This document provides an agenda and overview for a marketing management course covering the third leg of developing a marketing strategy - arriving at a "Go-To-Market" strategy. The first part reviews the previous two legs covered - choosing target customers/competitors/collaborators and using positioning to develop a marketing mix. The document then outlines an agenda covering introduction to Go-To-Market, hunting and gathering, sales funnel, sales management, selling through channels, and direct selling.
1. Course : PGEMP - Batch 41 Contact 3
Marketing Management
Prof S K Palekar : November 2013
S P Jain Institute of Management & Research, Mumbai
In this contact we will cover the third leg of the marketing strategy.
1st leg : choosing target customers / competitors / collaborators
2nd leg : Using “Positioning” to arrive at the “Marketing Mix”
3rd leg (now) : arriving at
“Go To Market” strategy
2. In this contact we will cover the third leg of the marketing strategy.
1st leg was covered in Contact 1 and consisted of
using the 5Cs model to study the market In order
to choose the target customers / competitors / collaborators
2nd leg was covered in Contact 2 . It consisted of “Positioning”
the offer vis-à-vis chosen customers / competitors / collaborators
In order to arrive at the “marketing mix” consisting of “7Ps”
Product, Place, Price, Promotion,
6. Description of “Go-To-Market” Activities
The “Marketing Budgets” of most companies are spent on such Go-To-Market
activities through their marketing, sales and service departments
All activities “between the factory producing the
products to the customers consuming them”
Spending by the marketing , sales, distribution ,
service and CRM departments
All manner of customer connect activities like media,
promotions, sales force, channel margins, discounts,
incentive schemes, PR, conferences, merchandising,
web sites, digital media, exhibitions etc.
All activities impacting various customers : end users,
influencers, channel members, franchisees, agents etc
7. Customers’ Buying Journey
The purpose of Go-To-Market activity is to help customers move on their buying
journey from left to right and make them more ready to buy.
8. Consumer Process
Industrial Process
Problem Recognition
Problem Recognition
New Buying
Task
Gen Needs Description
Supplier Search
Search
Proposal Solicitation
Supplier Selection
Evaluation
Setting up procedures
Routine Buying Task
Purchase
Routine Purchase
9. Generic Model “Customers’ Buying Journey”
: Visible Signs
1. Not aware that he needs to solve a problem
2. Recognizes the problem and is open to discuss it
3. The problem is understood and gets defined
4. Search begins for solution options
5. Options narrowed : “consideration set” emerges
6. 1st Preference gets defined
7. Terms and Conditions agreed
8. Order placed
9. Transaction completed
10. Assessment of satisfaction post purchase
You will need to create a model specific to your business
12. B2C : Your usual soap.
Customer searches
actively.
GATHERING
B2B : ERP system for
SME firms. Marketing
company searches
actively
HUNTING
Company Searches Actively
Customer Searches Actively
13. Marketers use different approaches to the customers who
are at different stages in their “Buying Journey”
For customers at the early stages of their buying journey (
Those who do not know that they have a problem, those who
only have a vague idea of what they need); the approach is
to help the customer to discover / own the problem
For customers who are at the middle stages of their buying
journey ( who are weighing features, vendors and terms in
order to narrow their options) the approach is to help the
customer discover right criteria and enable comparison
and choice between various features, vendors and terms
For those customers who are ready to transact, the approach
is to work out deals, provide selling outlets, improve stock
visibility, take orders, make delivery / collection / service
arrangements.
Where are most of your customers now? Is your Go-To-Market suitable?
