bu602w11.ppt

Thursday - Bus 602 1

Marketing Management

Chapter 13Chapter 13

Direct Marketing &

Global Marketing


Exam InformationDate: Thursday August 12thTime: 7:00 p.m. – 10:00 p.m.Place: downstairs SBE• You are responsible for all assigned materials from the text, notes, readings and related

material covered in class.

• Cheat Sheets are allowed – 3 pages single sided.

• About 50% of the exam will be multiple choice questions. Remaining will be mini case and essay style based on applying theory from the notes, reading and textbook to “hypothetical” situations.

• You will be expected to demonstrate that they know and understand the material. You are expected to be able to apply the strategy properly.

• Please bring a silent calculator.

• Please arrive early and bring your student I.D. card.

• I will be at the exam


What Is Direct Marketing?

• Communications with carefully targeted individual consumers to obtain an immediate response– Cultivate relationships– Often one-to-one interactive– Precise targeting– More effective results– Not simply an extra piece of the

puzzle, a whole new approach due to technology

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Growth of Direct Marketing

• Direct Marketing– The marketing is exploding and it will continue

for a while yet• Growing 8% annually vs. 6% for retail sales

• Canadian sales >$50 Billion

• Expected over next 5 years - 60% growth rate

• Online marketing– An untapped potential

• 65% are able to access the Internet, +29% VYA

• Canadian sales $2.3B (2000) to $5.5B (2005)


Growth of Direct Marketing:Trends

• The shift of consumers and how they spend their time is requiring new ways to get to them

• Consumers’ regaining control of their time:– Higher traffic costs (commuting, congestion)

– Inconvenient parking

– Lack of time

– Shortage of retail help

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Mass Marketing Vs. One-to-One Marketing

Mass Marketing One-to One Marketing

Average customerCustomer anonymityStandard productMass productionMass distributionMass advertisingMass promotionOne-way messageEconomies of scaleShare of marketAll customersCustomer attraction

Individual customerCustomer profileCustomized market offeringCustomized productionIndividualized distributionIndividualized messageIndividualized incentivesTwo-way messagesEconomies of scopeShare of customerProfitable customersCustomer retention


Customer Databases

• An organized collection of comprehensive data about individual customers or prospects including geographic, demographic, psychographic, and behavioural data

• NOT a mailing list• Database Marketing

– Process of building, maintaining, and using customer databases and other databases for the purpose of contacting and transacting with customers


Forms of Direct Marketing

Customersand

prospects

Customersand

prospects

Face-to-faceselling

Face-to-faceselling

TelemarketingTelemarketing

Direct mailmarketing

Direct mailmarketing

Kioskmarketing

Kioskmarketing

Onlinemarketing

Onlinemarketing

DirectResponse

TV Market-ing

DirectResponse

TV Market-ing

Cataloguemarketing

Cataloguemarketing

Figure 16-1


Face-to-Face Selling

• The sales call – we have spoken about this many times

• Business-to-business heavily relies on this– Locate prospects– Make customers– Build relationships– Grow business

• Consumer companies– Use both sales force (push) and consumer

promotions etc (pull)


Telemarketing

• Using the telephone to sell customers directly

• Outbound– Sell to consumers and businesses

• Inbound– Receive orders from radio and TV

ads, direct mail and catalogues

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Direct-Mail Marketing

• Sending a reminder, announcement, offer, or other item to a person at a particular address– One-to-one– High selectivity– Personalized– Flexible– Measurement results

easy


Direct-Mail Marketing:New Forms of Mail Delivery

• Fax mail– Sent and received

instantly

• E-mail– Instant arrival– Stored until read– Mail filters– Spamming

• Voice mail– Leave selling messages

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Catalogue Marketing

• Selling via catalogues mailed to a select list of customers, or made available in stores

• Sales $120B• Web-based catalogues

– Passive and must be marketed

– Won’t replace print catalogues completely


Direct Response TV Marketing

• Infomercials– Advertising programs for a

single product

• Home shopping channels– Entire channel dedicated to

selling

• Direct response advertising– TV ad with toll-free telephone

ordering

It allows you to browse the latest headlines, get scores and schedules on sports programs, order free coupons or product samples, and even buy products - all by using your remote.


