Week 11.3 Promotional Strategies

Direct Marketing

Direct marketing can use a variety of media options such as direct mail and catalogues, television home shopping, telemarketing, e-mail marketing, mobile marketing, and direct selling. E-mail marketing is one of the fastest-growing direct marketing mediums in Canada. The growth of mobile direct marketing and social network direct marketing have also been remarkable. Marketing towards Generation Y requires the use of mobile tools and social network direct marketing. Members of Generation Y are considered "digital natives." The greatest use of smartphones and tablets is found in Generation Y. 

Advantages of Direct Marketing

  1. Consumers can shop 24/7 without going to a store. 
  2. It saves time. Most people are busy with work. Not going to a store is very convenient. It also helps to avoid hassles with salespeople. 
  3. Direct orders help save money. Businesses save on labour costs and reflect savings to consumers in the form of lower prices. 
  4. It is fun and entertaining. There are millions of options available to browse and select from. 
  5. Direct marketing is preferred by some people due to the privacy. It is more private than in-store shopping.
  6. Most direct marketing companies provide excellent customer service with toll-free telephone numbers, customer service representatives, overnight delivery services, and money-back guarantees.

Direct marketing is valuable not only based on the value it provides for the consumers but also based on the responses it generates for the marketers. Direct marketing activities generate three types of responses: 

  1. Direct orders 
  2. Lead generation
  3. Traffic generation 

Direct Orders

Direct orders are generated as a result of marketing activities that provide all the necessary information to place an order and complete the purchase.

Photo from Club Med: woman in bathing suit looking out over the ocean.
Example: Club Med sends e-mails to sell "last-minute specials." If prospective customers can make a quick decision on their travel plans, they have the opportunity to order mid-week and fly in at the end of the week at 30-40% discount prices.

Lead Generation

Lead generation is the response in which the prospective customer shows interest as a result of the direct marketing efforts. Usually the consumer makes contact with the business and requests additional information. 

Four Seasons logo.
Example: Four Seasons Hotels sends direct mail to potential customers. In the package, the customers are provided with contact numbers and encouraged to request additional information. 

Traffic Generation

Traffic generation refers to the outcome of a direct marketing activity that motivates people to visit a business. Consumers pay a visit to the store as a result of the offer they receive. 

Payless logo.

Example: Payless ShoeSource sends e-mails containing offers and coupons that expire on a particular date to encourage traffic to their stores. 



Challenges of Direct Marketing

We have discussed the value generated by direct marketing activities. In order for direct marketing to work, businesses need up-to-date databases that contain profiles of potential customers so that they can reach out to specific customers through e-mail, direct mail, mobile marketing, and telemarketing. 

Technology enables businesses to collect data. Some data is collected at the time of purchase such as e-mail addresses, phone numbers, and postal codes. Other data is collected online. Businesses have started to match the names of consumers to their Facebook accounts in order to learn about their demographics and life styles. Google search activities can be tracked, Twitter followings can be observed, and click-stream behaviour can be recorded. Some direct marketers use cookies in their direct marketing efforts.

There are several challenges in direct marketing. One of the biggest challenges is to generate and maintain an up-to-date database. Legislation regarding privacy concerns is making it more difficult to collect data without violating the privacy of consumers. Some countries such as Italy and Denmark placed mandatory "opt-in" requirements. Potential customers must give permission to include themselves on a list for direct marketing solicitations. In contrast, potential customers in North America must make the effort to register their names into a "no-call list" in order to prevent direct marketing calls.

There are also ethical challenges in direct marketing. Most people are annoyed by telephone solicitations during dinner and evening hours. Directly going to people’s homes could be unwelcome due to violating their privacy and leisure time. Online privacy is also raised as an issue by many consumers. The Canadian Marketing Association developed guidelines for marketers to follow in order to protect consumers’ privacy.

Concept Check Questions:

1. One of the fastest growing direct marketing mediums in Canada is __________.


2. Which is NOT one of the three types of responses generated by direct marketing activities?