DEVELOPING AND UTILIZING ELECTRONIC MEDIA

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1 1 CHAPTER 7-2/E DEVELOPING AND UTILIZING ELECTRONIC MEDIA Summary In summary, the term electronic media encompasses television, radio and telephone. Television and radio are commonly referred to as broadcast media. Broadcast media are the most universal of communications media because broadcasting reaches virtually everyone and every location. There are a number of different advantages and disadvantages associated with both television and radio, as well as a number of different formats from which direct response advertisers may choose. Both mediums can be segmented according to different viewers and listeners. Direct response advertising on television and radio can be highly productive for direct marketers. However, these mediums are often used in conjunction with the telephone. Telephone marketing is frequently used by direct marketers for both inbound and outbound calls. It also has a variety of advantages and disadvantages. Technological changes have fueled the growth of telephone as a marketing medium; however, telephone marketers must be aware of the regulations on the use of this medium for marketing purposes. Planning a telemarketing program involves many steps. Training telephone operators is one of the most critical aspects in determining the effectiveness of telephone marketing. In conclusion, all forms of electronic media support one another. They create a synergistic effect in serving customers needs. Learning Objectives After completing this chapter, students should: Know the characteristics and the direct marketing uses of television as well as its advantages and disadvantages and especially the opportunities it presents for market segmentation Know the advantages and disadvantages of radio as a direct-response medium, and the possibilities for market segmentation in utilizing the medium Understand uses of telemarketing, including specific applications of inbound and outbound calling Understand telemarketing technology and be alert to the opportunities being presented by the emerging technology of television/telephone hook-ups Be able to describe how to plan a telemarketing campaign

2 2 Key Terms Broadcast- Consisting of television and radio, broadcast is the most universal of communications media. Cost per response (CPR)- The measurement of direct marketing for television which is most effective. Cost per viewer (CPV)- The total promotion budget divided by the total number of people in the viewing audience. Gross rating points (GRPs)- A mixture of reach and frequency measures which measure the number of people exposed to an ad. Reach- The quantity of people exposed to vehicles containing the ad. Frequency- The amount of insertions bought in a specific communication vehicle within a particular period of time. Infomercials- Television advertisements in which products are extensively illustrated, priced for quick sale, and sometimes rely on famous personalities for credibility. Media efficiency ratio (MER)- A ratio that is calculated by dividing infomercial sales by the media cost. Telemarketing- Utilizing the telephone as an interactive means for promotion or promotion response. Inbound calls- Telemarketing calls such as radio, and advertising response where customers are calling to place an order, or to request more information. Outbound calls- Type of telemarketing call in which organizations place calls to customers to make a sale or to offer information hoping for a later sale. Reactive telemarketing- Type of telemarketing in which the customer initiates the marketing communications. Proactive telemarketing- Telemarketing in which the marketing communications are initiated by the company. T1- A massive pipeline or conduit through which one may send numerous voice, data, or even video signals. Cold calls- Calls made when there is no present relationship with, or acknowledgment of, the direct marketer Dialed number identification system (DNIS)- ) two critical systems that permit more efficient and effective call handling allows any organization that has multiple 800 or 900 numbers to differentiate incoming calls based on the number dialed by the caller. Automated numbering identification (ANI)- Identifies the phone number of the individual calling. Predictive dialers- Sophisticated hardware systems that utilize machines to dial and

3 3 connect the call only when the computer identifies a live human voice on the other end of the line. Short messaging service (SMS)- A service that provides alerts to users who have signed up for the service through delivery or a text message to their cellular phones. Telephone script- A call guide which aids the telephone operator in communicating successfully with the prospect or customer. Review Questions 1. Broadcast media (television and radio) are the most universal of all media, but what limits their effectiveness for direct response advertising? (p. 4) With its universality, broadcast reaches the full range of geographic, demographic, and psychographic market segments, which are not always easily separated. Relatively high costs associated with relatively low response rates, however, result from reaching (and paying for) nonqualified prospects. Measurability and accountability, hallmarks of direct marketing, are difficult, if not impossible, with the broadcast media. Still, the potential reach is there, if it can be harnessed. 2. Suggest ways to segment markets through broadcast media. (p. 6) Market segmentation in broadcast, as in other media, is one way to maximize direct response. Television programming plays an important role in defining specific audience segments: sports, news, comedies, westerns, mysteries, variety, documentaries, wrestling, and opera or drama, can describe viewers and thus provide a showcase for a particular direct response offer. Other factors that can help segment markets include time of day and day of the week. Radio stations tend to develop strong images of programming, too, attracting particular types of listeners. Program formats can segment markets into an array of subgroups that is virtually unlimited: all-music, all-news, all-talk. Program format doesn't stop with just music, however: music can be "rock" or "classical" or "easy listening" or "country/western" or "show tunes" or nostalgic "music-of-your-life" programming. There are many different formats available to satisfy the listening desires of all consumers. Listeners are loyal to certain stations, so direct-response advertising, presented within an established program by a known personality, derives an air of credibility or even an implied endorsement from the station announcer. 3. In what ways do direct marketers use television as a medium? (p. 6)