14. If most of your customers are
at an early stages of their buying journey
Your focus needs to be on hunting and concept
selling ( creating need and budget)
Hunting
Developing criteria for identifying prospects
Using these rules to locate and contact prospects
Engage and pave the way for concept selling
Concept selling is needed when there is no existing
BANT ( Budget, Authority, Need and Time Pressure)
This is a very skilled level of selling
“Art of complex sale”
15. If most of your customers are
at the middle stages of their buying journey
your focus should be on COMPARATIVE SELLING
and you should help the customers discover
what are the criteria he should use in selecting
• the right features
• The right vendors
• The right terms and conditions
16. If most of your customers are
Ready to transact
Your focus should be on GATHERING
This means you should
Expand your reach : more distributors, more retailers,
more agents
Improve visibility and presence on the street and
inside the outlet
Work out better arrangements for
•
•
•
•
•
order-taking
Delivery
Payment
Service
Ease of access
17. Remember
To use different approaches to the customers
who are at different stages in their “Buying Journey”
Hunting and
Concept selling
Comparative
selling
Gathering and
Distribution
20. GATHERING
HUNTING
Customer Active / Searches
Customer inactive co searches
Appoint channel to sell
Appoint sales force to sell
Sales force manages channel
Sales Force sells to Customers
Demand created thru ads / display
Demand created thru conversation
Std simple mass products
Customized complex products
Low Price, High volume
High Price, Low Volume
“Product selling”
“Consultative selling”
21. Go-To-Market : 2 Different Systems
Hunting ( Business Development / Sales Management)
•
•
•
•
•
Requires more own / dedicated people
They cover a large portion of the customer journey
2 stage process : filter (leads) and focus (conversion)
They are skilled in customer / problems / solutions
They have order-creation capabilities
Gathering ( Channel Management )
•
•
•
•
•
Channel provides manpower - but not dedicated
They cover only a small portion of customer journey
2 stage process : Appoint channel member & manage
They are skilled in working capital management
They have order-taking and not selling capabilities
22. Metrics Used in Hunting / Gathering
Customers Come–To-Market on their own
• Try and use independent trade outlets to stock and
display where and when the customers come
• Example of metrics in TV business : counter enquiries,
calls at the call center, off take of brochures, price
quotations, demonstration, sale
Customers who don’t come on their own to market
•
•
•
•
Universe suspects prospects
Contact present QA Negotiations Close
Transact Install Train
Customer Relationship Management / Aftermarket
23. Various Go-To-Market Capabilities
Capability to define who are the prospects
Capability to recognize the prospects easily
Capability to locate them at relatively low cost
Capability to Contact them
Capability to Engage their attention
Capability to communicate when engaged
Capability to persuade and take the order
Capability to conduct he transaction
Capability to maintain relationship and give service
Capability to eplace, up-sell, cross-sell, referrals…
24. Readiness to Buy
B2B
B2C
Low
You Search Actively
( You Hunt )
High
Customers Searching Actively
( You Gather )
Low
High
Number of Customers
When customers search actively, structures to meet their demand come
up. Retailers, wholesalers who supply to these retailers, the company
warehouses and distributors who supply to these wholesalers .. All these
come up as independent businesses. When customers do not search
actively for you, there are no readymade “gathering points”.
25. Readiness to Buy
B2B
B2C
Low
Push
You can deal
directly
You need a
channel
High
Low
High
Number of Customers
In B2B businesses you can deal directly with a few large customers and
you can customize for them and you can first take order and then make
to order. But for mass products, the channel is a more economical
option to reach the market. In such case you are available through
channel but reach through mass media. There are multiple tiers in the
channel and multiple handling points. The products are standardized
and made to stock and have many packaging layers.
26. 4 Paradigms of Selling
Readiness to Buy
B2B
B2C
You need to hunt for
Customers - Reach
Low
Directly
You need to hunt for
the Customers – Use
channel
Customers are
searching - Reach
High
Directly
Customers are
searching – Use
channel
Low
High
Number of Customers
27. 4 Paradigms of Selling
Readiness to Buy
B2B
Low
ERP
“No Buying Budget”
Common Machinery
High B2B Consumables
Low
B2C
Insurance
Concept Products
Match Box
Staples
High
Number of Customers
30. Best Practice : Lead Management
OBJ : Weed out people unlikely to buy ASAP
Suspects (Target Audience ) who may buy
Prospects : who have the need, budget & desire
Hot Prospects : who are favorably considering us
Lead Management
Generation : Separate prospects from suspects
Qualification : Separate hot prospects from prospects
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
31. Best Practice : After Market Cultivation
Customer database maintenance / updation
Customer grading RFVR
Recency, Frequency, Value, Referrals
Direct Marketing of “offers”
To sell AMC
To sell accessories
To sell someone else’s products
To replace
To upgrade
To dispose or sell off
