chapter19 albert onglopez

www. facebook.com/v65ASMPHMarkma

Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling

Albert Macaire C. Ong LopezASMPH YL8

Chapter 19…

From mass communication

to more targeted, two-way communication


Outline ADirect marketing is…

1. Use of consumer-direct channels w/o using marketing middleman.

2. Beneficial in a lot of ways.3. Can be characterized by different

direct marketing channels.


Outline BInteractive marketing is…

4. Uses online communication a.k.a. The Internet to interact with customers5. Has its own advantages and disadvantages6. Has different forms


Outline CMobile marketing is…

7. Uses cellphones/smartphones as a medium for advertisers to reach consumers


Outline DWord of Mouth is…

8. Positive word of mouth sometimes happens organically, but can also be managed and facilitated.9. There are 3 main platforms for social media.10. Can be highlighted in two forms: buzz and viral marketing


Outline ESales Force is…

11. The original and oldest form of direct marketing 12. In designing the sales force, the company must develop sales force objective and strategy 13. Cont. sales force structure14. Cont. sales force size15. Cont. sales force compensation16. There are 6 steps in any effective sales process


Direct marketing concept 1:

Direct marketing is use of consumer-direct channels w/o using marketing middleman.

Examples of consumer-direct channels:• direct mail• catalog marketing• telemarketing• interactive TV• kiosks• websites• mobile devices



Direct marketing is beneficial in a lot ways.

• Promotes market demassification: building a customized, personalized, continuous relationship with each customer

• Can reach prospects at the moment they want a solicitation: customers look for you

• Makes the direct marketer’s offer and strategy less visible to competitors

• Can measure responses to their campaigns: which have been the most profitable


Concept 2

Direct marketing is beneficial in a lot ways. (p.536)

Kotler: L.L. Bean

Local: Metrobank, BDO credit cards-rewards program; Zalora, online fashion store

RP medical application: Health insurance- PhilHealth



Can be characterized by different marketing channels.

• Direct mailing: sending an offer, announcement, reminder, or other item to an individual customer (i.e. letters, flyers, foldouts, DVDs)– Objectives: order-response rate– Target market and prospect: RFM formula (recency, frequency,

monetary amount) or identify on basis of age, sex, income, education, previous purchases, occasion

– Offer elements (5): the product, the offer, the medium, the distribution method, the creative strategy

– Testing elements: beyond the response rates, measure the impact of d.m. on awareness, intention to buy, & word of mouth

– Measuring campaign success: Lifetime value = Ave. customer longevity, ave. customer annual expenditure, annual gross margin - ave. cost of customer acquisition and maintenance



Can be characterized by different marketing channels.

• Catalog marketing: can be in print form, DVDs, or online– Full-line merchandise catalogs– Specialty consumer catalogs– Business catalogs

• Telemarketing: use of telephones and call centers to attract prospects, sell to existing customers, and provide service by taking orders and answering questions– Inbound telemarketing: receiving calls from customers– Outbound telemarketing: initiating calls to prospects and customers

• Others: newspapers, magazines, radio, at-home shopping channels + toll-free number, infomercials


Interactive marketing concept 4:

Interactive marketing uses online communication a.k.a. the internet to interact with customers.

• The internet provides marketers and consumers with opportunities for much greater interaction and individualization.

• Some interactive marketing communication options:– Websites– Search ads– Display ads– Emails


Concept 4

Interactive marketing uses online communication a.k.a. the internet to interact with customers. (p.541)

Kotler: Burger King

Local: sulit.ph ; olx.ph ; PC express

RP medical application: Mercury Drug order online



Interactive marketing has its own advantages and disadvantages.

• Advantages:– Companies can send tailored messages that engage

customers: reflect their special interests and behaviors– Internet is highly accountable: effects can easily be traced– Marketers can turn the online community as a long-term asset– The Web offers contextual placement: buying ads on sites

related to the marketer’s offerings– Marketers can place advertisements based on keywords from

search engines• Disdvantages:

– Consumers can effectively screen out most messages– Advertisers can lose some control over their online messages

through hacking and vandalizing



Interactive marketing has different forms.

