Internet and direct marketing Free Essay Example

Internet and direct marketing: how principles of direct marketing help companies deliver their objectives

1. INTRODUCTION

Technological innovation in the world has led to growth in the forms of media used in marketing. The use of Internet in marketing makes the dictum “the world is a global village” a reality. In order to outmaneuver their competitors, companies have make use of marketing means that are consumer-focused and friendly. Internet and direct marketing are some of such channels. The Internet serves as a panacea to direct marketing since it allows both marketers potential customers to have direct contact.

Mullin (2002) defines direct marketing as the communication between a buyer and seller unswervingly, without the use of intermediary media and with no distractions in between. This definition implies direct contact between a buyer and a seller. However, some authors such as Lee (2001) and Lafond et al (2005) have described direct marketing as a type of marketing that employs the use of media such as catalogues and the internet.

In the past (and even currently though on a limited scale) the use direct marketing entailed marketers mailing potential customers copies of catalogues so that the potential customers would have a view of the range of goods and services available at a personal level (Lee 2001). Lee (2001) described such a strategy as a “shotgun approach” since thee was direct communication from the seller to the buyer. Today however, the use of Internet seems to supersede other forms of media such as telephones, postal mails and television (Lee 2001). The use of internet allows the creation of large databases, which are shared by user in all parts of the world.

In the USA fro example, 30 percent of the 97 million households are online (Lee 2001). Thus, as Lee (2001) notes, online marketing has radically changed the way in which information is shared between customers and marketers. A wide range Information about top bands of commodities in the world is available in respective websites, to which customers can give their feedback. The companies manufacturing such goods thus have an opportunity to collect information, analyze it and put it into use (Lee 2001).

Since marketing is about a marketer reaching the customer in most appealing way direct marketing should be have principles that have a focal point in the same dimension. A direct marketer relies on feedback from the customer, as this is the main strength of such marketing. Thus, the principles of direct marketing lie in the fact that the marketer processes information from the customers on an individual basis, even if the customer number reaches millions (Baker 2002). Such an approach is a likely success since a company takes into consideration the needs of every individual customer that gives feedback. Therefore, any adjustments made by the company to its goods and services are meant to satisfy almost all its customers, which is of course a boon to sales.

In the process of direct marketing, companies use the business-to-business (B2B) and business-to-customer (B2C) approaches. A B2B approach of marketing involves a transaction between two businesses unlike the B2C transaction that involves a business organization and a consumer (Baker 2002) in the exchange of goods and or services. In essence, companies use both approaches in different ways in order to maximize their marketing potential, hence sales. For instance, one company can use the B2B approach to target another company that is a consumer of its products or services. The Automotive Service Association International organization and the American Iron and Steel Institute are two organizations involved in the B2B market (“biz2biz.com”). On the other hand, there a wide range of organizations involved in the B2C market, ranging from processors to manufacturers, such as General Motors and the Ford Company

2. LITERATURE REVIEW

2.1 Principles of direct marketing

Direct marketing employs more than one form of media to create a link between the seller and the buyer. For instance, on the Internet several channels of communication can be used between the two players. Thus direct marketing using the internet is appropriately an integrated form of marketing, thus the term integrated direct marketing as used by Roman (1995). Since directing marketing is customer focused, it has characteristics that reflect its purpose. Roman (1995) noted that direct marketing has to be premeditated in that all sales and marketing channels have to operate within a precise plan and be harmonized in order to maximize the intended benefits. Secondly, direct marketing has to be research based such that the steps taken by a company involved should be commensurate with the findings if the research (Roman 1995). A thorough understanding of the customer would make direct marketing more profitable. Thirdly, direct marketing should target the particular customer needs (Roman 1995). It would be a waste of resource for a company to get involved in direct marketing without knowledge of the customers preferred means of communication. For example some customers on the internet would prefer blogs, others would prefer videos and You-tube picture, while others would prefer authentic websites, and so on. Such variations must be considered in case a company wants to reap maximum benefits of direct marketing.

