Marketing Transit Services to Business (1998) / Chapter Skim
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Chapter 4
Chapter 4
Pages 81-102
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From page 81... ...
The industries are: Package delivery or courier services Banking and finance Telecommunications Travel Insurance and health care · Non-profits These six industries provide examples of most all of the marketing methodologies discussed in Chapter 2, including the use of sales forces, direct marketing, partnering, market research, market segmentation, and customer focus. The corporate examples are intended to show the diversity and scope of business-to-business marketing, and to provide some insight into techniques that might be applicable to transit-to-business marketing.
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From page 82... ...
The market leader in package delivery, Federal Express (Fedex) , uses a variety of different marketing techniques to publicize its products, including direct mail, telemarketing, attendance at trade shows, anti a toil-free product hotline.59,60 FedEx was incorporated in 1971 with the business concept that a package delivery company that controlled its own airplanes could greatly increase service reliability over existing delivery operations.
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From page 83... ...
In an attempt to solve this problem and to generate new sales leads amongst backoffice shippers, DHL sent direct mail packages to secretaries who have used DHL services, asking them to deliver an inner package to their shipping manager. The inner promotional packet encouraged shipping managers to also use DHL.
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From page 84... ...
In contrast to the mass marketing campaigns used by shippers such as FedEx, UPS, and DHL, Airborne Express relies much more heavily on personal selling. Airborne does not attempt to provide a narrow range of services to a wide variety of different customers, but rather provides a wide range of customized services to a smaller group of customers.
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From page 85... ...
The ~ In package best companies have taken a comprehensive marketing approach to the design of I dIlliV~ry no on' products and services, have determined their unique value, and have developed , marketing methods to promote this unique value. DHL,, Airborne, and Fedders ~ marketing success is also attributable to the rigorous market segmentation which clearly approach Is best.
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From page 86... ...
Banks frequently use marketing techniques such as direct mail, telemarketing, and media advertising as vehicles for introducing new products.64~65'66 Some very successful banks have closely integrated their marketing and product development functions in order to provide products and services better tailored to customer needs. XYZ Bank (not its real name)
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From page 87... ...
Capital One has used this information on the previous behavior of customers to develop the first credit card balance-transfer option and, more recently, to develop a large number of targeted credit products such as student credit cards and affinity cards.68 Database customer information is also used by banks to target customers with direct marketing and telemarketing campaigns, to identify customers who can benefit from new services, and to analyze the profitability of individual branches and customers in order to find areas where financial improvements can be made. XYZ Bank, for example, has adopted a system of codes to track different types of customers and transactions, thereby facilitating the use oftheir database.
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From page 88... ...
For example, Chemical Bank sponsors a tree Radio City Music Hall performance open only to chosen customers; Chemical distributes free baseball tickets to preferred customers.74 XYZ Bank has created special teller windows for preferred customers, giving them faster, more sophisticated service for their special banking needs. Often, XYZ Bank's design and marketing of new services is aimed at keeping existing customers or increasing these customers' use of XYZ bank services.
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From page 89... ...
Nevertheless, there are still a number of interesting and innovative marketing techniques being directed solely at the business-to-business market. In ~ 994, in fact, Aclvertising Age 's Business Marketing estimated that AT&T was the largest business-to-business marketing spender of any industry.75 In general, telecom marketers employ most of the basic business-to-business marketing tools that were previously discussed in this report.
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From page 90... ...
Today, this sales force has grown to 8,500 account sales representatives staffing 250 offices nationwide with another 60 offices overseas.77,79 The move into the small business market was partly the impetus for such extensive growth. MC} began by using telemarketing "cold calls" to reach targeted businesses in the small business market.
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From page 91... ...
This type of constant reinforcement of the benefits of a telephone plan helps to create customer continuity in a market where businesses change providers quite often.78 In another innovative marketing technique, AT&T will help 800number customers pay for print ads if the AT&T 800 number is featured in the ad. This helps to increase AT&T's business while at the same time creating a mutually beneficial bond between the client and the service provider.84 Two particular lessons may be taken from the telecommunications industry example.
