Benefits Of Direct Marketing On Consumer Behavior Marketing Essay

Direct marketing is a method where the company sells directly to customers through the internet or mobiles or even through personal selling. The study provides an overview about the direct marketing methods and their benefits. The investigation aims at knowing the impact of these benefits on consumer behaviors through knowing their respond about the advantages of direct marketing and email. The result shows that some people don’t send feedback because they are annoyed from these types of calls or emails.

Chapter I: Introduction

Nowadays technology is in continuous motion of development leading to enhancing the market and promotion. The faster the network, the spread of digital photography or the spread of interactive programs are all good factors in making advertising and marketing more expanded and have lots of facilities. Despite all of these new advances, the marketing world is going through numerous changes.

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Business nowadays are relating its spreading along with the spread of technology and the ability of building up reputation, trust, loyalty, returns, license and market position. As the demands of consumers increase and become more socially aware, the value of product shifts and starts to need new forms of cooperation between the firms and consumers.

Direct marketing is a marketing that deals directly with the consumer without including the (middle man) or the dealers in the promotion process. Thus, the company’s message is given directly to the consumer. Direct marketing process is used by the small companies or the firms that don’t have a brand name. Those firms have small advertising budgets and cannot afford to pay for television advertisements (Rouse,2007).

According to Tim Berry (2011), who studies the strategies of direct marketing, the direct marketing contains many different approaches that help the producer of goods, products or services to be in direct touch with the consumer. Direct marketing can be based on face-to-face selling, direct mail, catalogs, telemarketing and many other forms of direct contact between the producer and consumer.

Customer database is important for the criteria of direct marketing for it’s the base that any company does its studies on. Not only the reliable customer database, however there are another factors that help in spreading of the reputation of the product such as: offering a greater customer value through more customized approach for the product and service offerings, distribution of the product to meet up all customers needs, and building up customer loyalty.

Direct marketing main criteria is to have a reliable customer profile that describes the dominant target markets. The customer profile must have good and enough details to support the customer database. Customer database enables capturing the main characteristics of predictions and consumers who are ready and willing to purchase the product or service exhibited by the firm. Customer database also offers demographic information about the consumers and collects data about the ages, incomes, educations, genders, and previous purchases.

purpose of the study

The purpose of this study is to examine the benefits of direct marketing on the consumer behavior. The study examines the effectiveness use of the email in reaching the target customers.

Methodology

The methodology consists of questionnaire that will be distributed over a sample of 100 Lebanese consumers in order to examine the benefits of direct marketing. As well as it will include a literature review about the definition of direct market and its benefits and the way that Lebanese consumer act towards it.

Chapter II: Literature Review

Every market consists of customers who differ in their needs, resources, locations, buying attitude, and buying practices. The segmentation process supports companies in dividing large markets into smaller segments that can be efficiently reached with products and services. Since segmentation divides the market into different groups where the members have similar need, the business has to identify that need in order to be able to satisfy customers.

The market segmentation can be produced at many levels because companies can avoid segmentations as the mass marketing. However, some companies can practice segment marketing or niche marketing that allows them to reach the complete segmentation known micromarketing or local marketing (Bevers, Waller, Amosson & McCorkle, 1998).

Most firms usually concentrates on the following steps while segmenting; identify the customer’s needs, indicate the events, evaluate the services for each market segment, select target segments, select positioning segment, and develop the marketing mix for the segment.

The companies collect and analyze the current segment sales, growth rates, and expected profitability. Targeting is the selection of a certain segment based on the firm’s objectives.

The target market is a set of customers sharing common needs that the company decides to serve. The company can adopt one of the three markets-convergence strategies (Lewis,1992):

The Company usually designs a product and a marketing program that request largest amount of customers because they ignore segment differences and looks after the whole market with only one offer. However, on the differentiated side the company targets many market segments with many different offers for each segment. But on the concentrated side the company concentrates on fulfilling the needs of only one segment at once.

Incorporated marketing communications is used to give a description about the approach to marketing communication. Marketing communication’s aim is to make sure of the reliability of the message through the media. Incorporated marketing communication programs are used by the companies through using the elements of marketing mix such as the products, price, promotion, and place. Marketing Mix is the main base for the marketing process, it includes Promotion as one of its elements, and the promotional activities include advertising with different Medias, sales promotion and trade promotion, personal selling activities, internet marketing, sponsorship marketing, direct marketing, database marketing, and public relations (Nash, 1992).

Businesses can use direct marketing in order to save profit and time since the firm can directly exhibit the product or service to the customer and this saves much time, as well as by direct exhibiting the firm is reducing the cost of advertisements in its entire means.

