POTENTIAL INFLUENCE OF SOCIAL AND TECHNOLOGICAL DEVELOPMENTS ON DIRECT MARKETING IN SOUTH AFRICA

This article argues that social and technological events in South Africa are leading to the development of the direct marketing industry. The article reviews various social and technological aspects as well as the influence that government intervention has on the direct marketing industry, especially in terms of legislation regarding privacy. The role of the South African Post Office is put under the spotlight since the direct marketing industry is very reliant on the Post Office. The opportunities presented by the information age are discussed and future growth areas highlighted. Although this paper mainly concentrates on direct marketing, it also tries to explain the potential role of direct marketing in an economic system approach, as a driving force of economic progress in developing countries.


INTRODUCTION
Direct marketing is a rapidly maturing industry in South Africa.With increased consumer interest and use of direct marketing, the industry is becoming more competitive and turning from a selling mode to one involving a more sophisticated marketing orientation.With this change it is necessary to understand better consumer attitudes, needs, beliefs and behaviour in order to fine-tune products and services and the ways in which they are offered (Pring, 1990).
The rapid increase of dual-income families has meant more income.At the same time, trends toward physical fitness, do-it-yourself, and home entertainment have reduced the time available for shopping and increased the attractiveness of direct purchases.The rapid technological advancement of electronic media and computers has made it easier for the consumer to shop and for the marketer to reach desired target markets.Direct marketing is alive and well in the world.Certainly the interest level is high.The things being done successfully by direct mail, the telephone and television are truly astonishing.This will definitely be a stimulus to a country's economy, in other words, raise its level of economic activity.
The present focus is on economic agents, which enables one to address the question of productive ability at the level of a firm, an industry and an economy in a systematic way.It places great emphasis on strengthening the organisational capabilities of economic agents in the process of economic development.Attention is also given to the technical and managerial capabilities of economic agents, viewing the "market" as a collection of relational arrangements among them.Although the paper will mainly concentrate on the issue of direct marketing, it will also try to explain the potential role of direct marketing in the present economic system approach (ESA) as a possible driving force for economic progress in developing countries.

DEFINITION
There are several reasons why the definition of direct marketing is important.On the one hand, the definition of a business area contributes to its professional image among consumers and other businesses.Moreover, the definition of a business area is used to delineate it for academic purposes of research and teaching, and for identification and communication among the practitioners and consultants in the area.Any conceptual definition of a business area is perforce an abstraction of techniques and practices, and as it is probable that no one definition will perfectly describe the concept of direct marketing, different definitions are used for different purposes (Bauer, 1992).
At present, the most widely accepted definition of direct marketing, which has been adopted by the Direct Marketing Association, is "an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location" (Belch & Belch, 1995).The most common definitions include direct mail, mail order, and direct response advertising.All three concepts are related to each other.Direct mail is a promotional medium where postal services provide the means of communicating with would-be buyers.These commercial messages come in different shapes and sizes -letters, postcards, catalogues, leaflets, coupons.Mail order is a device for advertising goods and services through a medium such as television, magazines, or newspapers.But orders are executed by mail.
Today, mail order has been expanded to the telephone.The modern customer finds it easier to phone an order than to write it out on a standard form, stuff it into an often ill-fitting envelope, and remember to drop it into a mailbox on the way to work.Whether the response is written or oral, the mail order technique is basically a method of product distribution.Direct response advertising sends out sales messages by any medium, like the mail order, but does not confine itself to any narrow post office boundaries.In this respect, direct response advertising embraces the broadest range of activities (Katzenstein & Sachs, 1992).
The direct marketing industry encompasses many different sales techniques, but essentially it includes every sales transaction where there is no face-to-face contact between seller and buyer.
We use direct mail, telemarketing, mail order, direct response via television, radio and the printed media, and are now moving into the computer age with interactive marketing.What sets direct marketing apart from traditional above-the-line advertising, is its focus on the measurability of campaigns in terms of returns that can be directly attributed to each campaign, and the direct relationship with the benefits that the medium offers (Ivins, 1996).
Over the years, various concepts have been used as synonyms for direct marketing, for example, mail order, direct mail and direct response.Mail order is merely a distribution channel, direct mail is one of a number of media used for direct marketing, and direct response is an action-oriented type of advertising.To complicate matters still more, even today there is no agreement among practitioners whether direct marketing should really be called direct marketing.Because of this, and the propensity of practitioners to adopt their own particular approach to direct marketing, various names for it have been coined, such as: It therefore follows that the concepts above emphasise a variety of aspects of direct marketing and new developments in the field, in conjunction with technological, social, political and economic innovations that also bring about changes of name.
Probably the most salient difference between traditional marketing and direct marketing can be found in the latter's prominent use of and dependence on some form of database.Database driven direct marketing starts with an established and well-defined database founded on a history of past behaviour or information of known purchasing behaviour and needs.The objective is not only to clinch an immediate sale, but to build up a relationship with large numbers of individuals over time.Direct marketers depend on continuous two-way communication with their clients.From this viewpoint, the purpose of direct marketing is to treat all current and prospective clients as individuals, and to build a relationship that would provide the consumers with tangible benefits and the company with growing profits (Puth & De Beer, 1996).

