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DIRECT MARKETING AND OTHER MEDIA Answers to Discussion Questions Explain the differences among direct marketing, direct-response advertising, direct mail, and direct selling. Answer: Direct marketing is the umbrella phrase for all forms of direct promotion. The other three terms are subsets of direct marketing. Direct-response advertising refers to advertising that includes a direct response device. Direct mail is direct communication via mail. Direct selling refers to selling direct to the end consumer via multi-level or single-level sales. Why has direct marketing enjoyed such rapid growth in recent years? Answer: Its growth is a product of its advantages which include the ability to target, measurability, and efficiency. Refer to the ad for DIRECTV’s satellite system (see Figure 15.3) Assume the manufacturer of this product chose to use direct mail to sell the product in addition to advertising it in magazines. Explain how you, as a chief marketing officer (or brand manager) for this company, would acquire the mailing list. What characteristics of businesses would you select in generating the list? Be specific. Answer: Students should consider that acquiring an external list from another company’s house list will require selecting a company from which to purchase which would seek similar customers. As the chief marketing officer or brand manager for DIRECTV, acquiring a mailing list for direct mail campaigns involves strategic selection based on demographics, behaviors, and other relevant criteria to target potential customers effectively. Here's how I would approach acquiring the mailing list: • Customer Profiling: Start by analyzing the existing customer base to understand their demographics, preferences, and behaviors. This data can provide valuable insights into the type of businesses or individuals most likely to be interested in DIRECTV's satellite system. • Market Segmentation: Segment the market based on factors such as geographic location, household income, age, and interests. For example, DIRECTV might target households in urban areas with higher disposable incomes and a penchant for entertainment and technology. • Data Purchase: Utilize reputable data brokers or agencies specializing in compiling mailing lists. These providers can offer access to extensive databases with detailed demographic and behavioral information. Ensure that the data is GDPR or CCPA compliant to respect privacy regulations. • Criteria Selection: Specify criteria for selecting businesses on the mailing list. This could include characteristics such as: • Geographic Location: Target regions with high population density or areas with a lack of cable infrastructure where satellite TV is a viable alternative. • Household Income: Prioritize businesses in neighborhoods or areas with higher income levels, as they are more likely to afford premium entertainment services like DIRECTV. • Business Type: Focus on businesses that align with DIRECTV's target market. For instance, restaurants, sports bars, hotels, and residential complexes might be particularly interested in offering satellite TV services to their customers. • Existing TV Providers: Target businesses currently subscribed to competitors' services or those dissatisfied with their current TV offerings. These businesses may be more receptive to switching to DIRECTV. • Purchase Behavior: Identify businesses that have shown a propensity for purchasing similar products or services, such as home entertainment systems or subscription-based services. • Data Verification and Validation: Verify the accuracy and relevance of the acquired mailing list through data validation processes. This ensures that the addresses and contact information are up-to-date and accurate, minimizing wasted resources on undeliverable mail. • Testing and Optimization: Implement A/B testing to refine the effectiveness of the direct mail campaign. Test different messaging, offers, and creative elements to identify what resonates best with the target audience and optimize future campaigns accordingly. By following these steps, DIRECTV can acquire a highly targeted mailing list that maximizes the effectiveness of its direct mail campaigns, reaching potential customers most likely to convert into subscribers. What should government regulators (e.g., Federal Trade Commission) do to prevent telemarketing abuses? What kind of prohibitions, if any, should be placed on telemarketing? Should there be any changes to the “do not call list” procedures? Should there be a “do not track list” for online marketing? How might it work? Answer: To prevent telemarketing abuses and protect consumers, government regulators such as the Federal Trade Commission (FTC) can implement several measures and regulations: • Stricter Enforcement of Existing Laws: The FTC should rigorously enforce existing laws such as the Telephone Consumer Protection Act (TCPA), which regulates telemarketing practices, including the use of autodialers and prerecorded messages. • Strengthening Consent Requirements: Require telemarketers to obtain express consent from consumers before making any marketing calls. This consent should be clear, unambiguous, and opt-in rather than opt-out. • Establishing Clearer Guidelines on Caller Identification: Mandate that telemarketers accurately display their caller identification information, including the name of the company and a contact number that consumers can use to opt out of future calls. • Imposing Time Restrictions: Limit the hours during which telemarketing calls can be made to prevent disruption