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
32. Best Practice for Revenue Over Time
TLV ( Total Life Time Value )
1st Purchase
2nd Purchase
13,
2003
After Sales Revenue
3rd Purchase
August
After Sales Revenue
After Sales Revenue
33. Best Practice for Revenue Generation
Value over cross-selling potential
1st Product
2nd Product
3rd Product
August
13,
2003
34. Communication Mix Practice in FMCG
Step
FMCG
1 Prospect Identification
Brand Management based on MR
2 Pre-approach
Ad & Concept testing
3 Approach / Contact
TV / Mass Media
4 Presentation
TV / Mass Media
5 Pre-close, Q/A, Negotiation
TV / Mass Media
6 Close
TV / Mass Media
7 Transaction
Retailer
8 Install / Commission
Not Applicable
9 Post sales activity
Not Practicable
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
35. Communication Mix Practice in Durables
Step
Durables
1 Prospect Identification
Brand Management based on MR
2 Pre-approach
Ad & Concept testing
3 Approach / Contact
Mass Media
4 Presentation
Mass Media builds traffic
5 Pre-close, Q/A, Negotiation
Retailer negotiates and closes
6 Close
Retailer
7 Transaction
Retailer
8 Install / Commission
Company Service
9 Post sales activity
Company Service
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
36. Communication Mix in Tele-Shopping
Step
Tele Shopping Network
1 Prospect Identification
Brand Management based on MR
2 Pre-approach
Demo documentary
3 Approach / Contact
Mass Media
4 Presentation
Mass Media
5 Pre-close, Q/A, Negotiation
Demo documentary + Call center
6 Close
Demo documentary + Call center
7 Transaction
Call center
8 Install / Commission
Franchised Service
9 Post sales activity
Telemarketing
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
37. Communication Mix in Life Insurance
Step
Insurance Policy
1 Prospect Identification
Agent
2 Pre-approach
Agent
3 Approach / Contact
Agent
4 Presentation
Agent
5 Pre-close, Q/A, Negotiation
Agent
6 Close
Agent
7 Transaction
Agent / Office
8 Install / Commission
Agent
9 Post sales activity
Agent
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
38. Communication Mix in PCB Makers
Step
PCB Maker
1 Prospect Identification
Electronic Mfg Directory, Exhibitions
2 Pre-approach
Net Research
3 Approach / Contact
Sales Rep
4 Presentation
Sales Rep
5 Pre-close, Q/A, Negotiation
Sales Manager + Technical Manager
6 Close
Sales Director
7 Transaction
Accounts & Logistics
8 Install / Commission
Initial handholding by technical
9 Post sales activity
Supply department
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
39. Ad Agency Looking For New Accounts
Step
Agency
1 Prospect Identification
Grapevine, Networking
2 Pre-approach
Checking with clients / references
3 Approach / Contact
Casual and informal
4 Presentation
Formal pitch by Directors
5 Pre-close, Q/A, Negotiation
Modalities and Fees
6 Close
Contract signed
7 Transaction
Contract signed
8 Install / Commission
Briefs, Budgets, etc
9 Post sales activity
Account Servicing
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
40. Best Practice : Separate Hunt & Gather
Teams
CUSTOMER ACQUISITION.
HUNTERS
CUSTOMER RETENTION
GATHERERS
42. Definition of Selling
Presenting yourself and your product / service / idea
to your prospects, personally and interactively,
in the light of their needs / beliefs / alternatives,
and persuade them to come to a conclusion
Favorable to you.
43. Checklist For Sales Managers Tasks
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Role statement and competency specifications
Prospecting and qualification criteria and methods
Classification and prioritization of customers
Who calls on whom, what frequency & depth, which product and how.
How do we measure contact and sales performance
Number of persons of each type needed at which headquarter.
Interviewing and selection
Inducting, training and deploying
Wastage of time on administrative chores
Time spent traveling vs for customer contact
Motivation, Meetings, Performance Reviews, Corrective actions
Refresher training for latest market, product information.
Creation of relationship assets with customers
Development of future leaders
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
44. CONTACT MANAGEMENT ISSUES
What type of personality and capabilities we need at various levels in
our sales force
Role statement and competency specifications
How do we prospect and qualify our customers, how do we classify
them so that appropriate salesperson and method can be used, how do
we prioritize them.
Prospecting and qualification criteria and methods
Classification and prioritization of customers
Who in the sales force and what kind of time spends with which
customer.
Who calls on whom and with what frequency and depth
To sell which product and how.
And achieves the call objectives
How do we measure contact performance
Result or efforts, quality or quantity, short term or long term
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
45. People Management Objectives - A
Compute number of persons of each type needed at each
headquarter.
Interviewing potential candidates
and selecting the ones that fit the role and capability statement in
terms of personality, knowledge, attitude, behaviour and motivation.
Inducting them through training and handholding.
Deploying them
in the market in such a way that they waste less time on administrative
chores & travelling;
and more time in front of the customers so that they can create value for the
customers and revenue for the company.
