Marketing management Chapter 19 pps

ADDRESS THE FOLLOWING QUESTIONS: 1. How can companies use integrated direct marketing for competitive advantage? 2. How can companies do effective e-marketinq? 3. What decisions do companies face in designing a sales force? 4. How do companies manage a sales force efficiently? 5. How can salespeople improve selling, negotiating, and relationship marketing skills? CHAPTER 19 MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING Today, marketing communications are increasingly seen as an interactive dialogue between the company and its customers. To make the sale to customers, marketers must work hard and work smart. Companies must ask not only "How can we reach our customers?" but also, "How can our customers reach us?" Thanks to technolog- ical breakthroughs, people can now communicate through tradi- tional media (newspapers, magazines, radio, telephone, television, billboards), as well as through computers, fax machines, cellular phones, pagers, and wireless appliances. By decreasing communications costs, the new technologies have encouraged more companies to move from mass communication to more targeted communications and one-to-one dialogue. But companies are also using their sales force to provide a human touch to their marketing. A Newell Rubbermaid trainee filling a product dispenser as part of his participation in the company's Phoenix program. 603 ewe// Rubbermaid's Phoenix program takes college graduates and assigns them to Wal-Mart, The Home Depot, Lowe's, and other retailers where they do everything from stocking shelves to demonstrating new stain-resistant plastic food containers to organizing in- store scavenger hunts. The 500+ college graduates selected for the program are chosen based on their accomplishments outside the classroom. Personable jocks or sorority presidents are favored on the basis of evidence of ambition, leadership, and teamwork. They then receive intensive training 604 PART 7 COMMUNICATING VALUE on effective retail marketing strategies to increase consumer demand in the seven to eight stores to which they are assigned. With their logo-emblazoned Chevy Trailblazers, the highly motivated and energetic sales force has generated, on average, double-digit, year-to-year sales increases.' 1 Personalizing communications—and saying and doing the right thing to the right person at the right time—is critical. In this chapter, we consider how companies personalize their marketing communications to have more of an impact. We begin by evaluating direct marketing; then we consider personal selling and the sales force. ::: Direct Marketing Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen. These channels include direct mail, catalogs, telemarketing, interactive TV, kiosks, Web sites, and mobile devices. Direct marketers seek a measurable response, typically a customer order. This is sometimes called direct-order marketing. Today, many direct marketers use direct marketing to build a long-term relationship with the customer. 2 They send birthday cards, information materials, or small premiums to certain customers. Airlines, hotels, and other businesses build strong customer relationships through frequency award programs and club programs. Direct marketing is one of the fastest-growing avenues for serving customers. More and more business marketers have turned to direct mail and telemarketing in response to the high and increasing costs of reaching business markets through a sales force. In total, sales from direct marketing generate almost 9 percent of the U.S. economy. 3 In addition to trying to increase sales force productivity, companies are seeking to substitute mail- and phone-based selling units to reduce field sales expenses. Sales produced through tra- ditional direct-marketing channels (catalogs, direct mail, and telemarketing) have been growing rapidly. Whereas U.S. retail sales grow around 3 percent annually, catalog and direct-mail sales grow at about double that rate. Direct sales include sales to the consumer market (53 percent), B2B (27 percent), and fund-raising by charitable institutions (20 percent). Total media expenditures for direct marketing in 2000 (including direct mail, telephone, broadcast, Internet, newspaper, magazine, etc.) has been estimated at $236.3 billion. 