566 The Marketing Book
Direct mail is simply one (very impor-
tant) marketing communications medium
used by direct marketers. Confusion between
direct marketing and direct mail has been
caused by their close relationship and by the
similarity of the terms. In attempts to avoid
confusion, direct marketing practitioners
have invented or borrowed a variety of alter-
native names for direct marketing, including
database marketing, data-driven marketing and
relationship marketing. Nevertheless, Wunder-
man’s ‘direct marketing’ remains the most
popular name.
Looking again at Stan Rapp’s definition
of direct marketing, could it be applied to
e-commerce?
Well, why not? The definition does not
specify any particular choice of medium to
replace the salesperson or shop. It could be a
printed catalogue, a website, an e-mail, a
press advertisement or a radio commercial.
Furthermore, successful practitioners
agree that the same principles and disciplines
apply. Nearly eight years before his company
jungle.com went live in August 1999, Steve
Bennett had founded Software Warehouse, a
major direct marketer of computer software.
Steve says (Internet Business, January 2001):
The Internet is just a new front end. Every-
thing at the back end, like delivery and logis-
tics, is as it was before.
Steve Bennett, founder of jungle.comIn September 2000, GUS bought jungle.com, a
£75 million turnover software, music and
video business, for £37 million. GUS was
Britain’s largest direct marketing group. ‘It has
half a dozen great catalogue brands and was
always the business we tried to learn from,’
said Steve Bennett.
In 1994, the year Michael Dell launched
his first website, the Dell Direct call centre
was already receiving nearly 50 000 calls from
customers daily. Even then, Dell was the
world’s largest direct marketerof computers.
Firms that deal direct
Like First Direct and easyJet, Dell is a pure
direct marketer, dealing with its customers
through its websites and call centres. Home
shopping companies, like La Redoute, provide
another example.
The logic for dealing direct is based on
efficiency – stripping out overheads or unpro-
ductive running costs. Such costs can include
bricks-and-mortar outlets, salesforces, dealer
margins, large stockholdings and so on. The
direct model works for both business-to-con-
sumer (B2C) and business-to-business (B2B)
applications. In fact, Dell’s customers range
from large corporations, such as Barclays Bank,
to individuals ordering from home. A partic-
ular advantage of the direct model is that it can
reduce the cost of international expansion
(Table 22.1).
A point to note is that it is not only
producers of goods or services that conform to
the direct model. First Direct, easyJet and Dell
are all producers. But La Redoute is a pure
retailer, not making any of the clothes or other
items that it sells. The insurance company,
Direct Line, is a producer. But direct insurance
brokers, sourcing policies from a large number
of insurers, are not producers.
Furthermore, Dell may sell software and
peripherals that it does not produce. In fact,
Dell’s chief production job is to assemble
components made elsewhere. Thus, the direct
model can work for retailers providing that it
increases retailing efficiency or makes buying
easier or more attractive.
Interest in the direct model has been given
a huge boost by the Internet, fostering the
development of new types of direct business,
including: Virtual exchanges– for example, Covisint,
the world’s largest B2B automotive
marketplace.
On-line auctionsandreverse auctions, such as
priceline.com.
Infomediaries,search servicesandbuying clubs.