584 The Marketing Book
Unless marketers are in a monopolistic situation
and have absolutely no competitors (and who is
ever in that position?) they still need to be fully
alert to competitive influences. Competition and
disruption may come not only from direct
competitors, but also from indirect competitors.
Quantitative market research is required by
all marketers, direct or otherwise. Qualitative
research is also needed because the database can
only reveal what customers are buying or not
buying. It cannot say why, or suggest alternative
new product avenues with much confidence.
Data analysis relies on back data (customer
history) to predict future behaviour. While this
is generally the best guide, it is certainly not
infallible. Circumstances and attitudes may
change, causing sudden shifts in demand.
The database and research – the
last word
In their study The Machine that Changed the
World, Womack, Jones and Roos (1991) made
clear how Toyota researched consumer
preferences:
Toyota was determined never to lose a former
buyer... it could minimize the chance of this
happening by using data on its consumer
database to predict what Toyota buyers would
want next... unlike mass-producers who con-
duct evaluation clinics and other survey
research on randomly selected buyers... Toyota
went directly to its existing customers in plan-
ning new products... Established customers
were treated as members of the Toyota family.In one generation, Toyota went from small
producer to the world’s number one in the
automotive market.
Clearly, if a manufacturer has 5 per cent of
the market and a 70 per cent loyalty rate, it is
more sensible for it to learn what its customers
want than what other manufacturers’ custom-
ers want. Yet few of Toyota’s competitors
accepted this obvious truth.
Toyota’s success is a triumph for good
marketing, not simply a testament to Japanese
technology. While other manufacturers were
obsessed with ‘conquest sales’ (sales made to
competitors’ customers), Toyota’s understand-
ing of the value of customer retention was and
is central to the discipline of direct marketing.
A competitor of Toyota estimated that it
cost five times as much to make a conquest sale
as a repeat sale. Collecting and acting on
information like this is the hallmark of success-
ful direct marketing.References
Chaffey, D., Mayer, R., Johnston, K. and Ellis-
Chadwick, F. (2000) Internet Marketing, FT
Prentice-Hall.
McCorkell, G. (1997) Direct and Database Market-
ing, Kogan Page.
McKenna, R. (1991) Relationship Marketing, Cen-
tury Business.
Peppers, D. and Rogers, M. (1993) The One-to-
One Future, Currency/Doubleday.
Womack, J. P., Jones, D. T. and Roos, D. (1991)
The Machine that Changed the World. Harper-
Collins, New York.Further reading
Chaffey, D., Mayer, R., Johnston, K. and Ellis-
Chadwick, F. (2000) Internet Marketing, FT
Prentice-Hall.
Halberg, G. (1995) All Consumers are NOT
Created Equal, John Wiley.
Hughes, A. M. (1995) The Complete Database
Marketer, Irwin Professional.
The Institute of Direct Marketing (2002)The
Direct Marketing Guide.
McCorkell, G. (1997) Direct and Database Market-
ing, Kogan Page.
Nash, E. L. (1999) Direct Marketing: Strategy,
Planning and Execution, 4th edn, McGraw-
Hill.
David Shepard Associates (1999) The New Direct
Marketing, 3rd edn, McGraw-Hill.