Direct Marketing: Victoria Secret and Toyota - Case Study Example

Direct marketing is a growing means of advertising as firms realize its benefits and efficiency. With the explosion of technology modes of communication and thus marketing and advertising are changing as firms resort to niche marketing and approaching customers directly and individually. According to Kotler (2003) this method is cheaper in times of restricted budgets that firms have. Direct marketing enables firms to focus on a smaller number of audiences and thus saves both time and money. Also, with the emergence of the web and the internet it has now become very convenient to market directly. Technology like the internet with its email facilities, websites and mobiles enable marketers to advertise directly to customers and potential buyers (Johnson 2005). Firms find it easier to market in such a manner because this sort of marketing helps them to target only those customers who would be interested in their products. Only those customers approach the outlets that have some sort of a keen interest in the products and this helps avoid window shoppers who waste time and therefore add to costs (Hyde 2008). This also helps in directly marketing efforts in a specific direction to specified people instead of mass marketing and going haywire with advertisements splashed all over the media like the TV, radio, billboards across cities and countries requiring exorbitant budgets(Kotler 2003). Direct marketing can be carried out in several ways which include directly mailing the customer, emailing , telemarketing etc. the benefits of direct marketing are several besides those mentioned above. The data of the customers of your product can be collected and it can even be purchased. This data is traceable, track able and can really help in further researching and improving the product and marketing methods. The preferences of the customers can be known and can be helpful especially when new products are to be launched (Thornton 1995). According to Kotler (2003) the downside is that since this data can be purchased, just anyone can purchase it and thus the consumers may get mails that they don’t want and may be irritated by telemarketing phone calls. The emails that the consumers get may not even reach the consumers who may disregard such mails as junk or block them out completely. The firms marketing in such a way may not know if the prospective consumers are reading the mails or discarding them but then again it’s a risk that every form of advertising incurs (Kotler 2003). Research shows that shifting to direct marketing has boosted sales and many firms are slowly making this shift and are benefiting from this mode of marketing. Those firms especially who have niche markets and have very well defined customer profiles can use such marketing to the best of their advantage (Johnson 2005). Victoria’s Secret and Toyota are such firms who are now heavily depending upon direct marketing with great success. Victoria’s Secret had mostly depended upon media like print and TV advertisements for the marketing of its products but in 1998 the firm launched its website where the consumers could purchase the products, view them and know of the latest trends availing the sales that the firm offered (Victoria’s Secret 2008). The firm was able to focus on its customers and bring in new customers too which boosted sales. Toyota found it cheaper and effective to advertise via direct marketing as it has a niche market and it is pointless to advertise on TV when most of the prospective customers may not be watching (Toyota 2008). They also found it beneficial to focus on the customers and reach out to them individually. Thus they relied more on mailing and with the invent of the internet they launched their website with success and increased their sales with the help of the web. Customers The customers of both Victoria’s Secret and Toyota are entirely different yet direct marketing has worked wonderfully for them. The customers of Victoria’s Secret are women who like trendy lingerie with focus on younger women who are either working or studying and who do not have very high budgets to spend on lingerie. Using the web suited them just fine as their target market is internet savvy. According to Hyde (2008) the firm was able to reach out to more customers and was able to keep the customers informed and educated. The customers are now able to know of the latest trends and new products and at the same time know of the sales and discounts offered with the convenience of purchasing online and getting their purchase delivered (Victoria’s Secret 2008). Since the target market of the firm is comparatively larger than that of Toyota, it would have been expensive for the firm to mail every prospective consumer personally (Toyota 2008). With the web, this has been made very easy customers can be approached more easily. The customer profile of Toyota is very different than that of Victoria’s secret. They are rich middle aged men who have a good job and therefore earn well (Toyota 2008). Reaching them out with TV advertising was expensive as this is a niche market and most of them work late with the result that they don’t have the time to watch TV and even if they do what are the chances that they would watch the commercial. Thus the firm resorted to direct marketing with success and reached the target market with their product information individually to be more effective (Johnson 2005). Mode of direct marketing Both Toyota and VS use direct marketing however, they use different modes to communicate with their customers. While VS uses the internet as the primary source of direct marketing while Toyota uses direct mail to reach out to their customers. The difference is because VS needs to show rather than inform the customers about their product (Victoria’s Secret 2008). Thus the customers can see the color, shape, and size designs etc on the web. Also, since the designs change so quickly and they are so many models that direct mail would turn out to be expensive as the customers are great in number. VS even held a fashion show online due to which it was able to reach a larger audience and customers and met great