to consumers' daily lives. For example, calls could be restricted to certain hours of the day, such as between 9 am and 9 pm. • Enhancing Penalties for Violations: Increase fines and penalties for telemarketers who violate regulations, including those related to calling numbers on the National Do Not Call Registry. • Improving Do Not Call List Procedures: Review and update the procedures for the National Do Not Call Registry to make it easier for consumers to register and maintain their preferences. This could include simplifying the registration process and providing more options for opting out of specific types of calls. • Establishing a Do Not Track List for Online Marketing: Similar to the National Do Not Call Registry, create a Do Not Track List for online marketing. This list would allow consumers to opt out of being tracked by websites for targeted advertising purposes. How might a Do Not Track List work for online marketing? • Consumers would have the option to register for the Do Not Track List through a centralized platform managed by a regulatory body like the FTC. • Websites and online advertisers would be required to respect consumers' preferences by refraining from tracking their online activities for targeted advertising if they are on the Do Not Track List. • Regulatory agencies would enforce compliance with Do Not Track regulations, imposing penalties on violators. • Browsers could include built-in features that allow users to easily enable Do Not Track settings, signaling their preference to opt out of online tracking. • Advertisers and website operators would be required to provide clear disclosures about their tracking practices and offer mechanisms for opting out, even for users not on the Do Not Track List. Implementing these measures would help strike a balance between allowing legitimate marketing activities and protecting consumers from intrusive and unwanted telemarketing calls and online tracking. Conduct 5 to 10 interviews with nonstudent adults regarding their personal experiences with and evaluations of telemarketing. Are they hassled often? Do they mind having telephone salespeople call them? What specific complaints do they have? Answer: 1. How frequently do you receive telemarketing calls? 2. How do you feel about receiving calls from telemarketers? Do you find them bothersome or intrusive? 3. Have you ever made a purchase or engaged with a telemarketer during a call? If so, what was your experience like? 4. What are some specific complaints or frustrations you have with telemarketing calls? 5. Do you think the National Do Not Call Registry is effective in reducing unwanted telemarketing calls? 6. Have you encountered any instances of telemarketing abuse, such as calls outside of permitted hours or from companies that ignore do-not-call requests? 7. How do you typically respond to telemarketing calls? Do you immediately hang up, engage with the caller, or something else? 8. Have you taken any measures to reduce the number of telemarketing calls you receive, such as using call-blocking apps or registering with the National Do Not Call Registry? 9. Do you think there should be stricter regulations on telemarketing practices? If so, what changes would you suggest? 10. Overall, how would you rate your experience with telemarketing? Would you say it's generally positive, negative, or neutral? These questions can help gather insights into individuals' personal experiences with telemarketing, their attitudes towards it, and any specific grievances they may have. It's important to conduct these interviews with a diverse range of adults to capture a variety of perspectives. Virtually any space is a potential medium for a marketer’s advertisement. Identify several novel forms of advertising media that go beyond the “other” media described in this chapter. Describe the target for each of these novel media, and offer an explanation as to why, in your opinion, each novel medium is effective or ineffective. Answer: Students will hopefully be creative in their answers using any potential opportunity to bring potential customers together with product or brand messages. Auto wrapping is one example that is gaining in popularity. Packaging opportunities such as delivery pizza boxes (think of Gateway’s distinctive white and black boxes) offer the opportunity to deliver messages to people who just ordered take-out food. Cell phone screens could display banner ads. Can you recall any prominent brand placements in movies you have seen lately? What were these placements? Were the products “positioned” in positive or negative contexts? How successful, in your opinion, were these placements? Answer: Answers should explain how effective placements were in getting brand information across to consumers. I can provide some examples of prominent brand placements in movies based on general knowledge: 1. Apple Products in Movies: Apple products, such as iPhones, MacBooks, and iPads, are frequently featured in movies and TV shows. These placements often position Apple products in a positive light, portraying them as sleek, modern, and desirable. For example, characters might use iPhones to make important calls or MacBooks to do creative work, reinforcing the brand's association with innovation and sophistication. 2. Automobile Brand Placements: Car manufacturers often pay for their vehicles to be prominently featured in movies, especially action-packed or high-profile films. These placements typically showcase the vehicles in positive contexts, such as thrilling chase scenes or stylish driving sequences. For instance, a character might drive a luxury car during a glamorous night out, associating the brand with status and aspiration. 