4 4 Direct-response advertisers utilize television in the following three ways: a. To sell products or services or a political candidate. b. To get expressions of interest or sales leads for personal follow-up. c. To support other media: newspapers or heavy penetration direct mail. 4. What is an infomercial on television? Describe some of the advantages and disadvantages in using infomercials for direct response advertising. (p. 10) Infomercials are an important means of demonstrating and selling certain categories of products usually a video of 30 minutes duration mainly appearing on cable channels and during early-morning and late-night time slots. 5. What are some of the most common products or services featured in infomercials? (p. 10) Exercise machines, cook-ware, weight loss programs, cleaning products, business opportunities, and non-profit organizations. 6. Explain the difference between inbound versus outbound calls as they are related to telemarketing. (p. 16) The telephone occupies a dual position in direct marketing. Like print or broadcast media, it is, outbound, a conduit for direct-response advertising. Outbound calls enable a company to place a call to the customer or prospect to make a sale, to offer information hoping for a later sale, or to provide customer service. Inbound, it is an alternative to mail or fax or web site for the response itself. Inbound calls take place when customers are calling to place an order, to request information or obtain customer service. Inbound calls are reactive in that the initiator of the marketing communications is the customer, while outbound calls are proactive because the direct marketer is the initiator of the marketing communications. The telephone is an interactive medium, which provides the flexibility and immediate response of a personal conversation. It can be especially effective when used in concert with other direct response media, such as direct mail or a web site. 7. Explain the difference between inbound versus outbound calls as they are related to telemarketing. (p. 16) The telephone occupies a dual position in direct marketing. Like print or broadcast media, it is, outbound, a conduit for direct-response advertising. Outbound calls enable a company to place a call to the customer or prospect to make a sale, to offer information hoping for a later sale, or to provide customer service. Inbound, it is an alternative to mail or fax or web site for the response itself. Inbound calls take place when customers are calling to place an order, to request information or obtain customer service. Inbound calls are reactive in that the initiator of the marketing

5 5 communications is the customer, while outbound calls are proactive because the direct marketer is the initiator of the marketing communications. The telephone is an interactive medium, which provides the flexibility and immediate response of a personal conversation. It can be especially effective when used in concert with other direct response media, such as direct mail or a web site. 8. Describe a few advantages and disadvantages of telemarketing. (p. 20) The advantages of telemarketing include: a. two-way feedback b. very flexible medium c. most productive medium d. cost effective The disadvantages of telemarketing include: a. intrusive marketing medium b. lacks visual enhancement c. does not provide a permanent, tangible response device 9. Why is it necessary for telemarketers to have a script to follow when communicating with customers or prospects? (p. 25) It is necessary for telemarketers to have a telephone script to follow when communicating with customers or prospects to assist the telephone operator in communicating effectively with the prospect or customer. Developing scripts offers the dual challenge of determining the right words to gain a favorable customer response or impression and, at the same time, minimizing the length and cost of a call. 10. Explain the role of telephone marketing for companies in today s highly technical world. (p. 15) The telephone is an interactive medium, which provides the flexibility and immediate response of a personal conversation. It can be especially effective when used in concert with other direct response media, such as direct mail or a Web site. To those who know how to use them, the interactive features of the telephone are, in many cases, replacing the face-to-face contact of a salesperson s visit to a prospect or a buyer s visit to a retail location. The telephone obviates the need for travel and makes it possible to talk with and not just to customers and prospects. The application of the telephone to direct marketing efforts is a most powerful combination. No other direct marketing medium can match its effectiveness. Telemarketing is actually a form of personal selling, since it occurs on a person-to-person basis but without the face-toface aspect.

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