in an ongoing relationship. Customers,
prospects, and others encounter the brand and company through a host of sources and create
from these various contacts ideas about the brand and company. By knowing the media habits
and lifestyles of important consumer segments, marketers can tailor messages through media that
are most likely to reach these segments at times when these segments are most likely to be
receptive to these messages, thus optimizing the marketing communication effort.

Ideally, IMC is implemented by developing comprehensive databases on customers and

prospects, segmenting these current and potential customers into groups with certain common
awareness levels, predispositions, and behaviors, and developing messages and media strategies
that guide the communication tactics to meet marketing objectives. In doing this, IMC builds and
reinforces mutually profitable relationships with customers and other important stakeholders and
generates synergy by coordinating all elements in the promotional mix into a program that
possesses clarity, consistency, and maximum impact.

Practitioners and academics alike, however, have noted the difficulty of effectively
implementing IMC. Defining exactly what IMC is has been difficult. For example, merely
coordinating messages so that speaking "with one clear voice" in all promotional efforts does not
fully capture the meaning of IMC. Also, changing the organization to accommodate the
integrated approach has challenged the command and control structure of many organizations.
However, studies suggest that IMC is viewed by a vast majority of marketing executives as
having the greatest potential impact on their company's marketing strategies, more so than the
economy, pricing, and globalization.

ADVERTISING

Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by

an identified sponsor; and it is disseminated through mass channels of communication.
Advertising messages may promote the adoption of goods, services, persons, or ideas. Because
the sales message is disseminated through the mass media—as opposed to personal selling—it is
viewed as a much cheaper way of reaching consumers. However, its non-personal nature means
it lacks the ability to tailor the sales message to the message recipient and, more importantly,
actually get the sale. Therefore, advertising effects are best measured in terms of increasing
awareness and changing attitudes and opinions, not creating sales. Advertising's contribution to
sales is difficult to isolate because many factors influence sales. The contribution advertising
makes to sales are best viewed over the long run. The exception to this thinking is within the
internet arena. While banner ads, pop-ups and interstitials should still be viewed as brand
promoting and not necessarily sales drivers, technology provides the ability to track how many
of a website's visitors click the banner, investigate a product, request more information, and
ultimately make a purchase.

Through the use of symbols and images advertising can help differentiate products and services
that are otherwise similar. Advertising also helps create and maintain brand equity. Brand equity
is an intangible asset that results from a favorable image, impressions of differentiation, or
consumer attachment to the company, brand, or trademark. This equity translates into greater
sales volume, and/or higher margins, thus greater competitive advantage. Brand equity is
established and maintained through advertising that focuses on image, product attributes, service,
or other features of the company and its products or services.

Cost is the greatest disadvantage of advertising. The average cost for a 30-second spot on
network television increased fivefold between 1980 and 2005. Plus, the average cost of
producing a 30-second ad for network television is quite expensive. It is not uncommon for a
national advertiser to spend in the millions of dollars for one 30-second commercial to be
produced. Add more millions on top of that if celebrity talent is utilized.
Credibility and clutter are other disadvantages. Consumers have become increasingly skeptical
about advertising messages and tend to resent advertisers' attempt to persuade. Advertising is
everywhere, from network television, to daily newspapers, to roadside billboards, to golf course
signs, to stickers on fruit in grocery stores. Clutter encourages consumers to ignore many
advertising messages. New media are emerging, such as DVRs (digital video recorders) which
allow consumers to record programs and then skip commercials, and satellite radio which
provides a majority of its channels advertising free.

PUBLIC RELATIONS

Public relations is defined as a management function which identifies, establishes, and maintains
mutually beneficial relationships between an organization and the publics upon which its success
or failure depends. Whereas advertising is a one-way communication from sender (the marketer)
to the receiver (the consumer or the retail trade), public relations considers multiple audiences
(consumers, employees, suppliers, vendors, etc.) and uses two-way communication to monitor
feedback and adjust both its message and the organization's actions for maximum benefit. A
primary tool used by public relations practitioners is publicity. Publicity capitalizes on the news
value of a product, service, idea, person or event so that the information can be disseminated
through the news media. This third party "endorsement" by the news media provides a vital
boost to the marketing communication message: credibility. Articles in the media are perceived
as being more objective than advertisements, and their messages are more likely to be absorbed
and believed. For example, after the CBS newsmagazine 60 Minutes reported in the early 1990s
that drinking moderate amounts of red wine could prevent heart attacks by lowering cholesterol,
red wine sales in the United States increased 50 percent. Another benefit publicity offers is that it
is free, not considering the great amount of effort it can require to get out-bound publicity
noticed and picked up by media sources.

