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Direct Marketing
Traditional Meaning: The acquiring and retaining of customers without the use of intermediaries. The meaning now given to Direct Marketing: The distribution of products, information and promotional benefits to target consumers through interactive communication that allows response to be measured.
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Direct Marketing
Marketing that reaches customers by communications directly addressed to the customer The process of sending promotional messages directly to individual consumers, rather than via a mass medium. Includes methods such as direct mail and telemarketing The sale of products by a producer direct to consumers with promotional efforts using direct mail, advertising, or telephone sales

Key features
The main purpose is to make: 1. A sale 2. Obtain a sales lead in highly targeted but with low cost. Direct contact with customer Use of database Relationship with customer

Need for Direct Marketing


Expert sales force can explain and demonstrate products well. Intermediaries may be unwilling or unable to sell the product. Intermediaries might be too costly. Potential buyer can be reached easily.

Benefits of Direct Marketing


Convenient and hassle free (online and telemarketing) Feeling of getting the shop at your place Helps to gain more product knowledge to the customer Cost and time saving ( for customer) Helps to improve relationship with customer Better chances to convert lead into sales

Channels
Direct mail (postal) (sophisticated selling) Telemarketing ( for mass coverage) Face to Face (effective selling) Online advertising Email Websites

Ways of direct marketing


Mass coverage 1. Average customer 2. Mass production 3. Mass distribution 4. Mass advertising 5. One way message 6. All customers 7. Customer attraction One to one 1. Individual customer 2. Customized prod. 3. Individual distribution 4. Individual advertising 5. Two way message 6. Profitable customer 7. Customer retention

Why it is growing in developed countries?


Higher cost of driving ( malls are away from residential areas) Parking charges Long queues of checkout counters 24*7 customer support Busy life Plastic money factor Credit score factor Everything is available on EMIs

Famous Marketing Strategies


Tupper ware Amway Eureka forbs- live demo of product Dell Sony Ericssion ( product visualization)

Direct Marketers
Lands End DHL Sunsilk Gang of Girls ZAPP

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The Practice of Direct Marketing

Occurs when a seller and customers deal with each other directly

Four tools of direct marketing


Catalog Direct mail Telemarketing Direct response advertising

Advantages of Direct Marketing


Collection of relevant customer information Purchase not restricted to a location The marketer controls product until delivery Easier to evaluate Flexibility in form and timing

Disadvantages of Direct Marketing


Consumers are still reluctant to purchase a product they have not seen or touched Annoyances associated with direct marketing Unable to reach everyone in the marketplace

Direct-Response Advertising
Combines the characteristics of advertising with a contact element The direct-marketing process
Objectives and strategies The offer Message and media strategy The response/order Fulfillment and customer maintenance Evaluation

Database Marketing
A practice that uses databases to predict trends and monitor consumers
Four primary objectives
1. Record names of customers 2. Store and measure results of advertising 3. Store and measure purchasing performance 4. Vehicle for continuing direct communication

The Database Marketing Process


1. 2. 3. 4. 5. 6. 7. Collection point Data entry Data assessment Data clustering Data application Data sharing Data refinement

The Key Players

Advertisers Agencies Media Companies Customers

Companies whose primary business is selling products and services by mail or telephone Retail stores who use direct marketing as a supplement to other forms of marketing communication

The Key Players

Advertisers Agencies Media Companies Customers

Advertising agencies Independent agencies Service firms Fulfillment houses

The Key Players

Advertisers Agencies Media Companies Customers

The media that deliver messages by phone, mail, or the Web

The Key Players

Advertisers Agencies Media Companies Customers

Recipients of the information and sometimes the initiator of the contact


Push-button shopper Mouse-clicking shopper

The Tools of Direct Marketing: Direct Mail

A print advertising message for a product or service that is delivered by mail

Practical Tips Get attention Create a need Answer questions Provide critical information Inspire confidence, minimize risks Make the sale Use an incentive

