Marketing expert Dominique Xardel speaks to Catalyst on direct marketing.
DOMINIQUE Xardel says he was convinced Amway would succeed in India when it was launched here nearly ten years ago. An expert on marketing and an author of numerous books, including two on Amway, Xardel is pleased he guessed it right. He is upbeat about the future of the company, which already has over one lakh people distributing its products in India, as also direct marketing, one of Xardel's focus areas.
Of course, any company that adheres to the ground rules of direct marketing is bound to succeed, says the Associate Dean for International Affairs at the ESSEC Grad School of Business, Paris. Which are? Good products, a comprehensive database, excellent logistics and constant communication.
Products should be good and ideally belong to categories that consumers seek at regular intervals, he says, citing as an instance the beauty products sold by Avon. Also, when companies use more than one route for marketing, they should have exclusive products in each. More importantly, they should have different brand names and cater to a different consumer base, he advocates.
Next on the list is database. "You cannot act if you don't have a database. Big companies have a great number of names to contact." But having a database is not everything; segmenting data is essential, he says. And the mantra for segmentation is RFM, which stands for `recency,' frequency,' and `money.' The three aspects being how recently people bought, the frequency of their purchases and how much they paid each time.
Nowadays, companies are finding ways to make their database more profitable, Xardel says. "IKEA, which sells furniture through direct marketing, wanted to know whether I would be interested in subscribing to the Time magazine."
Logistics is another important aspect. "You must be able to act fast on an order and deliver the product fast." This is important because, "a company can have a good product and database but still lose customers' trust due to bad logistics."
He says Dell Computers found it difficult to deliver on time when it got launched in France. "The word-of-mouth was negative." Fortunately for Dell, the problem was sorted out fast, and the company is now one of the most successful exponents of direct marketing, says Xardel.
The final rule is to constantly communicate. And on a one-to-one basis. It is not as if the companies will have to interfere with consumers' daily life, Xardel says, describing how companies like Dell do it: "They carry regular ads on magazines or newspapers, saying `we offer such and such products ... why don't you call us if you need them?'"
The use of media while employing direct marketing, he believes, should be more to inform the consumer about the direct buying opportunity.
"Direct marketing makes life convenient for the consumer. But what mustn't be forgotten is that the company has to innovate: find something that makes all the difference. Oriflame and Avon have, for example, created special products for the direct marketing channel that can't be found on retail shelves."
Xardel, who has had industrial experience in companies such as L'Oreal and Time Life Publications, teaches and researches marketing strategies and distribution, in addition to direct marketing. His latest book is titled Consumer Behaviour, which he has co-authored with M. S. Raju, a professor at IIAM, Visakhapatnam.