3. Soft Drink and Fast Food Brands: Brands like Coca-Cola, Pepsi, McDonald's, and Starbucks are frequently integrated into movie scenes, particularly in settings like cafes, restaurants, or convenience stores. These placements often depict the products in a positive light, conveying enjoyment, refreshment, or convenience. However, some placements may also incorporate humor or satire to playfully highlight the ubiquity of these brands in everyday life. The success of brand placements in movies can vary depending on factors such as the relevance of the brand to the storyline, the authenticity of the integration, and audience receptiveness. When done well, brand placements can effectively enhance storytelling and contribute to a more immersive viewing experience without feeling intrusive or forced. However, overly blatant or out-of-context placements may come across as inauthentic or distracting, potentially detracting from the overall enjoyment of the movie. Describe your use, if any, of yellow-pages advertising in recent weeks. Answer: I haven't used yellow-pages advertising in recent weeks. Most of my searches for products or services are done online, either through search engines like Google or through specific websites and apps tailored to the type of service or product I'm looking for. The convenience and ease of use of online platforms make them my preferred choice for finding information and making purchasing decisions. Provide two illustrative variables that a catalog marketer of men’s or women’s clothing (your choice) might include in its database. Answer: Students should reference the primary contact information and the variables of recency, frequency, and monetary value discussed in the chapter. There are two illustrative variables that a catalog marketer of women's clothing might include in its database: 1. Clothing Preferences: This variable could capture data on customers' preferences regarding clothing styles, colors, patterns, and fabrics. It might include information on whether customers prefer casual, formal, or trendy clothing, as well as their preferred sizes and fits. By understanding customers' clothing preferences, the marketer can tailor its catalog offerings to better match individual tastes and increase the likelihood of purchase. 2. Purchase History: This variable would track customers' past purchases of women's clothing from the catalog. It could include details such as the specific items purchased, purchase dates, purchase amounts, and frequency of purchases. Analyzing purchase history data allows the marketer to identify patterns and trends in customers' buying behavior, such as preferred brands, product categories, and seasonal trends. This information can inform targeted marketing efforts, personalized recommendations, and promotional strategies to encourage repeat purchases and customer loyalty. Assume you are a direct marketer of a line of merchandise imprinted with the logos of major universities. These items are targeted to the fans and supporters of university athletic programs. Detail how you would compile an appropriate mailing list, one that would reach people who are most likely to purchase the logo merchandise. Use your college or university for illustration. Answer: Possible list sources would include the following: (1) alumni who have graduated within specified dates, (2) season ticket holders for various athletic events, (3) purchasers of individual athletic tickets who have ordered through the mail (so that their names and addresses are available from the databases of university ticket offices), and (4) current students. Following is a lifetime-value analysis framework similar to that presented in the chapter. Perform the calculations necessary to complete row K: Answer: (in bold)
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
A Customers 2,000 600
240 132 86
B Retention rate 30 % 40 % 55 % 65 % 70 %
C Average yearly sales $250 $250 $250 $250 $250
D Total revenue $500,000 $150,000 $60,000 $33,000 $21,500
Costs
E Cost percentage 50 % 50 % 50 % 50 % 50 %
F Total costs $250,000 $75,000 $30,000 $16,500 $10,750
Profits
G Gross profit $250,000 $75,000 $30,000 $16,500 $10,750
H Discount rate 1 1.15 1.32 1.52 1.75
I NPV profit $250,000 $65,217 $22,727 $10,855 $6,143
J Cumulative NPV profit $250,000 $315,217 $337,944 $348,799 $354,942
K Lifetime value (NPV) $125.00 $157.61 $168.97 $174.40 $177.47
Assume that, 10 years after graduating from your university or college, you are appointed to your school’s Athletics Oversight Committee. The chair of the committee suggests that it would be useful to know the lifetime value of the average season-ticket holder. Describe how you might go about estimating the average ticket holder’s lifetime value over the first five years starting with the year that he or she first purchases season tickets. Refer to Table 15.2 to assist you with this analysis. Make whatever assumptions you deem necessary and then conduct the analysis. Using a spreadsheet program such as Microsoft Excel would obviously facilitate your analysis. Answer: To calculate the lifetime value of each customer over a period of time (i.e., five years), you need to know the number of customers in Year 1, the retention rate for each year, average yearly sales per customer, costs as a percentage of sales, and the discount rate. Once that information is known, students can follow the procedure that is described in the chapter and depicted in Table 15.2. What are your views on advergaming? Respond by commenting