The Tools of Direct Marketing: Direct Mail


Advantages Tells a story Engages attention Personalizes message Builds in feedback Reaches the unreachable Disadvantages Negative perceptions Cost Mailing list Response rate Vulnerability

The Tools of Direct Marketing: Catalogs


A multi-page direct-mail publication that shows a variety of merchandise Growth in this field is in the area of specialty catalogs Video catalogs provide more information about products

The Tools of Direct Marketing: Catalogs


Advantages Targeted Engages attention Complete information Convenience Disadvantages Negative perceptions Costs Response rate Mailing list

Tools of Direct Marketing: Telemarketing


Types of telemarketing Criticisms of telemarketing Telemarketing messaging design

The Tools of Direct Marketing: Direct-Response Advertising


All direct-response advertising moves the consumer to action Well-targeted Reaches prime audience

The Internet and Direct Response


Same components as direct mail and telemarketing Greater sampling opportunities New ways to gather info

Integrated Direct Marketing


The challenge is to integrate direct mail, catalogs, telemarketing, Web sites, e-mail, text messaging, and instant messaging with other marketing communication
Integrated direct marketing (IDM)

Database Marketing

Some Definitions of Database Marketing


Database marketing is a way of organizing a companys customer and prospect data so that it can be used more effectively in a direct marketing effort. It is a way of organizing the whole marketing process. Database marketing allows you to choose what to market to whom and when based on the sum total of your knowledge and experience with a customer or prospect. Other Definition: Database marketing is the technique of gathering all the information available about your customer, leads, and prospects into a central database and using that information to drive all your marketing efforts. The information is stored in a marketing database and can be used at both the strategic and tactical levels to drive targeted marketing efforts.

Why Database Marketing?


Informational Reasons Availability of abundance data Permission to collect them Technological Reasons Technology to collect and warehouse data Technology and computing power available to analyze them Availability of commercial software, some of which are even user friendly (e.g. XL miner, SAS enterprise miner) Commercial Reason Interest in generating intelligence to remain competitive main market share Drive to be efficient

Database Marketing (DBM) and Customer Relationship Management (CRM) In order to form a learning relationship with its customers, an enterprise (firm) must be able to:
1. 2. Notice what its customers are doing Remember what it and its customers have done over time

3.
4.

Learn from what it has remembered


Act On what it has learned to make customers more profitable

Similarities and Differences


Criteria Traditional Data Analysis* Data Mining* Database Marketing

Data analysis objectives


Apriori Theory Size of typical database Analytical tools

generally clearly not clearly stated stated


often exists small-moderate relatively less advanced (traditional) usually not there large advanced (newer) high

may or may not be clearly stated


may exist typically large advanced

CRM orientation not necessary

generally high but not necessary

*as viewed by marketers

How

Based on Transaction Data

How

Customer Relationship Management (CRM)

A More Inclusive Definition of Database Marketing


Database marketing is a systematic approach to the gathering, consolidation, and processing of marketing databases to learn more about customers and competitors, select target markets, compare customers' value to the company, provide more specialized offerings, as well as make other marketing and strategic decisions.

Database Marketing System


Memory
Data Other Data

Intelligence

Output

Customer Data

Data
Warehousing

Database

Data Analytic Tools/Software

Marketing Decisions

Transaction Data

Customer Activity Database


Data
Demographics Direct marketing

Techniques

Output/Application

Subscription Data
Activity Data

Frequency, Cross-Tab Correlation Logistic regression Decision Tree Survival/Churn Analysis

Prospecting

Exit Data

Customer retention

Promotions Data

Customer loyalty

Customer Activity Database - 2


Data
Demographics Segmentation

Techniques

Output/Application

Subscription Data
Activity Data

Frequency, Cross-Tab Correlation Algorithms for minimizing distance traveled / maximizing sales potential

