PLACE: getting the product to the customer. Decisions have to be made about the channels of distribution and delivery arrangements. Retail products may go through various channels of distribution:
1. Producer - sells directly to end users via own sales force, direct response advertising or direct mail (mail order).
2. Producer - retailers - end-users.
3. Producer - wholesalers/agents - retailers - end-users.
4. Producer - wholesalers - directly to end-users.
5. Producer - multiple store groups/department stores/mail order houses - end-users.
6. Producer - market - wholesalers - retailers - end-users.
Each stage must add, "value" to the product to justify the costs: the middleman is not normally someone who just takes his "cut" but someone whose own sales force and delivery system can make the product more easily and cost-effectively available to the largest number of customers. One principle behind this is "breaking down the bulk" the producer may sell in minimum quantities of, say, 10000 to the wholesaler, who sells in minimum quantities of 100 to the retailer, who sells in minimum quantities of 1 to the end-user. A confectionery manufacturer doesn't deliver individual bars of chocolate to consumer: distribution is done through wholesalers and then retailers who each "add value" to the product providing a good service to their customers and stocking a wide range of similar products.
PROMOTION - presenting the product to the customer. Promotion involves considering the packaging and presentation of the product, its image, the product name, advertising and slogans, brochures, literature, price lists, after-sales service and training, trade exhibitions of fairs, public relations, publicity, and personal selling's, where the seller develops a relationship with the customer.
Every product must process a "unique selling proposition" (USP) - features and benefits that make it unlike any other product in its market.
In promoting a product, the attention of potential customers is attracted and an interest in the product aroused, creating a desire for the product and encouraging customers to take prompt action ("AIDA").
Direct Mail and Direct Response
Direct Mail
Shopping without shops or direct marketing has become very big business, aided by direct mail, TV commercials and teletext, off-the-page selling, the telephone, the computer, and the credit card. Mail order nowadays better known as direct or direct response marketing. In Britain, direct mail takes third place to press and television and takes up 10 per cent of the total advertising expenditure. It is also an excellent medium for international advertising when it is more economical to airmail selected prospects than to advertise in the press which may be very limited anyway.
Confusion of terms can be avoided by remembering that direct mail is an advertising medium but mail order (or direct response) is a form of distribution, that is, trading by mail whatever medium is used for advertising sales offers. Consequently, direct mail is not limited to direct marketing: a retailer can use direct mail to attract shoppers to his store.
Characteristics of direct mail
It is addressed to selected, named recipients or at least to chosen people at selected addresses whether they be householders or managing directors. The quantity can be controlled, the message can be varied to suit different groups of people, and the timing can be controlled or at any rate estimated within postal limits.
Because of the controls mentioned above, it is economical in the sense that even the selected lists can be culled of unwanted addresses. De-duplication can be applied when a number of lists are being used in which certain names are repeated. It is also economical because in a mail shot more copy and illustrations can be used than would fill a whole page broadsheet newspaper, and at a fraction of the cost.
Unlike any other medium, except possibly the telephone, it is a one-to-one personal medium, like a conversation on paper. Generally, people like receiving mail, and if the recipient is well-chosen the mail shot will be welcomed. This medium is also personal in the sense that sales letters and envelopes can be addressed by name (personalised). Using special techniques like laser printing, dramatic and colourful effects can be achieved with the recipient's name inserted at various points in the body of the letter itself.
A direct mail campaign can be mounted very quickly, in a few hours if necessary given the facilities to write and reproduce a sales letter, and pack and post it with or without an enclosure. It is therefore a very flexible medium which can be used in an emergency.
For those advertisers who (a) have or can hire a reliable mailing list and (b) need to supply considerable information, direct mail can be their first line or primary advertising medium. In fact, they may use no other, except perhaps sales literature as enclosures. Others may use press advertising to produce enquiries or initial orders which provide a mailing list for future use.
A direct mail shot is usually consists of sales letter and enclosures. A sales letter is not just a business letter. It is a special form of copywriting with its own techniques. The length of the letter will depend on the extent to which the reader's interest can be sustained The letter may present a complete selling proposition, or it can be a covering letter referring the reader to an enclosure. The latter should not laboriously repeat the contents of the enclosure but highlight special features of it. Writing a sales letter we have a pattern to follow.
The main parts of a sales letter.
