LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. How can companies conduct direct marketing for competitive advantage?
2. How can companies carry out effective interactive marketing?
3. How does word of mouth affect marketing success?
4. What decisions do companies face in designing and managing a sales force?
5. How can salespeople improve their selling, negotiating, and relationship marketing
skills?
SUMMARY
1. Direct marketing is an interactive marketing system that uses one or more media to
2. Direct marketers plan campaigns by deciding on objectives, target markets and
3. Major channels for direct marketing include face-to-face selling, direct mail, catalog
marketing, telemarketing, interactive TV, kiosks, Web sites, and mobile devices.
4. Interactive marketing provides marketers with opportunities for much greater
5. Word-of-mouth marketing finds ways to engage customers so they choose to talk with
6. Two notable forms of word-of-mouth marketing are buzz marketing, which seeks to
7. Salespeople serve as a company’s link to its customers. The sales rep is the company
C H A P T E R
19
MANAGING PERSONAL
COMMUNICATIONS: DIRECT
AND INTERACTIVE
MARKETING,
WORD OF MOUTH,
AND PERSONAL SELLING
8. Designing the sales force requires choosing objectives, strategy, structure, size, and
compensation. Objectives may include prospecting, targeting, communicating, selling,
servicing, information gathering, and allocating. Determining strategy requires
9. There are five steps in managing the sales force: (1) recruiting and selecting sales
representatives; (2) training the representatives in sales techniques and in the
10.Effective salespeople are trained in the methods of analysis and customer
management, as well as the art of sales professionalism. No single approach works
OPENING THOUGHT
Students should be very familiar with the marketing systems described in this chapter,
especially Internet shopping. The challenge to the instructor in this chapter is ensuring
that the students understand that Internet marketing (e-marketing) is just one of the many
different avenues available to marketers trying to reach their target markets. Students
may be predisposed to believe that “all” marketing or the “future” of marketing is via the
electronic channels. The instructor should encourage in-class discussions on this position
and he/she is encouraged to take the “defensive” position to help the students understand
the many levels of business and consumer marketing.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester-long project, students who have decided to market their
2. Market demassification has resulted in an ever-increasing number of market niches
and the use of direct marketing to reach these niches is growing. In small groups (five
students maximum), have students collect as many direct marketing advertising
3. Sonic PDA Marketing Plan: Many marketers have to consider sales force
management in their marketing plans. The high cost of maintaining a direct sales
force and the need to establish multiple channels of distribution have led some
companies to include online, mail, and telephone sales for some of their personal
selling efforts. In your marketing role at Sonic, you are planning a sales strategy for
the new PDA. After reviewing your decisions about other marketing mix activities,
answer these questions about personal selling:
• Does Sonic need a direct sales force or can it sell through agents and outside
representatives?
• Whom should Sonic’s selling activities be focused?
ASSIGNMENTS
The direct market offering, according to the text, consists of five elements—the product,
offer, medium, distribution method, and creative strategy. Have the students collect direct
marketing offerings (sent to them, their families, and close friends). On a scale of 1-5 (1
being does not work, 5 being works very well), rank each of these offerings in terms of
these five elements. What is the group’s consensus as to which offers work the best (and
worse) and why?
In a research paper, students are to comb appropriate Internet sites, and documents,
illustrating the power of the “buzz” and “viral marketing” about products and/or services.
Which ones do they think are effective and why?
Dell® Computers has begun setting up kiosks demonstrating their products in regional
malls across the country. They are also selling their computers in Wal-Mart stores, Best
Buy, and other U.S. retailers. Dell will soon be selling through retailers in China.
Consumers are no longer directed to their web site to place an order. Obviously, Dell has
had to change its “contact” with consumers. What effect do you believe this type of
change in their direct marketing mantra is having on Dell’s business? Must other direct
marketers make the change?
Questions for the class: How effective did you find the SPIN method to be in your
“selling situation?” How difficult is it to frame questions in terms of situation, problem,
implication, and need-payoff? Do you believe that the SPIN method works?
END–OF–CHAPTER SUPPORT
MARKETING DEBATE—Are Great Salespeople Born or Made?