4 Figure 19.1 provides a break- down of the various types of direct marketing. The Benefits of Direct Marketing The extraordinary growth of direct marketing is the result of many factors. Market demassi- fication has resulted in an ever-increasing number of market niches. Higher costs of driving, traffic congestion, parking headaches, lack of time, a shortage of retail sales help, and lines at checkout counters all encourage at-home shopping. Consumers appreciate toll-free phone numbers and Web sites available 24 hours a day, 7 days a week, and direct marketers' commitment to customer service. The growth of next-day delivery via FedEx, Airborne, and UPS has made ordering fast and easy. In addition, many chain stores have dropped slower- moving specialty items, creating an opportunity for direct marketers to promote these items to interested buyers. The growth of the Internet, e-mail, mobile phones, and fax machines has made product selection and ordering much simpler. Direct marketing benefits customers in many ways. Home shopping can be fun, convenient, and hassle-free. It saves time and introduces consumers to a larger selection of merchandise. They can do comparative shopping by browsing through mail catalogs and online shopping BUSINESS ORGANIZATION ' 13 million Businesses 1 U.S. Aggr. Sales $17,590 trillion i Finance Marketing Production Direct Marketing Marketing Research Market Segmentation • Consumer • Industrial Direct Response Marketing Advertising Creation • Direct (response) • Indirect (support) Media 2000 Total Spending S421.98 billion Direct Mail ME:S44,715B Postal Non-Postal List Rental Telephone ME:S167,700B Broadcast ME: S73,020B Internet ME: S3.2B Newspaper ME: $49,246B Magazine ME:S17,083B Outbound ME: S58,850B Television ME: $53,435B Local ME: S42.062B Consumer ME:$12,348B Radio ME:S19,585B National ME:S7,184B Farm ME: 0,340B Inbound ME: S58.850B Business Papers ME: S4.395B Direct Response Expenditures 2000 S236.26B Channels of Distribution Measurable Response and/or Transaction Vending Machines Sales S41.350B Mail Order-Mail/Phone Sales $289.01 B Personal Visit to Seller (Retail) Sales S5,223,000B I Personal Visit or Call to Buyer Sales S12.037.0B Customer/Prospect Databases Response/Transaction Fulfillment Misc. Media ME: S66.943B Yellow Pages ME:12,367B Outdoor ME: $1,540B Trade shows ME:12.6B Other ME: S40,436B I Direct Mail Telephone Broadcast Internet Newspaper Magazine Misc. Media $44,715B S58.850B $32.85B S3.28B S22.05B $7,650B $66,943B I FIG. 19.1 Direct Marketing Flow Chart Source: Reprinted with permission from Direct Marketing magazine, 224 Seventh Street. Garden City, New York, 11530-5771. 606 PART 7 COMMUNICATING VALUE - services. They can order goods for themselves or others. Business customers also benefit by learning about available products and services without tying up time in meeting salespeople. Sellers benefit as well. Direct marketers can buy a mailing list containing the names of almost any group: left-handed people, overweight people, millionaires. They can customize and personalize messages. Direct marketers can build a continuous relationship with each customer. The parents of a newborn baby will receive periodic mailings describing new clothes, toys, and other goods as the child grows. Direct marketing can be timed to reach prospects at the right moment and receive higher readership because it is sent to more interested prospects. Direct marketing permits the testing of alternative media and messages in search of the most cost-effective approach. Direct marketing also makes the direct marketer's offer and strategy less visible to competi- tors. Finally, direct marketers can measure responses to their campaigns to decide which have been the most profitable. (However, see "Marketing Memo: Public and Ethical Issues in Direct Marketing.") Direct marketers can use a number of channels to reach individual prospects and customers: direct mail, catalog marketing, telemarketing, TV and other direct-response media, kiosk marketing, and e-marketing. LANDS' END A direct merchant of traditionally styled, upscale clothing for the family, soft luggage, and products for the home, Lands' End sells its offerings through catalogs, on the Internet, and in stores, after being acquired by Sears for S1.86 billion in 2002. The catalogs came out four times a year starting in 1964 and included detailed write-ups of products. Lands' End was an early adopter of the Internet, launching its Web site in 1995. The U.S. site offers every Lands' End product and is the world's largest apparel Web site in sales volume. A leader in developing new ways to enhance shopping experiences, customers can create a 3-D Virtual Model of themselves by providing critical measurements or a "personal wardrobe consultant" by