2.1 Direct Marketing

2.1.1 Definition

Direct marketing is a type of advertising in which the physical products are provided to consumers directly in order to communicate information about a product or service. It does not involve advertisements on the internet, on television or over the radio. Direct marketing is the practice of delivering promotional messages directly to the consumers on individual basis which is opposite to marketing through mass medium (Dobkin, 2005).

Direct marketing allows businesses and nonprofits organizations to exhibit directly to the customer using the following advertising techniques as the email, websites, mobile messaging, fliers, and distribution of catalogs, online ads, promotional letters, web browser cookies, fax numbers, international postal addresses, and outdoor advertising. Direct marketing process concentrates its focus on the consumer himself, data, and liability of the product.

Direct marketing is a process with the following characteristics: the marketing messages are directly presented to the consumers; this marketing process relies on the ability to address the members of the target market (Nash, 1992).

Direct marketing process demands what is known as (call to action) such as advertisement’s asking the permission to call phone numbers for free or click on a website’s links. Direct marketing is used by all types of businesses from small ones to big ones.

The more the consumer replies to a (call-to-action), the well executed direct advertising processes the company did, and this increases the returns on investments. Direct marketing is the directly reaching for a market which is the customers on personal means such as the phone or the email; it can be on mass media basis such as the infomercials and magazines ads (Larkin, 1992).

Direct marketing is known by the tactics that try to reach new consumers using direct communications, as well as it can reach customers already have seen the product. The key to make a successful direct marketing is by using a (call to action) which is by offering direct marketing campaigns through inviting messages to get customers attention and respond.

Direct marketing involves the business attempting to locate, contact, offer, and make incentive-based information available to consumers (Larkin, 1992).

2.1.2 Direct Marketing Types

There are three main types of direct marketing including the telemarketing, email direct marketing, and direct mail marketing. Telemarketing is a direct marketing that includes calling people and asking about things as donations, opinion, or purchasing. However, email direct marketing is another type of direct marketing that targets the consumers through their email accounts, the companies can find the email addresses from websites, forums, or purchased. Some companies ask the consumers to receive announcements to use their websites. But direct mail marketing is an advertising material that is sent directly to addresses whether its home or business address (Bills, Roth & Maestro-Scherer, 2000).

Direct marketing is a process of addressable communication that uses one or more advertising media to affect a sale, retail purchase or charitable donation. Direct marketing is very large and important part of the field of business marketing techniques. When done appropriately and correctly, direct marketing can produce important returns on investment (Bacon, 1992).

2.1.2.1 Direct Mail

It is the most common direct marketing strategy. Whether in letters, postcards, or advertising circulars. Getting the message out by mail “directly” to your target audience is very effective. This strategy refers to ‘junk mail.’

2.1.2.2 Email Campaigns

Due to electronic media, many companies use email the same way that they use mail. It reduces the costs of printing and mailing which became cheaper than a print mail campaign.

2.1.2.3 Fliers and Door Hangers

It is a type of direct marketing that depends on hanging the fliers and door hangers on the consumer’s door. Labor are involved in delivering messages directly to homes, this type is usually used within local area businesses.

2.1.2.4 Text Messages

Many companies started using text messages as a way to exhibit their products and sales to their customers. This type of direct marketing contains many laws and it is not possible for the company to send text messages to a large mass numbers. However, may businesses ask customers for their numbers and permission to text them with promotional information.

2.1.2.5 Social Media

Many companies use social media for sending their messages for Customers can link to the business and get information. Sending out messages through network helps providing information about events, sales, new products, new services or changes in the business.

Direct marketing also include other types such as distributing fliers, fax broadcasting, television marketing, voice mail marketing, door-to-door solicitations, and coupon ads in print media. Direct marketing allows the people to know about the business, but sometime the direct marketing becomes annoying, and this leave bad impression in people’s mind about the business. Therefore, the company should obey a strict privacy and laws when it comes to direct marketing because it is important to all companies in order to save profit but the type of the direct marketing used depends on the kind of industry, the business ethics and the budgets (Stone, Jacobs & Wientzen, 2001).

2.1.3 Historic overview

Many people don’t know what direct response marketing is, they relate direct marketing only to marketing or the word mail, like direct mail, junk mail, or plain old mail marketing. However, direct marketing isn’t only about physical materials exhibited to the consumers as a marketing piece. But direct marketing is a measurable, accountable, and track able way of marketing.

Direct mail became important base of marketing field since Montgomery Ward started its first catalog in 1872. Direct mail was a revolution at that time and the U.S. Postal Service started offering a huge amount of goods through it. It first started by going shopping in a three-day trip wooden cart and horse for ordering coal, ice boxes, dresses, harnesses, sears, and many other offers (Grunert, 2009).

