DIRECT MARKETING AN EFFICIENT COMMUNICATION TOOL

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1 DIRECT MARKETING AN EFFICIENT COMMUNICATION TOOL MIHAELA SIMONA DOGAN TIBISCUS UNIVERSITY FROM TIMIŞOARA, FACULTY OF ECONOMIC SCIENCES, DALIEI STR., NO. 1A, Abstract: Communication in retail is one of the areas in which companies permanently seek to optimize budgets under the conditions in which the level of consume has decreased, and the communication efforts must be intensified in order to keep the brand in the attention of the consumer. Under the conditions in which most of the players in the market concentrate their communication efforts on attracting and maintaining their clients through a lowestprices policy, the differentiating elements tend to be less and less visible. Furthermore, real differentiation cannot be obtained exclusively through advertising and communication. Key words: direct marketing, retail, Communication, retailers. JEL classification: M31 In order to build, along with an attractive brand promise, a positive buying experience, to stimulate the loyalty of the customers, a much more complex strategy is needed, taking into consideration more factors (assortment, quality, connected services, waiting time, price policy, promotions, etc). Each organization must have a customer relationship and service strategy to support the brand and facilitate retention, helping the company effectively deliver that which it promises. To reach this objective, the merging of the marketing strategy with the customer service, and human resource strategy, respectively, is necessary. The first step must be taken ever since the recruiting, ensuring the hiring of those who are capable and motivated to offer customers the buying experience that they desire. Obviously, the personnel policy will include the developing components needed to refine and get closer, to identity, with the proposed product. The internal marketing, motivation, brand engagement and customer relations programs are the elements which have a decisive contribution to generating a buying interaction with differentiating potential in the market. If customer activation can be realized through aggressive or constant communication, the loyalty of the customers cannot be obtained in the absence of a well-defined and rigorously implemented customer service strategy. The Direct Marketing Association (DMA) defines direct marketing as being direct communication with an individual or institutional customer, meant to generate a reply, in the form of an order (direct order), an information request (sale preparation) and/or the visit to a store or another place to buy a certain product or service (traffic creation). Direct orders include all communicational actions with a direct reply, regardless of the means of communication used, and specially projected to facilitate or finalize a transaction. All the information necessary to the potential customer to make a buying decision and accomplish a transaction will be appropriately provided in the advertisement. Sale preparation includes all communicational actions with a direct reply, regardless of the means of communication used, meant to suggest interest in a 399

2 product or service and providing the potential customer with the means to request and receive extra information about the product or service. Traffic creation includes all communicational actions with a direct reply, regardless of the means of communication used, and meant to motivate the potential customer to visit a store, a restaurant or another sale point to buy the advertised product or service. The means used in direct marketing are direct mail, telephone marketing, television, radio, daily press, periodic press and the generic other means category. Direct mail includes all communicational actions with a direct reply by mail or other delivery services performed using catalogues, postcards, postcard packs, letters, brochures, fliers, videotapes, audiotapes, disks and promotional items. Telephone marketing includes all communicational actions with a direct reply by telephone and some usual or special telecommunication services. Television includes all communicational actions with a direct reply by local, national or cable TV channels, in order to immediately sell a product or service, identify a potential client, or create traffic at sale points. Radio includes all communicational actions with a direct reply, performed through local or national radio stations, in order to immediately sell a product or service, as well as identify a potential customer or create traffic at sale points. The press includes the ensemble of advertising spaces with a direct reply, autonomous advertising inserts and other inserts used in community-level local, regional or national publications, distributed daily, weekly, monthly or on Sundays in order to immediately sell a product or service, identify a potential customer or creating traffic at sale points. The generic other means category used on direct marketing refers to advertising activities with a direct reply, involving the use of direct reply billboards, materials which can be taken over by consumers, advertising inserts in packages, interactive marketing information and services (online or by television), faxes, interactive booths, exterior advertising used in order to immediately sell a product or service, identify a potential customer or create traffic at sale points. Marketing communication is a new concept, which has particularly evolved in the last 2 decades of the 20 th century. The basic component of the marketing activity, marketing communication has become increasingly important in the activity of organizations. Through it, a link is created between the organization on one hand and employees, customers, providers, distributors or other categories of the public on the other. Along with managerial communication, marketing communication allows the organization to report to its environment (internal and external respectively). The role of marketing communication, erroneously identified initially with promotion (Michael Ray), is that of supporting the marketing plan, whilst helping the target audience understand and trust the specific announcer s advantage, according to American specialist John J. Burnett. Between promotion and marketing communication there is a part to whole relationship. Marketing communication is realized through promotional communication techniques, requiring temporary actions, taking place during continuous communication campaigns and techniques, including measures meant to ensure uninterrupted communication with the target public. Catalogue distribution is based on a database, and its quality is essential for the distribution process. A database can exist in many forms, which can advantage us or not. The optimizing of a database will allow redundancies and errors to be eliminated right from the start, validating and updating coordinates with correct 400