Public relations' role in the promotional mix is becoming more important because of what Philip
Kotler describes as an "over communicated society." Consumers develop "communication-
avoidance routines" where they are likely to tune out commercial messages. As advertising loses
some of its cost-effectiveness, marketers are turning to news coverage, events, and community
programs to help disseminate their product and company messages. Some consumers may also
base their purchase decisions on the image of the company, for example, how environmentally
responsible the company is. In this regard, public relations plays an important role in presenting,
through news reports, sponsorships, "advertorials" (a form of advertising that instead of selling a
product or service promotes the company's views regarding current issues), and other forms of
communication, what the company stands for.

DIRECT MARKETING AND

DATABASE MARKETING
DIRECT MARKETING.

Direct marketing, the oldest form of marketing, is the process of communicating directly with
target customers to encourage response by telephone, mail, electronic means, or personal visit.
Users of direct marketing include retailers, wholesalers, manufacturers, and service providers,
and they use a variety of methods including direct mail, telemarketing, direct-response
advertising, online computer shopping services, cable shopping networks, and infomercials.
Traditionally not viewed as an element in the promotional mix, direct marketing represents one
of the most profound changes in marketing and promotion in the last 25 years. Aspects of direct
marketing, which includes direct response advertising and direct mail advertising as well as the
various research and support activities necessary for their implementation, have been adopted by
virtually all companies engaged in marketing products, services, ideas, or persons.

Direct marketing has become an important part of many marketing communication programs for
three reasons. First, the number of two-income households has increased dramatically. About six
in every ten women in the United States work outside the home. This has reduced the amount of
time families have for shopping trips. Secondly, more shoppers than ever before rely on credit
cards for payment of goods and services. These cashless transactions make products easier and
faster to purchase. Finally, technological advances in telecommunications and computers allow
consumers to make purchases from their homes via telephone, television, or computer with ease
and safety. These three factors have dramatically altered the purchasing habits of American
consumers and made direct marketing a growing field worldwide.

Direct marketing allows a company to target more precisely a segment of customers and
prospects with a sales message tailored to their specific needs and characteristics. Unlike
advertising and public relations, whose connections to actual sales are tenuous or nebulous at
best, direct marketing offers accountability by providing tangible results. The economics of
direct marketing have also improved over the years as more information is gathered about
customers and prospects. By identifying those consumers they can serve more effectively and
profitably, companies may be more efficient in their marketing efforts. Whereas network
television in the past offered opportunities to reach huge groups of consumers at a low cost per
thousand, direct marketing can reach individual consumers and develop a relationship with each
of them.

Research indicates that brands with strong brand equity are more successful in direct marketing
efforts than little-known brands. Direct marketing, then, works best when other marketing
communication such as traditional media advertising supports the direct marketing effort.

Direct marketing has its drawbacks also. Just as consumers built resistance to the persuasive
nature of advertising, so have they with direct marketing efforts. Direct marketers have
responded by being less sales oriented and more relationship oriented. Also, just as consumers
grew weary of advertising clutter, so have they with the direct marketing efforts. Consumers are
bombarded with mail, infomercials, and telemarketing pitches daily. Some direct marketers have
responded by regarding privacy as a customer service benefit. Direct marketers must also
overcome consumer mistrust of direct marketing efforts due to incidents of illegal behavior by
companies and individuals using direct marketing. The U.S. Postal Service, the Federal Trade
Commission, and other federal and state agencies may prosecute criminal acts. The industry then
risks legislation regulating the behavior of direct marketers if it is not successful in self-
regulation. The Direct Marketing Association, the leading trade organization for direct
marketing, works with companies and government agencies to initiate self-regulation. In March
of 2003 the National Do Not Call Registry went into affect whereby consumers added their
names to a list that telemarketers had to eliminate from their out-bound call database.

DATABASE MARKETING.

