978-0134149530 Chapter 14 Lecture Note Part 1

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

CHAPTER 14

DIRECT, ONLINE, SOCIAL MEDIA, AND MOBILE MARKETING

PREVIEWING THE CONCEPTS – CHAPTER OBJECTIVES

1. Define direct and digital marketing and discuss their rapid growth and benefits to

customers and companies.

2. Identify and discuss the major forms of direct and digital marketing.

3. Explain how companies have responded to the Internet and the digital age with various

online marketing strategies.

4. Discuss how companies use social media and mobile marketing to engage consumers and

create brand community.

5. Identify and discuss the traditional direct marketing forms and overview public policy

and ethical issues presented by direct marketing.

JUST THE BASICS

CHAPTER OVERVIEW

This chapter looks at direct marketing and its fastest-growing form, digital marketing—online,

social media, and mobile marketing.

In many ways direct and online marketing constitute an overall marketing approach—a blend of

communication and distribution channels all rolled into one.

ANNOTATED CHAPTER NOTES/OUTLINE

FIRST STOP

Amazon.com: The Poster Child for Direct and Digital Marketing

When you think of shopping online, chances are good that you think first of Amazon.

From the start, Amazon has grown explosively. Its annual sales have rocketed from a modest

$150 million in 1997 to $89 billion today.

At Amazon, every decision is made with an eye toward improving the Amazon.com customer

experience.

Amazon wants to deliver a special online experience to every customer. Most Amazon.com

regulars feel a surprisingly strong relationship with the company, especially given the almost

complete lack of actual human interaction.

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

More than just a place to buy things, Amazon.com has become a kind of online community in

which customers can browse for products, research purchase alternatives, share opinions and

reviews with other visitors, and chat online with authors and experts. In this way, Amazon does

much more than just sell goods online. It engages customers and creates direct, personalized

customer relationships and satisfying online experiences.

Thus, Amazon has become the poster child for direct and digital marketing.

DIRECT AND DIGITAL MARKETING

Direct and digital marketing consist of direct connections with carefully targeted individual

consumers to both obtain an immediate response and cultivate lasting customer relationships.

Direct marketers communicate directly with customers, often on a one-to-one, interactive basis.

Use Key Term Direct and Digital Marketing here.

The New Direct-Marketing Model

Most companies still use direct marketing as a supplementary channel or medium.

For a growing number of companies, direct and digital marketing constitute a complete model

for doing business.

Firms employing this new direct model use it as the only approach.

Rapid Growth of Direct and Digital Marketing

Direct and digital marketing have become the fastest-growing forms of marketing.

Direct-marketing-driven sales now account for about 12 percent of the total US economy.

Total digital advertising spending—including online display and search advertising, social

media, mobile, video, email, and other—now accounts for the second-largest share of media

spending, behind only television, which it’s expected to overtake by 2018.

Use Marketing at Work 14.1 here.

Benefits of Direct and Digital Marketing to Buyers and Sellers

For buyers, direct marketing is convenient, easy, and private.

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

Advantages:

Gives buyers ready access to a wealth of products

Gives buyers access to a wealth of comparative information about companies, products,

and competitors

Is interactive and immediate

Gives consumers a greater measure of control

Benefits of Direct and Digital Marketing to Sellers

Can target small groups or individual consumers

Low-cost, efficient, speedy alternative for reaching their markets

Can offer greater flexibility

Gives sellers access to buyers that they could not reach through other channels

Use Chapter Objective 1 here.

Use Discussion Question 14-1 here.

FORMS OF DIRECT AND DIGITAL MARKETING

Use Figure 14.1 here.

Use Chapter Objective 2 here.

The major forms of direct and digital marketing are as follows:

1. Face-to-face selling

2. Direct-mail marketing

3. Catalog marketing

4. Telemarketing

5. Direct-response TV marketing

6. Kiosk marketing

7. Online marketing (Figure 14.1)

Use Linking the Concepts here.

DIGITAL AND SOCIAL MEDIA MARKETING

Digital and social media marketing is the fastest-growing form of direct marketing.

Marketing, the Internet, and the Digital Age

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

Use Chapter Objective 3 here.

Use Key Terms Digital and Social Media Marketing and Multichannel Marketing here.

Use Online, Social Media, and Mobile Marketing here.

Much of the world’s business today is carried out over digital networks that connect

people and companies.

Digital usage and impact continues to grow steadily. Internet household penetration in the

United States is approximately 87 percent.

The average U.S. Internet user spends almost six hours a day using digital media, primarily via

mobile devices.

Worldwide, 40 percent of the people now have Internet access.

More than half of all U.S. households now regularly shop online.

Omni-channel retailing companies market both through traditional stores and through digital

means. These companies are having more online success than their online-only competitors.