One debate in sales is about the impact of training versus selection in developing an effective
sales force. Some observers maintain that the best salespeople are “born” that way and are
effective due to their personalities and all the interpersonal skills they have developed over a
lifetime. Others contend that application of leading-edge sales techniques can make virtually
anyone a sales star.
In addition, salespeople must communicate trust, be trustworthy, ethical, and honest because
so much of their dealing with customers/clients depends upon these characteristics. One
cannot be expected to “train” for honesty, nor can one be expected to train a person in his/her
ethical behavior. These are traits formed from birth and can only be found during the selection
process.
MARKETING DISCUSSION
Pick a company and go to their Web site. How would you evaluate the Web site? How well
does it score on the 7Cs design elements: context, content, community, customization,
communication, connection, and commerce.
Student answers will differ depending on their favorite Web sites.
Marketing Excellence: FACEBOOK
1) Why is Facebook unique in the world of personal marketing?
Suggested Answer: The social networking Web site fulfills people’s desire to
2) Is Facebook just a passing fad or is it here to stay? What are the company’s
greatest strengths and risks?
Suggested Answer: Student answers will vary but good students may cite these facts from
the article to support their position regarding Facebook’s legs: “Facebook is the most
The company’s greatest strengths lies in the sheer number of members and active users.
3) Discuss the recent privacy issues that challenged Facebook. Will privacy
restrictions limit its ability to offer personal marketing opportunities?
Marketing Excellence: UNILEVER (AXE & DOVE)
1) What makes personal marketing work? Why are Dove and Axe so successful at
it?
Suggested Answer: Personal marketing works when the company targets specific age
2) Can personal marketing go too far in a company? Why or why not?
Suggested Answer: Student answers will vary from Yes—personal branding can be edgy
3) Is there a conflict of interest in the way Unilever markets to women and young men? Is
it undoing all the good that might be done in the Campaign for Real Beauty by making
women sex symbols in Axe ads? Discuss.
Suggested Answer: Student answers will vary and calls for judgments on the effectiveness of
DETAILED CHAPTER OUTLINE
In the face of the Internet revolution, marketing communications today increasingly occur as a
kind of personal dialogue between the company and its customers. Companies must ask not
only “How should we reach our customers?” but also “How should our customers reach us?”
and “How can our customers reach each other?” New technologies have encouraged
DIRECT MARKETING
Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods
and services to customers without using marketing middlemen. They often seek a
measurable response, typically a customer order, through direct-order marketing.
A) Today, many direct marketers use direct marketing to build a long-term relationship
with the customer.
B) Direct marketing has been a fast-growing avenue for serving customers.
E) Sales produced through traditional direct marketing channels (catalogs, direct mail,
and telemarketing) have been growing rapidly, along with direct-mail sales, which
include sales to the consumer market, B2B, and fundraising by charitable institutions.
The Benefits of Direct Marketing
Market demassification has resulted in an ever-increasing number of market niches.
A) Direct marketing benefits customers in many ways:
a. Home shopping can be fun, convenient, and hassle-free
b. Saves time
B) Sellers benefit as well.
1) They can customize and personalize messages.
C) Direct marketing must be integrated with other communications and channel
activities.
D) Every brand contact delivers an impression that can strengthen or weaken a
relationship.
Direct Mail
Direct-mail marketing involves sending an offer, announcement, reminder, or other item
to a person.
A) Direct marketing is a popular medium because it:
1) Permits target market selectivity
In constructing an effective direct-mail campaign, direct marketers must decide on their:
B) Objectives
1) Most direct marketers air to receive an order from prospects and judge a
campaign’s success by the response rate.
2) A response rate of 2% to 4% is considered good.
C) Target Market and Prospects
1) R-F-M formula: Recency, frequency, monetary amount to select customers
D) Offer elements. The offer strategy has five elements:
1) The product
Testing Elements
One of the great advantages of direct marketing is the ability to test, under real marketplace
conditions, different elements of an offer strategy, such as products, product features, copy
platform, mailer type, envelope, prices, or mailing lists.