Database marketing is a form of direct marketing that attempts to gain and reinforce sales
transactions while at the same time being customer driven. Successful database marketing
continually updates lists of prospects and customers by identifying who they are, what they are
like, and what they are purchasing now or may be purchasing in the future. By using database
marketing, marketers can develop products and/or product packages to meet their customers'
needs or develop creative and media strategies that match their tastes, values, and lifestyles. Like
IMC, database marketing is viewed by many marketers as supplanting traditional marketing
strategies and is a major component of most IMC programs.

At the core of database marketing is the idea that market segments are constantly shifting and
changing. People who may be considered current customers, potential customers, and former
customers and people who are likely never to be customers are constantly changing. By
identifying these various segments and developing a working knowledge of their wants, needs,
and characteristics, marketers can reduce the cost of reaching non-prospects and build customer
loyalty. Perhaps the most important role of database marketing is its ability to retain customers.
The cumulative profit for a five-year loyal customer is between seven and eight times the first-
year profit.

Since database marketing is expensive to develop and complex to implement effectively,

companies considering database marketing should consider three important questions. First, do
relatively frequent purchasers or high dollar volume purchasers for the brand exist? Secondly, is
the market diverse enough so that segmenting into subgroups would be beneficial? Finally, are
there customers that represent opportunities for higher volume purchases?

SALES PROMOTION/SPONSORSHIPS/
EXHIBITIONS
SALES PROMOTION.

Sales promotions are direct inducements that offer extra incentives to enhance or accelerate the
product's movement from producer to consumer. Sales promotions may be directed at the
consumer or the trade. Consumer promotions such as coupons, sampling, premiums,
sweepstakes, price packs (packs that offer greater quantity or lower cost than normal), low-cost
financing deals, and rebates are purchase incentives in that they induce product trial and
encourage repurchase. Consumer promotions may also include incentives to visit a retail
establishment or request additional information. Trade promotions include slotting allowances
("buying" shelf space in retail stores), allowances for featuring the brand in retail advertising,
display and merchandising allowances, buying allowances (volume discounts and other volume-
oriented incentives), bill back allowances (pay-for-performance incentives), incentives to
salespeople, and other tactics to encourage retailers to carry the item and to push the brand.
Two perspectives may be found among marketers regarding sales promotion. First, sales
promotion is supplemental to advertising in that it binds the role of advertising with personal
selling. This view regards sales promotion as a minor player in the marketing communication
program. A second view regards sales promotion and advertising as distinct functions with
objectives and strategies very different from each other. Sales promotion in this sense is equal to
or even more important than advertising. Some companies allocate as much as 75 percent of their
advertising/promotion dollars to sales promotion and just 25 percent to advertising. Finding the
right balance is often a difficult task. The main purpose of sales promotion is to spur action.
Advertising sets up the deal by developing a brand reputation and building market value. Sales
promotion helps close the deal by providing incentives that build market volume.

Sales promotions can motivate customers to select a particular brand, especially when brands
appear to be equal, and they can produce more immediate and measurable results than
advertising. However, too heavy a reliance on sales promotions results in "deal-prone"
consumers with little brand loyalty and too much price sensitivity. Sales promotions can also
force competitors to offer similar inducements, with sales and profits suffering for everyone.

SPONSORSHIPS.

Sponsorships, or event marketing, combine advertising and sales promotions with public
relations. Sponsorships increase awareness of a company or product, build loyalty with a specific
target audience, help differentiate a product from its competitors, provide merchandising
opportunities, demonstrate commitment to a community or ethnic group, or impact the bottom
line. Like advertising, sponsorships are initiated to build long-term associations. Organizations
sometimes compare sponsorships with advertising by using gross impressions or cost-per-
thousand measurements. However, the value of sponsorships can be very difficult to measure.
Companies considering sponsorships should consider the short-term public relations value of
sponsorships and the long-term goals of the organization. Sports sponsorships make up about
two-thirds of all sponsorships.

EXHIBITS.

Exhibits, or trade shows, are hybrid forms of promotion between business-to-business

advertising and personal selling. Trade shows provide opportunities for face-to-face contact with
prospects, enable new companies to create a viable customer base in a short period of time, and
allow small and midsize companies that may not be visited on a regular basis by salespeople to
become familiar with suppliers and vendors. Because many trade shows generate media
attention, they have also become popular venues for introducing new products and providing a
stage for executives to gain visibility.