The U.S. Postal system played an important role in spreading of direct mail industry because of its ability to reach almost everywhere and anyone. For this it was the means for the direct mail flow. After the period civil war in America and the rapid expansion and reconstruction, people started to be more economically satisfied and became more attracted to fashionable things and products (Feinberg & Eastlick, 1997).

As early as 2000 B.C., the Code of Hammurabi, a tombstone of Babylonian commandment, protected social security and safety of the Babylonian direct seller, who was then referred to as the hawker. The Code stated that “the hawker shall swear the pledge of God” if any enemy caused him trouble in the travels. It also said that the trader who sells the goods must make suitable payment for some lost (Grunert, 2009).

It is believed that the term direct marketing have been used in Lester Wunderman speech in 1967.

In 1872, Aaron Montgomery Ward made the first mail order catalog for his mail order business by buying products and reselling it directly to consumers. Therefore, he was removing the middle men from the whole process and it is known that middle men lessen the percentage of achieving profit, this benefit the consumer as well because it lessen his bills and reducing the price (Kim, 2000).

Direct mail advertising organization is the base of the present-day direct marketing association and it was established in 1917. However the third class bulk mail postage rates were established in 1928.

Aaron Montgomery Ward knew mail establishment by using a technique to sell products directly to the customers with attractive prices. And this is possible if used in an effective and efficient way. The development of the market industry is used as an original base for marketing products and creating customer loyalty. After that the term “direct marketing” was known after Montgomery Ward’s time (Kim, 2000).

Later in 1967 direct marketing was identified and names by Lester Wunderman who were considered the father of contemporary direct marketing. He was the creator of the toll-free 1800 number and loyalty marketing programs which include the Columbia Record Club, magazine subscription cards, and American Express Customer Rewards programs.

Many famous catalogs for the products allowed the direct mail to continue its rise to become famous. The direct printed ads became popular as well and captured the imagination and people’s attention for many years. After that direct mail letters appeared with classic boxes, and then the postscripts and the multiples inserts entered the market in 20th century.

The television in both forms the infomercials and products commercials allowing to add demonstration of products to the direct marketing world. With the beginning of cables and satellite television, the direct marketing product became more known such as HSN (Home Shopping Network), and other products (Mcdonald, 2012).

Due to online marketing, spammers used to send consumers gems as the advertisements fro medications, drugs, and sexual enhancements, but email marketing became respected in the direct respond world. Email marketing exhibit advertising which remains a famous means of getting the customers attention especially when there is a convenient article supported by pictures.

Keyword searches are the latest tools added to direct marketing, whether it’s natural or paid. It enhances and motivates responses and online marketing. Keyword marketing characteristics from measurable, accountable and track able is the newest interactive marketing technique that helps business acquiring and creating loyal consumers (Mcdonald, 2012).

Other type of marketing is the social marketing and web technologies in direct response marketing. These marketing are considered online marketing and they can make effective result because they are not pure direct response marketing. The quantity of the responses to investments on twitter, face book and other social marketing campaigns are difficult to quantify. As well as it is impossible to track all the responses from each campaign alone because this type of direct marketing is a very effective one and have infinity numbers of consumers. The social networking is about making connections and developing relationships. It’s more likely to reach people and start a relationship rather than marketing products with measurable outcomes.

The marketing mix is a combination of different tactics to spread too many and speak to few. Direct marketing’s types are a part of marketing mix. The company decides how much part is predicted to how much one is needed to promote action and measurable dealings with consumers.

According to Jeanne Grunert (the president of Seven Oaks Consulting) (2009), the marketing firm helps the business to focus and explain the market message and strategies to attract new consumers and businesses. Jeanne Grunert’s has insights and motivate and inspire many small businesses owners to achieve their goals.

2.1.4 Tools

Direct marketing includes a number of different marketing tools that require the company to implement and use. These marketing tools may be emails, sales letters, telesales, or other tools.

2.1.4.1 Direct Marketing Emails

Emails may be a form of direct marketing or they can be e-newsletters. The difference between direct marketing emails and other emails is that they require an action now that can be tracked and measured. The email may, for example, be a description of a product and at the end give the person the call to “buy it now” by visiting your website. The company will be able to track how many people clicked on the link and bought your product using online tracking software. When writing direct marketing emails the sender need to be aware that he cannot write them in the same way he would write other direct marketing materials as this will probably get them caught in spam filters so try to disguise your direct marketing message while still giving a powerful call to action (Berry, 2011)

2.1.4.2 Telesales

Companies try to contact their customer through telephone calls since it permit them to reach wider target, his form of direct marketing is telesales and although many customers don’t like it, it can still bring results. In order to get the best results from telesales the company should target the lists and try a two-call system whereby you first of all call to find out the customer’s needs and then phone back later for the direct marketing call (Palmer & Gehlen, 2003).

