Direct Response Marketing

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Direct Response Marketing

Part 1

Marketing has evolved in the contemporary era to include various forms of advertising that allow firms and companies to propagate the sale of their respective products or services to potential customers. The advent of technology has considerably increased innovation in direct marketing. Firms and companies have taken advantage of popular forms of media in directing advertising to customers in the comfort of their abodes. One popular form of direct marketing through popular media is the infomercial. Also referred to as Direct Response TV (DRTV), infomercials comprise television commercials that commonly incorporate a website or a phone number. Usually, infomercials feature two to four in-house advertisements that run for a maximum of two minutes in the event of inviting a potential client to phone or use other means to inquire or purchase a respective product or service.

On a personal note, I purchased from an infomercial two years ago. The infomercial at that time involved advertisement of sleeved blankets. The particular commercial advertised The Snuggie, which is still one of the most popular brands that advertise and sell sleeved blankets. At first, I had not thought of the idea of purchasing from an infomercial but due to the measurable success that my peers had experienced in purchasing products such as mobile phones, shoes and other physical products, I decided to attempt purchase of the sleeved blanket, popularly termed as The Snuggie. The numbers provided by The Snuggie infomercial enabled me to enquire for the product. Surprisingly, the response was fast, formal and precise enough such that I placed my order for one Snuggie that night. Furthermore, I was informed that the product would be at my doorstep the following morning prior to the address specifics I had given. Interestingly, it worked out; I received my Snuggie in the morning through personal delivery.

Part 2

The Loan-To-Value (LTV) Ratio is a type of lending appraisal ratio that is utilized by financial organizations and various external lenders to determining a borrower’s financial capability in the payment of mortgage. Usually, financial organizations and lenders utilize the LTV ratio in order to approve or disapprove of allocation of a mortgage fund to a borrower. In this specific case, the LTV Ratio comprises a financial connotation that is utilized by financial lenders to articulate a loan’s ratio to the purchased asset’s value. Typically, the Loan to Value ratio is used in determining the ratio of a loan to the value of a respective property. As such, the LTV ratio illustrates the ratio amid a single primary loan and the value of the respective property.

In this case, the LTV ratio can be applied to an asset I purchased a year ago. The asset or property was a plasma television set and ranged between the prices of US$ 1600 to US$ 2000 at the period. However, the price was exorbitant for me. Because of this reason, the dealer of the television set advised me to obtain a loan from him. Since the product was going to be used on a long-term basis, I borrowed US$ 1500 from the borrower in order to purchase the television set which was being sold at US$ 1900. Therefore, the LTV ratio for the television set will be calculated as follows:

LTV Ratio = (Amount borrowed/Value of Asset Purchased) X 100%

= (1500/1900) X 100%

= 78.9 = 79%

The LTV ratio for the product is 79 percent, which is reasonable. This is because the LTV ratio for the particular product was high. In addition, the risk for purchasing the product was low since the dealer was a higher-risk creditor and as such possessed high credit gains and high loan amounts for such products since most dealers that deal in electronic products provide null options as well as low loan amounts for borrowing considerations.

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