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Example research essay topic: Direct Marketing Concepts Versus Mail - 1,758 words

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Direct Marketing Concepts Versus Direct Mail Direct mail is a marketing technique by which the seller sends marketing messages directly to the buyer. Unlike with other forms of marketing communications, such as TV advertising or placing articles in newspapers through media relations, it is not necessary to have another medium carrying the message with direct mail. With direct mail, seller has total control over the presentation of his seller message. Direct mail is a unique blend of advertising and sales.

While good advertising should certainly lead to sales, direct mail allows to present the product or service and to make an offer (Levitt, 32). Direct mail is sometimes referred to as direct marketing. There are, however, some important differences between the two. Direct mail might be thought of as of a subset of direct marketing. Direct marketing, then, is the broadest of the two terms. Direct mail is, as the term implies, a marketing message that's delivered to prospects by mail.

Direct marketing encompasses more than marketing messages going through the mail. The nature of the business might lend itself to allow direct delivery of promotional items, free samples or other marketing messages to prospects. Some examples of direct marketing activities are listed below (Gerlich, 23). 1) Fliers for lawn services that are distributed door-to-door. 2) Free shampoo sample included in the womens magazine. 3) Cookies or flowers delivered by a caterer or florist to a party planning service. 4) Exhibiting at trade shows or events. 5) Offering seminars on professional services. 6) Offering product demonstrations. In addition to the simple goal of creating sales by offering products through the mail, direct mail is a tactic used for other marketing goals. Direct mail sales results can be used as a way to test new markets for store locations.

If the product or service is expensive, direct mail may be a cost-effective way to gather qualified prospects. Direct mail may introduce a prospect to the product and service, helping to make cold sales a little warmer. Direct mail may be of the following types: 1) Catalogs or other product literature with ordering opportunities. 2) Sales letters. 3) Sales letters with brochures. The advantages of direct mail can be illustrated with following examples. For example, it allows someone to target the message to a very specific audience. This person can pick one street of houses or all residents of a city, target college freshmen or just college freshmen at one college who own a car, mail to all customers or just to those who spend an average of $ 25 per visit to the store.

The possibilities are as endless as the mailing lists accuracy allows. This is a relatively expensive medium. However, if it is possible to focus on only high-probability purchasers, cost effectiveness can be good. Direct mail messages can be personalized to add reader appeal. Seller can evaluate its effectiveness. If he compares the number of responses to the number of pieces mailed, he can calculate the response rate.

If he includes coded coupons or response cards he can keep track of exactly who responded and from where (Gerlich, 35). Mail readers are actively involved. People read their mail when they choose. So, for at least a second or two, the message will have their undivided attention while they open and scan it. Among direct mail disadvantages is the fact that many people do not like unsolicited offers and many are skeptical of their validity. Increasingly, busy people do not even open what they view as junk mail.

Using this method of advertising requires thorough maintenance of mail lists. Many advertisers do not like to bother with updating mail lists. With outdated lists, however, mail goes to undeliverable addresses and wastes money. These kinds of errors annoy, or worse yet offend, the recipient. Some groups are concerned about the environmental impact of resources used for advertising mailings (Levitt, 45). Direct marketing has quite a few strategic advantages over other forms of marketing it does suffer its share of shortcomings.

Among them are: 1) Cost Per Thousand (CPM). On a cost-per-thousand basis, direct marketing is far more expensive than other forms of advertising. Some marketers list some of the CPM prices for various media, and there is no comparison between them and direct marketing. Furthermore, with postage rising on a fairly regular basis, the CPM figure keeps rising as well. 2) Costs of Production. Consider that a catalog may cost more than $ 1 to print in four colors.

Then, add up to 50 cents for bulk mailing. For 1000 exposures, the cost would be over $ 1500, which is 80 to 100 times as expensive as newspaper advertising. But that is not all. Production costs for a catalog can run into many thousands of dollars. Photography, models, typesetting, and layout are not cheap. As stated above, though, in spite of extraordinary expenses, direct marketing is still seen as a very effective use of funds. 3) Short Life of Databases.

A database is only as good as the freshness of its data. It is estimated that between 15 - and 20 -percent of American households change addresses each year. Thus, a database can be outdated before it is even used. Direct marketing is nearly always sent via bulk mail (because it is cheaper), but bulk mail is not forwarded, meaning it gets delivered to the labeled address regardless of who is living there. Unless the recipient makes a purchase, the marketer has wasted the cost of printing and mailing, as well as the cost-per-name of the database. 4) The Throw-Away Problem.