A) Direct marketers must remember that response rates typically understate a campaign’s
long-term impact.
Measuring Campaign Success: Lifetime Value
By adding up the planned campaign costs, the direct marketer can figure out in advance the
needed break-even response rate.
A) By carefully analyzing past campaigns, direct marketers can steadily improve
performance.
Catalog Marketing
In catalog marketing, companies may send full-line merchandise catalogs, specialty consumer,
and business catalogs.
A) Catalogs are a huge business—71 percent of Americans shop from home using
catalogs, by phone, mail, or the Internet.
B) The success of a catalog business depends on the company’s ability to manage its:
1) Customer lists.
C) Business marketers are making inroads to global consumers as well.
Telemarketing
Telemarketing is the use of the telephone and call centers to attract prospects, sell to existing
customers, and provide service by taking orders and answering questions.
A) Telemarketing helps companies increase revenue, reduce selling costs, and improve
customer satisfaction.
C) Telemarketing is increasing in business-to-business marketing.
Other Media for Direct-Response Marketing
Direct marketers use all the major media to make offers to potential buyers.
Public and Ethical Issues in Direct Marketing
Direct marketers and their customers usually enjoy mutually rewarding relationships.
Sometimes the darker side emerges:
A) Irritation
INTERACTIVE MARKETING
The newest channels for direct marketers are electronic. The Internet provides marketers and
consumers with opportunities for much greater interaction and individualization.
Advantages and Disadvantages of Interactive Marketing
The variety of online communication option means companies can send tailored messages that
engage consumers by reflecting their special interests and behavior.
A) Using the Web has disadvantages.
a. Consumers can effectively screen out most messages
B) Many feel that the pros outweigh the cons for Web marketing.
Interactive Marketing Communication Options
A company has to decide which forms of Internet advertising will be most cost-effective
in achieving advertising objectives.
A) Web sites
C) Search Ads
A hot growth area in interactive marketing is paid search or pay-per-click ads, which
now account for roughly half of all online ad spending. Thirty-five percent of all
searches are reportedly for products or services.
In paid search, marketers bid in a continuous auction on search terms that serve as a proxy
for the consumer’s product or consumption interests.
relevant.
Marketing Memo: How to Maximize the Marketing Value of E-Mails
Lists the 5 ways to maximize e-mails.
MOBILE MARKETING With cell phones’ ubiquitous nature and marketers’ ability to
personalize messages based on demographics and other consumer behavior characteristics.
Mobile marketing options
A) Mobile ad spending was estimated to be almost $1 billion worldwide in 2009, most of
which went into SMS text messages and simple display ads. With the increased
capabilities of smart phones, however, mobile ads can be more than just a display medium
using static “mini–billboards.”
Marketing Memo: Segmenting Tech User
A research firm found that U.S. adults fall into three two? groups: 39% are motivated by
Mobility; 61% are stationary media majority.
WORD OF MOUTH
A) Consumers use word of mouth to talk about dozens of brands each day, from
media and entertainment products such as movies, TV shows, and publications to
food products, travel services, and retail stores.
Social Media
Social media are a means for consumers to share text, image, audio, and video
information with each other and with companies and vice versa.
Social media allow marketers to establish a public voice and presence on the Web and
reinforce other communication activities. Because of their day-to-day immediacy, they
can also encourage companies to stay innovative and relevant.
A) There are three main platforms for social media:
a. Online communities and forums;
C) A key for success for online communities is to create individual and group
activities that help form bonds among community members. Information flow in
online communities and forums is two-way and can provide companies with
useful, hard-to-get customer information and insights.
D) Blogs, regularly updated online journals or diaries, have become an important
outlet for word of mouth.
A) There are millions in existence and they vary widely, some personal for
close friends and families, others designed to reach and influence a vast
audience.
E) Corporations are creating their own blogs and carefully monitoring those of
others.
F) Blog search engines provide up-to-the-minute analysis of millions of blogs to find
out what’s on people’s minds.
Social Networks
Social networks have become an important force in both business-to-consumer and
business-to-business marketing.
A) Major ones include Facebook, the world’s biggest; MySpace which concentrates
on music and entertainment;