Direct Marketing is an attempt to approach the customers directly. It is a personal approach to consumers. This direct approach may be through sales letters and circulars. It may be through leaflets, folders and brochures. All these are routed through post and so are called direct mailings. Distributors are bypassed in direct marketing. For demonstrations, sales people may call in on the prospects.
In US, there are very large direct marketing agencies, with a high profile roster of clients, e.g., American Express, AT & T, Bell Systems, British Airways, British American Tobacco, Burroughs Wellcome, Dinner’s club, Du Pont, IBM, General Electric, Newsweek, Philip Morris, P & G. In 1993, the gross spending the world over the direct mail has increased by 7.2 percent over 1992 to touch $ 27 billion (Rs 89,000) crores). DM thus remains the world’s most preferred ad medium.
There is a huge opportunity for direct marketing in India. Direct marketing may exploit new technologies like E-mail, TV etc.
Direct Marketing depends upon the database of the market. The basic challenge in the Indian market is to develop database management skills. The kind of lists now available is not databases at all. They are available for one rupee per name and address while good databases cost anything between Rs 8 to Rs 75 per name and address. Building up database is a time consuming process. It takes anything between 3-5 months to build databases.
It is difficult to say what is the ideal ratio of general advertising to direct marketing. It varies so much by-product categories. General advertising is preferred for packaged products; direct marketing accounting for less than 20 p.c. For satellite TV, cable TV, selling subscriptions, it is mainly direct marketing.
Direct marketing does make sense for small advertisers like a small company or a departmental store. To make direct marketing effective we select a 20 p.c. sample of population that accounts for 80 p.c. of sales.
Direct marketing effect can be easily measured. Many Indian agencies have opened up direct marketing division. Corporate Voice Direct has tied up with Kobs and Drafts (K &D).
Direct marketing can make use of personal selling and promotional literature. Mail order advertisements are a form of marketing. It is cheaper than personal selling. Sears & Roebuck in America was the pioneer of mail order in the US. In India, the first company that made a success of mail –order business was Bull worker. Mail order advertisements have their merits and demerits. The costs of sales are low since no marketing and distribution networks are required, and no margins have to be paid to intermediates. The disadvantages is only one product can be sold at a time. There are diminishing returns, since every additional advertisement brings a lower response than the previous one.
Direct marketing is slowly coming of age. In India today, we get mail order advertisement ranging for a wide variety of products from music cassettes to saving schemes to holiday packages.
Even computer software companies like Microsoft has commissioned Contract direct to promote its MS DOS 6.0. It seeks to reach its target of EDP managers and general users via direct mail and advertising.
So far, direct marketing outfits in the US believed that an effective TV commercial for direct marketing should be approximately 90 seconds long in order to demonstrate brand’s qualities and to get in a call action, with the telephone number repeated as often as possible.
However, mainstream agencies deviate from this norm and create shorter, faster and learner ads. Right now in the US, direct marketing is mostly used by services, charities and travel but many new growth areas are fast opening up. Direct marketing agencies have become more television- literature to keep up. Direct response TV is coming into mainstream – and clients cannot ignore its pulling power.