Online Marketing

Online marketing refers to marketing via the Internet using company Web sites, online

advertising and promotions, email marketing, online video, and blogs.

Use Key Term Omni-Channel Retailing here.

Web Sites and Banded Web Communities

Use Key Terms Branded Community Web Site and Marketing Web Site here.

Use Discussion Question 14-2 here.

Marketing Web sites engage consumers in an interaction that will move them closer to a

direct purchase or other marketing outcome.

Branded community Web sites don’t try to sell anything at all. Their primary purpose is to

present brand content that engages consumers and creates customer-brand community.

Online Advertising

As customers spend more time online, companies are shifting more of their marketing dollars to

online advertising.

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

The largest from of online advertising is search-related ads (or contextual advertising). This

form of online advertising involves text-based ads and links that appear alongside search engine

results.

This is the largest form of online advertising, accounting for almost half of all online advertising

spending last year.

E-mail Marketing

E-mail marketing is an important and growing digital marketing tool. By one estimate, 91

percent of all U.S. consumers use email every day.

During the latest holiday season, 90 percent of marketers said that their holiday campaigns

included email marketing.

Marketers get a return of $42 for every $1 they spend on e-mail.

The dark side of the growing use of e-mail marketing is the explosion of spam.

Use Key Terms Online Advertising, E-Mail Marketing, Spam, and Viral Marketing here.

Use Discussion Question 14-3 here.

Online Videos

Viral marketing is the digital version of word-of-mouth. Viral marketing involves videos, ads, or

other marketing content that is so infectious that customers seek it out or pass it along to their

friends.

Blogs and Other Online Forums

Brands conduct online marketing through various digital forums that appeal to specific

special-interest groups.

Blogs (Web logs) are online journals where people and companies post their thoughts and other

content.

Most marketers are now tapping into the blogosphere as a medium for reaching their customer

communities.

Use Key Terms Blogs and Social Media here.

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

Social Media Marketing

Using Social Media

Marketers can engage in social media in two ways:

1. They can participate in existing social media.

2. They can set up their own social media.

Using existing social media seems the easiest, so most brands have set up shop on a host of

social media sites (such as Facebook, Twitter, and Pinterest).

Some of the major social networks are huge. Nearly 1.4 billion people access Facebook every

month, nearly 4.4 times the population of the United States.

Social Media Marketing Advantages and Challenges

Using social media presents both advantages and challenges.

On the plus side:

Social media are targeted and personal.

Social media are interactive.

Social media are immediate and timely.

Social media can be very cost effective.

Social media are engaging and have social sharing capabilities.

On the negative side:

Most companies are still experimenting with how to use them and results are hard to

measure.

Social networks are largely user controlled.

Integrated Social Media Marketing

Most large companies are now designing full-scale social media efforts that blend with and

support other elements of a brand’s marketing strategy and tactics.

Use Discussion Question 14-4 here.

Mobile Marketing

Mobile marketing features marketing messages and promotions delivered to on-the-go

consumers through their mobile devices.

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

The widespread adoption of mobile devices and the surge in mobile Web traffic have made

mobile marketing a must for most brands.

Use Key Term Mobile Marketing here.

Use Chapter Objective 4 here.

Use Marketing at Work 14.2 here.

Use Critical Thinking Exercise 14-9 here.

Use Linking the Concepts here.

TRADITIONAL DIRECT MARKETING FORMS

Personal selling was covered in detail in Chapter 13.

Direct-mail marketing involves sending an offer, announcement, reminder, or other item to a

person at a particular address.

Use Discussion Question 14-5 here.

Use Key Term Direct Mail Marketing here.

Direct mail (including both catalog and non-catalog mail) accounts for 29 percent of all U.S.

direct marketing sales.

Direct mail characteristics:

Well suited to direct, one-to-one communication

Permits high target-market selectivity

Can be personalized

Is flexible

Allows easy measurement of results

Costs more than mass media per thousand people reached, but people reached are much

better prospects

Some analysts predict a decline in the use of direct marketing as new forms of delivery have

become popular, such as e-mail and mobile marketing.

Catalog Marketing

Use Key Term Catalog Marketing here.

Catalog used to be defined as a printed, bound piece of at least eight pages, selling multiple

products, and offering a direct ordering mechanism.

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Chapter 14 Direct, Online, Social Media, and Mobile Marketing

With the Internet, more and more catalogs are going digital. A variety of online-only catalogers

have emerged, and most print catalogers have added Web-based catalogs and smartphone catalog

shopping apps.

Advantages of digital catalogs:

Eliminate production, printing, and mailing costs

Allow real-time merchandising

Printed catalogs are still thriving.

Advantages of printed catalogs:

One of the best ways to convince consumers to use the online versions

Create emotional connections with customers

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