A Global

Perspective
Philip Kotler
Gary Armstrong
Swee Hoon Ang
17 Siew Meng Leong
Chin Tiong Tan
Direct and Online Oliver Yau Hon-
Ming
Marketing: Building PowerPoint slides adapted by
Peggy Su

Direct Customer
Relationships

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-1

Learning Objectives
After studying this chapter, you should be able to:
1. Define direct marketing and discuss its benefits to
customers and companies
2. Identify and discuss the major forms of direct
marketing
3. Explain how companies have responded to the
Internet and other powerful new technologies with
online marketing strategies
4. Discuss how companies go about conducting online
marketing to profitably deliver more value to customers
5. Overview the public policy and ethical issues
presented by direct marketing

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-2

Chapter Outline
1. The New Direct-Marketing Model
2. Growth and Benefits of Direct Marketing
3. Customer Databases and Direct Marketing
4. Forms of Direct Marketing
5. Online Marketing
6. Integrated Direct Marketing
7. Public Policy Issues in Direct Marketing

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-3

The New Direct Marketing Model
• Direct marketing consists of direct
connection with carefully targeted individual
consumers to obtain an immediate response
and cultivate lasting customer relationships.
• No intermediaries
• An element of the promotion mix
• Fastest-growing form of marketing

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Growth and Benefits of Direct
Marketing
Benefits to Buyers
• Convenience
• Ready access to many products
• Access to comparative information about
companies, products, and competitors
• Interactive and immediate

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Growth and Benefits of Direct
Marketing
Benefits to Sellers
• Tool to build customer relationships
• Low-cost, efficient, fast alternative to reach
markets
• Flexible
• Access to buyers not reachable through other
channels

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Customer Databases and
Direct Marketing
Customer Database
• A customer database is an organized
collection of comprehensive data about
individual customers or prospects, including
geographical, demographic, psychographic,
and behavioral data.

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Customer Databases and
Direct Marketing
Customer Database
Uses:
• Locate good and potential customers
• Generate sales leads
• Learn about customers
• Develop strong long-term relationships

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Forms of Direct Marketing
• Personal selling
• Direct-mail marketing
• Catalog marketing
• Telephone marketing
• Direct-response television marketing
• Kiosk marketing
• Digital direct marketing
• Online marketing

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-9

Forms of Direct Marketing
Direct-Mail Marketing
• Direct-mail marketing involves an offer,
announcement, reminder, or other item to a
person at a particular address.
• Personalized
• Easy-to measure results
• Costs more than mass media
• Provides better results than mass media

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-10

Forms of Direct Marketing
Catalog Direct Marketing
Catalog direct marketing involves printed and
Web-based catalogs.
• Benefits of Web-based catalogs
• Lower cost than printed catalogs
• Unlimited amount of merchandise
• Real-time merchandising
• Interactive content
• Promotional features

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Forms of Direct Marketing
Catalog Direct Marketing
• Challenges of Web-based catalogs
• Require marketing
• Difficulties in attracting new customers

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Forms of Direct Marketing
Telephone Direct Marketing
• Telephone direct marketing involves using
the telephone to sell directly to consumers
and business customers.
• Outbound telephone marketing sells directly
to consumers and businesses.
• Inbound telephone marketing uses toll-free
numbers to received orders from television
and print ads, direct mail, and catalogs.

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-13

Forms of Direct Marketing
Telephone Direct Marketing
• Benefits of telephone direct marketing
• Purchasing convenience
• Increased product service and information
• Challenges of telephone direct marketing
• Unsolicited outbound telephone marketing
• Do-Not-Call Registry

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Forms of Direct Marketing
Direct-Response Television Marketing
• Direct-response television (DRTV) marketing
involves 60- to 120-second advertisements that
describe products or give customers a toll-free
number or Web site to purchase products, and
30-minute infomercials such as home shopping
channels.
• Less expensive than other forms of promotion
• Easier to track results

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Forms of Direct Marketing
Kiosk Marketing
• Kiosk marketing involves
placing information and
ordering machines in
stores, airports, trade
shows, and other locations.