2.1.4.3 Sales Letters

Sales letters are a form of direct marketing; they appear on websites and in magazines. Sales letters use the method of calling people many times and leaving a convincing copy about the product the repeat itself many times. However, the best way to achieve success in this way is by writing a persuasive copy that convince the consumers and perceive their needs and explains how the product can help and fulfill their demands (Hennerberg & Alexander, 2012).

2.1.4.4 Infomercials

Infomercials are another type of direct marketing that is placed on television; this type is very encouraging type because it promotes the consumer and encourages him to purchase the products. In order for this type of direct marketing to be successful, it uses the celebrities, or scientists to create reliability. In addition to that this type needs many bonuses and money guarantees to be achieved well (Hamstra, 1999).

Many tools can be used in direct marketing process but they all aim to get the consumer to respond directly and not wait for long time to respond towards the product. Achieving this differs with the tool used and its important to know how to use each tool in direct marketing (Hennerberg & Alexander, 2012).

2.1.5 Direct marketing success factors:

In many situations direct marketing is more beneficial to be used than any other type of marketing. Direct marketing must be able to identify the target consumers by sharing characteristics and information. The more characteristics of the target consumers that can be identified, the more a direct marketing campaign targeted to those individuals will work. Since direct marketing relies on direct communications and encouraging the consumer to act, it is important to reach the target customers through mailing lists or broadcast medium.

Other situations where direct marketing will works well are the situations that demands lots of talking and explaining about the product or service, and this is when the products has a potential for repeat sales and when there’s no need to have great control over the sales message.

Direct marketing programs achieve success while delivering the right offer at the appropriate time and to the right person in a convenient way. This type of marketing requires a complex discipline with expertise in many fields to achieve success. Direct marketing identify the target market and select the convenient media in which it reaches more consumers.

Direct markers use an effective execution in order to influence the consumers, and they present the offer in a very effective way to absorb the customer attention. Direct marketing is a process of communication that regulates the relationships between existing customers and the new ones.

2.1.6 Advantages of direct marketing:

There are many kinds of direct marketing which are used nowadays, and they include the internet based initiatives such as the direct E-mail. However, direct marketing can also include many traditional types like the advertising direct mail and telemarketing (Lahiff, 2011).

There are many advantages for the usage of direct marketing in reaching the customer directly. Some of the advantages are the following: Narrowing the target audience: it is the most noticed benefit for the direct mail because of its ability to target only the consumers who are most likely to buy the products or services. Companies can narrow the potential market and to find the potential customers and send flyers directly to them with direct marketing, but first they have to determine its customers by answering the questions about their generation, sex, ethnicity needed, hobbies and interests, location, and willing to travel for their offers(Lahiff, 2011).

Since the company sends information directly to the individuals, they can specify the target on demographic that have interest in such product. This enhances the response rates as they receive the information directly, in addition this gives the chance to personalize the relationship between the consumer and producer such as the email addresses and names of consumers.

Direct measurements: direct marketing is an easier way to track because it is compared with sayings, advertising, and word-of-mouth. People can calculate directly the percentage of responses due to the amount of responses to the campaign. The company can monitor the rates and find out the amount of responses due to basic send-out programs such as the MailChimp or Campaign Monitor.

Cheap and quick production: all the forms of direct marketing that the company may choose to use are cheap and cost little budgets and are quick to produce, such as the email campaigns which have little cost and don’t take much time to be created and reaches people’s inboxes directly.

Potential to build list of potential or existing customers: the company can build a database of contacts and consumers for future use by engaging repeatedly the potential or existing customers. This process makes the targeting much easier for future marketing campaigns.

Getting the biggest bang for buck: direct mail does not limit the number of words that the advertisers have to say, or the amount of time they have to get t he message across unlike some forms of advertising. Therefore, the message can take as long as it needs to be clarified so that the advertisers can assure that the potential clients get their all of their needs from the advertisements. Since direct marketing consists of narrowed target consumers, this means that the cost to advertise is controlled and much more less than that of usual marketing because the other marketing types charge a huge rate no matter if the companies target is big pr small.

Refining the initiatives: direct marketing has a great advantage which is having exact numbers of individuals reached. Thus instead of depending on approximations, the company campaigns can determine the exact ratios, as the conversion rates.