• Websites: The 7Cs of an Effective Website(1) Context. Layout and design

(2) Content. Text, pictures, sound, and video the site contains

(3) Community. How the site enables user-to-user communication

(4) Customization. Site’s ability to tailor itself to different users or to allow users to personalize the site

(5) Communication. How the site enables site-to-user, user-to-site, or two-way communication

(6) Connection. Degree that the site is linked to other sites

(7) Commerce. Site’s capabilities to enable commercial transactions



Interactive marketing has different forms.

• Search ads– Paid search: marketers bid in a continuous auction on search terms

that serve as a proxy for the consumer’s product or consumption interests

– Pay-per-click ads: advertisers pay only if people click on ads• Display ads/banner ads

– Small, rectangular boxes containing text or picture that companies pay to place on relevant Web sites

• Interstitials– Advertisement video or animation which pop up between changes

on a website• Podcasts

– Digital media files created for playback on portable MP3 players, laptops, or PCs

• Emails


Mobile marketing concept 7:Mobile marketing uses cellphones/smartphones as a medium for advertisers to reach consumers

• Cellphones/smartphones also known as the “third screen” (TV first, computer second)

• Mobile marketing options:– SMS text messages– Simple display ads– Mobile apps

• Kotler: Volkswagen GTI model on an iPhone app (Real Racing Game)

• Local: MIMS Gateway mobile


Word of Mouth concept 8:Word of mouth sometimes happens organically, but can also be managed and facilitated.

• Consumers use word of mouth to talk about dozens of brands each day.

• It is particularly effective for smaller businesses, with whom customers may feel a more personal relationship.

• Nowadays: Use of social media to get the word out.• Kotler: Intuit• Local: Facebook, Twitter


Word of Mouth concept 9:There are 3 main platforms for social media

• (1) Online communities and forums– Created by consumers or group of consumers without commercial

interests or company affiliations– Others: can also be sponsored by a company

• (2) Blogs– Regularly updated online journals or diaries

• (3) Social Networks– Major ones: Facebook, MySpace, LinkedIn, Twitter


Word of Mouth concept 10:Word of mouth can be highlighted in two forms: buzz and viral marketing

• Buzz marketing:– Generates excitement, creates publicity, and conveys new relevant

brand-related information through unexpected, or even outrageous means

– Kotler: BzzAgent– Others: ALS Ice Bucket challenge

• Viral marketing:– Also known as “word of mouse”, it encourages consumers to pass

along company-developed products and services or audio, video, or written information to others online

– Local: Unicef Philippines- donations, relief efforts

• User-generated content sites: Youtube, MySpace Video, Google video


Sales Force concept 11:Sales Force is the original and oldest form of direct marketing.

• Sales people are the company’s personal link to its customers.• It covers six positions, ranging from the least to the most

creative types of selling.1. Deliverer—A salesperson whose major task is the delivery of a product (water, fuel, oil).

2. Order taker—An inside order taker (standing behind the counter) or outside order taker (calling on the supermarket manager).

3. Missionary—A salesperson not permitted to take an order but expected rather to build goodwill or educate the actual or potential user (the medical “detailer” representing an ethical pharmaceutical house).

4. Technician—A salesperson with a high level of technical knowledge (the engineering salesperson who is primarily a consultant to client companies).

5. Demand creator—A salesperson who relies on creative methods for selling tangible products (vacuum cleaners, cleaning brushes, household products) or intangibles (insurance, advertising services, or education).

6. Solution vendor—A salesperson whose expertise is solving a customer’s problem, often with a system of the company’s products and services (for example, computer and communication systems)


Sales Force Concept 11

Sales Force is the original and oldest form of direct marketing.(p.553)

Kotler: SoBe, AllState, Amway, Tupperware

Local: Avon Philippines, Sun Life Financial

RP medical application: Sales reps, pharma companies


Sales Force concept 12:In designing a sales force, the company must develop sales force objectives and strategy.

• Sales reps need to know how to diagnose a customer’s problem and propose a solution that can help improve the company’s profitability.– Example: Sales reps to spend 80% of the time with current customers and

20% with prospects• Companies must deploy sales forces strategically so they call

on the right customers at the right time in the right way.• Once the company chooses its strategy, it can use a direct or

indirect sales force.– Direct sales force: consists of full- or part-time employees who work

exclusively for the company– Indirect sales force: consists of manufacturers’ reps, sales agents, brokers,

who earn a commission based on sales.