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Forms of Direct Marketing
Digital Direct Marketing Technologies
• Mobile phone marketing
• Podcasts
• Vodcasts
• Interactive TV

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Forms of Direct Marketing
Digital Direct Marketing Technologies
• Mobile phone marketing includes:
• Ring-tone giveaways
• Mobile games
• Ad-supported content
• Contests and sweepstakes

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-18

Forms of Direct Marketing
Digital Direct Marketing Technologies
• Podcasts and vodcasts involve the
downloading of audio and video files via the
Internet to a handheld device such as a PDA
or portable media player and listening to them
at the consumer’s convenience.

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-19

Forms of Direct Marketing
Digital Direct Marketing Technologies
• Interactive TV (ITV) lets viewers interact with
television programming and advertising using
their remote controls and provides marketers
with an interactive and involving means to
reach targeted audiences.

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Online Marketing
Marketing and the Internet
• The Internet is a vast public web of computer
networks that connects users of all types
around the world to each other and to a large
information repository.

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Online Marketing
Online Marketing Domains
• Business to consumer (B2C)
• Business to business (B2B)
• Consumer to consumer (C2C)
• Consumer to business (C2B)

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Online Marketing
Online Marketing Domains

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Online Marketing
Online Marketing Domains
• Business to consumer (B2C) involves
selling goods and services online to final
consumers.
• Business to business (B2B) involves selling
goods and services, providing information
online to businesses and building customer
relationships.

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Online Marketing
Online Marketing Domains
• Consumer to consumer (C2C) occurs on
the Web between interested parties over a
wide range of products and subjects.
• Blogs
• Offer a fresh, original, and inexpensive way to
reach fragmented audiences
• Difficult to control

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Online Marketing
Online Marketing Domains
• Consumer to business (C2B) involves
consumers communicating with companies to
send suggestions and questions via company
Web sites.

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Online Marketing
Types of Online Marketers
• Click-only marketers
• Click-and-mortar marketers

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Online Marketing
Click-Only Marketers
• Click-only marketers operate only online without
any brick and mortar presence.
• E-tailers
• Search engines and portals
• Shopping or price comparison sites
• Internet service providers
• Transaction sites
• Content sites

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Online Marketing
Click-Only Marketers
• E-tailers are dot coms that sell products and
services directly to final buyers via the Internet.
• Amazon
• Expedia
• Search engines and portals are ports of entry to
the Internet.
• Yahoo!
• Google

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Online Marketing
Click-Only Marketers
• Internet service providers (ISP) provide Internet
connections for a fee.
• Starhub
• Jaring
• Shopping or price comparison sites provide
product and price comparison information
• Yahoo! Shopping

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Online Marketing
Click-Only Marketers
• Transaction sites take commissions for
transactions on their sites.
• eBay
• Content sites provide financial, news, research, and
other information
• Cna.com (Channel NewsAsia)
• ESPN.com

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Online Marketing
Click-and-Mortar Marketers
• Click-and-mortar companies are brick-and-mortar
companies with an online presence.
• Advantages of click-and-mortar companies include
• Known and trusted brand names
• Strong financial resources
• Large customer bases
• Industry knowledge
• Reputation
• Strong supplier relationships
• More options for customers
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Online Marketing
Setting Up an Online Presence
• Creating a Web site requires designing an
attractive site and developing ways to get
consumers to visit the site, remain on the site,
and return to the site.
• Types of Web sites
• Corporate Web site
• Marketing Web site

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Online Marketing
Setting Up an Online Presence
• A corporate Web site is designed to build
customer goodwill and to supplement other
channels, rather than to sell the company’s
products directly to
• Provide information
• Create excitement
• Build relationships

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Online Marketing
Setting Up an Online Presence
• A marketing Web site is designed to engage
consumers in interaction that will move them
closer to a direct purchase or other marketing
outcome.