Based on the above considerations, Roman (1995) listed five principles that guide direct marketing. To begin with, direct marketing has to begin with the customer (Roman 1995). As earlier mentioned, the customer (whether in the B2B market or in the B2C market) is the focal point of marketing. As such all consideration must be made on the most appropriate medium of communication which is most captivating. Secondly, the marketing company has to listen to the sales field force (Roman 1995). It is obvious that the findings of market research are the most important ideas with respect to product or service modification by a company. Thirdly, the media used in direct marketing have to be synchronized (Roman 1995). While are used on the internet, there has to be a common ground for interpreting the information collected or ensuring that the information given various customers is congruent. In addition, the marketing company has to develop an incentive that provides value to the customer (Roman 1995). The internet per se is not a panacea for successful direct marketing. The marketing company has to be creative by providing other facilities such as contact phone numbers and use of sales people to reach the customers. Calling the customers to ascertain their feelings could inculcate a customer’s confidence in a company (Roman 1995). Finally all is marketing is not complete with just one contact between the marketing company and the customer. The process has to be repeated on and on (Roman 1995) in order to convince customers fully that a particular company’s goods or services are the best.

2.2 Organizations in the B2B market

2.2.1 Automotive Service Association

The Automotive Service Association (ASA) is a non-profit trade association that serves automotive professions in the United States and several other companies (“ASA”). ASA employs the B2B strategy by providing services to other business organizations such as garages and shops in terms of automotive repairs. ASA’s internet marketing strategy enables it to reach directly to customers in other countries who may be in need of the association’s services. Among the direct marketing strategies that the association uses are provision of online membership services in which potential customers can make enquiries about the association and other needs. The association also has a chat facility in which online customers can talk directly to its representatives and thereby get immediate feedback.

2.2.2 American Iron and Steel Institute

The American Iron and Steel Institute (AISI) is an umbrella organization for companies that deal in steel products in North America (“AISI”). Nevertheless, the information on its website (“AISI”) is helpful for companies dealing in steel all over the world. Among AISI’s objectives are to provide high quality value added products to a wide range of customers across the globe, and to increase the market for North American steel in both traditional and innovative applications. In this context, the second objective emphasizes an objective of direct marketing- increasing sales.

2.3 Organizations in the B2C market

2.3.1 General Motors

General Motors (GM) is a US-based automotive manufacturing company that has consumers the world over and is considered the world’s largest automaker (“GM”). The company manufactures a wide range of automotives such as Buick, Daewoo, Opel, Cadillac, Chevrolet and HUMMER to name but a few “GM”). The company has embraced direct marketing buy ensuring that its range of products are available on its website with full color that leaves a potential customer with desire for the company’s products. In addition, the website has contact addresses such that customers in USA or in other continents can directly sample the company’s products. The site gives the company’s history plus its reputation. As such, potential customers will go for GM products with confidence of the renowned reputation.

2.3.1 The Ford Company

Ford Motor Company’s website (“Ford Motor Company”) has a great deal of information on the vehicles made by the company, purchasing options, owner services, innovation and the company’ values. On visiting the site, a customer can sample the wide range of automotive brands such as Ford, Volvo and Mazda. In addition, the purchasing options give a customer a variety of services such as special offers, accessories and purchase modes. The company also highlights its values such as concern for the environment, education, diversity and community fund. This marketing strategy would make a potential consumer to have more than one reason for buying a Ford company product.

2.4 Evaluation of direct marketing in B2B and B2C markets

The use of internet as a medium of direct marketing adds impetus to organizations’ objectives in marketing. Both B2B and B2C organizations have benefit from the strategy since many individuals and companies are getting connected online to access information. Since some organizations rely on other organizations’ products, the online B2B market is usually busy with companies searching for the most appropriate alternatives for their needs (Lee 2001). In the same way the B2C market is the most saturated, with individuals and organizations busy looking for the most appropriate companies from which to shop online (Lee 2001).

3.  IMPORTANCE OF DIRECT MARKETING IN STRATEGIC, TACTICAL AND OPERATIONAL LEVEL

Direct marketing is an all-important strategy both to the sellers and buyers in the light of the aforementioned aspects. Kitchen and Pelsmacker (2004) noted that direct marketing is important to marketing companies in that it involves customers’ direct access to the companies’ information. As such, the companies involved in direct marketing have the ability to persuade the customer to buy their products (Kitchen and Pelsmacker 2004). Attractive websites such as those described above would unquestionably leave a household convinced to buy a particular company’s products. Moreover, a tactical aspect of direct marketing is that it is interactive (Kitchen & Pelsmacker 2004). Internet marketing is personalized. Only interested customers will visit particular websites. Moreover, since the websites are self-explanatory with links to particular areas of interest, the marketer does not have to persuade a buyer on television of by mail, the customer simply visits the links from which he or she would like to get information.