answering questions about their clothing preferences. Weekly e-mails with quirky tales and discounts also drive sales. A story of how a customer wore his Lands' End mesh shirt to a preserve for orphaned chimpanzees in the Republic of Ghana led to an increase of 40 percent in sales of the shirt that week. 5 Direct Mail Direct-mail marketing involves sending an offer, announcement, reminder, or other item to a person. Using highly selective mailing lists, direct marketers send out millions of mail pieces each year—letters, flyers, foldouts, and other "salespeople with wings." Some direct marketers mail audiotapes, videotapes, CDs, and computer diskettes to prospects and customers. MARKETING MEMO THE PUBLIC AND ETHICAL ISSUES IN DIRECT MARKETING Direct marketers and their customers usually enjoy mutually rewarding relationships. Occasionally, however, a darker side emerges: Irritation: Many people do not like the increasing number of hard-sell, direct-marketing solicitations. Especially bothersome are dinnertime or late-night phone calls, poorly trained callers, and computerized calls placed by auto-dial recorded-message players. Unfairness: Some direct marketers take advantage of impulsive or less sophisticated buyers. TV shopping shows and infomercials may be the worst culprits with their smooth-talking hosts and claims of drastic price reductions. Deception and fraud: Some direct marketers design mailers and write copy intended to mislead buyers. They may exag- gerate product size, performance claims, or the "retail price." The Federal Trade Commission receives thousands of com- plaints each year about fraudulent investment scams or phony charities. i Invasion of privacy: It seems that almost every time consumers order products by mail or telephone, enter a sweepstakes, apply for a credit card, or take out a magazine subscription, their names, addresses, and purchasing behavior may be added to several company databases. Critics worry that marketers may know too much about consumers' lives, and that they may use this knowledge to take unfair advantage. People in the direct-marketing industry are attempting to address these issues. They know that, left unattended, such problems will lead to increasingly negative consumer attitudes, lower response rates, and calls for greater state and federal regulation. In the final analysis, most direct marketers want the same thing that consumers want: honest and well-designed marketing offers targeted only to those consumers who appreciate hearing about the offer. MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING CHAPTER 19 607 Direct mail is a popular medium because it permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement. Although the cost per thousand people reached is higher than with mass media, the people reached are much better prospects. Direct mail may be paper-based and handled by the U.S. Postal Service, telegraphic services, or for-profit mail carriers such as FedEx, DHL, or Airborne Express. Alternatively, marketers may employ fax mail, e-mail, or voice mail to sell direct. Direct-mail marketing has passed through a number of stages: E "Carpet bombing." Direct mailers gather or buy as many names as possible and send out a mass mailing. Usually the response rate is very low. • Database marketing. Direct marketers mine the database to identify prospects who would have the most interest in an offer. a Interactive marketing. Direct marketers include a telephone number and Web address, and offer to print coupons from the Web site. Recipients can contact the company with questions. The company uses the interaction as an opportunity to up-sell, cross-sell, and deepen the relationship. B Real-time personalized marketing. Direct marketers know enough about each customer to customize and personalize the offer and message. • Lifetime value marketing. Direct marketers develop a plan for lifetime marketing to each valuable customer, based on knowledge of life events and transitions. One company long recognized for its strong, beneficial focus on customers is Maine's L.L. Bean, Inc., which sells outdoor/casual clothing and equipment through mail order, online catalogs, and retail stores and factory outlets. To maximize customer satisfaction, the company has an unequivocal, 100 percent guarantee for all purchases. Founder L.L. Bean placed a notice on the wall of the Freeport store in 1916, which proclaimed, "I do not consider a sale complete until goods are worn out and customer still satisfied." Bean even once refunded the money on a pair of two-year-old shoes because the customer said the pair did not wear as well as expected! 