c



  
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Personal Communication based marketing ± Direct and Interactive Marketing, Word-of-mouth

marketing, Personal selling




 
y Consumer-direct (CD) channels without marketing middlemen. Direct mail, telemarketing,
kiosks, websites, mobile devices,
y ong-term relationship with customer sought.
y ¦igh cost of reaching customers through sales force in traditional methods
Benefits ±
y ë





Many niches now, mass marketing strategies inappropriate
y Consumers short of time - prefer toll free numbers, websites.
y Courier industry growth enables delivery of goods
y uperstores often don¶t stock specialty items, so they have to be sold through direct
marketing.
y Marketers can buy mailing lists of various target groups (doctors, engineers etc.)
y 0lternative media and messages can be tested.
y Gffer and strategy less visible to competitors.
Direct Mail (key points in bold)
y ending an  , announcement, reward etc. individually to consumer
y ¦ighly selective mailing lists for 

 selectivity.
y Can be personalized
y 0llows 
  

 


 which type of communication
is succeeding)
y Cost higher than mass media, but targeted customers are better prospects
y Problem ± too many marketers using it ± the person sees it as µspam¶

G



 

    0lso to, µ  

 
 

  
   


   
   


 

Œ


  R-F-M formula

R ±Recency ± how much time passed since last purchase
F ± Frequency ± how many times purchased
M ± Monetary amount. ± how much they have so far spent
Identify prospects based on age, sex, income, education, occasions, previous mail-order purchases.
e.g. College students would buy laptops, backpacks. Newlyweds buy furniture, electronic equipments
Building customer database: Buy it from third-party/build it yourself through some promotion which
gets people to register. If someone does not want to give his contact details, use style of ICICI and
Zapp!

G 

›  





 

Important 0dvantage of Direct Marketing ± ability to test under different elements of offer strategy.
The envelope should be colored, different size than usual, handwritten address. The letter should have
P., toll free number and website address should be given. The designation of the undersigned should
be influencing. The impact of direct marketing is measured on the basis of awareness, intention to buy
and word of mouth.


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Based on planned campaign costs, determine
break-even response rate. (Net of returned merchandise and bad debts)
ong term measures ± average customer longevity, customer annual expenditure, average gross
margin minus average cost of customer acquisition and maintenance.
c

 

 send full time merchandise catalog or speciality catalogs, customer catalgos, or
business catalogs in print or CDs or online(websites). Done by IKE0, 0von.
Business Marketers ± put the catalog online, access to global consumers, printing and mailing costs
saved.
Important
y Manage customer lists to avoid duplication or bad debts
y Control inventory
y Gffer quality merchandise so returns are low
y Project a distinctive image

Œ

 
·se telephone and call centres. Provide service ± take orders, answer questions.
- Increases Revenue
- Decreases cost
- Improve customer satisfaction and interaction
— 

 ± Receiving calls from customers
 

± initiating calls to prospects and customers
—

 ± restrictions by govt. of India. Need to register at NDNC - N0TIGN0 DG NGT
C0 REGITRY

— 

 ±television commercials that combine information and entertainment. To promote
products which are complicated or technologically advanced.
e.g. Telebrands, 0sian ky hop

 



—



  

y Irritation
y ·nfairness ± marketers take advantage of naïve buyers especially the elderly
y Deception and Fraud ± exaggerate product features, price
y Invasion of privacy ± in building customer database

—



 
Internet ± interaction with customers and individualization of communication is the key.
0dvantages
y Can send tailored messages
y Measurement of · i.e. ·nique isitors, Number of hits, time spent can be done easily
y Contextual placement ± buy ads on sites that are related to the marketer¶s offerings.
Disadvantages
y Messages can be screened out ± block pop-ups
y Bogus clicks by software-powered web-sites inflate the no. of customer visits.
y Consumers can use the videos/messages of the advertisers and misuse it



 !
 


0 user will like a website if:
* It gets downloaded easily
* The front page is attractive
* Easy to navigate
* ecure
* Good font and colors

- Websites ± even µC¶ elements
y Context ± layout and design
y Content ± Text, pictures, sound and video
 y Community ± ·ser-to-user communication enabled or not on the site
y Customization ± site tailors itself to different users or allow users to personalize it
y Communication ± site-to-user, user-to-site and two-way
y Connection ± degree that site is linked to other sites.
y Commerce ± site¶s ability to enable commercial transactions
- Microsites ± limited area on web, not full websites. Paid for by an external
advertiser/company, Insurance ads on areas on car websites
- earch 0ds ± paid-search or pay-per-click. Google search throws ads of related
products/services when searching for any term.
- Display 0ds/Banner ads ± small boxes that contain a text and picture placed on relevant
websites.
- Behavioral targeting ± track online behavior of target customers to find best match. ay if a
customer is visiting insurance companies ads repeatedly then show an insurance ad on even a
non-related website such as sports site that he visits.
- Interstitials ± advertisements usually with video/animation that pop up between changes on a
website. ¦eadache reliever ads when falling stock prices are updated on a financial site.
- ponsorships ± sponsor websites such as news sites, financial sites, etc.
- 0lliances and affiliates ± one internet company working for another, 0mazon has one million
affiliates that post its banners on their sites.
- Gnline Communities ± companies sponsor online communities for users.
- E-Mail
- Mobile Marketing