success. For Toyota direct mail works better as they have comparatively smaller number of customers (Hyde 2008). Also, the data of the customers is available and thus the firm can mail directly to the prospective clients. Also, direct mail works better as the customer needs to be informed and educated about the product and this is much easier with direct mail. With the web mail, the firm has to wait for the customer to approach the products, however, in case of Toyota which is a more expensive product than that of VS approaching the customers themselves reminds them of the brand and initiates brand retention which is very important in case of Toyota as VS already has great brand loyalty. Both use internet and direct marketing however, VS depends more on the former and Toyota more on the latter (Toyota 2008). Sales The sales of both Toyota and VS have increased drastically with direct marketing. The whole of the automobile industry has increased its investment in direct marketing with $248.1 billion of sales in 2008 (DMA, 2008). According to Hyde (2008) Toyota marketed its reshaped models in New Zealand via direct marketing in 2004 and had a 23% increase in sales. For VS the direct sales account for 25% of the sales but the figures are increasing over time as the firm sees the benefits of direct marketing and as it collects more data of the customers. Budgets In today’s time competition has become very stiff for both the firms and the budgets have become constrained. Thus the firms have shifted towards direct marketing as it is cheaper and increases the sales. TV advertising is expensive but the more important thing is that it is not as effective as direct marketing which is a cheaper option as one needs to reach out to a smaller audience where more of them are prospective buyers (DMA, 2008). Thus with direct marketing the firms can curtail their budgets and increase their sales too at the same time. Also, according to Hyde (2008) the firms can avoid advertising to the audience that does not have any interest in the products. Thus direct marketing is more focused and thus curtails costs enabling the two firms to remain within the budget (Toyota 2008). Consumer relations It’s very crucial for Toyota to maintain customer relations as their product is such that they need to give after sales services too. The firm has to communicate with the customers asking about their satisfaction, problems and needs. They also have to have good relations with the customers so that there is good word of mouth for the products. Also, the firm has to make sure that they collect inputs and data from their current clients and satisfy them completely so that they can bring in new clients. Customer relations are also important for Toyota when it comes to data collection and taking note of the problems so that they can improve their products (Hyde 2008). There are only a few number of consumers for Toyota compared to VS so it has to focus on these customers and their satisfaction. VS on the other hand, focuses on customer relations but not so much as Toyota as it is easier for VS to get customers than Toyota. However, for VS it is important to maintain customer relations to keep their customers satisfied and to collect their data and input for research purposes. Conclusion Direct marketing has become an important tool for marketing products in today’s era of cutthroat competition. VS and Toyota have taken full advantage of direct marketing and have been able to boost their sales with it. Both the firms have entirely different customer profiles yet they have been able to increase their sales (Victoria’s Secret 2008). They have been able to modify direct marketing according to their needs. Direct marketing has been able to curtail their costs in times of low budgets. Also, their sales have increased manifold with this tool. As per Johnson (2005) Toyota has been able to educate its customers with direct market which it could never have with TV advertisements which is not only expensive but also doesn’t increase sales with the same proportions. Both the firms have been able to maintain customer relations with direct marketing which has helped them keep a track of their customers and conduct research on an extensive scale. It has also been helpful to improve their products and launch new ones. There are many tools of direct marketing and Toyota has been using direct mail more than the others. This has suited their customer profiles (Toyota 2008). On the other hand, VS was not as successful with direct mail as it was with internet marketing as this form of direct mail was much more suitable for them. Thus direct marketing has proved helpful for both these firms although they have been using different modes to suit their particular products. As per Johnson (2005) direct marketing has gained a lot of recognition as with the help of technology it has become easier to do so with easily available data bases and the internet. Increasingly firms are shifting towards direct marketing as their find it beneficial for their firms and as it helps them curtail costs, increase their sales and reach a wider market in an era of globalization. References DMA, (Jan, 2008), “Direct marketing facts and figures in the automobile industry”. Accessed on 9th August 2008. Available at: http://www.the-dma.org/cgi/disppressrelease?article=1072 Hyde, B. (2008), Toyota New Zealand. Accessed on 10th August 2008. Available at: http://www.nzpost.co.nz/Cultures/en-NZ/BusinessSolutions/DirectMarketing/TheBeautyOfDM/BetterReturnOnInvestment/ToyotaNewZealand.htm Johnson, G. (Feb 2005), The New Advertising-DM Connection. Accessed on 10th August 2008. Available at: http://directmag.com/mag/marketing_new_advertisingdm_connection/ Kotler, P. (2003), Marketing Management. 11th ed. Pp. 680-700. New Jersey: Prentice Hall. Thornton , P. (Oct 1995), Direct mail: the darling of marketing. Accessed on 11th August 2008. Available at: http://findarticles.com/p/articles/mi_m3830/is_n8_v44/ai_17763836?tag=content;col1 Toyota, (2008), Accessed on 9th August 2008. Available at http://www.toyota.com/ Victoria’s Secret, (2008), Accessed on 11th August 2008. Available at: http://www.victoriassecret.com/ Read More