Multimedia for Direct Marketing

Multimedia for Direct Marketing

Ralf Wagner (University of Kassel, Germany) and Martin Meißner (Bielefeld University, Germany)
DOI: 10.4018/978-1-60566-014-1.ch133
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Abstract

Multimedia technologies provide direct marketers with an incredible diversity of opportunities for communication to as well as with customers in a more appealing manner than old-fashioned printed advertisements or mailings (Coviello, Milley, & Marcolin, 2003). Direct marketing is one of the most important application domains of innovative multimedia products. An increasing share of marketing spending is invested in network activities, particularly WWW advertising and online shops. Online marketing activities have become so prominent that the 2000 Superbowl has been labeled the “Dot com Bowl” (Noe & Parker, 2005). In this article, we outline: • how companies improve their business by multimedia and networks, and • the challenges for direct marketing brought about by multimedia. The remainder of the article is structured as follows: in the first section, we provide a definition of direct marketing, illustrate the opportunities opening up for marketers by the new technologies, and present a scheme of tasks in direct marketing. Additionally, we describe the features of direct marketing using multimedia in the four domains of product, price, place, and promotion. In the subsequent section we address the possibilities for contemporary relationship marketing in the framework of content, commerce, and community. Thereafter, we discuss innovative direct marketing activities using the examples of advertising in personalized digital TV environments and mobile telephony. The article concludes with a comparison of different direct marketing media and a synopsis of success factors.
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Introduction

Multimedia technologies provide direct marketers with an incredible diversity of opportunities for communication to as well as with customers in a more appealing manner than old-fashioned printed advertisements or mailings (Coviello, Milley, & Marcolin, 2003). Direct marketing is one of the most important application domains of innovative multimedia products. An increasing share of marketing spending is invested in network activities, particularly WWW advertising and online shops. Online marketing activities have become so prominent that the 2000 Superbowl has been labeled the “Dot com Bowl” (Noe & Parker, 2005).

In this article, we outline:

  • how companies improve their business by multimedia and networks, and

  • the challenges for direct marketing brought about by multimedia.

The remainder of the article is structured as follows: in the first section, we provide a definition of direct marketing, illustrate the opportunities opening up for marketers by the new technologies, and present a scheme of tasks in direct marketing. Additionally, we describe the features of direct marketing using multimedia in the four domains of product, price, place, and promotion. In the subsequent section we address the possibilities for contemporary relationship marketing in the framework of content, commerce, and community. Thereafter, we discuss innovative direct marketing activities using the examples of advertising in personalized digital TV environments and mobile telephony. The article concludes with a comparison of different direct marketing media and a synopsis of success factors.

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Direct Marketing: Definitions And Tasks

According to the American Marketing Association (2006), the term direct marketing is defined by two perspectives (cf. http://www.marketingpower.com):

  • Retailing Perspective: “A form of non-store retailing in which customers are exposed to merchandise through an impersonal medium and then purchase the merchandise by telephone or mail.”

  • Channels of Distribution Perspective: “The total of activities by which the seller, in effecting the exchange of goods and services with the buyer, directs efforts to a target audience using one or more media (direct selling, direct mail, telemarketing, direct-action advertising, catalog selling, cable selling, etc.) for the purpose of soliciting a response by phone, mail, or personal visit from a prospect or customer.”

The former perspective highlights the nexus of direct marketing to multimedia, because multimedia, and particularly networks such as the Internet and the World Wide Web, is the modern surrogate of human salespeople praising products and services. However, multimedia and networks might be used to offer additional value to customers. The latter perspective emphasizes the advantage provided by modern multimedia technologies: immediate buying without changing the medium. There are several terms for this, proposed in the literature, with respect to particular media such as “e-mail marketing,” “Internet marketing,” and “mobile marketing” (via cellular phones, PDAs, etc.). Thanks to this advantage, direct marketing using multimedia technologies stands out from the crowd of marketing techniques. Some authors propose to enrich the elements of the classical marketing with e-marketing components, but more detailed investigations suggest that the recent changes are more fundamental than just blending the marketing mix with an electronic mix (e.g., Kalyanam & McIntyre, 2002; Verona & Prandelli, 2002). All marketing concepts mentioned previously have to cope with the tasks of conventional marketing, which are commonly broken down into the domains of product, price, place, and promotion. Table 1 depicts a scheme of tasks that direct marketers have to accomplish in order to tap the full potential of multimedia and networks.

Key Terms in this Chapter

Customer Relationship Management (CRM): The systematic collection and utilization of business data to manage interactions with customers by identifying patterns and interests of customers as success factors in order to foster customer loyalty through individualized correspondence and tailored offers.

Direct Marketing: A direct communication to a customer or business by one or more media that are designed for the purpose of soliciting a response in the form of an order, a request for further information, or a personal visit from a customer.

Mobile Marketing: Adding value to the customers and enhancing revenue by distributing any kind of message or promotion on mobile devices.

Mass-Customization: Provides customized offers based on individual needs by the use of flexible computer-aided manufacturing systems in order to combine low unit costs of mass production with the flexibility of individual customization.

Collaborative Filtering: A collective method of recommendation based on previously gathered information to guide people’s choices of what to read, what to look at, what to watch, and what to listen to.

SMS Marketing: Using short messages services (SMS) to provide customers with time and location sensitive, personalized information to promote goods and services.

Price Differentiation: A pricing strategy to sell the same product to different consumers at different prices based on the customer’s estimated economic value of an offering.

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