about this advertising practice both from the perspective of advertisers and from the viewpoint of game players. Answer: From the advertiser’s point of view, advergaming provides an excellent advertising medium for reaching young males. From the players’ point of view, reactions might be mixed. For example, some students will find this blatant commercialism and distracting, while others will believe it ads to realism in the game and is a good way to become familiar with brands. Advergaming, the practice of integrating advertising content into video games, carries both benefits and drawbacks from the perspectives of advertisers and game players. From the perspective of advertisers: • Engagement: Advergaming offers a highly engaging platform for reaching target audiences. By seamlessly integrating branded content into games, advertisers can capture the attention of players who are actively engaged in the gaming experience. • Brand Exposure: Advergames provide an opportunity for extensive brand exposure. Players interact with branded elements within the game environment, reinforcing brand awareness and potentially influencing purchase decisions. • Targeting: Advergaming allows advertisers to target specific demographics or niche audiences based on the characteristics of the game and its player base. This targeted approach can enhance the effectiveness of advertising campaigns. • Measurable Results: Advergaming campaigns can be tracked and analyzed to measure their effectiveness in terms of engagement, brand recall, and conversion rates. This data-driven approach enables advertisers to optimize their strategies for maximum impact. From the viewpoint of game players: • Intrusiveness: Some players may perceive advergaming as intrusive or disruptive to their gaming experience. An excessive presence of branded content within a game can detract from immersion and enjoyment, especially if it feels forced or irrelevant to the gameplay. • Authenticity: Players may question the authenticity of advergaming experiences, particularly if the integration of advertising content feels forced or inauthentic within the context of the game world. Maintaining a balance between advertising and gameplay is crucial to preserving the integrity of the gaming experience. • Privacy Concerns: Advergaming may raise concerns about privacy and data collection, especially if players feel that their gaming behavior is being monitored or exploited for targeted advertising purposes without their consent. • Creative Integration: When done well, advergaming can enhance the gaming experience by integrating advertising content in a creative and seamless manner that adds value to the gameplay. Players may appreciate sponsored content that enhances their gaming experience rather than detracting from it. Overall, advergaming can be a powerful marketing tool for advertisers to engage with consumers in a unique and interactive way. However, it's essential for advertisers to approach advergaming with sensitivity to the preferences and experiences of game players, ensuring that advertising content is integrated thoughtfully and respectfully within the gaming environment. Brand placements in movies, on TV, and in songs represent a subtle, even covert, way to present a brand message. Traditional advertising, by comparison, is, in a manner of speaking, “in your face.” One therefore could argue that traditional advertising is a more honest form of communications than the practice of branded entertainment. What are your views on this? Might one argue that brand placements are even a bit deceitful? Answer: The comparison between traditional advertising and branded entertainment, such as brand placements in movies, TV shows, and songs, raises interesting questions about the honesty and transparency of different forms of communication. Traditional advertising is indeed more overt and "in your face" compared to branded entertainment. Advertisements typically clearly identify themselves as promotional content, and consumers are generally aware that they are being marketed to when they encounter traditional ads. This transparency can be seen as a form of honesty because it doesn't disguise the intent behind the communication. On the other hand, branded entertainment, including product placements and integrations into various forms of media, can be more subtle and covert in its approach. While this subtlety can make brand placements less intrusive and disruptive to the viewing or listening experience, it also raises questions about transparency and honesty. Consumers may not always realize they are being exposed to advertising content, which can blur the line between entertainment and marketing. One could argue that brand placements, particularly when they are not clearly disclosed as paid endorsements, may indeed be considered somewhat deceitful. The audience may not always recognize that they are being influenced by advertising messages, which can lead to a sense of manipulation or deception. However, it's essential to consider the context in which brand placements occur. When done thoughtfully and in a way that enhances the overall entertainment experience without compromising its integrity, brand placements can add value for both the audience and the brands involved. For example, a well-integrated product placement that feels organic within the storyline of a movie or TV show can contribute to the realism and authenticity of the narrative. Ultimately, the key lies in transparency and disclosure. Brands and content creators should strive to be upfront about any commercial relationships or sponsored