direct promotion

3.3 The Marketing Mix – Promotion Methods (Cambridge 9609)

1. Promotion in the Marketing Mix

Promotion is one of the four Ps. For the IGCSE/A‑Level exam you must be able to:

• Identify the five main types of promotion.
• Explain the purpose of each type.
• List typical media/tools, at least two advantages and two disadvantages.
• Describe the key evaluation metrics used for each type.
• Show how promotion objectives link to overall marketing objectives (SMART, KPI’s).

2. Overview of Promotion Types

3. Linking Promotion to Marketing Objectives

• Promotion objectives must directly support the overall marketing objectives (e.g., increase market share, launch a new product, improve brand image).
• Use the SMART framework when setting promotion goals:
  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time‑bound
• Typical KPI’s for each type of promotion are shown in the table above; choose those that best reflect the set objective.

4. Direct Promotion – Detailed Study

4.1 Definition

Direct promotion is a communication that targets individual customers or a clearly defined group, bypasses intermediaries, and includes a clear call‑to‑action (CTA) that encourages an immediate response or purchase.

4.2 Key Characteristics

• Targeted: messages are directed at specific individuals or well‑defined segments.
• Measurable: response can be tracked and linked to cost.
• Interactive: includes a CTA that prompts an immediate reply (phone call, click, visit).
• Personalised: content can be adapted to the recipient’s preferences, purchase history or behaviour.

4.3 Common Direct Promotion Methods

4.4 Planning a Direct Promotion Campaign (8‑step Process)

1. Define the objective (SMART): e.g., “Generate 250 qualified leads for the new fitness tracker within 5 weeks.”
2. Identify the target audience: use demographics, psychographics, purchase history, CRM data, or look‑alike modelling.
3. Select the appropriate medium: match audience preferences (e.g., 30‑40 % of the segment prefer email, 20 % respond better to SMS).
4. Develop the message: clear, compelling, benefits‑focused, and include a strong CTA (e.g., “Claim your £50 discount – click now”).
5. Design the offer: discount, free sample, limited‑time deal, loyalty points, or bundled package.
6. Set budget and schedule: allocate costs (production, media, database purchase) and choose timing (seasonality, product launch). Include a contingency.
7. Implement the campaign: produce materials, upload lists, schedule sends/calls, ensure delivery tracking.
8. Measure, evaluate and report: calculate response, conversion, CPA, ROI; compare with benchmarks; recommend improvements.

4.5 Evaluation & Measurement

• Response Rate: \(\frac{\text{Number of responses}}{\text{Number of contacts}}\times100\)
• Conversion Rate: \(\frac{\text{Number of sales}}{\text{Number of responses}}\times100\)
• Cost‑per‑Acquisition (CPA): \(\frac{\text{Total campaign cost}}{\text{Number of sales}}\)
• Return on Investment (ROI): \(\frac{\text{Revenue – Cost}}{\text{Cost}}\times100\%\)
• Benchmark figures (industry averages) help assess performance:
  • Email open rate ≈ 20‑25 %
  • Email click‑through ≈ 2‑4 %
  • Direct‑mail response ≈ 1‑3 %
  • Telemarketing conversion ≈ 5‑10 %
• Present results in a simple table or bar chart for quick comparison with targets.

4.6 Legal & Ethical Checklist (per method)

• Data protection (GDPR/UK Data Protection Act): obtain explicit consent, provide an easy opt‑out, store data securely, retain records of consent.
• Do‑Not‑Call (DNC) registers: check national lists before any telemarketing call.
• Electronic Communications Regulations: every email must contain a clear, functional unsubscribe link.
• Consumer Protection Act & Advertising Standards Authority (ASA): offers must be clear, not misleading, and all terms must be disclosed.
• Environmental considerations: use recyclable paper for direct mail, minimise packaging, and consider carbon‑offsetting for large mail‑outs.

4.7 Integration with the Other 4 Ps

• Product: Direct mail can include samples or detailed spec sheets; personal selling can demonstrate product features.
• Price: Personalised discounts or loyalty points reinforce pricing strategy and perceived value.
• Place (Distribution): Direct‑response ads can drive traffic to specific retail outlets, pop‑up stores, or e‑commerce sites.
• Promotion (overall): Direct promotion should complement advertising, sales promotion and digital activity to create a cohesive communications mix.

4.8 Case Study – Direct Email Campaign for a New Smartphone

Context: A UK mobile‑phone retailer emailed 15 000 customers who had purchased Android devices in the past 12 months. The email offered a £100 discount on the latest flagship model with a prominent “Buy Now” button linking to a dedicated landing page.

Results (2‑week period):

Learning points:

• Segmentation by previous purchase behaviour produced a higher‑than‑average open and click‑through rate.
• A concise, benefit‑focused subject line and a single, prominent CTA drove conversions.
• Tracking through a unique landing‑page URL enabled accurate calculation of CPA (£80) and ROI.

4.9 Key Points to Remember

• Direct promotion works best when the audience is clearly defined and the message is personalised.
• A compelling, unambiguous CTA is essential for high response rates.
• Measure response, conversion, CPA and ROI; compare with industry benchmarks to justify spend.
• Compliance with data‑protection, DNC, and consumer‑rights legislation is mandatory.
• Integrate direct promotion with the other three Ps and with advertising, sales promotion and digital activity for a consistent brand voice.

4.10 Practice Questions (Paper 3/4)

1. Explain how direct mail can support a new product launch. Include at least two advantages and two disadvantages.
2. A telemarketing campaign cost £5 000 and generated sales worth £20 000. Calculate the ROI and comment on its significance.
3. Discuss the ethical considerations a company must address when using personal selling in residential areas.
4. Compare and contrast the measurement techniques used for advertising (e.g., GRPs, CPM) with those used for direct promotion (e.g., response rate, ROI).
5. Outline how a direct‑response TV advert could be linked to an online email follow‑up to maximise conversion.