If the company campaign didn’t receive the willing turn-around after the advertisement, they can treat the tactic used and repeat the advertisement all over again. Therefore the advertising direct mail can be used for many purposes because the company has to deal with easy management and they can test new markets, study the response of customers towards the new products or services, manage the pricing, and use small runs to examine the marketing field before exhibiting the products in the market and before big launches.

Due to the spread of web usage, selling process to the future clients and consumers became very simple and have distributed in huge way. Therefore direct marketing is an interactive system of marketing in which it uses advertising Medias to affect consumer’s response toward the product and deal with them at any location. Direct marketing allows the postcard printing pieces to create awareness of the business among the targeted consumers. It allows the company to build a qualified and probable database for the business. It also allows the company to develop an effective and responsive feedback system (Cooper, 2009).

Many shoppers prefer to deal with direct marketing because they don’t enjoy dealing with salespeople and there is no need for face-to-face operation in using direct marketing. Also it helps the consumer to gather true information which provides him with evidences of effectiveness in marketing medium as the postcard printing projects.

Through direct marketing it became easy to measure the results because it is accurate and the company can know exactly how many people have been contacted. When the company runs a direct marketing campaign and knows the exchanges rates that occurred in it and how many products got sold, it can work on refining and improving the success rates. Buying direct means the dealing directly with the manufacturer without involvement of the third retailer or distributor. And this saves money and time for the consumer (Dobkin, 2005).

2.1.7 Disadvantages of direct marketing:

According to Lyve Alexi’s pleshette (2010) (PowerHomebis.com Staff Writer), the disadvantages of direct marketing can be the following: many people or consumers don’t like to receive offers and junk mails in their email and they delete them without even opening them to see what’s in it. Many resources need to be allocated in the preservation of lists because the success of the direct marketing promotional campaigns depends on the quality of the mailing lists. Direct marketing can be expensive but it depends on the target market and the consumers who are willing to buy and what product has been exposed to selling, as well as on the quality of the list and size of the campaign. The productions of direct mailing materials have involved the price for using different professionals such as the copywriter, the artist, the photographers, the printers, and many others (Cooper, 2009).

Chapter III: Methodology

The purpose of the study is to examine the impact of direct marketing on the consumers.

There are different tools in collecting data: interviews, questionnaires, and online tools. Each tool has its characteristics in collecting data. Since the interview can’t provide the study by information needed to examine both the marketer and the customer on mobile marketing, the questionnaire was selected as a tool in order to collect the needed data. The questionnaire can be collected by personal interaction, or face to face interaction. This study used the written questionnaire that let the person to answer after understanding the question by selecting one of the options.

The collection of data in the literature review is secondary data which facilitate the achievement of the project objective. This kind of data is collected from articles, books, and WebPages. The secondary data need to be located, evaluated, and verifying.

The primary data collection used in this project was the questionnaire since the sample is 100 individual. The questionnaire consists of 12 questions well directed in order to examine the benefit of direct marketing.

Chapter IV: Data Analysis

The answers of the questionnaire was analyzed in order to show the percentages of the respondents who agree that direct marketing has a lot of benefits on the consumer behavior.

The results are presented in the pie charts below:

Gender :

Both genders are involved in business and marketing nowadays due to the development and improvement in technology. The finding present 58% male and 42% female which are approximately close result. The result shows that Lebanese market has a variety of opinions based on both genders involvements.

Q1. Do you believe in the concept of direct marketing methods?

The result shows that 60% of the sample is aware about the concept of direct marketing methods including the email, network marketing, small messages, mobile marketing, and all the methods of direct marketing. 40% of the respondents are not familiar with direct marketing since they don’t give the permission to accept or read them.

Q2. The email is the effective tool of direct marketing

The result shows that 40% strongly agree that the email is an effective marketing tool, and 20% also agree on the same statement. 10% are neither with nor against since they don’t have email yet. 10% disagree and 20% strongly disagree because they don’t know how to work on direct marketing methods especially the internet.

Q3. Direct Market narrows the target audience

The result shows that 30% strongly agree and 20% agree that direct marketing reach the target audience of the company only. 20% skip this question due to the lack of knowledge, 10% disagree and 20% strongly disagree.

Q4. The company sends the information directly to you

The result shows that 40% strongly agree and 14% agree that direct marketing reach the consumer directly with the information it want to inform him about. 20% skip this question due to the lack of knowledge, 10% disagree and 20% strongly disagree since they don’t have emails.

Q 5. Direct marketing enhances the response rates as you send your feedback directly

The result shows that 20% strongly agree and 40% agree that dire