content to ensure that consumers are fully informed and can make decisions accordingly. This transparency fosters trust and credibility, which are essential elements of effective communication in any form. Visit www.brandchannel.com/brandcameo_films.asp and identify a movie that you either have seen or are at least familiar with. Examine the brands that have been placed in that movie and comment on why you think these brands chose to be placed in that particular movie. Answer: If you provide me with the name of the movie you're interested in, I can certainly offer insights into the brands placed within it and speculate on why those brands might have chosen to be featured in that specific film. Feel free to share the movie title, and I'll provide my analysis based on general knowledge and understanding of brand placement strategies. Given the chapter’s discussion of “alternative” forms of ad media (on garbage trucks, in restrooms, on people, etc.) and the implication that any unused space is a potential advertising medium, identify two “spaces” advertisers are not currently using that could be used for placing ad messages. What kinds of brands would advertise on each of your suggested spaces, and what would be an appropriate target audience for such messages? Do you think this form of advertising is appropriate? Answer: Two potential "spaces" that advertisers are not currently utilizing for ad messages could be: • Public Transportation Seating: Advertisers could place branded messages or logos on the seats of buses, trains, or subway cars. This space is currently underutilized for advertising purposes but presents a captive audience during commutes. Brands related to travel, transportation, or entertainment could advertise here. For example, airlines could advertise their services on subway seats, targeting commuters who may also be potential travelers. The appropriate target audience for such messages would be individuals who regularly use public transportation, including commuters and city dwellers. • Sidewalks and Pavements: Advertisers could use stencils or temporary chalk-based ads to place messages directly on sidewalks and pavements in high-traffic areas. This form of advertising would catch the attention of pedestrians and passersby, especially in urban areas. Brands related to local businesses, events, or promotions could benefit from sidewalk advertising. For instance, a nearby café could advertise its daily specials or a local theater could promote upcoming performances. The appropriate target audience for sidewalk ads would be pedestrians, tourists, and individuals frequenting the area. As for whether this form of advertising is appropriate, it depends on various factors such as the location, context, and execution of the ads. Advertisers must consider local regulations and guidelines regarding outdoor advertising to ensure compliance and avoid causing nuisance or safety hazards. Additionally, the messaging should be relevant, non-intrusive, and respectful of the surrounding environment. When done tastefully and in moderation, utilizing unused spaces for advertising can be an effective way to reach target audiences in unexpected places. However, overuse or misuse of such spaces could lead to backlash from the community and detract from the effectiveness of the ads. Therefore, advertisers should approach this form of advertising with caution and consideration for both the audience and the environment in which the ads are placed. What is your reaction to advertisements in movie theaters that precede featured films? Does such advertising disturb you, or do you find it perfectly acceptable? Answer: Advertisements in movie theaters that precede featured films are a common practice, and my reaction to them is generally neutral. Here's why: • Expected Practice: Advertising before movies has become a standard practice in many theaters, so I anticipate seeing commercials when I go to the movies. Knowing this, I'm mentally prepared for it and don't find it particularly disruptive. • Contextual Relevance: Movie theater advertising often includes trailers for upcoming films, which I consider relevant and part of the overall movie-going experience. Additionally, the advertisements are typically tailored to the audience demographic, so they can be somewhat targeted and may even provide information about products or services I'm interested in. • Time to Settle In: The advertisements usually play before the start time of the featured film, giving me a few minutes to settle into my seat, get comfortable, and prepare for the movie. It's not like they interrupt the film itself, so I don't find them bothersome in that regard. • Supporting the Theater: I understand that advertising helps offset the costs of operating movie theaters and contributes to keeping ticket prices relatively affordable. In that sense, I see it as a necessary aspect of the movie theater experience. While I generally find advertisements in movie theaters to be acceptable, I do appreciate it when theaters strike a balance and keep the duration of pre-movie ads reasonable. Too many or overly long advertisements can detract from the overall experience and become more intrusive, potentially leading to audience frustration. As long as the advertisements are relevant, not overly intrusive, and don't significantly delay the start of the featured film, I don't have a strong negative reaction to them. Solution Manual for Advertising Promotion and Other Aspects of Integrated Marketing Communications Craig J. Andrews, Terence A. Shimp 9781111580216, 9788131528242, 9781133191421, 9781337282659
