Topic: Direct Marketing

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Purpose of this Document

Dear Student,

The sole purpose of this document is to help you in organizing your thoughts & knowledge for the
upcoming CSFA-Foundation level exam and also for your placements in near future. We have discussed
with many of our friends who are regularly visiting campuses across nation for hiring students from MBA
colleges as to what they look in the candidate when they are hiring for sales or marketing profile and
keeping in mind the finer details pointed out by them we have shortlisted various topics which an
interviewer feels that the potential candidate should know thoroughly.

We have covered few important contemporary topics in brief which a student studying or is interested in
marketing should know. Also we have shortlisted topics here, which will help you in covering your
syllabus for CSFA-Foundation level as well as for your marketing interviews. These topics are in addition
to the study materials, which have been earlier provided by Team Mercadeo for your learning purpose.
We hope that CSFA will help you in preparing for your future ordeals in a more confident way and you
make a good name for yourself in the field chosen by you.

All the best

Cheers

Team Mercadeo

Direct Marketing
Mail order pioneer Aaron Montgomery Ward knew that by using the technique of selling products
directly to the customer at appealing prices could, if executed effectively and efficiently, revolutionize the
market industry and therefore be used as an innovative model for marketing products and creating
customer loyalty. The term "direct marketing" was coined long after Montgomery Ward's time.

In 1872, Aaron Montgomery Ward produced the first mail-order catalogue for his Montgomery Ward
mail order business. By buying goods and then reselling them directly to customers, Ward was
consequently removing the middlemen at the general store and, to the benefit of the customer, drastically
lowering the prices. The Direct Mail Advertising Association, predecessor of the present-day Direct
Marketing Association, was first established in 1917. Third class bulk mail postage rates were established
in 1928.

In 1967, Lester Wunderman identified, named, and defined the term "direct marketing". Wunderman
considered to be the father of contemporary direct marketing is behind the creation of the toll-free 1-
800 number and numerous loyalty marketing programs including the Columbia Record Club, the
magazine subscription card, and the American Express Customer Rewards program.

Direct Marketing is a form of advertising that removes the "middle man" from the promotion process,
as a company's message is provided directly to a potential customer. It involves advertising techniques
that can include Cell Phone Text messaging, email, interactive consumer websites, online display ads,
fliers, catalog distribution, promotional letters, targeted television commercials, response-generating
newspaper/magazine advertisements, and outdoor advertising. Amongst its practitioners, it is also
referred to as Direct Response Advertising.


Direct marketing is practiced by businesses of all sizes from the smallest start-up to the leaders on the
Fortune 500. A well-executed direct advertising campaign can prove a positive return on investment by
showing how many potential customers responded to a clear call-to-action. General advertising eschews
calls-for-action in favor of messages that try to build prospects emotional awareness or engagement
with a brand. Even well-designed general advertisements rarely can prove their impact on the
organizations bottom line. The demonstrable result of Direct Marketing is the reason for its increasing
popularity.

Direct marketing is attractive to many marketers because its positive results can be measured directly.
For example, if a marketer sends out 1,000 solicitations by mail and 100 respond to the promotion, the
marketer can say with confidence that campaign led directly to 10% direct responses. This metric is
known as the 'response rate,' and it is one of many clearly quantifiable success metrics employed by
direct marketers. In contrast, general advertising uses indirect measurements, such as awareness or
engagement, since there is no direct response from a consumer.

Direct marketing messages emphasize a focus on the customer, data, and accountability. Hence, besides
the actual communication, creation of actionable segments, pre and post campaign analytics, and
measurement of results, are integral to any good Direct Marketing campaign.

Characteristics that distinguish direct marketing are:

A database of names (prospects, customers, businesses, etc.), often with certain other relevant

information such as contact number/address, demographic information, purchase habits/history,

company history, etc., is used to develop a list of targeted entities with some existing common interests,
traits or characteristics. Generating such a database is often considered part of the Direct Marketing
campaign.

Marketing messages are addressed directly to this list of customer and/or prospects. Direct

marketing relies on being able to address the members of a target market. Addressability comes in a
variety of forms including email addresses, phone numbers, Web browser cookies, fax numbers and
postal addresses.

Direct marketing seeks to drive a specific "call to action." For example, an advertisement may ask

the prospect to call a free phone number, mail in a response or order, or click on a link to a website.

Direct marketing emphasizes trackable, measurable responses, results and costs from prospects

and/or customers regardless of medium.

Measurement of results is a fundamental element in successful direct marketing. The Internet has made
it easier for marketing managers to measure the results of a campaign. This is often achieved by using a
specific website landing page directly relating to the promotional material. A call to action will ask the
customer to visit the landing page, and the effectiveness of the campaign can be measured by taking the
number of promotional messages distributed (e.g., 1,000) and dividing it by the number of responses
(people visiting the unique website page). Another way to measure the results is to compare the
projected sales or generated leads for a given term with the actual sales or leads after a direct
advertising campaign.


Reference Link backs:
http://en.wikipedia.org/wiki/Direct_marketing#History
http://www.investopedia.com/terms/d/direct-marketing.asp

DISCLAIMER
This content in not a copyright of Mercadeo Education we have just tried to accumulate the data from various sources and put them together for the CSFA classroom.
We have placed all the references from where the content has been sourced.