6 In constructing an effective direct-mail campaign, direct marketers must decide on their objectives, target markets, and prospects; offer elements, means of testing the campaign, and measures of campaign success. • ANZ BANK Australia's ANZ Bank's "Change Your Home to Suit Your Life" campaign was chosen winner of the 2003 Direct Marketing Association award as top international direct and interactive marketing campaign. Direct-response agency M&C Saatchi used sophisticated data analysis to identify and tailor a campaign to raise interest in home loans. Database profiling was used to select customers from 16 distinct groups of targets. Direct mail then offered information specific to each target audience, reflecting the recipient's situation and specific needs. As a result of the campaign, ANZ received a record number of calls to its home buyers' line—an 83 percent year-on-year increase— a 3 percent rise in home loan applications, and a 47 percent increase in campaign recognition. The direct-mail campaign specifically resulted in 4,922 new accounts or mortgages with a conversion rate of 6 percent. 7 )BJECTIVES Most direct marketers aim to receive an order from prospects. A campaign's success is judged by the response rate. An order-response rate of 2 percent is normally con- sidered good, although this number varies with product category and price. Direct mail can achieve other communication objectives as well, such as producing prospect leads, strengthening customer relationships, informing and educating customers, reminding customers of offers, and reinforcing recent customer purchase decisions. TARGET MARKETS AND PROSPECTS Direct marketers need to identify the characteristics of prospects and customers who are most able, willing, and ready to buy. Most direct marketers apply the R-F-M formula [recency, frequency, monetary amount) for rating and select- ing customers. For any proposed offering, the company selects customers according to how much time has passed since their last purchase, how many times they have purchased, and how much they have spent since becoming a customer. Suppose the company is offering a leather jacket. It might make this offer to customers who made their last purchase between 30 and 60 days ago, who make three to six purchases a year, and who have spent at least $100 608 PART 7 COMMUNICATING VALUE MARKETING MEMO WHEN YOUR CUSTOMER IS A COMMITTEE One of the many advantages of database marketing and direct mail is that they allow you to tailor format, offer, and sell messages to the target audience(s). Business marketers can create a series of interrelated and reinforced mailings to decision makers and decision influencers. Here are some tips for increasing success in selling to a customer-by-committee: • When creating lead generation and follow-up mailings, remember that most business mailings are screened once, twice, or even more before reaching your targeted audience. n Plan and budget for a series of mailings to each of your customer-by- committee members. Timing and multiple exposures are critical in reaching these audiences. • Whenever possible, mail to individuals by name and title. Using the title helps the in-office mail screener reroute your mailing if the individual addressed has moved on to another job. • Do not necessarily use the same format and size for reaching all your targeted audiences. A more expensive-looking envelope may reach the president or CEO, but it may be equally effective to use a less expensive, less personal format to reach other decision influencers. Tell your customer-by-committee that you are communicating with others in the organization. Make your decision influencers feel important. They can be your biggest advocates. When communicating with different audiences, make sure you anticipate—and address—their individual buying objectives and objections. When your database or mailing lists cannot help you reach all the key people, ask the individual you are addressing to pass along your information. When doing a lead-generation mailing, make sure to ask for the names and titles of those who might be interested and involved in the buying decision. Enter this information into your database. Even though it may seem like a lot of work (and expense) to write different versions of the same letter and create different offers, there is a big payoff. The final decision maker may be interested in having a payback calculated, but others may be interested in day-to-day benefits such as safety, convenience, and time sav- ings. Tailor your offer to your targets. Source: Adapted from Pat Friesen, "When Your Customer Is a Committee," Target Marketing (August 1998): 40. since becoming customers. Points are established for varying R-F-M levels, and each customer is scored. The higher the score, the more attractive the customer. The mailing is sent only to the most attractive customers. 