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
46. People Management Objectives - B
Motivating them to bring out their best and training them
to keep them abreast of latest market, product information.
Conduct meetings communicating, motivating and directing
the salespersons so that not only sales targets are achieved
but even the relationship assets in terms of customers and the
manpower assets in terms of existence of skilled leaders are
created which lay foundation for the future growth.
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
47. Selling Through Channel
What your customer wants =
What you can provide + what your channel can provide
skpalekar@hotmail.com
48. Examples of Channel Services
Availability
Want toothpaste at the shop downstairs
I don’t mind traveling but want to see wide range of sarees
Delivery
Want my monthly grocery delivered to my home
I don’t want to order and wait for it to be shipped
Financing
Want installment scheme to buy LCD CTV
I want to try it and then own it
Awareness
Want to know new types of insurances plans
Want to see all variety of chocolates before I select
S K Palekar : Contact : skpalekar@ hotmail.com
49. Examples of Channel Services
Education and Updation
Latest advances in treating termites
Latest clinical tests of new medicines
Consulting / Diagnostic
Shall I repair my fridge again or…
Annual check up… do I need any proactive medical help
Customization
Measure my hall and supply carpeting
Assess wall condition and recommend treatment and paint
Commissioning
Install the garden sprinkler system
Fitting the modular kitchen in my house
S K Palekar : Contact : skpalekar@ hotmail.com
50. Examples of Channel Services
Training, handholding, coaching
How to use the latest software
How to use all the accessories of my vacuum cleaner
Upgradation
want to fit GPS on my car
Want to renovate my house
Replacement , Disposal
Take away my old fridge and give new
Garbage disposal
Repair and maintenance
Annual pest control contract for my flat
Electrician when something goes wrong with my wiring
S K Palekar : Contact : skpalekar@ hotmail.com
51. Examples of Channel Services
Enquiry Response
Be able to register a complaint 24 x 7
Need to know fares of different airlines
Order taking
Take my order on the phone
Visit me and see how many tiles I need to buy
Status / alert information
Flight delays
Pending Bills
Convenience
I don’t want to wait too much in the queue
I want tickets delivered to my house
S K Palekar : Contact : skpalekar@ hotmail.com
52. Review Question : Why channels ?
Many customers; spread everywhere : soap
One company cannot reach all
Customers buy from local / trusted middlemen
Customers don’t know the company
Customers buy assortment / bundle of products
Company cannot supply this
Company does not know all customers well enough
Hence may not be able to extend credit and facilities
Company not close / good enough to serve well
Local proximity : better response time
Company’s person not be in the market all the time
Channel members are in the local market all the time
Costs of a separate channel unsustainable
Channel works for multiple firms hence cost effective
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
53. Main Channel Decisions
The 3 decisions are
1. Horizontal coverage of the market ?
Intensively or selectively?
2. Vertical Length of the chain. How long ? Number
of tiers in the chain?
3. Own (full control) ? Use others (part control)?
Use existing outlets or set up own outlets?
54. When Selective ? When Intensive ?
Use selective (sparse) distribution when
Generally high ticket (price) items
Consumers’ perceived risk high ( cars )
Consumer rely on technical advice ( Professional camera )
Assurance of post-purchase service important ( durables )
frequency of purchase is low ( luggage).
brand loyalty is high (Levi’s)
Retail personal influence important ( fashion )
Use Intensive (Mass) distribution
When the situation is opposite.
55. Selective or Intensive ?
Product characteristics
Intensive Distribution : For products purchased frequently , For
products purchased with a minimum effort , for Convenience goods
Selective Distribution : consumers shop around extensively before final
purchase, shopping or specialty goods
Degree of control
Intensive Distribution : Manufacturers willing to relinquish significant
control over the marketing of their products within the channel might
prefer an intensive strategy.
Selective Strategy : for close control over selling prices, type and
extent of selling assistance at point of sale, display standards and
product image
56. Channel Architecture : How Long ?
Company Customer ? ( DIRECT SALES)
Used by industrial products and high value products
Company Retailer Customer ? ( 1 TIER )
Used by consumer durables and brand showrooms
Company Distributor Retailer Customer ? (2 TIER )
Used by fast moving packaged goods companies
57. How many tiers ? 2 Extremes
For industrial products, the number of customers are few and the
value of the order per delivery is high. Yhey use DIRECT SALES
system where the vertical length is zero (company directly sells to
the end user).
