Direct Marketing

Table of contents

  Illustrations  III

  List of abbreviations  IV

1  Introduction  1

1.1  Definition  1

1.2  The history of direct marketing  2

1.3  Delimitation of the classical marketing  3

1.4  Objectives of direct marketing  4

2  Importance of direct marketing  5

2.1  For the companies  5

2.2  For the customers  7

3  Instruments of direct marketing  7

3.1  Classical media with elements for response  8

3.2  Not addressed advertising mail  8

3.3  Addressed advertising mail  9

3.3.1  Mailing  9

3.3.2  Other media  10

3.4  Telephone marketing  10

3.4.1  Active telephone marketing (Outbound)  10

3.4.2  Passive telephone marketing (Inbound)  11

3.5  New media  11

3.5.1  Couponing  11

3.5.2  E-Mail marketing (Permission-marketing)  11

3.5.3  Homepage and banner advertising  12

4  Database-Marketing as an success factor for direct marketing  12

4.1  Database-Marketing in general  12

4.2  Meaning of the target group selection  14

5  Examples from the practice  15

5.1  Direct marketing at Festo AG Co. KG  15

5.2  Direct marketing at Home Shopping Europe (HSE24)  17

6  The future of direct marketing  19

7  Conclusion  19

  Vocabulary  V

  Literature  VIII

  Illustrations  

  Illustration 1 Flow of information: classical marketing direct marketing  3

  Illustration 2 Number of companies using direct marketing in different branches  

  and company sizes  6

  Illustration 3 Use of several direct marketing instruments in 2003  8

  Illustration 4 Expenditures for the media of direct marketing  9

  Illustration 5 Ladder of loyalty from Kreutzer  13

List of abbreviations

DDV Deutscher Direktmarketing Verband (German Direct  

Marketing Association)  

HSE24 Home Shopping Europe  

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1 Introduction

No matter whether in the newspaper while having breakfast, in the radio on the

way to work, in the afternoon when looking through the post or in the evening while

relaxing by watching TV… everywhere we are overwhelmed with advertising. In the

course of this we encounter media of classical marketing and of direct marketing.

In this seminar paper the area of responsibility of direct marketing should be shown. The readership shall get a perspective over the instruments, areas and possibilities of use, as well as realize the difference to the classical marketing.

1.1 Definition

There are lots of various definitions for direct marketing in the literature. This is

also explaining the different spellings in the German language (Direktmarketing,

Direkt-Marketing, Direct Marketing). As in this seminar paper the several views can

not be discussed, only the definition from the "German Direct Marketing

Association" (called DDV) is consulted.

"The concept of Direct Marketing includes all marketing activities that use media and communication tools with the purpose to establish an interactive relation to the target person, in order to induce them to an individual, measurable reaction." 1

The most important headwords of this definition surely are "individual" and "measurable". Because with direct marketing campaigns it could be determined how the individual customers have reacted to the advertising. The possibility to measure the success is the most important feature of direct marketing for the companies.

The direct marketing campaigns can either address already existing customers or can be used for the canvassing of new customers. According to this the media can be designed differently. But in both cases the interactive relation, which means a direct contact, to the customer is established or strove for.

¹ Definition from the DDV, quoted after Holland, Heinrich (1992): Direktmarketing, 1. edition, Munich

1993, p4

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1.2 The history of direct marketing

The direct marketing can look back at a long history, which has its beginning in the

year 3,000 before Christ. In this time economic series were written down and sent

on panels of clay, cloth or on so-called "Papyrus". On this occasion small wooden

boxes served as an envelope. The first advertising letters came a little bit later.

These were the epistles from the apostles, for example Paulus and Petrus.

The first catalogues were developed just after the invention of the letterpress. On the first of October 1498 the first catalogue including books was brought out from Aldo Romano Manuzio in Venice. The first advertising letter, in which the copy of the imperial document was advertised, was proved in Basel in 1471. Lots of people denote the construction of the first letter box in Germany on October the first 1823 as the date of birth of the modern direct marketing.

From here on the direct marketing records a fast evolution. In 1935 Ad-con in Frankfurt published the first definition of direct marketing, whose content is really similar to the modern definitions. The contemporary DDV was set up in 1948 called "Association of addresses publisher" (ADV) and got its present name in 1985.

After the Second World War more and more books about direct marketing came out. In the fifties the direct marketing was not particularly accepted in the society, until Alfred Gerardi woke up the economy with his book "Customers in every house" in 1959.

The first computers and chain printers were also becoming a marketing instrument in the sixties. The direct marketing also became, slowly but steady, academic. The first seminars about direct marketing at universities were held by Heinz Fischer.

In the years from 1970 to 1979 the first compulsory lecture about direct marketi ng for the eighth semester in business management at the University of Pforzheim took place. The computer technologies caught on more and more, until the chain printers were replaced by laser printers and so the drawing up of advertising letters

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got faster. In this decade also the companies in the business-to-business sector developed the use of direct marketing for themselves. The media telephone, TV, internet and email have been used stronger and stronger since the nineties. Out of this the "Multi Channel Marketing" was developed.

Nowadays, in the 21rst Century, the direct marketing enjoys a big popularity and represents an important factor for all kinds of companies, as well as for all households.

1.3 Delimitation to the classical marketing

The classical marketing is concentrating on the advertised product with the main target of sales increase of this product. To reach that, it uses the instruments of mass advertising, like commercials, posters, advertisements, and so on. "Having the (potential) customer directly in one's sight" instead is the motto of direct marketing. All marketing campaigns are focused on the customer. Examples are mailings, telephone marketing and newsletters. These instruments will later be explained in detail.

On closer examination of the flow of information the distinction is getting cleaner. The direct marketing in contrast to the classical marketing has mutual flow of information, therefore a kind of dialog. This means that the customer has the possibility to get in contact with the company every time.

Illustration 1: Flow of information: classical marketing – direct marketing 2

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Source: Holland, Heinrich (1992): Direktmarketing, 1. edition, Munich 1993, p5