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Online Marketing
Designing Effective Web Sites
• To attract visitors, companies must
• Promote in offline promotion and online links
• Create value and excitement
• Constantly update the site
• Make the site useful

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Online Marketing
Designing Effective Web Sites
• The seven Cs of effective Web site design
• Context
• Content
• Community
• Customization
• Communication
• Connection
• Commerce
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Online Marketing
Designing Effective Web Sites
• Context is the site’s layout.
• Content is the site’s pictures, sound, and
video.
• Community is the site’s means to enable
user-to-user communication.
• Customization is the site’s ability to tailor
itself to different users or to allow users to
personalize the site.

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-38

Online Marketing
Designing Effective Web Sites
• Communication is the way the site enables
user-to-user, user-to-site, or two-way
communication.
• Connection is the degree that the site is
linked to other sites.
• Commerce is the site’s capabilities to enable
commercial transactions.

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Online Marketing
Designing Effective Web Sites
• The eighth C
• To keep customers coming back, the site
needs to constantly change.

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Online Marketing
Placing Ads and Promotions Online
• Forms of online advertising
• Display ads
• Search-related ads
• Online classifieds

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Online Marketing
Placing Ads and Promotions Online
• Display ads
• Banners are banner-shaped ads found on a Web
site.
• Interstitials are ads that appear between screen
changes.
• Pop-ups are ads that suddenly appear in a new
window in front of the window being viewed.
• Rich media ads incorporate animation, video,
sound, and interactivity.

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Online Marketing
Placing Ads and Promotions Online
• Search-related ads are ads in which text-
based ads and links appear alongside search
engine results on sites such as Google and
Yahoo! are effective in linking consumers to
other forms of online promotion.
- Will effectively attract online customers to promote new products

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Online Marketing
Placing Ads and Promotions Online
• Other forms of online promotion include
• Content sponsorships
• Alliances
• Affiliate programs
• Viral advertising

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 Online Marketing
Placing Ads and Promotions Online
• Content sponsorships provide companies with
name exposure through the sponsorship of special
content such as news or financial information.
• Alliances and affiliate programs are relationships
where online companies promote each other.
• Viral marketing is the Internet version of word-of-
mouth marketing and involves the creation of a Web
site, an e-mail message, or another marketing event
that customers pass along to friends.
Viral marketing is more known as spam (unwanted e-mails), in facebook

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Online Marketing
The Future of Online Advertising
• Online advertising provides a useful
purpose as a supplement to other marketing
efforts and is playing an increasingly
important role in the marketing mix.

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Online Marketing
Creating or Participating in Web
Communities
• Web communities allow members to
congregate online and exchange views on
issues of common interest.

Congregate = mass

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Online Marketing
Using E-mail
• Marketers are developing enriched messages
that include animation, interactivity, and
personal messages with streaming audio and
video to compete with the cluttered e-mail
environment.

Clutter = untidy

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Integrated Direct Marketing
• Integrated direct marketing involves
the user of carefully coordinated
multiple-media, multiple-stage
campaigns.

Various mode of marketing..

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Public Policy Issues in
Direct Marketing
• Customer irritation, unfairness, deception,
and fraud
• Privacy
• Security

Junk e-mails, spam, pop-up, fraud

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Public Policy Issues in
Direct Marketing
Irritation, Unfairness, Deception, and Fraud
• Irritation includes annoying and offending
customers.
• Unfairness includes taking unfair advantage
of impulsive or less-sophisticated buyers.

Copyright © 2009 Pearson Education South Asia Pte Ltd 17-51

Public Policy Issues in
Direct Marketing
Irritation, Unfairness, Deception, and Fraud
• Deception includes “heat merchants” who
design mailers and write copy designed to
mislead consumers.
• Internet fraud includes identity theft and
financial scams.

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Public Policy Issues in
Direct Marketing
Invasion of Privacy
• The concern is that marketers may know too
much about the consumers and use this
information to take unfair advantage.
• Sale of databases
• Microsoft

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