For FMCG products like WIMCO matchboxes, virtually everyone
in the country is a potential customer and the behavior of these
customers is such that they don’t want to walk and plan much to
purchase a matchbox! Therefore WIMCO wants to make their
products available in smallest of the paanwalla shops ( 20 Lakh
nationally in over 5000 towns) and it is impossible for the
company to do this on their own. They have 3 Tier system :
company selling to 2000 wholesalers who in turn sell to 20 Lakh
outlets.
58. Direct sales ( Zero Tier )
Own sales force selling direct to end user
Prevalent among industrial goods manufacturers
If large volume per customer, this is cost effective
More control over own sales force than of distributor’s
Customers prefer to deal directly with the manufacturer.
Direct touch with market : better / faster feedback.
59. Own Channel or Someone Else’s ?
It is always a dilemma whether to use an existing trader or to
set up one’s own trading establishment ( store)
2 extreme options are :
Setting up one’s own store.
You can select the location,
the interiors, how to
display, what to display,
how many people of what
kind to employ, how much
moving space to keep,
whether you want the
store only for your brand
exclusively.
Using someone else’s
existing store but then you
have to learn to live with
his location, interiors,
display facilities, what he
stocks and displays, his
people. And he is of
course stocking and selling
existing brands (your
competitors).
60. Using Conventional Channels
They invest in your stock, display your goods, deliver goods,
make invoices and extend credit on your behalf.
Many of them also feed marketing information back to you.
Advantages of using existing channels.
They are more efficient marketers : They know local customers.
Their costs are shared by many brands : They are more efficient.
They can respond faster to local requests.
You don’t need to invest in space, stock, people and administration.
You incur only variable costs - you don’t spend if you don’t sell
Disadvantages to manufacturers
Channel members independent : not bound by contracts
Co-ordination through power, bargaining, negotiation
Low concern towards what happens to you : before &after
Low member loyalty, low entry and exit barriers
Less control, less systemic economies, and less stability
61. Manufacturers manage these
disadvantages…
STICK : agreements on sales terms and obligations like
Price maintenance
Demonstration facilities that meet certain technical requirements
Qualified sales staff
Refraining from illegal, deceptive, and unethical practices.
CARROT : Working closely in planning and carrying out
inventory plan
advertising plan
sales training plan.
OVERALL ATTEMPT IS TO BE THE “CHANNEL CAPTAIN”
responsible for achieving systemic coordination within the channel.
The more success manufacturers have with these attempts, the closer
will a conventional system resemble corporate and contractual systems.
62. “Fully Controlled Vertical”
May be either Owned or Franchised
Gas stations, Bata stores.
Advantages
List price maintaninence
Quality control ( gasoline quality, baking, freshness )
Market feedback from stores on new design
Better services offered at the outlets
Disadvantages
Investment in real estate, stock and human resources
inflexible in adapting quickly to new opportunities
63. Type of “Franchising”
Product trade name franchising
The right to market the franchisor’s product
within a designated market area
using the franchisor’s trade name.
Examples : Automobiles and truck dealers, soft drink bottlers.
Business format franchising.
All above plus the franchisee acquires the right to utilize the business
know how - operating manuals and standards, quality control,
information systems, or marketing plans
Examples : fast foods, motels and hotels, personal services,
rental services, stores, real estate services.
64. How “Franchising” Helps …
Benefit to franchisees
opportunity to be “own boss”
“Pre-packaged” business with no prior business experience.
A well-recognized trade name
Assistance in starting up : site, layout, equipment, training
continuing support : new products, promotions, operations
Benefit to franchisor
Rapid scaling up without losing control
expand the business using someone else’s time and money
Yet exercise control / coordination on local marketing policy.
Franchisees are more motivated and willing than dealers
65. How “Franchising” Hampers …
Problems to franchisees
Fly-by-night franchisors.
Inflated sales and profit projections.
Overcharged by franchisors in buying supplies.
vulnerability : franchisor may pull the plug for no reason.
Problems to franchisors
Franchisees are “independent minded” : hard to control
Large-chain franchisees can exert considerable pressure
Legal costs / battles over franchisee autonomy/ termination clauses
66. Bata uses multiple channels
Through their own “Bata” stores (Bata brand)
Space, Stock, People .. All by Bata.