SOCIAL AND TECHNOLOGICAL DEVELOPMENTS
In the middle 1970s, in response to changing social behaviour patterns and as a result of the efforts of some astute practitioners, direct response, which had been growing slowly but steadily, started to leap forward.More families had two working spouses, so there was less time to shop -and direct mail and mail order became the way to save time.Vast expansion of consumer credit through major credit cards gave direct mail shoppers a convenient way to pay for goods ordered by mail or over the phone.Advances in data processing also helped direct marketers to become increasingly sophisticated in using and maintaining the lists, and later databases, necessary to target their campaigns more precisely.Technological developments in the computer industry also helped to expand the use of effective, personalised mail business (Bacon, 1992, pp. 4-5).
The current evolution of the marketing database has mostly been technology-generated.More and more instruments are becoming available as a result of the decreasing costs of additional computer power, and the ever increasing information available on customers and business prospects.The principles, methods and technologies of marketing databases are truly scientific.
It has been proved that retaining customers is much more cost effective and profitable than finding new ones.It has also been proved that by creating and maintaining a constant dialogue with each individual customer, information will come to light that makes it possible for marketers to sell more products to the same customer (Swigor, 1995).
Technology already exists for storing and profiling customer data.But focused management of marketing information is rare.Certain preparatory steps in organisational structure may be necessary.Advances in database analysis and customised printing technology will support the trend, as will predictive modelling techniques applied to much bigger databases of personalised information.Predictive computer models will anticipate the future behaviour of certain types of individuals -even when little exact information on past response patterns is at hand.The current emphasis is on maximising the value of existing customers.Once data on general customer behaviour and typical spending or response patterns can be effectively modelled, the marketer will be able to seek out new customers anticipating that their future value makes the effort worthwhile.This means that the information management marketer will successfully trespass on the mass marketer's domain.Already indications are that new technology will be rapidly harnessed and that information management is the key to success (Hopkins, 1996).
A confluence of social, economic and technological forces is rapidly transforming the structure of the retail industry.Rapp and Collins (1990) identified the following trends in and characteristics of the marketplace that favour direct response advertising: target markets (because of changing demographics and lifestyles); demands on personal time; overcrowding by too many new products, services and stores; weakening of the impact of television advertising; decline in brand and store loyalty; and clutter (overkill and waste of advertising).
Shopping at retail outlets will undoubtedly remain a vital social and a functional activity for a long time to come.There are, however, certain social and economic forces that make shopping from home attractive.Some of these forces are: the annoyance and waste of traffic and shopping congestion, the wide spread deterioration in the quality of service in retail shops, increase in the number of career and professional women, greater emphasis on standardisation and branding of products, and the growing use of credit cards.Rosenberg and Hirschman also identified the willingness of consumers to change and their acceptance of the technology used to market products directly, as further reasons that make shopping from home attractive (Terblance & Smit, 1996).