1. Introductory opening paragraph needs to capture reader’s attention.
2. The proposition is the heart of the letter.
3. Convincing the reader. There may be a price concession if the offer is taken up quickly, or the offer may have a time limit.
4. Final paragraph consists of instructions on how to respond or order.
Adopting the above four-point formula, here is an example of how a sales letter might be written.
Dear Mr. Brown
What do you do when your wife says the lawn needs cutting? Do you turn over a new leaf in the book you are trying to read? Or maybe you take the dog for a walk? If you haven't got a dog perhaps you pray that it will rain?
That's if you have an old back-breaker of a lawnmower that's agony to push up and down the lawn on a hot day.
With the new Smith and Jones electric lawnmower you don't have to push. You simply steer! The machine does all the work. It's a pleasure, really.
Your wife will be surprised how willingly you take your Smith and Jones out of the garden shed. She'll probably have a drink waiting for you afterwards, not that you'll be hot and weary. It will just be nice to sit down with her in the deckchairs and admire that neat, trim lawn. Nice work, Mr. Brown!
You can see the new Smith and Jones electric lawnmowers at the New Town Garden Centre – open all weekend sо you can call in when it suits you. It comes in a box you can put in the boot, and it's very easy to assemble. Why not bring the wife along?
Yours sincerely John Donaldson
Manager
When writing a sales letter it is necessary to use language which is appropriate to the medium, the product and the reader. The contents of the envelope should be kept to a minimum. Some mailings consist of so many items of different shapes and sizes that the recipient is bewildered and may well discard the whole lot! Good enclosures are those which supplement the sales letter. Some of the best examples of well-planned shots are the one-piece mailers which contain all the necessary information and the order form, making an accompanying sales letter unnecessary.
A printed envelope can be an advertisement just like the packaging of a retail product. It is the first thing people see. It can attract attention and invite curiosity about the contents, and if sufficiently interesting to the recipient the printed envelope could achieve priority over other correspondence received at the same time.
The size of envelopes can be controlled by the format of printed enclosures. Large leaflets in large envelopes can arrive in a very battered state whereas smaller leaflets in smaller envelopes are more likely to arrive in the same condition as when packed. So it’s better to use the small ones.
In order to send direct mail shots the company should create mailing lists. There are a lot of ways of creating or obtaining mailing lists. The information may be took from sales bills bearing the names and addresses of purchasers, from the response to advertisements, from yearbooks, annuals, directories and membership lists. They may be created by using a direct mail house or by hiring a list from list-brokers who specialize in this service. There are also firms which specialize in client's lists on computerized databases, adding and deleting names as requested, and so managing and maintaining a client's own list.
It is important to have an up-to-date mailing list, and it is bad policy to build a continuous mailing list which is never checked or revised. People do move, change their names or die. A mailing list of customers can be out-of-date after two years and in some cases in six months.
Not all direct advertising, or distribution of materials, is sent by post. A large volume is delivered door-to-door to houses, shops or offices. There are three types of mail-drop service:
1) by specialist door-to-door distributors;
2) by the Post Office;
3) in conjunction with the delivery of free newspapers.
Direct Response Marketing
Direct response is a form of distribution as I’ve mentioned above. The reasons for its growth and success are lack of personal services in self-service stores and supermarkets, problems of car-parking and road congestion near shopping centres, popularity of credit and charge cards.
Today the variety of means by which 'armchair' shopping can be conducted are only limited by the ability of modern mail order traders to conceive yet another technique of what is now called direct response marketing. We have moved a long way from the mail-order bargains of the popular press or the mail order club catalogues, although both still exist. It is now a sophisticated business extending rapidly into the realms of alternative television, micro-computers and videodisc catalogues. At the same time, traditional media continue to be used, but this does now include commercial television, as with recorded music producers. The largest single user of direct response is insurance.
Direct response has become a very substantial area of agency business, conducted either by specialist agencies, or by specialist subsidiaries of well-known agencies. A major reason for the expansion of direct response marketing has been the demand from clients for 'accountable advertising' where they can measure the response in enquiries, sales leads or sales.