8 Prospects can also be identified on the basis of such variables as age, sex, income, educa- tion, and previous mail-order purchases. Occasions provide a good departure point for segmentation. New parents will be in the market for baby clothes and baby toys; college freshmen will buy computers and small television sets; newlyweds will be looking for housing, furniture, appliances, and bank loans. Another useful segmentation variable is consumer lifestyle or "passion" groups, such as computer buffs, cooking buffs, and outdoor buffs. For business markets, Dun & Bradstreet operates an information service that provides a wealth of data. In B2B direct marketing, the prospect is often not an individual but a group of people or a committee that includes both decision makers and multiple decision influencers. See "Marketing Memo: When Your Customer Is a Committee" for tips on crafting a direct-mail campaign aimed at business buyers. Once the target market is defined, the direct marketer needs to obtain specific names. The company's best prospects are customers who have bought its products in the past. Additional names can be obtained by advertising some free offer. The direct marketer can also buy lists of names from list brokers, but these lists often have problems, including name duplication, incomplete data, and obsolete addresses. The better lists include overlays of demographic and psychographic information. Direct marketers typically buy and test a sample before buying more names from the same list. OFFER ELEMENTS Nash sees the offer strategy as consisting of five elements—the product, the offer, the medium, the distribution method, and the creative strategy. 9 Fortunately, all of these elements can be tested. In addition to these elements, the direct-mail marketer has to decide on five components of the mailing itself: the outside envelope, sales letter, circular, reply form, and reply envelope. Here are some findings: 1. The outside envelope will be more effective if it contains an illustration, preferably in color, or a catchy reason to open the envelope, such as the announcement of a contest, MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING premium, or benefit. Envelopes are more effective when they contain a colorful com- memorative stamp, when the address is hand-typed or handwritten, and when the envelope differs in size or shape from standard envelopes. 10 2. The sales letter should use a personal salutation and start with a headline in bold type. The letter should be printed on good-quality paper and be brief. A computer-typed letter usually outperforms a printed letter, and the presence of a pithy P.S. increases the response rate, as does the signature of someone whose title is important. 3. In most cases, a colorful circular accompanying the letter will increase the response rate by more than its cost. 4. Direct mailers should feature a toll-free number and also send recipients to their Web site. Coupons should be printed out at the Web site. 5. The inclusion of a postage-free reply envelope will dramatically increase the response rate. Direct mail should be followed up by an e-mail, which is less expensive and less intrusive than a telemarketing call. TESTING ELEMENTS One of the great advantages of direct marketing is the ability to test, under real marketplace conditions, different elements of an offer strategy, such as products, product features, copy platform, mailer type, envelope, prices, or mailing lists. Direct marketers must remember that response rates typically understate a campaign's long-term impact. Suppose only 2 percent of the recipients who receive a direct-mail piece advertising Samsonite luggage place an older. A much larger percentage became aware of the product (direct mail has high readership), and some percentage may have formed an intention to buy at a later date (either by mail or at a retail outlet). Furthermore, some of them may mention Samsonite luggage to others as a result of the direct-mail piece. To derive a more comprehensive estimate of the promotion's impact, some companies are measuring