DIRECT MARKETING AND THE PRIVACY ISSUE
Until recently two pieces of legislation were at the centre of the so-called data privacy row in South Africa: The Bill of Rights, which guarantees the right to privacy, and the Open Democracy Bill.The Direct Marketing Association (DMA), in co-operation with other industries, successfully lobbied to have the Bill of Rights revised, and with the amendment of the Constitution this legislation is no longer of significant concern.
The Open Democracy Bill, on the other hand, is still in draft form, and expected to reach Parliament in 1998.Being prepared by the Office of the Deputy President, the bill was originally designed to ensure transparency in government.However, for what are widely regarded as political reasons, the scope of the bill was increased beyond its initially intended focus on open government to include specific aspects of the private sector, in particular, the credit bureaux industry.
One such aspect, part of the draft bill since its inception, is of great concern to the direct marketing industry.Section 50 of the bill rules out the use of personal data without that person's consent which calls into question many standard business practices.Simple issues which the bill threatens, include whether a company may cross-sell products to an existing client, or even communicate with clients via newsletters or catalogues, without prior permission.
As a dramatic development in the latest draft version, a new clause was suddenly added which would prevent the disclosure of personal data without permission.This new section clearly prohibits the sale or purchase of nominal lists.For the direct marketing industry, reliant as it is on personal data, these two clauses portend a catastrophe.Recognising the danger posed by the bill, the DMA formed a task force to determine its response.At the same time a multi-industry committee was formed by members of the direct marketing, life assurance, credit bureaux, insurance, and retail industries.This committee will also lobby government to reconsider the threat.The DMA believes that once government recognises the real economic implications of the sections concerned, it may be quick to change its approach (Ivins, 1996).
The fact that abuses of privacy can and do occur -either overtly or through the kind of end-runs around the law made possible by the new technology -has been widely documented in the business press.A few years ago, illegal use of one million California voter registration records by Metromail which, if the law had been fully enforced, would have carried a penalty of 50 cents each time an individual's record was used for a commercial purpose.Some US state governments with revenue problems are actually encouraging such abuse by actively selling information from their databases, including driver's license registration information, without informing the persons concerned.We are also quickly moving from brokering lists, essential matters of public record, to the more lucrative, and potentially invasive, use of name appending and co-op databases whose popularity has seen remarkable growth.Today, many business organisations display, at the risk of endangering customer trust and encouraging consumer backlash, an extraordinarily cavalier, business-as-usual attitude regarding human privacy in traditional direct response advertising as well as Internet-based promotion (Morris-Lee, 1996).
The governments of several countries have already adopted draconian privacy laws, effectively barring their citizens from the global information economy.New Zealand practically represents the new order of such legislative control.The New Zealand Privacy Act not only determines that marketers ensure any information collected to be relevant and essential for an organisation's business purpose, but requires that personal information is collected directly from the individual.They must also actively seek the individual's authorisation to collect it.In addition, the Act rules that reasonable steps are taken to make the individual aware that the information is being collected, why it is collected, and who is going to receive it.In addition, the name and address of any organisation collecting and holding it must be given, and the individual has the right to access and correct it.Today, Holland, Germany, and a growing list of countries have already adopted similar legislation.And in July 1995, the Council of Europe's Convention on Data Protection adopted a directive to protect the fundamental rights and freedoms of individuals, in particular, their right of privacy with respect to the processing of personal data (Morris-Lee, 1996).