O  
ocial networks ± includes both B2C and B2B. Particularly effective for smaller businesses for whom
customers feel a more personal relationship. Thought of one person can affect 2 others, on net it
increases to 8
Buzz and iral Marketing
* Buzz marketing ± generate excitement, create publicity, through unexpected or outrageous
means
* iral Marketing ± Pass on ads online [µhare¶] (word of mouse)

Gpinion eaders
hill Marketing or tealth Marketing ± Communication Researchers see the society as group of
cliques where people interact with each other frequently. Pay people to anonymously promote a
product or service in public places without disclosing their relationship to the sponsoring firm.

0s per Malcolm Gladwell, three factors arouse interests in ideas:

- Three kind of people need to be involved
 Maven: Knowledgeable about good as well as bad things
 Connector: ¦ave good networking
 alesmen : ¦ave a very good convincing/persuasive skill
- tickiness: an idea must be expressed
- The Power of Context: context helps people to organize groups
Blogs



  
"  



  
# 
 types of sales representative ± least creative to most creative
- Deliverer ± delivers the product (water, fuel, oil etc.)
- Grder taker ± inside order taker (stands behind the counter) or outside order taker
(supermarkets)
- Missionary ± doesn¶t take orders, builds goodwill, educates the actual or potential user
E.g. a medical detailer in a Pharma house
- Technician ± Engineering consultant to client companies
 - Demand creator ± one who uses creative methods to sell products/services
- olution vendor ± whose expertise is solving a customer¶s problem, not just sell a product


" G



 $

Tasks of sales force

y Prospecting ± search prospects
y Targeting - decide how to allocate time between prospects and customers
y Communicating ± give information about company¶s products or services
y elling ± approach customer, present product, answer doubts and close the sale
y ervicing ± provide consulting on problems, technical assistance, arrange financing
y Information Gathering - Conduct market research
y 0llocating ± Decide which customers to be given priority during product shortages.

everaged sales force ± because of high costs

y Representatives sell the more complex and customized products to large customers
y Inside salespeople and web-based ordering for low-end selling
y ead generation, order fulfillment, post-sale support can be outsourced

elling includes the support of

y Top management ± when national accounts or major sales are at stake
y Technical people ± supply information about product
y Customer-service reps ± provide installation, maintenance, and other services
y Gffice staff ±

Types
Direct sales force ± full-time or part time employees working exclusively for the company.
Contractual sales force ± manufacturers reps¶ sales agents and brokers
Inside sales personnel ± work from office using telephone or receive the visits from buyers
Field sales personnel ± travel and visit customers.


    

y trategic force ± technical and quality people
y Geographic sales force
y Distributor sales force ± to deal with distributors
y Inside sales force ± telemarketing


 
%& 

 
 '
y Group customers into classes based on annual sales volume
y Establish how many calls would be desirable for each of the customer class
y Multiply number of accounts to get total number of calls, arrive at the total workload in sales
calls per year
y Determine how many calls one rep can make on average
y 0nnual calls/0verage call one rep makes = no of sales people


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Fixed amount, variable amount, expense allowances, benefits.




  
" 
Recruiting and ales Representatives -> Training and upervising ales Representatives ->
supervising sales representatives -> motivating sales representatives -> evaluating sales
representatives

  

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y Norms for Prospect calls ± limit on how many calls should be made to a prospect
y ·sing sales time efficiently ± by using the help of inside sales people(tech support, sales
assistants and telemarketers)



 

 (
1. Prospecting and Qualifying ± Identify and qualify prospects.
2. Preapproach ± earn as much as possible about the prospect company and its buyers. Plan
overall strategy for an account
3. Presentation and Demonstration ± Communicate Features, 0dvantages, and benefits (F0B)
4. Gvercoming objections ± Customers pose psychological resistance (inertia), logical resistance
to price, company, delivery schedule etc.
5. Closing
. Follow up and maintenance

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+&' G

 
- Make (by developing): 0lso called Grganic Growth
- Buy (by acquisition)
 acquisition of patents from other companies
 buy other company
 buy license or franchise from other company

Œ$+&  ±

- Totally new, blockbuster products that can transform a market
- Continuous innovation and new variants on a basic product. For e.g. 80% of ony¶s
new products are made by modifying existing products

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+&' 
y The Innovation Imperative ± Continuous innovation is a necessity. Companies that do
this quickly seize the market.
y New Product uccess ± Established companies focus on