Additionally, direct marketing leads to behavioral response (Kitchen & Pelsmacker 2004). The importance of this is that as potential customers visit various websites to access information, they become used to doing so and so visit the websites frequently to get the latest information about a company’s products.  Kitchen and Pelsmacker (2004) also noted that direct marketing is convenient for the customer. This is indubitably true since with the advent of personal computers, potential customers can browse the Internet at their own convenient time and make decisions. Operationally, this is advantageous to both sellers and buyers since the seller does not have to interrupt the buyer with frequent promotional visits.

Direct marketing is also important in that it promotes improvement of service. Using the automotive industry as an example, customers from different parts of the world can visit car manufacturers’ websites and recommend the cars they would prefer for the terrains in their countries. This would compel the manufacturers to adjust accordingly at the advantage of their sales. More over other comments from people visiting website can be valuable and the company would save a great deal spending in research.

4. IMPORTANCE OF DATABASE MARKETING AND INTERNET MARKETING IN DEVELOPING DIRECT MARKETING STRATEGY

An important aspect of using the internet for direct marketing is the ability of the marketer to have a database of customer. In database marketing, the marketing company can select from in its database a list of customers it intends to send messages through phone, email or postal mail (Drozdenko & Drake 2002). Unlike aggregate marketing which targets the average customer, database marketing is specific to individuals. Thus, a company can search from its database a  list of customers deemed to be regular customers and send them messages tailored specifically for them (Drozdenko & Drake 2002). Thus, a strong relationship between a seller and a buyer is created over the internet, which enhances the direct marketing strategy. In this context, Internet and database marketing offer a strong link between marketing companies and the customers. Moreover, regular customers can be encouraged to forward the message they receive to their friends. This further develops the direct marketing strategy.

CONCLUSION

Internet marketing is a vital strategy for organizations to outwit their rivals. The principles of direct marketing have to be assiduously implemented with special focus to the customer since marketing targets the customer.  Organizations in either B2B or B2C markets reap the benefits of marketing over the internet. The organizations involved in direct marketing over the internet enjoy the benefits of being close to their customers, albeit virtually. As such, customers also enjoy the direct contact they have with the sellers. Database marketing is more customer-specific and boosts the customer-seller relationship.

REFERENCES

“AISI,” American Iron and Steel Institute, Available from: http://www.steel.org//AM/Template.cfm?Section=About_AISI (October 15, 2008)

“ASA,” Automotive Service Association, Available from http://www.asashop.org/ (October 15, 2008)

 “Ford Motor Company,” Available from: http://www.ford.com/about-ford/company-information (October 15, 2008)

“GM,” General Motors, Available from: http://www.gm.com/corporate/about/ (October 15, 2008)

Baker, M J 2002, The Marketing Book, Butterworth-Heinemann, New York

Biz2biz.com, Automotive Professional Associations, Available from: http://www.biz2biz.com/organizations/ (October 15, 2008)

Drozdenko, R & Drake P D, 2002, Database Marketing and E-commerce: Strategy, Development, and Data Mining, SAGE, London

Kitchen, P J & Pelsmacker P de 2004, Integrated Marketing Communication: A Primer Routledge, New York:

Lafond, R; Sinha, C; Institute of Southeast Asian Studies,&  International Development Research Centre (Canada) 2005, E-commerce in the Asian Context: Selected Case Studies, IDRC, Ontario

Lee, O 2001, Internet Marketing Research: Theory and Practice Idea Group Inc (IGI), New York

Mullin, R 2002, Direct Marketing: A Step-by-step Guide to Effective Planning and Targeting, Kogan Page Publishers, New York

Roman E 1995, Integrated Direct Marketing: Techniques and Strategies for Success McGraw-Hill Professional, London