the impact of direct marketing on awareness, intention to buy, and word of mouth. MEASURING CAMPAIGN SUCCESS: LIFETIME VALUE By adding up the planned campaign costs, the direct marketer can figure out in advance the needed break-even response rate. This rate must be net of returned merchandise and bad debts. Returned merchandise can kill an otherwise effective campaign. The direct marketer needs to analyze the main causes of returned merchandise (late shipment, defective merchandise, damage in transit, not as advertised, incorrect order fulfillment). By carefully analyzing past campaigns, direct marketers can steadily improve performance. Even when a specific campaign fails to break even in the short run, it can still be profitable in the long run if customer lifetime is factored in (see Chapter 5). A customer's ultimate value is not revealed by a purchase response to a particular mailing. Rather, it is the expected profit made on all future purchases net of customer acquisition and maintenance costs. For an average customer, one would calculate the average customer longevity, average customer annual expenditure, and average gross margin, minus the average cost of customer acquisition and maintenance (properly discounted for the opportunity cost of money). 11 Catalog Marketing In catalog marketing, companies may send full-line merchandise catalogs, specialty consumer catalogs, and business catalogs, usually in print form but also sometimes as CDs, videos, or online. JCPenney and Spiegel send general merchandise catalogs. Victoria's Secret and Saks Fifth Avenue send specialty clothing catalogs to the upper-middle-class market. Through their catalogs, Avon sells cosmetics, W R. Grace sells cheese, and IKEA sells furniture. Many of these direct marketers have found that combining catalogs and Web sites can be an effective way to sell. Thousands of small businesses also issue specialty catalogs. Large businesses such as Grainger, Merck, and others send catalogs to business prospects and customers. Catalogs are a huge business—about 71 percent of Americans shop from home using catalogs by phone, mail, and Internet. They spent an average of $149 per catalog order in 2002. 12 The success of a catalog business depends on the company's ability to manage its customer lists carefully so that there is little duplication or bad debts, to control its inventory carefully, to offer quality merchandise so that returns are low, and to project a distinctive image. Some companies distinguish their catalogs by adding literary or information features, sending swatches of materials, operating a special hot line to answer questions, sending gifts to their best customers, and donating a percentage of the profits to good causes. 610 PART 7 COMMUNICATING VALUE PATAGONIA "Stunning," "soaring," and "wonderful" were a few of the adjectives that Catalog Age judges used in awarding Patagonia's fall 2002 edition their Catalog of the Year prize. The judges cited the spectacular cover shot of South American mountains, the excellent selection of merchandise, and the superb presentation. Copy was lauded as being highly detailed without being technical, high-quality photographs were seen as providing strong visual images, and environmental essays and field reports were deemed to add relevant editorial substance. The judges also cited the catalog's strong customer service policies and ease of ordering. 13 The cover of the award-winning Patagonia catalog, Fall 2002 edition. Global consumers in Asia and Europe are catching on to the catalog craze. In the 1990s, U.S. catalog companies such as L.L. Bean, Lands' End, Eddie Bauer, and Patagonia began setting up operations in Japan—and with great success. In just a few years foreign catalogs— mostly from the United States and a few from Europe—have won 5 percent of the $20 billion Japanese mail-order catalog market. A full 90 percent of L.L. Bean's international sales come from Japan. Consumer catalog companies such as Tiffany & Co., Patagonia, Eddie Bauer, and Lands' End are also entering Europe. Business marketers are making inroads as well. Sales to foreign (mainly European) markets have driven earnings increases at Viking Office Products and computer and network equipment cataloger Black Box Corporation. Viking has had success in Europe because, unlike the United States, Europe has fewer superstores and is very receptive to mail order. Black Box owes much of its international growth to its customer service policies, which are unmatched in Europe. 