Store Location

Location data

Store Promotion

Distance Data

Geodemographic Database
Data
Zip codes

Techniques

Clusters

Output/Application
Segmentation

Demographics

Cluster Analysis

Distinct
Clusters used for
Advertising/Promotion Targeting

Purchase

Reading habits

Vacationing

Supermarket Database
Data Techniques Output/Application

Demographics

Stocking/Inventory control

Logistic regression
Aggregate Purchase Data

Simultaneous system Cluster analysis

Advertising

Panel Purchase Data

Market basket analysis


Shelf placement

Querying
Pricing/coupons

Retail Environment

Dear Miss Nayyar It gives me great pleasure to invite you to the exclusive preview of Pantaloons upto 50% off sale on Wed & Thur, 4th & 5th Jan 2012. Only our valuable greencard members can avail sale discounts on 'Exclusive Sale Preview Days'. There is an entire range of apparel for men, women and kids as well as sunglasses, watches, perfumes, cosmetics, jewellery, toys and much more. Make sure to bring your family along. Happy Shopping! Kailash Bhatia, CEO - Pantaloons

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Mailing List
A mailing list is a collection of names and addresses used by an individual or an organization to send material to multiple recipients. The term is often extended to include the people subscribed to such a list, so the group of subscribers is referred to as "the mailing list", or simply "the list".

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Types of Mailing List


House List Response List Buyers List Membership List Subscription List Controlled Circulation Paid Circulation Donor List Credit Card Holder List
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Compiled List
Consumer compiled List Consumer Lifestyle enhanced List Business Compiled List

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OFFER
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Offer

Offer

To attract the customer over a period of time to generate sales and to retain the customer and the launch of a new product or service. Offer mostly restricted to a particular geographic area.

Product
Cosmetic, Home Appliance, Kitchen Appliance, Real Estate, Pharma, Food & Beverage etc.

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Medium
Radio, TV, Print , Coupons, Loyalty card, Bonus Cards, Membership Cards, Vouchers, Newspapr Clipping,

Distribution method
Newspaper (Frequent use), DRA, Pamplet, Hoarding, Online, Catalogue, Telemarketing, Push Button Strategy, Mouse Clicking

Creative strategy
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Types of Offer
Sweepstakes Toll Free Response Guarantee Redeem Coupons Vouchers Free-Gift Offer Multi Book Offer Free Kit Offer

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Magazines
Magazine Universe: India Advantage Timing & Frequency (CPR) Ad Size
Spectacular Unit Single Full Page Unit Small Space Unit (One Column) 56, 42, 21 Line Units, Square Card ( Two Columns by 70 lines)

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Colors
Four Colors Two Color Black & White Placing of the Advertisement
More visibility on the Right hand pages Three Cover Ad Back of front Back Cover Inside Back Cover

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Newspaper
Newspaper Preprints Main Newspaper v/s Newspaper Supplement (CPM) Local Newspaper Magazines Timings o Newspaper Insertion Position Factor Colour V/s Black & White
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TV/Radio
Ratings Commercial Lengths Reach & Frequency Buying Time TV Schedules Market Performance
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Introduction to B 2 B Marketing

Marketing
The process of planning and executing. The conception (product), pricing, promotion, and distribution of ideas, goods, and services.

To create relationships that satisfy individual and organizational objectives.

Business Marketing
MARKETING OF GOODS AND SERVICES TO:
Companies Government Bodies Institutions (i.e. hospitals) Non-Profit Organizations (i.e. Rotary Club)

FOR USE IN PRODUCING THEIR PRODUCTS AND/OR TO FACILITATE THEIR OPERATIONS

Difference Between B2B & B2C

B2B: goods or services are sold for any use other than personal consumption Note: It is not the nature of the product; it is the reason for the transaction.

Is it a B2B or B2C Transaction

You buy a gear to fix your mountain bike. Ford buys the same gear to fix a machine. Xerox buys soft drinks for its cafeterias. You start a landscaping business and purchase a lawnmower. The Indian government buysanything.