THE ROLE OF THE POST OFFICE IN DIRECT MARKETING
As long as government refuses to privatise postal services in South Africa, direct marketers will continue to be reliant on the Post Office.While the Post Office is actively pursuing sound business principles in order to become profitable, and making wide-ranging changes to its service levels, it is still subject to political pressure from government.For example, government is insisting on the implementation of a universal postal service, regardless of the economics of the requirement.Add to this government's subsidy withdrawal to the Post Office, and the Post Office's inability as a wholly government-owned operation to drastically cut staff levels, and one can appreciate its untenable position.The cut in government subsidy will inevitably be shifted on the consumer in the form of higher postal tariffs.Unfortunately this will have an inflationary effect, which is not in line with service delivery and the basic need satisfaction of poorer households.DMA has worked with the Post Office in search of solutions to their problems, like ways to minimise tariff rises, increasing volumes and the provision of additional services.The DMA has a long-standing relationship with the Post Office, and a special committee dealing with postal affairs.It represents the industry on the National Postal Forum, and at the Post Office's national stakeholders' meetings.Two recent successes achieved for the direct marketing members were the containment of tariff increases on standard mail and the agreement to delay the increase until service standards were at an acceptable level (Ivins, 1996).
As technology continues to produce better, faster and less expensive options to mail order marketers, the prospect of worldwide direct mail usage seems increasingly feasible and attractive.Before these efforts can become reality, however, several major obstacles need to be overcome.These include major gaps in addressing information, lack of standards, different currencies, wide variations in national postal rates and procedures, and the need for uniformity to ensure the smooth flow of international mass mailings.These and other critical issues are being addressed by the International Direct Mail Advisory Council, which was created by the Universal Postal Union (UPU), a United Nations Organisation responsible for world postal affairs.UPU has created a Direct Mail Market Development Program designed to promote public/private partnerships in order to stimulate mail order market growth around the world (Goldner, 1996).
Economic considerations and cultural differences are some of the several difficulties mail order marketers must address when seeking to operate on a global scale.The mere fact that postal rates and regulations differ from nation to nation may cause direct marketers a great deal of difficulty in planning and executing a mailing programme.Another difficulty is the fact that many countries have conflicting customs about what should be mailed.These rules may grow out of cultural practices, moral beliefs or physical packaging requirements.The United States is the most advanced mail order marketer in the world today, with Europe close behind and Japan learning quickly.When one considers the enormous impact mail order has had on commerce in the United States, the prospects in developing countries are exciting.Small companies would afford to do business across international frontiers, competing with the largest rivals.The fact that developing countries have difficulty in establishing new markets, might be overcome to a certain extent in this way.This might be the beginning of an outward trade policy by these countries, and the inflow of much needed foreign exchange could then be alleviated.The focus of the UPU effort will include determining the current state of direct marketing in each country, defining addressing and postal standards, studying delivery mechanisms, payment methods and dealing with guarantee and return procedures, and so on (Goldner, 1996).

Opportunities in the retailing area
Traditionally, shops served as the primary distributors of retail products because consumers were accustomed to make their purchases there.Few acceptable alternatives existed and the value of consumers' money exceeded the value of their time.The increased use of multiple channels for the distribution of retail products is a more recent marketing phenomenon.Direct order retailing has become a more important component of many organisations' direct marketing efforts.Technology increasingly enables organisations to embark on direct order marketing, which has led to mail order buying becoming an acceptable shopping format for an increasing number of consumers (Terblance & Smit, 1996).
A number of changing environmental conditions suggest that direct marketing will present opportunities to retailers internationally.First, convenience is now recognised as a fundamental lifestyle component due to changes in the status and employment of women, dual-career families, and other changes in family structure and responsibilities.Convenience has been cited by consumers as an important reason for purchasing products and/or services through direct marketing channels.A second environmental condition contributing to the growth and importance of direct marketing is the increasing spread of technology.Lower costs of data analysis and computerisation have made it possible to collect and analyse data on a more individualised basis.
Technology was ranked as the number one opportunity in both United States and overseas direct marketing.This would suggest that retailers are fairly optimistic about the application of technology to direct marketing.When coupled with the retailers' perceptions of consumer demand, a fairly positive future scenario of direct marketing results.However, this scenario needs to be tempered with the rather obvious concerns about government regulation, both at home and abroad.But there is still reason to be optimistic about the opportunities that technology presents.A recent study by Akhter indicated that technological factors were closely related to direct mail volume in twelve European countries.Technological innovations are numerous, but perhaps the most important to direct marketers are the combined forces of reduced computer costs and increased processing and storage capabilities, which have resulted in more effective marketing communications with customers (Morganofsky, 1993).

