What are direct marketing and interactive marketing? 583
book first published in 1991. Its author was
Regis McKenna, a marketing consultant known
widely for his work with Apple Computers.
McKenna believes that marketing is everything
and doing marketing is everyone’s job. The key
elements of McKenna’s notion are:
Select a specific market segment and dominate
through a superior understanding of
customers’ product and service needs.
Integrate customers into the design process.
Use monitoring, analysis and feedback to
maintain ‘dynamic positioning’ that is always
appropriate to the marketing environment.
Develop partnerships with suppliers, vendors
and users to help maintain a competitive edge.
Note that this concept of relationship market-
ing is also quite distinct from direct marketing,
although direct marketers may be ideally
placed to exploit it, especially in an e-commerce
environment. One example of a direct and
interactive marketer apparently following
McKenna’s strategy to the letter is Dell.
Relationship marketing in action
Dell set out to develop and dominate the
direct distribution segment of the PC
market, a segment which (by value)
consists primarily of business buyers.
Dell customers ‘build’ their own
computers on ordering from the Dell
website. In practice, Dell believes they
‘uptrade themselves’ – specifying a higher
performance machine than they could be
‘sold’ by a salesperson. By inviting
customers’ comments and suggestions and
responding accordingly, Dell is also able to
keep innovating in a relevant way. For
example, DellHost allows customers to
rent space for their website from Dell,
removing the necessity to buy, monitor
and maintain servers. In this way, Dell
generates revenue by solving a known
problem, not merely by selling hardware. Through opening up its order book on the
extranet, Dell is able to make suppliers
responsible for maintaining just-in-time
parts deliveries. Suppliers can also meet on
the extranet and collaborate to solve
mutual problems. Superior supply chain
management has given Dell a competitive
edge.Limitations of the customer information system
The database is inward looking to the extent
that it refers only to those customers that a
business already has on its books.
Although it is possible to import external
data to profile customers and compare them
with the market at large, this is not a substitute
for marketing research.
The database, however good, remains
introspective. It does not admit or report upon
external influences. Disturbance to plans and
forecasts may result from environmental
influences, e.g. the economic situation, environ-
mental concerns or other newsworthy pre-
occupations which affect purchase behaviour.
Worse, it does not report on customers’ use of
competitors or on the success or otherwise of
competitive initiatives. Share of customer (or
share of wallet) is a key success measure in
direct marketing.Who is loyal, who is not
The database can often reveal whether a
customer’s purchase pattern indicates loyal or
disloyal purchase behaviour. However, it cannot
report directly on customers’ use of com-
petitive offerings. This can only be done on a
sample basis, using marketing research. N.B.
The sample for this research can be taken from
the database.