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From page 92... ...
82985 For example, in 1993, British Airways launched its Club World business service and, in order to promote this campaign, used a $30 million print and television advertising campaign directed solely at the business sector.86 Telemarketing also is used by some travel companies, although its use does not appear to be as widespread as it is in other sectors.82,82 A number of travel companies also use direct sales to market their products to large businesses. Delta Airlines uses a sales force to make personal contact with its customers, and Royal Caribbean Cruise Lines conducts the majority of business selling through its I ~ sales representatives who make faceto-face visits.
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From page 93... ...
In addition, a Super Shuttle direct dial telephone is installed in the hotel lobby for the exclusive use of hotel guests and employees.94 By offering these kinds of special services, travel companies can create customer loyalty and better wordof-mouth among business travelers. In addition, by moving the competition away from pricing, they can generate more profits while still remaining competitive in the marketplace.
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From page 94... ...
that this could be quite a lucrative market, but must be targeted with special advertising and promotion in order to attract the most desirable customers.82 Residence Inn by Marriott targets its advertising at business travelers making extended stays by using media they fee' will reach those customers, including television ads featured on CON, Headline News, and ESPN; and print ads appearing in USA Today, Sports Illustrated, the major weekly newsmagazines, and in publications aimed at personnel, sales, and marketing professionals.92 Many hotels also target marketing at meeting and , ~..... ~ San Franeleco International Airport [Sag]
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From page 95... ...
Direct mail appears to be a quite popular way of reaching businesses, particularly for marketing insurance packages different from those found in a typical employee benefits package.94 95 One insurer sends with each introductory correspondence a dollar and a letter stating that he is giving the business a dollar, and will show them how to save even more dollars if they respond to his offer.96 While telemarketing also is used, it is primarily a follow-up to direct mailings that have not produced an immediate response. It seems the narrow market for business insurance as well as the complexity of insurance products have made mass advertising an unsuitable medium for business-to-business marketing.
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From page 96... ...
_ 97.105 Also, database information systems and computerized data are a new and effective resource for the insurance industry to isolate specific company types that are potential customers. Commercial databases such as those sold by Dun & Bradstreet are a particularly good source of leads because they provide detailed information that can be used to analyze the suitability of a company.96 Another important source of new contacts is referrals from businesses that are already customers, or even from friends, family, and other business associates.
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From page 97... ...
The original research, the Journal article, and Work Family Direction's innovative strategy led to significant organizational growth; the company started in 1982 ar,6 now boasts services to almost every employer in the Fortune 500. Due in large part to the complexity and variation in insurance products, personal contact has been the most effective method of business-to-business marketing.
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From page 98... ...
ZTP+4 is an improved zip-code service that offers cost savings for both the Postal Service and its business customers.409 The Postal Service also generates $300 million in sales per year via its commemorative stamp program, with projected sales expected to increase to $1 billion within the next five years.~° To stimulate sales, the Post Office is featuring more celebrities on its stamps (for example, the Elvis Presley stamp generated $40 million in sales)
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From page 99... ...
In earlier years the NFL took an active role in training the United Way in more sophisticated marketing techniques, and provided NFL marketing personnel to conduct training and to develop marketing plans for local United Way chapters.
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From page 100... ...
While it may be unrealistic to expect that transit providers will suddenly find corporate sponsors to subsidize marketing efforts or program costs, there may be some advantage for transit agencies to foster stronger links with local or national corporations. These links may even be developed from pools of employers already connected to transit programs.
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From page 101... ...
This strategy leas certainly proved effective in the non-profit sector, and may encourage employers to make even larger commitments to local or regional transit providers. Get= In order to adapt to extreme competitive pressures, the package delivery, banking and finance, telecommunications, travel, insurance and health care, and non-profit industries all developed a number of innovative marketing strategies and techniques to reach consumers.
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