Characteristic
Sales volume Purchase volume

B2B Market
Greater Greater

B2C Market
Smaller Smaller

Number of buyers
Size of individual buyers Location of buyers Buyer-seller relationship Nature of channel Buying influences

Fewer
Larger Concentrated Closer More direct Multiple

Many
Smaller Diffuse More Impersonal Less direct Single/Multiple

Type of negotiations
Use of reciprocity Use of leasing Key promotion method

More complex
Yes Greater Personal Selling

Simpler
No Less Advertising

B2B ITS ALL ABOUT DEMAND

DERIVED DEMAND
The demand for a companys products comes from (derived) the demand for their customers products. Most demand comes from consumers.

JOINT DEMAND
Two products are used together and demanded together Both products are consumed at the same time

Major Uses of B2B Products

For additional production (e.g., components are combined into subassemblies and become part of the finished product) For use in operations, but not part of the finished product For resale

Classifying Business Goods & Services

3 Main Categories of Products Entering Goods


Become part of the finished product Cost assigned to the manufacturing process

Foundation Goods
Capital Items Typically depreciated over time

Facilitating Products
Support organizational operations Handled as overhead expenses

Classifying Business Goods & Services Entering Goods Raw Materials


Farm products & natural products Only processed as necessary for handling & transport Require extensive processing

Manufactured Materials & Parts


Any product that has undergone extensive processing prior to purchase Component Materials require additional processing Component Parts generally do not require additional processing

Classifying Business Goods & Services

Foundation Goods Installations


Major long-term investment items Buildings, land, fixed equipment, etc.

Accessory Equipment
Less expensive & short-lived Not considered part of fixed plant Portable tools, PCs, etc.

Classifying Business Goods & Services

Facilitating Products Supplies


Any supplies necessary to maintain the organizations operations

Services
Maintenance & Repair support Advisory support Logistical support

Categories of B2B Customers

Commercial enterprises
Indirect channel members and facilitators OEMs (original equipment manufacturers) Users = customers

Governmental organizations Institutions

CONCEPT OF CREATIVITY
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Ability to generate fresh, unique and appropriate ideas to solve communications problems. To be appropriate and effective the idea must be relevant to the target audience. Break through the clutter.

Definition of Advertising Creativity

Good creative strategy is often central to determining the success of a product or service. Advertising campaign that is poorly conceived or executed can be a liability. An ad or commercial that is creative does not mean it will effectively communicate the intended message.

Importance of Advertising Creativity

Advertising Campaigns
Integrated Integrated

Interrelated Interrelated Marketing Communication Activities

Coordinated Coordinated

Centered on a Theme or Idea


Appears In Different In Different Media Media Over a Time Period

Ad Campaign versus Ads


Brand advertising relies on a series of related ads which run over time Average campaign length is about 03-18 months Some campaigns last years

Creating new campaigns may be risky and many are simply tweaks on old ideas

Burger King Tries Again . . . and Again and Again and Yet Again
76 Have it your way. 77-78 America loves burgers and were Americas Burger 87 King. 78-80 Whos got the best darn burger? 80-82 Make it special. Make it Burger King. 82 Arent you hungry for Burger King now? Arent you hungry? 86-87 This is a Burger King town. The best food for fast times.

88-89 We do it like youd do it. 89-91 Sometimes you gotta break the rules. 91-92 Your way. Right away. 92-94 BK Tee Vee: I love this place!

82-83 Battle of the burgers. 83 83-85 The big switch. 85-86 Search for Herb.

94- 98 Get your burgers worth.


98-99 It just tastes better. 99-?? Go the distance

Creative Strategy vs. Execution

Creative Strategy

Determining what the advertising message will say or communicate

Creative Execution

Determining how the message will be said

Message Objectives
1. Perception: create attention, awareness, interest, recognition, and recall 2. Cognitive: deliver information and understanding 3. Affective: touch emotions and create feelings 4. Persuasion: change attitudes, create conviction and preference 5. Transformation: establish brand identity and associations 6. Behavior: stimulate some form of action
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What is the message? What is the execution?

Think about connecting


Brooklyn Bridge and Absolut Vodka..become What?

What is the message? What is the execution?