From small black and white ads in the popular press to full-colour, full-page ads in the weekend colour supplements, a huge variety of goods and services arc sold off-the-page. Most hobby and enthusiasts magazines carry ads offering goods by post, from foreign stamps to computer software. The business pages offer unit trusts, and even the popular papers offer life insurance, motor-car and private hospital insurance. Correspondence courses have long been sold this way. Even the sale of shares is conducted by prospectuses published in The Times and Financial Times.
A number of commercial and non-commercial organisations sell from catalogues which may be advertised in the press and on TV or sent to regular customers, members or donors, or direct mailed against selected mailing lists. Such catalogues are usually distributed annually or seasonally, but some are issued more frequently. They may be for specific products or services such as garden seeds, bulbs or roses; foreign stamps or coins; fashion goods; wines; pipes; or perhaps tour holidays.
There are two kinds of clubs, those for club agents who enrol a circle of members, with the agents earning commission on the sales; and clubs for individual members who usually undertake to buy a minimum number of books, records, cassettes or CDs a year. Some airlines operate mail order clubs for passengers.
The first group enrol agents by means of ads in the women's press and in family magazines like TV Times and Radio Times. The reader should note the special wording of the application coupons in these ads. Particular information is requestedsuch aswhether the applicant has a telephone, and there is generally an age limit and perhaps geographical limits.
Also television, telephone and teletext may be used as the method of distributing. Advertisers quote the Teledata (ВНР) number to make enquiries or order goods. It is a 24-hour personalised telemarketing service, making it unnecessary for customers to mail coupons and for advertisers to handle them. All the sales information is held in a computer. For example, an advertisement for the Hyundai Stella 1.6 motor car, concluded with: 'phone Teledata 071-200-0200 for a brochure and the name and address of your nearest dealer'. The teledata receptionist gives the addresses of the nearest dealers, and note the caller's address in order to send the brochure, and asks where the advertisement has been seen and the make and year of the caller's present car.
Electronic mail is a system whereby mail is received on a Telex or non-Telex computer terminal with a modem which permits a print-out on a printer. This system is limited to recipients who have the necessary receiving equipment. But the growth of such office facilities is making electronic mail a viable direct response medium especially since there is the interaction facility to respond directly and quickly.
Direct marketing relies on trust. Customers have to send money in advance and do not see the goods until they arrive. That is why this form of trading is less common in developing countries. In Britain, the Mail Order Protection Scheme means that customers are protected by the publishers who do not wish to receive complaints from readers.
In Britain there are many laws which could concern the direct response marketer, and some may be of general application wherever the goods are sold. To these may be added the common law of contract. Most of these laws apply to off-the-page direct response, some apply to all forms of direct response marketing.
I. Importance of exhibitions
Exhibitions are popular throughout the world and have a long history, originating with old trading markets such as the 'marts' in what are today Belgium and the Netherlands, where British merchants sold their wool and woollens in the fourteenth century. The exhibition developed into the show attended by either the trade or the general public. London for many years became a major exhibition centre, to mention only the Great Exhibition of 1851, the Wembley Exhibition of 1924, and the Festival of Britain in 1951. In recent years the National Exhibition Centre in Birmingham has rivalled London although many events are held at Olympia, Earls Court, the Horticultural Halls and the Barbican Centre in the City.
Throughout the world there are major exhibition centres, often government supported (unlike Britain!), the chief ones in Europe being Frankfurt, Basle and Milan. Many exhibitions are nowadays held in the Gulf states, an indication of the need to develop their emergent economies. Permanent trade exhibition centres exist in developing countries such as Malaysia and Nigeria.
II. Types of exhibition
1. Public indoor
Usually held in specially built halls, the public show is based on a theme of public interest such as food, the home, do-it-yourself, gardening or holidays and travel.
2. Trade or business indoor
A more specialised type of exhibition, this will probably have a smaller attendance consisting of bona fide visitors who are invited, given tickets in their trade journal or admitted on presentation of their business card.
3. Private indoor
These are usually confined to one sponsor, but occasionally consist of a few sponsors with associated but not rival interests Venues are usually hotels, local halls, libraries, building centres or company premises if suitable.
4. Outdoor
Certain subjects lend themselves to outdoor exhibitions, for instance aviation, farm equipment (at agricultural shows) camping and large construction equipment. Exhibition stand may also be available at outdoor or tented events like flower shows and horse shows. In hotter countries exhibitions normally held indoors in the northern hemisphere will be held out-of-doors.