What is Direct Marketing?
Any product sold through the market goes through an elaborate system of production, transportation, procurement at the marketplace, and subsequently, one or two steps before reaching the end consumer. The entire value chain adds value to transportation, storage, delivery, or product improvements.
As can be understood from the description above, traditional marketing involves various players before it reaches the final stakeholder- the consumer or customer. The Direct Marketing strategy reduced the number of stakeholders to two or three- Either the company directly sells to consumers or, in some cases, a carrying & forwarding agent would stock the goods in various cities for final delivery to consumers.
History of Direct Marketing in India
There was already a huge market for direct selling in India, but it remained in the unorganized segment. They sold anything from ice creams, bangles, garments, processed or semi–processed food, toys, and consumer products but mostly catered to the lower and middle income groups.
Of course, street smart salesmen and women also effectively marketed vegetables, fish, fruits, and all sorts of handcrafted figures and curios. Eureka Forbes popularized the concept of clean homes through vacuum cleaners and pushed towards organized direct marketing in the 1980s.
In the 1980s, Eureka Forbes actively directed a sustained campaign towards door-to-door demo-and-sales calls, with support from advertisements on newspapers and television, to promote the concept of clean homes through vacuum cleaners.
After that, in recent years, several examples of direct marketing efforts have succeeded in the Indian marketplace- Amway, Dell laptops & computers, Modicare, Tupperware, PureIT (Hindustan Lever), and Kent Purifier, to name a few.
Unlike the eighties and seventies, direct marketers have several new tools to reach a wider audience across geographies and territories.
Before delving at length into the various tools at the disposal of the direct marketing industry, here are some major advantages direct marketing has over traditional marketing channels.
Advantage of Direct Marketing
- Saves distribution costs: The major advantage of direct marketing is a huge saving on distribution costs. As already stated, it cuts through a clutter of stakeholders before it reaches the customer; Delivering the product to the premises results in achieving significant savings. Amway, e.g., claims to distribute the distribution costs saved to independent distributors after keeping a share for themselves. The company either retains or partially passes on the protection to the consumers, for greater investment in products and technologies.
- Product or service at doorsteps: The conventional method of selling involves the buyer going to the shop or marketplace to search for products and selecting them. There often needs to be a way to demonstrate the product’s effectiveness in real life. Direct marketing makes it possible to reach the consumer’s doorstep, give a live demo in a real setting, and effectively convince the customer to buy a product.
- Environmental Costs: Huge costs on transportation, hoardings, and point-of-sale promos can save, impacting carbon footprint and associated ecological costs. Delivering the product to the premises not only affects consumer fuel and time savings but also requires no shop space or infrastructure for brand development. The more products that come under direct marketing, the lesser would be the logistical costs.
- Independent Salesmen/Distributors to benefit: Direct marketing may impact traditional sales; however, several new professionals looking for independent work and income can help by becoming associates of such companies. Or become a network marketing professional.
- Understand customer requirements: Direct marketing companies contact customers face-to-face and are better position to get product feedback, understand their needs, and fine-tune products.
Technology Comes to Direct Marketer’s Aid
Compared to yesteryear, the rapid growth of technology, telecommunications, satellite communications, and the internet has created new tools for the direct marketing industry to penetrate the market.
1)Email 2) SMS 3) Website-Mobile Apps 4) Facebook/Pinterest 5) Radio & Television 6) Direct-to-home 7)Events & Trade fairs 8) Wayside promotions 9)Direct mail -Envelope campaigns 10) Print advertisements
1. Email: Email campaigns involve directly mailing to prospective customers from a database collected from various sources. To prevent email bounces and spam, which can result in wasted effort, it is important to take precautions. Getting software such as MailChimp to manage contacts, send emails, and track results are better. It claims that 10 million people use it for designing, and 600 million emails are sent using it. This form of marketing can ensure reaching the intended audience, but there needs to be an assurance that they will open the mail. Some service providers, such as Google, separate emails into primary, promotion, and social, leaving the right to open the mail to the receiver’s interests. Somebody not interested in promotional mail may not open it at all, even though it could be a product or service, they may be looking for.
A good-looking title that does not do a hard sell but addresses a potential customer need could be more appropriate for email marketing. How to lower your home loan EMI without a new loan? Give your dishwashing worries in the kitchen to us at a reasonable price… Email campaigns provide enough opportunity to describe the product, features, uses, and pictures.
And, of course, all the contact information required for ordering and making an appointment. Email marketing could have been more effective for many corporates because readers are already bombarded with such emails, and most put filters or block them. Having toll-free numbers enable more inquiries to come to your business.
2. Short Messaging Service: Short Messaging Service (SMS) is a very cost effective direct marketing tool and, in Indian terms, can be as cheap as 10 or 12 paise per message depending on how much quantity of messages you subscribe to; for example, the service providers give attractive rates for above one lakh SMSes. Making sure that the timing of the SMS, the day, and the words to convey the message are appropriate is crucial. Messages exceeding the 160-character limit will be considered as two messages and charged accordingly to avoid additional charges.