 


Newer companies create 

  
 that are cheaper and more likely to
alter the competitive spaceEstablished companies slow to react or invest in these
disruptive technologies, because they threaten their investment. The established
companies should continuously monitor customer¶s preferences so that they don¶t
face unforeseen situations.
 Key success factors
y ·nique, superior product
y Well-defined product concept ± careful assessment of target market,
product requirements and benefits before proceeding to produce
y New Product Failure ± reasons ±
 ignored or misinterpreted market research
 overestimates of market size
 high development costs: high R&D, manufacturing and marketing costs
  poor design
 incorrect positioning
 ineffective advertising
 insufficient distribution support
 hortage of important ideas in certain areas ± not much to improve
 Fragmented markets ± smaller market segments mean lower sales and profit
 ocial & government constraints ± Consumer safety & environmental
concerns
 Capital shortages: Not much funds
 horter required development time
 horter product life cycle: Rivals quickly copy
 Wrong timing: either late or early(market not developed yet)

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%


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y ½ 
  +&' senior mgmt. Must decide how much to
budget. ome companies finance a lot of products so that they will get few winners.
Gthers carefully test the prototypes through various stages
y G

%
 +&' Product Managers/¦igh level
management committee/Cross functional teams/ enture teams are given the
responsibility. kunk works are informal workplaces like garage etc where
intrapreneurial teams attempt to develop new products




   —

—
,

ideas from new products could come from
y Interacting with others ±
  Customers, employees, scientists, engineers, channel members, marketing
agencies, top management and even competitors
  Gne on one interviews and focus group discussions
  Market Research
  Crowd-sourcing or Co-creation ± inviting the internet community to help create
content or software
  ead users ± innovate products without knowledge of company itself
y Creativity Techniquesstimulating creativity in individuals and groups
y 0ttribute listing ± innovate by modify existing attributes
y Forced relationship ± consider each idea in relation with another
y Morphological analysis ± e.g. the transportation problem
y Reverse assumption analysis ± reverse all the normal assumptions
y New contexts ± take familiar processes into new contexts.
y Mind mapping ± link a thought to the thought that follows it, and so on.

ateral marketing ± combine two product concepts or ideas to create a new offering

—
 
 'drop poor ideas as early as possible as product development costs rise with
each successive stage
 - DRGP error ± company dismisses a good idea
- GG-error ± company permits a poor idea to move into development
- 0bsolute product failure ± loses money and its sales does not cover variable costs
- Partial product failure ± loses money but its sales cover variable costs & some of
fixed costs
- Relative product failure ± profit is lower than the company¶s target rate of return.



G
 


$
Gverall Probability of success = Probability of technical completion * Probability of
commercialization given technical completion * Probability of economic success given
commercialization




  
Product idea ± possible product the company might offer to the market
Product concept ± elaborated version of the idea expressed in consumer terms

c
Œ
 
Concept Development ± consumers don¶t buy product ideas, they buy product concepts. Each
concept represents a 
  that defines the product¶s competition.
y Choose a category concept and determine its perceptual map.
y Create a positioning map based on the perceptual map
y The product concept is made into a brand concept explained through a brand
positioning map to position the brand in the suitable segment

Concept Testingpresenting the product concept, either physically or symbolically to target

consumers and getting their reactions

Rapid Prototyping and virtual reality are being used to test product concepts
Testing is done on the following:
y Communicability and Believability
y Need level
y Gap level ± are there other products to satisfy this need or if not, what is the gap level
y Perceived value ± price perceived in relationship to value
y Purchase intention ± inclination to buy
y ·ser targets, purchase occasions, purchasing frequency

c

!
$
measure consumer preferences for alternative product concepts
Method for deriving the utility values that consumers attach to varying levels of a product¶s
attributes


 
 $preliminary 3 part strategy
1st part ± Target market¶s size, structure and behaviour; the planned product positioning and
the sales, market share and profit goals in the first few years
2nd part ± planned price, distribution strategy and marketing budget for the first year
3rd part ± describes long-run sales and profit goals and marketing mix strategy over time
½
!
$
evaluate proposal¶s business attractiveness
Estimating total sales ± first time sales + replacement sales + repeat sales



 
 
estimated by R&D, manufacturing, marketing and finance
departments
upplementary contribution ± change in income to other company products caused by the
new product campaign.
Drag along income ± additional income to them;
Cannibalized income ± reduced income.




   
c 


%


  ± Translating customer requirements into a working prototype is
helped by a set of methods known as Quality Function Deployment (QFD)
y Physical prototypes ± R&D dept. Develops one or more version of the product
concept.
y Customer Testsalpha testing ± testing within the firm, beta testing with customers


Œ
 
y Consumer Goods market Testing ± Estimate 


 

 





ales-wave research -