Kiosk Marketing

• Placing information and ordering machines at locations

• Some current uses:– Greeting card maker

– Fit woman’s jeans

– New car information

– Fundraising

– Trade shows


Online Marketing and Electronic Commerce

• Conducted through interactive online computer systems which link consumers with sellers (marketspaces)

• Commercial online services (AOL) that provide services for a fee– Growth is slowing

• Internet – While free, you need an ISP to get access– Began in the US with military

– >Billion websites now

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Online Marketing Channels

Four Ways to Conduct Online Marketing

Creating anElectronic Presence Online

PlacingAdvertisementsOnline

Using onlineE-mail or

Webcasting

Participating in InternetForums, Newsgroups and

“Web Communities”


Integrated Direct Marketing

Paid ad witha response

channel

Paid ad witha response

channelDirect mailDirect mail Outbound

telemarketing

Outboundtelemarketing

Continuingcommunication

Continuingcommunication

Face-to-facesales call

Face-to-facesales call


Global Marketingin the Twenty-first Century

• Faster communication, transportation, and financial flows

• International trade booming

• Intensifying global competition

• Foreign competition in home markets

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Global Marketingin the Twenty-first Century

• Era of free trade• Government assistance

– Team Canada

• Global is risky– Economics– Regulations– Tariffs– Trade barriers– Corruption


Deciding Whether to Go International

• In order to survive locally you need to think strategically about your industry

• Reasons:– Defensively

• Counterattack on competitor’s home turf• Reduce market dependence• Global competitors entering

– Offensively• Higher profits than at home• Shrinking domestic market

• Weigh risks and assess global ability

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Concentratedomestically

Concentratedomestically

Select entryoptions

Select entryoptions

Identify specific opportunitiesIdentify specific opportunities

Can we?Can we? No

Yes

Should we?Should we? NoMust we?Must we? No

Yes

Start

Improvecapability

Improvecapability

The Decision Process Involved in Determining Whether to Compete in Global Markets


Major Decisions in International Marketing

DecidingWhether to go international

DecidingWhether to go international

Decidingwhich markets

to enter

Decidingwhich markets

to enter

Looking at theglobal marketing

environment

Looking at theglobal marketing

environment

Deciding on theglobal marketing

program


program


organization


organization

Deciding howto enter the

market

Deciding howto enter the

market


The World Trade Organizationand GATT

• WTO formed as an umbrella organization to oversee world trade– 140 member countries

– Administers trade agreements

– Provides negotiation forum

– Handles trade disputes

• Oversees the General Agreement on Trade and Tariffs (GATT)– Designed to promote

world trade

– 8 rounds of negotiation since 1948


Global Marketing Environment:Regional Free Trade Zones

• European Union (EU)– Formed in 1957

– 15 members

– Euro currency

– Tremendous trade opportunity

– Big and competitive

– “Fortress Europe”

• North American Free Trade Agreement (NAFTA) - 1994

• Asian-Pacific Economic Cooperation (APEC)

• Mercosur - Latin America


Cultural Environment

• Every country has:– Folkways

– Norms

– Taboos

• Business behaviour– Personal distance

– Direct vs. diplomatic

– Lack of promotion

– Meeting and greeting

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Examples of Cultural Differences that Could Lead to Market Problems

Body Language

• Standing with your hands on your hips is a gesture of defiance in Indonesia.• Carrying on a conversation with your hands in your pockets makes a poor impression in France, Belgium, Finland, and Sweden.

• Shaking your head from side to side means yes in Bulgaria and Sri Lanke.

