McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 17Relationship Building:

Direct Marketing, Personal Selling, and

Sales Promotion

17-2

Chapter Overview

The importance of relationship marketing & integrating marketing communications with advertising

17-3

Chapter ObjectivesDiscuss the importance

of relationship marketing & IMC

Describe the pros & cons of personal selling

Identify benefits & draw-backs of sales

promotion

Define direct marketing and its role in IMC

Explain the importance of databases to direct

marketers

Define sales promotion & its importance as a communication tool

Discuss the role of personal selling in IMC

Explain push & pull strategies and give examples of each

17-4

Relationship Marketing & IMC

Advertising can create an image, but a reputation must be earned

17-5

Understanding Direct Marketing

Direct marketing is . . .

To effect a measurable response

and/or transaction

A measurable system

of interactive marketing

Using one or more

advertising media

With this activity

stored in a database

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Direct Marketing Companies

17-7

Marketing Databases

Marketing databases enable marketers to. . .

Target, segment, and grade customers

Store key customer information

Record customer & channel transactions

Measure efficiency of direct-response ads

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Marketing Databases

Data Management

DataAccess

Two Processes

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Direct Marketing’s Role in IMC

RFM is a mathematical formula that helps determinethe most valuable customers in a company’s database

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Direct Marketing’s Role in IMCDrawbacks to Direct Marketing

Negative, sales-oriented reputation

Consumers enjoy visiting retail stores to shop

Hesitation to buy goods not seen, touched, tried

Clutter

Privacy concerns

Lack of prestige

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Direct Marketing Activities

Personal direct selling

Telemarketing

Direct Sales

17-12

Direct Marketing ActivitiesE-mail

Brochures

Sales letters

Self-mailers

Postcards

Statement stuffers

Folders

House organsDirect-Mail Advertising

17-13

Direct Marketing Advertising

Flexibility

Control

Selectivity Personal impact

Coverage & reach Exclusivity

Pros

Response

Testability

17-14

Direct Marketing Advertising

Lack of content support

Selectivity problems

High cost per exposure

Negative attitudes

Delivery problems

Environmental concerns

Anti-spam lawsCons

17-15

Buying Direct-Mail AdvertisingAcquire direct-mail lists House

Mail-response

Compiled

Consider a list broker Charges a commission

Tailors the list

Improves list quality

17-16

Buying Direct-Mail Advertising

Distribute the package

Weight affects costs and delivery method

Produce the package

Designer

Writer

Letter shop

17-17

Catalog SalesCatalog salesmake up the

largest portion of direct

marketing

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Catalog Sales

Top 10 catalog companies

17-19

Direct Response Broadcast Ads

More people are watching infomericals and buying products

17-20

Direct Response Broadcast Ads

Television is a powerful instrument for direct marketers

17-21

Personal SellingThe Human Medium See the people

Most expensive

Long-term benefits

Personal Selling depends on the…

Type of business

Product or service

Business strategy

17-22

Personal Selling Drawbacks

Labor intensive

Costly

Time consuming

Few economies of scale

Poor reputation of sales

Finding good salespeople

17-23

Personal Selling in IMC

Communication functions of sales reps

Building Client

Relationships

GatheringInformation

for Company

FulfillingCustomer

Orders

Providing Information to

Customers

17-24

Sales Promotion in IMCValue-added tool to accelerate product’smovement from producer to consumer

Rebate Sweepstakesor contestCoupon “Freebie”

SponsorshipSpecialpricing

Negative Effect on

Brand Value

Positive Effect on

Brand Volume

17-25

Sales Promotion in IMCSnapple used

sales promotion and product

positioning to advertise its

Mango Madness flavor

17-26

Strategies & Tactics

Push Promotions

Slotting Allowances Trade Deals

Display Allowances Buyback Allowances

Allowances Meetings/Conventions

Premiums & Contests

Push Money & Spiffs

Co-op Advertising

17-27

Strategies & TacticsPayne Heating

and Cooling uses trade

promotion to increase

distribution

17-28

Strategies & TacticsManufacturers

often pay a display

allowance for in-store exhibits

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Strategies & Tactics

Pull Promotions

P-O-P Materials VIP Cards

Refunds & Rebates Sampling

Combination Offers

Coupons

Contest/Sweepstakes

Premiums

17-30

Strategies & Tactics

Effectiveness of various promotions