PERSONAL SELLING

Personal selling includes all person-to-person contact with customers with the purpose of
introducing the product to the customer, convincing him or her of the product's value, and
closing the sale. The role of personal selling varies from organization to organization, depending
on the nature and size of the company, the industry, and the products or services it is marketing.
Many marketing executives realize that both sales and non-sales employees act as salespeople
for their organization in one way or another. One study that perhaps supports this contention
found that marketing executives predicted greater emphasis being placed on sales management
and personal selling in their organization than on any other promotional mix element. These
organizations have launched training sessions that show employees how they act as salespeople
for the organization and how they can improve their interpersonal skills with clients, customers,
and prospects. Employee reward programs now reward employees for their efforts in this regard.

Personal selling is the most effective way to make a sale because of the interpersonal
communication between the salesperson and the prospect. Messages can be tailored to particular
situations, immediate feedback can be processed, and message strategies can be changed to
accommodate the feedback. However, personal selling is the most expensive way to make a sale,
with the average cost per sales call ranging from $235 to $332 and the average number of sales
calls needed to close a deal being between three and six personal calls.

Sales and marketing management classifies salespersons into one of three groups: creative
selling, order taking, and missionary sales reps. Creative selling jobs require the most skills and
preparation. They are the "point person" for the sales function. They prospect for customers,
analyze situations, determine how their company can satisfy wants and needs of prospects, and,
most importantly, get an order. Order takers take over after the initial order is received. They
handle repeat purchases (straight rebuys) and modified rebuys. Missionary sales reps service
accounts by introducing new products, promotions, and other programs. Orders are taken by
order takers or by distributors.

INTERNET MARKETING

Just as direct marketing has become a prominent player in the promotional mix, so too has the
Internet. Virtually unheard of in the 1980s, the 1990s saw this new medium explode onto the
scene, being adopted by families, businesses and other organizations more quickly than any other
medium in history. Web sites provide a new way of transmitting information, entertainment, and
advertising, and have generated a new dimension in marketing: electronic commerce. E-
commerce is the term used to describe the act of selling goods and services over the Internet. In
other words, the Internet has become more that a communication channel; it is a marketing
channel itself with companies such as Amazon.com, CDNow, eBay, and others selling goods via
the Internet to individuals around the globe. In less than 10 years advertising expenditures on the
Internet will rival those for radio and outdoor. Public relations practitioners realize the value that
web sites offer in establishing and maintaining relationships with important publics. For
example, company and product information can be posted on the company's site for news
reporters researching stories and for current and potential customers seeking information.
Political candidates have web sites that provide information about their background and their
political experience.

The interactivity of the Internet is perhaps its greatest asset. By communicating with customers,
prospects, and others one-on-one, firms can build databases that help them meet specific needs of
individuals, thus building a loyal customer base. Because the cost of entry is negligible, the
Internet is cluttered with web sites. However, this clutter does not present the same kind of
problem that advertising clutter does. Advertising and most other forms of promotion assume a
passive audience that will be exposed to marketing communication messages via the mass media
or mail regardless of their receptivity. Web sites require audiences who are active in the
information-seeking process to purposely visit the site. Therefore, the quality and freshness of
content is vital for the success of the web site.

THE FUTURE OF MARKETING

COMMUNICATION

Marketing communication has become an integral part of the social and economic system in the
United States. Consumers rely on the information from marketing communication to make wise
purchase decisions. Businesses, ranging from multinational corporations to small retailers,
depend on marketing communication to sell their goods and services. Marketing communication
has also become an important player in the life of a business. Marketing communication helps
move products, services, and ideas from manufacturers to end users and builds and maintains
relationships with customers, prospects, and other important stakeholders in the company.
Advertising and sales promotion will continue to play important roles in marketing
communication mix. However, marketing strategies that stress relationship building in addition
to producing sales will force marketers to consider all the elements in the marketing
communication mix. In the future new information gathering techniques will help marketers
target more precisely customers and prospects using direct marketing strategies. New media
technologies will provide businesses and consumers new ways to establish and reinforce
relationships that are important for the success of the firm and important for consumers as they
make purchase decisions. The Internet will become a major force in how organizations
communicate with a variety of constituents, customers, clients, and other interested parties

Read more: Marketing Communication - strategy, organization, levels, system, company, disadvantages,
business, system, Integrated marketing communication, Advertising, Public relations, Direct marketing
and database marketing http://www.referenceforbusiness.com/management/Log-Mar/Marketing-
Communication.html#ixzz1A4CETbZn
http://www.scribd.com/doc/37292283/Chap-001