Marketing Strategy Literature – DIRECT MARKET STRATEGY ADOPTED BY GAS AND ELECTRIC PRODUCTS
This chapter will review the existing and published literature on direct marketing. It begins by explaining the origins of direct marketing. Then the definitions of direct marketing given by various authors will be reviewed. In addition, they will appreciate the factors that contribute to the growth of direct marketing. In addition, the different types of direct marketing and available gems will be explained. The advantages and limitations of direct marketing will also be analyzed. This section then discusses the impact of data on direct marketing. Finally, the chapter will report on ethical considerations and social responsibility in direct marketing and the laws and regulations governing direct marketing activities.
Marketing Strategy Literature
Et al., 1999; p4). However, the origins of direct marketing date back to 1498, when Aldus Manutius published a catalog of books in Venice. Direct selling in England began in 1667, when William Lucas published a book on horticulture. (Evans et al., 2004; p1) Direct selling grew out of mail order in the UK. In the early 20s
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Century, England’s postal system began to evolve. One of the mail order catalogs of that era was the Freemanscatalogue of 1905 (McCorkell, 1997). After the war, mail orders grew rapidly and steadily. Direct channels’ share of retail sales rose steadily from the 1950s to the 1970s (McGoldrick, 1990; p. 60). In the mid-1980s, mail order lost its share to competition from high street supermarkets, which began to offer credit services (Stewart, 1992). In the late 1980s, mail order became popular. It was encouraged
Retailers such as Marks & Spencer and Next have helped the direct marketing industry grow by increasing the convenience of catalog shopping by improving product range and credit.
6) Since then, direct marketing has grown so much that it is considered the fastest growing area of marketing communications.
Defining direct marketing is difficult because there is a lot of debate about what direct marketing is. This difficulty in defining is because direct marketing is not an agency or a distribution channel (Evans et al., 1995; p16). UKDirectMarketing Association
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Direct or invited communications and results between the company and its existing customers and prospects are measured to assess return on investment.
Direct marketing is an interactive marketing program that uses one or more advertising mediums to generate a measurable response and/or activity anywhere.
Because it mainly focuses on using a specific form of advertising to elicit a measurable response’ (Bauer and Miglautsch 1992). It therefore had a different meaning
There has been a huge increase in direct marketing spend. Direct marketing spend in the UK in 2003 was €13.7 billion. This was a 15% increase from last year (Ng, 2005; p629). There are several reasons for the growth of direct marketing in use. The main factors that contributed to the growth of direct marketing are:
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According to Smith (1993), the segmentation of the consumer market is the main factor that led to the development of direct marketing. Market fragmentation has reduced the use of multiple marketing channels. Although direct marketing channels offer a better ability to target different consumer groups in market segments, many organizations still use direct marketing methods. (quoted from Jobber and Lancaster, 2006; p328)
There have been significant changes in the population and lifestyle. As a result, the structure of households also changed. Many women work today; single parent families etc. All of these changes have left consumers with less time, so they are more likely to shop online, by phone or by mail. This led to the growth of direct marketing. (Brassington and Pettitt, 2000; p732)
Advertising is less targeted and less targeted. The cost of these traditional marketing channels has increased dramatically. All of these factors have reduced the effectiveness of traditional media. (Evans et al., 1995; p17)
Over the years, the cost of manipulating and storing data has come down significantly. Today, many firms can create and manage a marketing website. Hardware costs have also decreased and data processing capabilities have improved. Therefore, it is now easy to store and update large amounts of customer information (Roberts and Berger, 1989). This contributed to the growth of direct marketing.