Page 444 - Foundations of Marketing

Retailing, Direct Marketing, and Wholesaling | Chapter 14 411

multi-billion-dollar industry, although it now competes with the Internet for customers’ atten-
tion. This marketing method has resulted in some products gaining widespread popularity.
You may have heard of the Shake Weight, Snuggie, and Magic Bullet—all of which became
popular through direct-response television marketing campaigns. Direct-response marketing
is also conducted by sending letters, samples, brochures, or booklets to prospects on a mail-
ing list and asking that they order the advertised products by mail or telephone. In general,
products must be priced above $ 20 to justify the advertising and distribution costs associated
with direct-response marketing.

Telemarketing

A number of organizations use the telephone to strengthen the effectiveness of traditional
marketing methods. Telemarketing is the performance of marketing-related activities by
telephone. Some organizations use a prescreened list of prospective clients. Telemarketing
can help to generate sales leads, improve customer service, speed up payments on past-due
accounts, raise funds for nonprofit organizations, and gather marketing data.
However, increasingly restrictive telemarketing laws have made it a less appealing market-
ing method. In 2003, the U.S. Congress implemented a national do-not-call registry, which
has more than 200 million numbers on it. The Federal Trade Commission (FTC) enforces
violations and companies are subject to fi nes of up to $ 16,000 for each call made to numbers
on the list. The Federal Communications Commission (FCC) ruled that companies are no
longer allowed to call customers using prerecorded marketing calls simply because they had
done business in the past. The law also requires that an “opt-out” mechanism be embedded in
the call for consumers who do not wish to receive the calls. Companies that are still allowed to
make telemarketing phone calls must pay for access to the do-not-call registry and must obtain
updated numbers from the registry at least every three days. Certain exceptions do apply to
no-call lists. For example, charitable, political, and telephone survey organizations are not
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restricted by the national registry.
Television Home Shopping

Television home shopping presents products to television viewers, encouraging them to
order through toll-free numbers and pay with credit cards. The Home Shopping Network
originated and popularized this format. The most popular products sold through television
home shopping are jewelry ( 40 percent of total sales), clothing, housewares, and electronics.
Most homes in the United States have access to at least one home shopping channel, with the
Home Shopping Network and QVC being the largest.
The television home shopping format offers several benefi ts. Products can be demon-
strated easily, and an adequate amount of time can be spent showing the product so view-
ers are well-informed. The length of time a product is shown depends not only on the time
required for performing demonstrations, but also on whether the product is selling. Once the
calls peak and begin to decline, hosts switch to a new product. Other benefi ts are that custom-
telemarketing The
ers can shop at their convenience and from the comfort of their homes.
performance of marketing-
related activities by telephone
Online Retailing television home shopping
A form of selling in which
Online retailing makes products available to buyers through computer connections. The phe-
products are presented to
nomenal growth of Internet use and online information services has created new retailing
television viewers, who can
opportunities. Online retailing is a rapidly growing segment that most retailers view as vital
buy them by calling a toll-free
to business. Retailers frequently offer exclusive online sales, or may reward customers who number and paying with a
visit their websites with special in-store coupons and other promotions and discounts. Online credit card
retailing satisfies an increasing expectation among consumers to have multiple channels avail- online retailing Retailing
able to obtain the goods and services they desire. that makes products available
Consumers can perform a wide variety of shopping-related tasks online, including pur- to buyers through computer
chasing virtually anything they desire. They can track down rare collectibles, refi ll their connections

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