Through multi-brand stores ( BSC brand)
Space, Stock, People belong to the independent store
Through multi-brand stores under other brand names
Bata manufactures for other labels
Also sells direct to customers (some areas)
In some stores when people cannot find the color and the size they
want in the style of shoes they like, they take orders direct along
with an advance and delivers shoes straight to customers via
couriers.
67. Tiered systems
Note : At each stage there is a buyer and a seller
Company
Direct Sales System : Company sells to end user
Customer
Adopted when number of customers are low
And when order size is high. Example : B2B.
One tier system
Company
Retailer
Customer
Adopted when number of customers are many
But not high and order size is average. Example : Durables : Cars, CTV
2 tier system
Company
Distributor
Retailer
Adopted when number of customers are high
And when order size is low. Example : Match Boxes
S K Palekar : Contact : skpalekar@ hotmail.com
Customer
68. Tiered systems
Note : At each stage there is a buyer and a seller
One tier system
Company
Retailer
Customer
2 tier system
Company
Distributor
Retailer
S K Palekar : Contact : skpalekar@ hotmail.com
Customer
69. Value Added By Sales Force is
Not only persuasion and promotion
C
O
M
P
A
N
Y
Transportation of physical goods
Title / Ownership of the goods
Payments
Intelligence and Information
Persuation and Promotion
Outbound Services, Inbound complaints / enquiries
Waste, Reconditioning, Buy Back, Disposal
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
C
U
S
T
O
M
E
R
70. Industrial Products : Go To Market
Few and large customers – can contact direct.
Promotion is done personally.
Own
Channel
Options
Direct Selling Force
Another firm’s
Channel members’
S K Palekar : Contact : skpalekar@ hotmail.com
71. Direct Promotion : Go To Market
Direct Response Ads
Channel
Options
Tele Marketing
Direct Marketing
Direct Mail
Catalog Selling
S K Palekar : Contact : skpalekar@ hotmail.com
74. Direct Marketing Advantages
Can be individually targeted.
It is less wasteful than mass media.
The approach can be customized for better impact.
75. Direct Marketing Advantages
Can evaluate response from each contact
Whereas in mass media you need spend
huge sums before you can conclude if it is working or not.
76. Direct Marketing
100 test mailers
1% response
1st improvement
1000 test mailers
2% response
2nd improvement
10000 mailers
3% response
Commercial success
77. Mass
vis-à-vis
Mass reach
Low cost per reach
Easy to organize
One way communication
Low impact per contact
Response comes late
Response requires huge money
Suitable For
Mass consumption items
Items well stocked by the trade
Items well understood by people
Direct
Individually targeted
Less wasteful
Can be customized for impact
Ease of evaluation of response
High cost per contact
Difficult to organize
Suitable For
Niche products
Items not easily available
Items requiring concept selling
78. 13% of all goods in USA
Catalog houses : Sears
Tele-shopping networks : Tele-Brands
Ads inviting phone contact : Citibank
Net shopping : Dell computers
Telemarketing : Nationwide insurance
House to house selling : Electrolux
Multi-level marketing : Amway
79. CIRCUMSTANCES FOR DIRECT
MARKETING
Concept / Complex products : extensive explanation
Custom made product : customer presence
Custom made service : pre or after sales
Customers don’t know where it is available
Too few potential customers : mass market wasteful
High priced product : makes personal contact viable
High scope for after-market revenue : good TLV
Eureka Forbes / SKP
80. What only direct contact can do
Customization ( DIRECT MAIL )
Interactive ( DELL )
Multi Sensory ( ARIAL SAMPLING )
Context Sensitive ( AMAZON . COM )
Sensitive to body language, tone of voice ( SELLING )
Engaging and Relational ( LIFE TIME VALUE )
Referrals Potential ( PROFESSIONAL SERVICES )
Eureka Forbes / SKP
82. Conveying Value : Limitations of Ad vs Selling
1.
2.
3.
Ad : Same message / story / positioning for all
Ad : 1 way, duration short, attention poor, simple message
Selling : more time, 2 way dialogue, 5 senses
1. Complex products
2. Abstract services
3. Demonstration
For Private Circulation Only : Sales & Distribution Course By S K Palekar : skpalekar@hotmail.com
83. Communication Mix
in Customer Acquisition & Retention
Advertising : Mass, trade, niche
Public Relations
Direct Marketing : mail, call, letter
Personal Selling : Trade Shows, Events, Seminars, p call
84. 4 Criteria for Media Selection
Reach in TA
Engagement
Cost / Reach
Personalized, 2 Way,
5 senses, Interactive