Two Perspectives on Advertising Creativity

The ability to generate fresh, unique and appropriate ideas that can be used as solutions to communication problems.
Its not creative unless it sells. Only artistic value and originality count.

Managers

Artists

Creative Strategy Decisions

Planning Creative Strategy


Creative challenges Creative personnel Creative process Preparation incubation, illumination Verification and revision Copy platform Creative theme/idea Message appeals Creative Executions

Creative Challenges
Creative specialists face challenge of taking research, creative briefs, strategy statements, communication objectives and other input and transforming them into an advertising message. Many people follow a proven formula when creating ads, because they are safe.

Chapter 6 : Creative Strategy Decisions

Creative Personnel
Use their artistic talents to translate communication objectives into advertising campaign. Account planning: plays important role during creative strategy development by driving process from the customers point of view.

Young's (J. Walter Thompson) Creative Process


Immersion
Immersing Getting rawone's material, self in data, the immersing problem toone's get a self in the problem to get the background. background. Ruminating on the data acquired, turning it this way and that in the mind. Ceasing analysis and putting the problem Ceasing analysis and putting the problem out of conscious mind for out of conscious mind for a time. a time. A sudden inspiration or intuitive revelation about an a potential idea or solution. solution. Studying the revelation, evaluating it, and developing it for practical usefulness.

Digestion

Incubation

Illumination

Verification

Creative Process
Wallas Four-Step Approach: Preparation

Gathering background information


Incubation Idea development Illumination Seeing the solution

Verification
Refining the idea and finding the appropriate solution

Getting Creative Input


Use the the product product to to become familiar become familiar with it! with it.

Read anything anything related to related tothe the product or product or market! market.

Talk to Listen to users what and people are talking non-users about about! the product.

Work in and learn about the clients business.

Ask everyone Read the market involved for research. information!

Learn as much as possible about product or service, target market, competition and any other relevant research Focus groups: Give insight as to why and how consumers use a product or service What is important to them in choosing a particular brand What they like and dislike about certain products or services

Preparation, Incubation, Illumination

Verification and Revision


Evaluate ideas generated Reject inappropriate ideas Refine remaining ideas Give them final expression

Verification and Revision


Techniques used: Directed focus groups Message communication studies Portfolio tests Viewer reaction profiles Storyboard Series of drawings used to present the visual plan or layout of a proposed commercial

Creativity Tactics Effective Brainstorming and Ideation Best when done in small groups (5-10 people)

All thoughts are fair game. Never, ever criticize anyones idea at any point. Listen and build upon others ideas. Find the good in every idea. Hold the session in a novel location. Very often the creative leap will initially seem unnatural.

Head and Heart Strategies


Two basic approaches to translating message objectives into strategy Hard- and Soft-Sell strategies
Hard Sell: touches the mind and creates a response based on logic Soft Sell: uses emotional appeals or images to create a response

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Head and Heart Strategies


Most advertising messages use a combination of two basic literary techniques to reach the head or the heart of the consumer Lectures and Dramas
Lecture: a serious instruction given verbally Drama: relies on the viewer to make inferences

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Facets of Creative Strategy


Drive Perception Attention and awareness Interest Memory Drive Cognition These messages get consumers to learn about products by focusing on a products features

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Facets of Creative Strategy


Touch Emotions Highlight psychological attraction of the product to the target audience through emotional responses Persuade Appeal Selling premises Conviction

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Facets of Creative Strategy


Transform Product Branding Image advertising is used to create a representation in the customers mind Associations Drive Action A signature that serves to identify the company or brand Also serves as a call to action if it gives direction to the consumer about how to respond
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Before Creative Work Begins


Advertising Strategy Must Define
Target Audience Product Concept Communications Media Advertising Message (message strategy) Account management group responsible for developing the advertising strategy

The Creative Brief (Copy Platform)


Creative teams guide for writing and producing the ad Who? Why? -- Rational vs Emotional What? - product features Where and When? What? - tone, style, approach

Copy Platform-Creative brief


1. Basic problem or issue the advertising must address

2. Advertising and communications objectives


3. Target audience

4.