The Internet
Not so very long ago one might have asked marketers in South Africa what the Internet was, and they would probably have shrugged their shoulders as it was virtually unknown in the business community.Used by the military and universities for many years, predominantly for information exchange via e-mail, the Net is now undergoing fundamental change, as business is discovering it as a medium to transfer information quickly and cost-effectively.But as an inherently one-to-one communication medium, it also holds enormous marketing potential for companies big and small (Rudolph, 1996).
Technology is not only having an impact on product development, but also on the ways we communicate with our markets.Developments affecting direct marketing continue to accelerate seemingly at the speed of light.But probably the most talked about media form today is the Internet.The area that probably receives the most attention from direct marketers is the World Wide Web (WWW).The Internet, together with other emerging media such as Interactive television and CD-ROM (Compact Disc Read Only Memory), are adding to the globalisation of electronic retail modes.This enables companies, often already under pressure to show more profits, to cast their net wider than their current markets which are often saturated.But the Internet is not yet a proven marketing medium.The Web is in its infancy as a marketing device, and as such is largely untested, unregulated and unrefined.It is moreover difficult to target, control and measure, and is growing extremely fast which makes promotional clutter a problem.
Today, the Internet is used by rapidly growing interest groups all over the world, that increases exponentially by the hour.It is important to know and understand some of the following terms which will be used very often in the near future: • The Internet is a network of networks, interlinked via satellite and undersea cable.The 'host' or 'server', the core of individual networks, usually carries all its clients' information and makes it available to anyone in the world who is 'on-line'.
• World Wide Web: This was developed to make the Internet into a visual, media-rich world of information accessible to anyone.It allows users to connect with other sites.
• Home page: This provides information on the company and its resources.It also links up with other company pages and other Web sites.
The Internet is mostly used by people between the ages of 18 and 34 years.Two thirds of Internet users seem to be male and more than one million new users sign up each month.
Predictions show 75 million users by the end of 1998.The Internet is a potentially effective distribution vehicle costing marketers substantially less than newspapers and direct mail to advertise to consumers (Raphel, 1996).
Internet is the backbone of a variety of services, of which only e-mail and the WWW are of direct interest to the marketing community.E-mail allows one to send electronic messages to recipients (whose address is known beforehand) across the world; this is not limited to text, but can also be graphics, animations or spreadsheets.The WWW is an accumulation of hypertext documents, which mainly carry hyperlinks to other pages or sites, regardless of location.This enables one virtually to travel the world at the touch of a button.But this alone does not explain why the Net is growing so fast, and why it has become so important to marketers.Here are some more reasons (Rudolph, 1996): • The Net is an equaliser because no matter whether you are IBM, Microsoft or just a oneman business operating from home far away from urban centres, you can offer your products and services to exactly the same customers.
• The Net is inexpensive compared to traditional ways of communicating.The Net allows you to do all your correspondence for the price of a local phone call.To offer your services on the Net can be as cheap as R100 per month, excluding the creation of your Web pages.
• The Net is flexible because it allows you to communicate with existing and prospective customers on an individual basis.Because of technological advances you can use various tools to assist you serve customers individually.
• The Net is responsive if you get the right message out to the right people.If you show them that you really care and that your products are worth considering, which includes the Web site, you stand a good chance of attracting interested parties.Technology allows you to enter into an inexpensive dialogue and feedback process with prospective clients.
• But the Net is also merciless.If you ignore the unwritten code of the Internet, the so-called 'Netiquette', you will bear the full brunt of those offended by your actions.

Interactive technologies
Put in simple terms, interactive marketing uses new technologies to help overcome practical database and direct marketing problems while building more rewarding customer relationships.
The versatility of interactive technology can reduce the anxiety surrounding the buying process, by giving viewers access to more information on a wider selection of products than traditional channels can do (Steyn, 1996).When a buyer makes a purchase, an exchange of money for goods take place.The seller accepts the money as fair payment for the value he or she has created.The buyers know, or perceive, that the value they are getting equals the price they are paying.A deal is struck and value delivered equals value received: this is the "value equation".Interactive marketing technologies often have the power to alter the equation by adding value to one or both sides of the equation (Cross, 1996).CD-ROMs are becoming widely used as technology marketing tools.CD-ROM technology stand out from its sister interactive technologies in its ability to combine print, video and audio messages in a package that can also act like a random access database.The CD-ROM can also be used together with other communications media to add even more content.For example, the CD-ROM can be used in combination with commercial on-line services and the Internet to retrieve updated and complementary material.It is, in a sense, not just one medium but a multimedium.Like all good marketing uses of interactive media, the CD-ROM's capabilities alter the value equation between buyer and seller.With more information and variety, buyers can make better buying decisions faster, and with greater confidence (Cross, 1996).
Another much discussed direct marketing medium is interactive television with its home shopping channels.Yet another example is the so-called 'electronic brochures' or interactive disks.Electronic brochures can be used on the Internet or as a bulletin board service.This is one of the reasons why marketers need to plan viewer involvement and interaction carefully from the start, when considering new media like electronic brochures.South Africa is in the "advantageous" position of trailing a few years behind the world in these new technologies.It provides us with the opportunity to observe and learn before employing new technologies in our own marketing activities.Emerging technologies and media in direct marketing should be evaluated in the same way as new technologies in other fields.They should not be employed for the sake of innovation alone -the decision should be based on sound market information as well as technological research to determine the features and benefits that they represent (Swart, 1996).
As more companies strive to keep pace with the technological achievements of the Information Age, they make larger investments in marketing databases.On the one hand, managers think "this is the right way to go," but on the other hand they worry "for what we're investing, this had better work."Nobody denies the benefits of database marketing.However, often after many months or even years of building technologically sophisticated marketing databases, marketing managers still cannot answer what they consider to be simple questions in a timely manner, if they can be answered at all.This realisation occurs when the product is near completion and tends to lower expectations about the capabilities of the marketing database.As a result, frustration abounds among marketing managers who need to actively use this database, and the MIS (Management Information Systems) group which must support the database, with the one group not fully appreciating the demands made on the other (Leeds, 1996).

