Direct Marketing Introduction - Marketing Management

We discussed some of the changes taking place in channels of distribution. It was suggested that one of the growth areas of channels has been direct marketing. The term ‘direct marketing’ was first coined by Leslie Wunderman in 1961 following work he had done with American Express and Columbia Records. However, the principles of mail order catalogue marketing,which was an early form of direct marketing, can be traced back to Europe in the fifteenth century following Gutenberg’s invention of type and production of trade catalogues from printer publishers. The principal feature of direct marketing is that it sends messages direct to consumers and not via intervening media. This involves the use of direct mail, e-mail and telemarketing through business to consumers (B2C) and business to business (B2B) communications that are normally unsolicited. It attempts to persuade customers to make purchases that emphasize explicitly a ‘call-to-action’ that involves a prominent message to gain a positive measurable and trackable response from potential customers.

Direct marketing is a pro-active approach to marketing that takes the product or service to potential customers rather than waiting for them to come to a store or other point of access. It is a form of ‘non-shop’ shopping and is sometimes referred to as ‘precision marketing’ or ‘one-to-one’ marketing.

Rather than the marketing firm sending out a general communication or sales message to a large group of potential customers, even if these constitute well-defined market segments, direct marketing tends to target specific individuals or households. In a B2B context this would be an individual or a specific organization. Direct marketing is not just concerned with marketing communications. It is also concerned with distribution. In using direct marketing, the firm is making a choice to cut out the use of marketing intermediaries and sell the product or service direct to customers. This has implications for both channels of distribution and logistical decisions. Direct marketing comes in a variety of forms. It is one of the fastest growing areas of marketing and is being propelled by technical advances, particularly in the field of computer technology and the worldwide web (www). It has been taken up with enthusiasm in a wide variety of contexts .This medium of communication is not new, as many companies have sold products direct to the public for many years. For example, Kleeneze was established in 1923 by Harry Crook in Bristol.

Another long established direct marketer is Avon Cosmetics, established over 120 years ago by David McConnell as the California Perfume company. Direct mail through the post and mail order catalogues has been utilized for a long time and all are forms of direct marketing.

Direct marketing originated in the early 1900s and the Direct Marketing Association (DMA) was established in the USA in 1917. It became an important force in the UK in the 1950s, but at this stage of its development it was generally concerned with direct mail, mail order and door-to-door personal selling. Today the scope of direct marketing has expanded dramatically largely due to the use of the telephone and in particular the use of the Internet. Its scope includes all marketing communications elements that allow an organization to communicate directly with prospective customers, or prospects. This includes direct mail, telephone marketing, direct response advertising, door-to-door personal selling and the Internet.

Another form of direct marketing, which many think of as new, but has been with us for many years is ‘Party Plan’ selling. As the name suggests, party plan selling is selling products direct to customers in their own homes by throwing a ‘party’ for friends and relatives to attend. During the party they are sold the products by an agent. Perhaps the most iconic name in party selling is ‘Tupperware’. Earl Silas Tupper introduced his new plastic kitchen storage products in 1942 in the USA. By 1946, Brownie Wise, one of his employees, was marketing products by organizing parties. The telephone has been used for B2B sales for many years, particularly for the regeneration of ‘routine’ orders and for making sales appointments. It is now being used increasingly in domestic direct marketing programmes often to ‘follow up’ a posted personalized mail shot.

Motoring organizations, such as the RAC and AA in the UK, have used direct personal selling for many years to sell membership of their organizations and today use direct mail extensively to keep members informed about product and service benefits. However, direct marketing has evolved with advances in computer technology. The use of computers to store, retrieve and manipulate customer information has revolutionized the way direct marketing firms operate. Companies can make use of the Internet and computer databases which allows them to access data ‘warehouses’ and gives them the capability to sort and aggregate or use what is termed data fusion to increase its value as a marketing resource.

As a component of direct marketing, the Internet has the potential to be the most powerful direct marketing tool ever. Owning a computer workstation that is wired to the Internet is now becoming almost as common as owning a TV. Children being taught at schools using new technology today and playing computer games at home take the use of the Internet as a shopping medium for granted. The Internet will continually evolve. We are at the beginning of the next business revolution that will affect the way we live, work and play. Online marketing using a computer, a modem and the Internet has been the fastest growing form of direct marketing in recent years and is set to grow substantially over coming years. Virtually every product or service that one can think of can now be bought directly through the Internet. Products and services such as books, travel and entertainment, have proved particularly suitable for this type of marketing, but now one can purchase houses, cars education, and even cosmetic surgery over the Net.

The telephone derives its power as a direct marketing medium from its transactional nature (i.e. one human being in a controlled conversation with another). What originally began as ‘ordering by telephone’ evolved into telemarketing which creates and exploits a direct relationship between the supplier and the customer through interactive use of the telephone.

There are still opportunities for traditional methods of communication that are well proven. Some of the more long established forms of direct marketing methods, like door-to-door selling, are still effective and widely used, and direct mail and telephone marketing techniques are still widely used. Computer technology continues to develop and ideas are change constantly. It will be interesting to see what direct marketing will look like in 10 or 20 years’ time.

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