Direct marketing delivered by mail is often considered to be junk mail, and hence winds up in the trash, frequently without even being perused. For this reason, many direct marketers are willing to incur the expense of catalogs because consumers are more likely to view the catalogs as keepers, meaning they will put them in the magazine rack for a while, and refer to them more than once. A letter, on the other hand, is not worth keeping, nor are the envelope stuffers that come with credit card bills (Etzel, 76). 5) Customer Apprehension. Many consumers are still apprehensive about buying things through the mail, over the phone, or on the Internet. Concerns about security as well as fears about getting the wrong size, or even damaged merchandise, keep many people from purchasing from non store retailers. Much of this apprehension is baseless, because virtually anything can be delivered via the different couriers and truck lines.

And if something does need to be returned, for whatever reason, it is not infeasible to do so. Still, the fear of receiving unacceptable merchandise, as well no desire to have to deal with returns, keep people from shopping in this manner. Furthermore, until marketers can fully convince people that their credit card numbers are safe, shopping via the Internet will only be a novelty for the few (currently one-third of Internet users) who have bravely submitted their orders online (Beckwith, 54). 6) Customer Sensory Deprivation. With nearly every form of direct marketing, consumers are deprived of their five senses. They cannot see the product in front of them, and cannot view it from multiple angles; they cannot feel the product; they cannot taste the product (if it is edible); they cannot hear the product (if it is audible); and they cannot smell the product. Furthermore, they cannot try on the product for fit, nor can they see how the product would look on them, or in their home.

In other words, much is left to the imagination of the consumer. The best photography, TV demonstration, or written description do not compare to the ability to utilize ones senses in direct contact with the product. 7) Low Response Rates. One of the biggest hazards of direct marketing is the very low response rate. Given the short life of databases, as well as the throw-away problem, it is not unlikely to achieve even a one-percent response rate.

But while this may sound terribly depressing, one-percent could still prove to be quite profitable, especially if the base is large enough. For example, one-percent of one million is still 10, 000, and if each person orders $ 100, the revenues would be $ 1, 000, 000. Furthermore, if great care has been taken in selecting the recipients of the mailings, the response rate can be improved upon, as well as the amount spent per purchase. In spite of these frequently low rates, DMs are undaunted, and remain willing to continue their quest (Etzel, 87). The future of direct marketing is very positive. Given the increasingly hectic nature of American lives, people will welcome with open arms shopping alternatives that do not take as much time as more traditional methods.

They will also embrace the fact that shopping can be done from the comfort of their home at any hour of the day, and, in many cases, through the technological convenience of the Internet. This does not mean, however, that all forms of direct marketing will flourish. As for the market share of direct marketing versus traditional retailing, it is doubtful that the former could ever be much more than the forecasted one-third. Too many types of products require in-person shopping.

Furthermore, most people actually like to shop at one time or another, because it is a social activity. Finally, some products, like groceries, which certainly could be purchased via the Internet, are often best bought personally because consumers cannot thump melons or squeeze the Charmin through their modems. In other words, traditional retailers are fairly safe from being overtaken by the DMs, but they must certainly be aware of the inroads they are making. Even 15 - to 20 -percent of the market is a sizeable chunk percentage-wise and revenue-wise for retailers to be able to absorb. The inherent advantages of Direct Marketing outweigh the disadvantages in many cases, allowing the DMs to continue to nibble away at traditional retailers dominance.

Direct marketing will continue to be a strong complement to traditional retailing, but never a real substitute (Hill, 211). References Etzel, Michael J. , and others. Marketing. 11 th ed. McGraw-Hill, 1996. Fundamentals of marketing.

Gerlich, Nicholas: Direct Marketing. Non store Retailing for the 2000 s, Warner, 1998. Beckwith, Harry. Selling the Invisible: A Field Guide to Modern Marketing. Warner, 1997.

Hill, Sam, and Glenn Rifkin. Radical Marketing: From Harvard to Harley, Lessons From Ten That Broke the Rules and Made It Big, Walton, 1997. Levitt, Theodore. The Marketing Imagination. Free Press, 1986.


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