3 streets and addresses, preparation for sorting and interrogations according to multiple criteria, and socio-demographic reporting and analysis. In essence, all these procedures optimize the budget allotted to the proposed communication action and then the best organization by addressing groups of targetclients, according to the desired criterion: income, positioning, average cart per shopping session, etc. Once the right work premises are created, the necessary solution in communication can be identified. The most used form of direct market, unaddressed distribution (unaddressed distribution of advertising material or drop mail is an efficient form of connecting with consumers), is appreciated both in Romania, and in other countries where the retail market is in more advanced stages of development. In Europe, catalogues, brochures and fliers represent up to 50% of the purchase decision, and in some countries, they reign supreme over any other means of promotion. In Romania, as well, studies have shown that 35% of the population that receives informative advertising materials uses them in the decision of buying, while 32% reads it carefully and 21% just browses it. Like any form of communication, unaddressed distribution is the more efficient the more it integrates into ample marketing campaigns. Studies conducted in the United States have shown that, in the case of retailers who have used the distribution of advertising materials in parallel with TV or online commercials, the message was remembered by a larger proportion of the audience than in the case of campaigns in which TV communication was used exclusively. Such campaigns generally have a tactical role, which is why they have to contain very profitable offers for the consumer, to determine them to visit the store. The frequency and quality of the distributed materials are as important for the success of the campaigns. To fulfill their roles of increasing the brand s notoriety, a constant frequency must be maintained, so that the customer may recognize the flier the moment it reaches their mailbox. Furthermore, to offer direct benefit to the reader, it is useful that, alongside offers, the flier or brochure should contain practical information such as: recipes, advice and ideas for decorating, etc. Thus, a direct communication link can be made with the potential customer. When they read the material, they will perceive it as a friendly conversation, not feeling that it is all about trying to sell something. A useful tool for small retailers Unaddressed distribution is not and should not only be the privilege of large retailers. Stores which have a local addressability and delimit their attraction area can benefit from this tool to increase their promotion level and gain new customers. Even great retailers have a few transmissions on a monthly basis, varying according to seasonality and respecting the aforementioned ideas to ensure the success of companies. It is essential that the distribution process should be coherent, so that, when choosing the distribution service provider, the retailer must take into consideration such criteria as the distribution infrastructure, the delivery capacity, the coverage that is offered, the steadiness with which the distribution can be performed and the capacity of the distributor to offer a full package as a consultant. The aspect of ensuring the loyalty of existing customers is just as important, under the conditions in which the cost for gaining a new customer is usually higher than that for keeping an existent one. And this is where addressed distribution and the geo-marketing instrument can play an essential role. The first is used in correlation with the database owned by the retailer or the store through loyalty programs. The optimized base permits addressing each customer segment with the desired message and thus makes the resources for the campaign more effective. 401

4 Addressed distribution has an important role in maintaining customers, basically being the way contact is kept with loyal customers, about which some information is known, which allows the sketching of an economical landscape which is useful in constructing communication and delivering the right messages, appropriate for each type of customer. Addressed distribution, in the category of envelopes weighing under 50 grams, will soon become, starting from 2013, a more efficient instrument from the point of view of necessary resources. Once the market becomes more liberal, the major players from the private domain will be able to offer retailers and companies with large client bases postal services at a superior quality level and an inferior price to that of the Romanian Post Office. Geo-marketing increases the complexity of direct mailing The newest and most complex instrument used in direct mailing is geomarketing. It allows the transposition into graphic representation of the information in the profile of the buyers and its distribution on a map. In communication campaign terms, geo-marketing offers the possibility of decreasing allotted resources through a preliminary analysis and planning. For this undertaking to work, though, two sets of information need to be harmonized: the vector maps of the company that performs the distribution, which accurately show the exact situation of the addresses in the territory, and the information about clients that is desired to be put into the analysis. Let us consider, for example, a hypermarket which is active in various cities of the country, having a database with existing clients and data about their addresses, income, age, etc. By overlapping this data on a vector map, the distribution of customers according to the desired criterion and the dynamics and mobility of customers in the proximity of stores will be highlighted. Also, the attraction zones can be validated, invalidated and given dimension. Thus, the appropriate marketing instruments for future campaigns will be defined, choosing between addressed and unaddressed distribution. It can be found that a significant number of customers live on a onekilometer radius around the store, while the density in the 2-5 kilometer radius is only scattered in this case, it is better for certain campaigns to be announced to customers from the further area by addressed distribution instead of unaddressed, to decrease the allotted budget. In conclusion, geo-marketing allows both the optimization of the communication effort by better allotting resources and the identification of tendencies in the selective behavior of the customers. Geo-marketing also proves its effectiveness outside the sphere of direct marketing, being used to place outdoor advertisements and founding some strategic sale decisions such as establishing the locations of new stores. Large retailers in Romania use a part of the aforementioned instruments, or every one of them in different proportions. It is important that they understand that they must be integrated and that only thus will they be successful in optimizing the communication process and gain important savings in a period in which all kinds of budgets are carefully kept under observation by companies. 402

5 BIBLIOGRAPHY 1. Catană, A. G., Marketing, the philosophy of market success, Dacia Publishing House, Cluj-Napoca, Danciu, V., Competitive strategic marketing, Economic Publishing House, Bucharest, Stone, M., Bond A., Blake E., The definitive guide to direct and interactive marketing, All Publishing House, Bucharest, Stone, B., Jacobs, R., Successful direct marketing methods, 7 th edition, ARC Publishing house, Chişinău, *** *** Magazin progresiv magazine, issue 155 october

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