1,1 By putting their entire catalogs online, catalog companies have better access to global consumers than ever before, and save considerable printing and mailing costs in the process. MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING CHAPTER 19 611 Telemarketing Telemarketing is the use of the telephone and call centers to attract prospects, sell to existing customers, and provide service by taking orders and answering questions. Telemarketing helps companies increase revenue, reduce selling costs, and improve customer satisfaction. Companies use call centers for inbound telemarketing (receiving calls from customers) and outbound telemarketing (initiating calls to prospects and customers). In fact, companies carry out four types of telemarketing: a Telesales. Taking orders from catalogs or ads and also doing outbound calling. They can cross-sell the company's other products, upgrade orders, introduce new products, open new accounts, and reactivate former accounts s Telecoverage. Calling customers to maintain and nurture key account relationships and give more attention to neglected accounts. a Teleprospecting. Generating and qualifying new leads for closure by another sales channel. E Customer service and technical support. Answering service and technical questions. Although telemarketing has become a major direct-marketing tool, its sometimes intrusive nature led to the establishment by the Federal Trade Commission of a National Do Not Call Registry in October 2003 so that consumers could indicate if they did not want telemarketers to call them at home. Only political organizations, charities, telephone surveyors, or companies with existing relationships with consumers were exempt. 15 Telemarketing is increasingly used in business as well as consumer marketing. Raleigh Bicycles uses telemarketing to reduce the amount of personal selling needed for contacting its dealers. In the first year, sales force travel costs were reduced by 50 percent and sales in a single quarter went up 34 percent. Telemarketing, as it improves with the use of video- phones, will increasingly replace, though never eliminate, more expensive field sales calls. An increasing number of salespeople have made five- and six-figure sales without ever meeting the customer face-to-face. Effective telemarketing depends on choosing the right telemarketers, training them well, and providing performance incentives. Here is an example of successful telemarketing. i- USAA USAA, located in San Antonio, Texas, proves that a company can successfully conduct its entire insurance business over the phone without ever meeting customers face-to-face. From its beginnings, USAA focused on selling auto insurance, and later other insurance products, to those with military service. It increased its share of each customer's business by launching a consumer bank, issuing credit cards, opening a discount brokerage, and offering a selection of no-load mutual funds. In spite of transactions taking place on the phone, USAA boasts one of the highest customer satisfaction ratings of any company in the United States. It received the Chairman's • Award from J. D. Power & Associates in 2002. 16 Other Media for Direct-Response Marketing Direct marketers use all the major media to make offers to potential buyers. Newspapers and magazines carry abundant print ads offering books, articles of clothing, appliances, vacations, and other goods and services that individuals can order by dialing a toll-free number. Radio ads present offers to listeners 24 hours a day. TELEVISION Television is used by direct marketers in several ways: 1. Direct-response advertising -Some companies prepare 30- and 60-minute infomercials that attempt to combine the sell of commercials with the draw of educational information and entertainment. Infomercials can be seen as a cross between a sales call and a television ad and cost roughly $250,000 to $500,000 to make. A number of people have become famous with late-night channel switchers (e.g., Tony Robbins, Victoria Principal, and Kathy Smith). Increasingly, companies selling products that are complicated, tech- nologically advanced, or simply require a great deal of explanation are turning to infomercials (Callaway Golf, Carnival Cruises, Mercedes, Microsoft, Philips Electronics, Universal Studios, and even the online job search site, Monster.com). 17 They share the [...]