THE FUTURE OF DIRECT MARKETING
Direct marketing is rapidly assuming the position of the most prominent marketing technique of the 1990s.This is borne out by the increasing use of direct response advertising in both print and electronic media as well as in telemarketing.Add to this the tremendous possibilities of electronic cataloguing, and the face of traditional marketing may soon be very different from what we used to know.All these marketing approaches enable the consumer of today to be much more selective through more accessible product information and greater possibilities of comparison.However, this implies that the emphasis of marketing communication will have to shift from market penetration to product information and illustration.Through modern technology, consumers of the future will have more control over their selection of marketing media and information.They will be able to access or ignore a much wider spectrum of media than in the past.Obviously, such a shift in emphasis may totally change the nature of advertising agencies.Particularly the traditional media department may have to move its focus to strategic database planning and management.Advertising on interactive data networks, CD-ROM and automated voice response systems may shift the emphasis from today's mass media to tomorrow's one-on-one interactive media options (Puth & De Beer, 1996).
While mail order, both domestic and international, faces increasing competition from electronic commerce, there will always be a place for written communications to be posted and delivered.
Certain things can be communicated better via hard copy, like the personal touch of a handwritten note.Mail order will grow as direct mail users, postal authorities and government officials come up with solutions for the obstacles to efficient delivery.In the years to come, effective marketers will have to know their trade very well and be ready to respond to new challenges.The key is not knowing where one will be five years from now, but being flexible enough to adjust to a world and a marketplace that is constantly changing at an increasingly faster rate (Goldner, 1996).
The consumers of the future will have access to technologies that put them in control of the marketing communications they receive, and they will then decide what to see, what to read, what to hear, and when to do it.Although South Africa is lagging behind the top industrial countries in some respect, it possesses the necessary infrastructure to develop and manage a relatively sophisticated direct marketing industry.Toll-free telephone services, extensive production capacity, advanced data base management capabilities and direct order facilities, signal an exciting future for direct marketing in South Africa.The 1990s will be good to direct marketing in South Africa.The country has the people, an excellent direct marketing association and the desire to succeed (Jutkins, 1990).

CONCLUSION
South Africa is currently going through a transition phase from state monopoly to a proliferation of private enterprises.New policies governed by the Independent Broadcasting Authority (IBA) are being implemented, South African Broadcasting Corporation (SABC) television channels have been reshaped and renamed, satellite television is a reality, community radio stations are proliferating and there has been technological innovation across all media types.The research challenge for planners and buyers of media will be to find good quality research which is based on reliable, quantifiable samples.We face a rapidly changing media scenario, deregulation of broadcast media, new media providers of new opportunities, and a fragmentation of media consumption (Foster, 1996).The economic consequences of direct marketing in developing countries should not be underestimated.The fact that South Africa has access to the necessary technology and also serves as a gateway to Africa, could lead to increased trade interaction and economic integration in the region.
Direct marketing clearly has tremendous potential in South Africa.Many direct marketers have already achieved notable success.South Africa offers adequate markets, advanced technology and high levels of locally manufactured as well as imported products which lend themselves to direct marketing.No doubt this form of marketing will increasingly become the preferred way of doing business in many product and service categories.As South Africa is seen as the cornerstone in Southern Africa, this potential transfer of technology and knowledge may well lead to improved human development, which is essential for the economic development of the region.