Sales Force concept 13:In designing a sales force, the company must develop sales force structure

• Developing a sales force structure consists of many types such as:– Territorial structure– Product or market structure

• Kotler : Motorola, manages 4 types of sales force:– (1) Strategic market sales force: technical, applications, quality

engineers, service personnel assigned to major accounts– (2) A geographic sales force calling on thousands of customers in

different territories– (3) A distributor sales force calling on and coaching Motorola

distributors; and – (4) An inside sales force doing telemarketing and taking orders

via phone and fax.

• Local: Philippine-based call centers - inside sales force


Sales Force concept 14:In designing a sales force, the company must develop sales force size

• Sales reps are one of the company’s most productive and expensive assets.

• Increasing their number increases both sales and costs. • Once the company establishes the number of customers it

wants to reach, it can use a workload approach to establish sales force size. This method has five steps:1. Group customers into size classes according to annual sales volume.

2. Establish desirable call frequencies (number of calls on an account per year) for each customer class.

3. Multiply the number of accounts in each size class by the corresponding call frequency to arrive at the total workload for the country, in sales calls per year.

4. Determine the average number of calls a sales rep can make per year.

5. Divide the total annual calls required by the average annual calls made by a sales representative to arrive at the number of sales representatives needed.


Sales Force concept 15:In designing a sales force, the company must develop sales force compensation

• To attract top-quality reps, the company must develop an attractive compensation package.

• Sales reps want income regularity, extra reward for above-average performance, and fair pay for experience and longevity.

• Four components of sales force compensation:– (1) Fixed amount: a salary, satisfies the need for income stability. – (2) Variable amount: whether commissions, bonus, or profit sharing,

serves to stimulate and reward effort. – (3) Expense allowances: enable sales reps to meet the expenses of

travel and entertaining. – (4) Benefits: such as paid vacations, sickness or accident benefits,

pensions, and life insurance, provide security and job satisfaction.


Sales Force concept 16:There are 6 steps in any effective sales process.

• Step 1: Prospecting and qualifying– Identify and qualify prospects

• Step 2: Preapproach– Learn as much as possible about the prospect company and its

buyers– Understand the purchasing process

• Step 3: Presentation and Demonstration– Tell the product story to the buyer using a features, advantages,

benefits, and value (FABV) approach


Sales Force concept 16:There are 6 steps in any effective sales process.

• Step 4: Overcoming objections– Maintain a positive approach – Ask the buyer to clarify the objection, questions in such a way that the buyer

answers his own objection, denies the validity of the objection, or turns it into a reason for buying.

• Step 5: Closing– Closing signs from the buyer: physical actions, statements or comments,

and questions– Reps can ask for the order, recapitulate the points of agreement, offer to

help write up the order, ask whether the buyer wants A or B, get the buyer to make minor choices such as color or size, or indicate what the buyer will lose by not placing the order now.

• Step 6: Follow-up and maintenance– Necessary to ensure customer satisfaction and repeat business– Company seeks a long- term-supplier-customer relationship


• Direct marketing is use of consumer-direct channels w/o using marketing middleman.

• Direct marketing is beneficial in a lot ways.• It can be characterized by different marketing

channels. • Interactive marketing uses online communication

a.k.a. the internet to interact with customers.• Interactive marketing has its own advantages and

disadvantages. • Interactive marketing has different forms.

Summary


• Mobile marketing uses cellphones/smartphones as a medium for advertisers to reach consumers

• Word of mouth sometimes happens organically, but can also be managed and facilitated.

• There are 3 main platforms for social media• Word of mouth can be highlighted in two forms:

buzz and viral marketing

Summary


• Sales force is the original and oldest form of direct marketing

• In designing the sales force, the company must develop sales force objective and strategy, structures, size, and compensation

• There are 6 steps in any effective sales process

Summary


Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling

Albert Macaire C. Ong LopezASMPH YL8

Chapter 19…

From mass communication

to more targeted, two-way communication