... S Tubridy, "Major Account Management, " in AMA Management Handbook (3rd ed.), edited by John J Hampton (New York: Amacom, 199 4), pp 3-25,3-27; Sanjit Sengupta, Robert E Krapfel, and Michael A Pusateri, "The Strategic Sales Force," Marketing Management (Summer 199 7): 29-34; Robert S Duboff and Lori Underhill Sherer, "Customized Customer Loyalty," Marketing Management (Summer 199 7): 21-27; Tricia Campbell,... Quarterly, April 19, 2004, pp 32-34 2 The terms direct-order marketing and direct-relationship marketing were suggested as subsets of direct marketing by Stan Rapp and Tom Collins in The Great Marketing Turnaround (Upper Saddle River, NJ: Prentice Hall, 199 0) 21 Asim Ansari and Carl F Mela, "E-Customization," Journal of Marketing Research 40, no 2 (May 2003): 131-145 3 Michael McCarthy, "Direct Marketing. .. Bob Stone, Successful Direct Marketing Methods, 6th ed (Lincolnwood, IL: NTC Business Books, 199 6) Also see David Shepard Associates, The New Direct Marketing, 2nd ed (Chicago: Irwin, 199 5); Amiya K Basu, Atasi Basu, and Rajeev Batra, "Modeling the Response Pattern to Direct Marketing Campaigns," Journal of Marketing Research (May 199 5): 204-212 9 Edward L Nash, Direct Marketing: Strategy, Planning,... Industrial Marketing Management 15 (198 6): 55-62 52 Charles Waltner, "Pall Corp Wins Business with Info-Driven Web Site," Net Marketing (October 199 6) 53 Willem Verbeke and Richard P Bagozzi, "Sales Call Anxiety: Exploring What It Means When Fear Rules a Sales Encounter," Journal of Marketing6 4 (July 2000): 88-101 54 Gilbert A Churchill Jr., Neil M Ford, and Orville C Walker Jr., Sales Force Management: ... (Homewood, IL: Irwin, 199 3) Also see Jhinuk Chowdhury, "The Motivational Impact of Sales Quotas on Effort," Journal of CHAPTER 19 631 Marketing Research (February 199 3): 28-41; Murali K Mantrala, Prabhakant Sinha, and Andris A Zoltners, "Structuring a Multiproduct Sales Quota-Bonus Plan for a Heterogeneous Sales Force: A Practical Model-Based Approach," Marketing Science 13, no 2 (199 4): 121-144; Wujin... York: The Free Press, 199 2); James C Freund, Smart Negotiating (New York: Simon & Schuster, 199 2); Frank L Acuff, How to Negotiate Anything with Anyone Anywhere Around the World (New York: American Management Association, 199 3); Jehoshua Eliashbcrg, Gary L Lilien, and Nam Kim, "Searching for Generalizations in Business Marketing Negotiations," Marketing Science 14, no 3, pt 1 (199 5): G47-G60 ... Business Journal, June 20, 2002 17 Jim Edwards, "The Art of the Infomercial," Brandweek, September 3, 2001, pp 14 -19 18 "Infomercial Offers Multiple Uses," Direct Marketing (September 199 8): 11; Tim Hawthorne, When and Why to Consider Infomercials," Target Marketing (February 199 8): 52-53 19 Charles Fishman, "The Tool of a New Machine," Fast Company, May 2004, pp 92-95 22 Byron Acohido, "Rich Media Enriching... Butterworth-Heinemann, 199 9) 42 Michael Copeland, "Hits and Misses," Business 2.0, April 2004, p 142 MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING 43 Luis R Gomez-Mejia, David B Balkin, and Robert L Cardy, Managing Human Resources (Upper Saddle River, NJ: Prentice Hall, 199 5), pp 416-418 44 "What Salespeople Are Paid," Sales & Marketing Management (February 199 5): 30-31; Christopher... Chu, Eitan Gerstner, and James D Hess, "Costs and Benefits of Hard-Sell," Journal of Marketing Research (February 199 5): 97-102; Manfred Krafft, "An Empirical Investigation of the Antecedents of Sales Force Control Systems," Journal of Marketing^ (July 199 9): 120-134 55 Eilene Zimmerman, "Quota Busters," Sales & Marketing Management (January 2001): 59-63 56 Melanie Warner, "Confessions of a Control Freak,"... Driscoll, and Earl Bohn, "Smart Selling" BusinessWeek, August 3, 199 2, pp 46-48; William Keenan Jr., ed., The Sales and Marketing Management Guide to Sales Compensation Planning: Commissions, Bonuses and Beyond (Chicago: Probus Publishing, 199 4) 45 Sonke Albers, "Salesforcc Management Compensation, Motivation, Selection, and Training," in Handbook of Marketing, edited by Bart Weitz and Robin Wenslcy (London: . Sales Force," Marketing Management (Summer 199 7): 29-34; Robert S. Duboff and Lori Underhill Sherer, "Customized Customer Loyalty," Marketing Management (Summer 199 7): 21-27; Tricia. costs in the process. MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING CHAPTER 19 611 Telemarketing Telemarketing is the use of the telephone and call centers to attract. market. 23 MANAGING PERSONAL COMMUNICATIONS: DIRECT MARKETING AND PERSONAL SELLING CHAPTER 19 613 The Benefits of Interactive Marketing Interactive marketing offers many unique benefits. 24 It is

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