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REVIEW QUESTIONS
16.4. What are the advantages and disadvantages of direct response marketing
communication?
Because DBC is designed to generate immediate responses, this means it is also easy
to tell quickly if the messages are meeting their objectives. Unlike mass media
advertising and public relations, the effects of DBC are more immediate and more
measurable. Also, direct response marketing opens up the door for interactivity.
Interactivity, or two-way communication, is the heart of DBC since it drives the
Some marketers see direct response as more limiting than brand or image advertising
because it does not reach as many people or, if it does, the traditional cost of reaching
each individual is higher per impression. Proponents justify the higher costs by
noting that the objective is action rather than recall or attitude change. Also, in today’s
16.5. Discuss the five steps of the direct response marketing process.
The five basic steps in traditional direct response marketing are:
Setting objectives and making strategic decisions.
Communication of an offer by the seller through the appropriate medium.
16-6. What are the five media tools of direct marketing and how do they differ?
Beyond personal sales, direct marketing employs five primary tools to achieve its
Direct Response Advertising
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Ads in the mass media are less directly targeted than are direct mail and catalogs, but
A direct-response commercial on radio or TV can provide the necessary information
for the consumer to request information or even make a purchase. Radio’s big
advantage is its highly targeted audience. In contrast, television is a good medium for
direct marketers who are advertising to a broadly targeted product. As more national
marketers move into the medium, the direct-response commercial is becoming more
Direct Mail
Of those organizations that use direct marketing, direct mail is the most popular
method. Advertising mail represented more than 63 percent of all mail received to
households, according to the U.S. Postal Service’s Household Diary Study.With
advances in digital printing, it is now possible to personalize not only the address and
salutation on the letter, but also other parts of the information as well as the offer. The
response rate for direct mail can vary from .01 to 50 percent, but it’s typically in the 2
Catalogs
Catalogs have been effective direct-response marketers for as long as there has been
mail. Following the explosion of digital media, however, catalogs also evolved into
easy-to-use online publications. The growth in the 21st century is in specialty catalogs,
Telemarketing
Before telemarketing calls were greatly limited by government-supported
do-not-call lists, more direct-marketing dollars were spent on telemarketing phone
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inbound and outbound. An inbound or incoming telemarketing call is initiated
with a customer. The consumer can be responding to an ad, catalog, e-mail, or
Online Based e-Marketing
Much Internet advertising is simply direct marketing in electronic form. Because of
its interactive dimension, more and more direct response marketing is taking place on
the Web, and social media are accelerating that trend. Direct response marketing,
The technology of the Internet has also produced dramatic changes in the direct-mail
industry. The Internet has facilitated the ease of producing and distributing traditional
direct mail by e-mail. It also provides greater sampling opportunities. For example,
online music stores now have hundreds of thousands of music clips for shoppers to
16-7. What is spam and how is it being handled by marketers?
Spam is the practice of generating and sending unwanted e-mail. The FTC has
Twitter has filed complaints in federal court against companies and individuals who it
claims violate the anti-spam provisions in its user agreement. Amazon has filed
Critics would like to see the government close down the bulk of e-mail operations.
Technology is unable to control these practices, and spammers have proven creative
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16-8. What is a database and how do direct marketers use it?
Direct response marketers use databases to keep track of customers and identify
prospective customers. They are also a segmentation tool to communicate relevant
A database is at the heart of direct marketing and of the practice of behavioral
marketing, which means that individuals are targeted based on what they have done in
the past – products they’ve bought, shows they have watched, sites they have visited,
16.9. If you are using data mining to develop a prospecting program for a client,
what would you be trying to accomplish?
The practice of sifting through and sorting information captured in a company’s
database in order to target customers and maintain a relationship with them is called
Marketers collect information about their customers in order to better target
customers who might really be interested in their offers. Data mining is also used to
16.10. Explain the privacy issues that involve direct response communication.
Privacy is a huge concern for all direct marketers, not just those engaged in
e-commerce and it has generated fierce debate among consumer privacy advocates,
marketing and advertising associations and federal regulators. Companies are
Unknown tracking of consumers while online takes place through the use of cookies,
little files installed on user’s web browsers without users’ knowledge, to track their
online behavior. The use of cookies is increasing as the number of data trackers
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Many browsers come with a ‘do not track’ option. Google got in trouble with the FTC
in 2012 when it was demonstrated that Google bypassed these privacy settings for
To be fair, many customers appreciate the relevance of the brand messages they
receive through these practices. And while many customers are willing to give
Although the FTC does not have the authority to write new privacy rules, it hopes to
spur the industry to regulate itself. In terms of self regulation, the Digital Advertising
Alliance, a consortium of organizations in the advertising and marketing industries,
has created the AdChoices program, which includes a code of conduct, as well as
16.11. What is the objective of data-driven relationship programs?
Using the insights captured from previous interactions to create data-driven
communication, companies are better able to respond to and interact with their
customers. Ultimately, the knowledge in the database is the tool used to build and
maintain customer relationships. Data driven communication has been defined as a
16.12. What does RFM stand for and how is this concept used in target marketing?
Direct marketers have identified three criteria that help them predict who is most
likely to repurchase: recency, frequency, and monetary (RFM). The more recently
customers purchased from a company, the more likely they are to buy again. Also, the
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16.13. Discuss permission marketing. What strategies can be used to overcome the
problems of spam?
Because spam is a huge problem for legitimate e-mail marketers, many are now using
an approach called permission marketing. This approach attempts to address the spam
problem by asking potential customers for permission to send them e-mail. Opt in
16.14. How is integrated direct marketing used in an IMC program?
Historically, direct marketing was the first area of marketing communication that
Two reasons integration plays so well in the direct-response market is because of its
emphasis on the customer and its measurability. The coordination problem is a
challenge due to the deluge of data bombarding customers from many different
Instead of treating each medium separately, as some advertising agencies tend to do,
DBC companies seek to achieve precise, synchronized use of the right media at the
A common problem with IDM is that direct response marketing messages and
advertising messages often do not reinforce each other as well as they should. This is
16.15. What is a loyalty program and how does LCV enter into the planning for such
a program?
A loyalty program rewards loyal customers for their business.
Perhaps the most ambitious attempt to create consumer loyalty is through a concept
called lifetime customer value (LCV). LCV is an estimate of how much purchase
volume companies can expect to get over time from various target markets. LCV is
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By knowing your consumer’s past behavior, you can decide how much you want to
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