Mobile users are likely to see SMSs after office hours or before, apart from holidays, when they are more relaxed about reading the details. As a general rule, a good indicator of the efficacy of the campaign is a twenty percent response rate, which also depends on the use of crisp words and data to convey the message.
3. Website: A website is one of the best ways to reach a wider audience. However, the popularity of a website depends on its ranking in search engines such as Google. Again, it depends on the quality of content, photos, and pictures using popular keywords. It would be good to have a good search engine optimization (SEO) consultant to guide you on using HTML codes, keywords, and tags that could increase the number of visitors to the site. Optimizing the website is necessary for mobile, and developing mobile apps for accessing products and ordering products can bring new business. A robust payment mechanism with a gateway free of technical snags should exist.
Websites allow greater flexibility in displaying products, descriptions, news about the industry, blogs, and user reviews. Ensure that there are contact forms of direct marketing to get customer inquiries and get their database for further follow up.
4. Facebook/Pinterest: Social media has emerged as the best platform for branding, sales promotion, and customer engagement for various industries, especially fashion, and garments. Many businesses have only a Facebook store and still do good business management. Pinterest has an overwhelmingly US audience and mostly women; hence not suitable for other countries. However, having a landing page to capture customer information or bookings is important. Facebook pages enable the description of products, photos, events, and product launches. FB page popularity depends on getting new likes, more shares for posts, and attracting more comments. However, companies need to avail of paid services which start from as low as Rs 40 per day for post boost (less than US $1).
5. Radio & TV: Radio and television have emerged as effective media for direct campaigns. Some channels have only time devoted to the direct marketing of products. The campaign’s efficacy would depend on timings, video quality, demonstrations, voice-over, and commentary. Not all products or services are suitable for such direct marketing efforts. Companies typically promote health, fitness, kitchen accessories, and home products, among others, through TV advertising. Homemakers are the target audience for TV advertisements of such products. They usually come on TV during off-peak hours, making it unlikely for office-going or business people to see them.
6. Direct-to-home: Many consumer products, books, and accessories of use in homes are sold through direct selling; however, with the growth of malls and shopping complexes offering wider choices, direct-to-home sales have lost their effectiveness unless the product is unique. Product acceptance will be lesser unless supported by print and television ads. Meeting prospective customers and closing a call requires a lot of effort, as many people tend to shut their doors to direct sellers. Make it Active Voice.
7. Events & Trade Fairs: Events and trade fairs are held as part of festivals in many cities and towns where exhibition stalls are set up to promote products and services. Getting informed and buying products in a huge gathering of people is what it is. Some products and services allow for inquiries and bookings on the event days and delivering them to the customer at home. Director marketing relies heavily on word of mouth publicity to go forward.
8. Way-Side Kiosk: Many businesses hold way-side kiosk promotion activity for branding and sales promotion. An umbrella with the brand name and a desk and chair are all required for this promotion. Water purifiers, vacuum cleaners, mobile phones, personal loans, cars, and just about any product can be promoted this way. Some such programs are organized in malls and front of shopping establishments.
9. Direct-mail campaigns: Direct mail campaigns are cost effective direct marketing methods for reaching a specific or wider audience. However, sales conversion would depend on the product’s branding and the consumer’s utility.
10. Newspapers/Magazines: Newspapers and magazines continue to be good mediums for reaching out to a wider audience for direct sellers. It helps in branding, product promotion, and awareness building and helps bring more visitors to the website. However, cost terms and Return on Investment (RoI) depend on the products sold and whether they have a wider geographical reach.
Not all products and business categories can have direct marketing techniques applied to them. Garments, cosmetics, water purifiers, utensils, books, and other products are more suited for such a business.
Some products or brands remain available only through direct marketing – for example, Tupperware and Amway continue to be sold directly. However, they have brand shops to display and sell products. However, the efficacy of direct marketing would depend on the choice of medium, their return on investment (RoI), and how innovative the product is.
India’s direct selling industry may grow eightfold to cross the Rs 64,500 cr mark in the next 10 years. The initiative constitutes only 0.4% of the entire retail sector, which is lower than its market share in other comparable nations such as Malaysia and China. Direct selling has been constrained in many states due to a need for more regulatory clarity.
Direct selling is operational in 100 countries with a market size of $180 bn. It has added significantly to women’s empowerment, skill development, technology percolation, and expansion of small and medium enterprises in states, according to the FICCI-KPMG report. Indian direct selling companies recorded a growth of 16% over the past five years.
It said Government is gaining tax revenues to Rs 740-790 mn annually. The report noted that the direct selling market would be driven by factors such as growth in consumer markets and an increase in penetration to globally comparable levels.
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