• Crossing your legs to expose the sole of your shoe is really taboo in Muslim countries. In fact, to call a person a “shoe” is a deep insult.

Physical Contact

• Patting a child on the head is a grave offense in Thailand or Singapore, since the head is revered as the location of the soul.

Promptness

• Be on time when invited for dinner in Denmark or in China. In Latin countries, your host or business associate would be surprised if you arrived at the appointed hour.

Eating and Cooking

• It is rude to leave anything on your plate when eating in Norway, Malaysia, or Singapore.

• In Egypt, it is rude not to leave something.

Other Social Customs

•In Spain, there is a very negative attitude toward life insurance. By receiving insurance benefits, a wife feels that she is profiting from her husbands death.


Politico-Legal and EthicalEnvironment

• Four key factors:– Attitudes toward

international buying– Government bureaucracy– Political stability– Monetary regulations

• Countertrade– Barter– Compensation (buyback)– Counterpurchase

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Import and Other Restrictions

• Common trade restrictions:– Tariffs

– Quotas

– Embargos

– Exchange controls

– Non-tariff barriers

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Economic Environment

• Marketers must evaluate the country’s:– Stage of economic development– Buying power of the people– Strength of the currency– And many more …


Deciding Which Markets to Enter

• Set marketing objectives and policies

• Volume of foreign sales• How many countries?• Types of countries?• Rank markets

• What are your decision criteria!!

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Indicators of Market Potential:Demographic Characteristics

• Size of population• Rate of population

growth• Degree of urbanization• Population density• Age structure and

composition of the population

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Indicators of Market Potential:Geographic Characteristics

• Physical size of a country

• Topographical characteristics

• Climate conditions

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Indicators of Market Potential:Economic Factors

• GNP per capita• Income distribution• Rate of growth of

GNP• Ratio of investment to

GNP

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Indicators of Market Potential:Technological Factors

• Level of technological skill

• Existing production technology

• Existing consumption technology

• Education levels


Indicators of Market Potential:Sociocultural Factors

• Dominant values• Lifestyle patterns• Ethnic groups• Linguistic

fragmentation

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Indicators of Market Potential:National Goals and Plans

• Industry priorities• Infrastructure

investment plans

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Deciding How to Enter Markets:Market Entry Strategies

Exporting

DirectIndirect

Joint venturing

LicensingContract manufacturingManagement contracting

Joint ownership

Direct investment

Assembly facilitiesManufacturingfacilities

Amount of commitment, risk, control, and profit potentialAmount of commitment, risk, control, and profit potential


Deciding on Global Marketing Program

• Standardized marketing mix or adapted marketing mix?– Marketing concept applies

– World brands

– Adapt only if local wants cannot be changed or avoided

• Think globally but act locally


Deciding on Global Marketing Program: Product

Develop newproduct

Communicationadaptation

Communicationadaptation

Dualadaptation

Dualadaptation

Productinvention

Productinvention

Straightextension

Straightextension

Productadaptation

Productadaptation

Adaptproduct

Don’t changeproduct

Don’tChangepromotion

Adaptpromotion

Product

Pro

mot

ion

International Product and Promotion Strategies


Deciding on Global Marketing Program: Promotion

• Message• Colours• Communication

adaptation strategy• Media availability


Deciding on Global Marketing Program: Price

• Not always the case but pricing in other countries generally is higher than domestic

• Foreign subsidiaries and the challenge of setting the right price

• Currencies – show problems• Influence of the internet – level playing

field• Moving towards standardizing


Deciding on Global Marketing Program: Distribution

• What level of control do you want to have• Do you give it to someone to sell or sell

it yourself?• Depending on the risk level and control

you want it will vary the program that is best for a company


Deciding on Global Marketing Organization

ExportingGlobal

OrganizationInternational

Division

bu602w11.ppt

Documents

directmail marketing

online marketing channels

growth rate online marketing

marketing management

customer databases

online email

individual customers

list of customers