Major selling idea or key benefits to communicate

5. Creative strategy statement (campaign theme, appeal, execution technique) 6. Supporting information and requirements

Message Strategy (Rationale)


Description of the ad campaigns overall creative approach
Verbal Nonverbal Technical (mandatories)

The BIG IDEA

Perspectives of Great Ad Men on the Big Idea

David Ogilvy

Leo Burnett
Find the inherent drama or characteristic of the product that makes consumers buy it

Brand image or personality is particularly important when brands are similar

Every ad must contribute to the complex symbol that is the brand image.

(Inherent drama) is often hard to find but it is always there, and once found it is the most interesting and believable of all advertising appeals.

A Big Idea. . .
Is Bedescribable describablein inaasimple simpleword wordor orphrase phrase

Attracts prospects attention attention Be likelythe to attract the prospects

Revolves around the clinching benefit(s) Revolve around the clinching benefit

Allow you to brand the advertising Allows you to brand the advertising

Let prospects vividly experience the product

Creative Theme/Idea
Campaign theme Should be a strong idea Central message that will be communicated in all advertising and other promotional activities Short term in nature, done on annual basis

Creative Theme/ Idea


Best approaches for developing effective advertising: Positioning

Using a unique selling position


Creating a brand image Finding the inherent drama

Positioning
Establish the brand position in the consumers mind Done for companies as well as brands

Positioning as Unique Selling Proposition


Establish a particular place in the customers mind for the Establish a particular place in the customers mind for the product or service product or service

Positioning

Based on product attributes/ benefits, price/quality, use or application, type of user, problem solved

POSITIONING BY PRICE/ QUALITY Parle Bisleri Bada Bisleri, same price ad campaign. POSITIONING BY USE OR APPLICATION Surf Excel is positioned as stain remover Surf Excel hena! Also, Clinic All Clear Dare to wear Black. POSITIONING BY COMPETITOR Onida was positioned against the giants in the television industry through this strategy, ONIDA colour TV was launched with the message that all others were clones and only Onida was the leader. neighbours Envy, Owners Pride.

IBMs New Positioning: Provider of Business and Consulting Services

This Ad Positions 3M as Highly Innovative

Unique Selling Proposition


Each advertisement makes a proposition to the customer It must be one the competition cannot or does not offer It must be strong enough to pull over new customers to the brand

The Unique Selling Proposition


Unique Selling Proposition

Benefit

Unique

Potent

Buy this product or service and you will benefit this way or enjoy this reward

Must be unique to this brand or claim; something rivals can't or don't offer

The promise must be strong enough or attractive enough to move people

1. Low Price Wal-Marts USP statement is short, sweet and to the point. Wal-Mart Always Low Prices. Always 2. High Quality Rolex also has a short USP statement that communicates volumes. Rolex Quality Takes Time 3. Superior Service Rackspace sums up their USP statement in two words. Rackspace Fanatical Support 4. Size/Selection Amazon.coms original USP was clear and focused. Amazon.com Earths Biggest Bookstore. 5. Convenience A good example of the Convenience USP is Schwans. This company has been delivering frozen food items to customers homes for over 50 years. They have kept up with technological changes by adding the convenience of online ordering and multiple payment options. Schwans Shopping should be easy. Cooking should be fun.

6. Customization/Most Options Ping Golf Clubs-USP statement reflects their commitment to custom fitting their products to their customers needs. Ping The leaders in custom fit, custom built golf clubs. 7. Speed The FedEx USP statement explains exactly why to use their service. FedEx When It Absolutely Has To Be There Overnight. 8. Originality, First in Marketplace OilOnline.coms USP statement emphasizes their first mover status in their niche. OilOnline.com The Original Online Source for the Oil Industry. 9. Strongest Guarantee Like all well thought out USPs, the Craftsman USP statement leaves no doubt what their main advantage is. Craftsman Tools Hand tools so tough, they're guaranteed forever.

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