08 -14 November 2000

Search all issues

powered by FreeFind

Send Your Feedback!


Keeping informed

As consumers become more demanding, suppliers are realising the importance of having the right product available for a target market sector. In line with this, companies are now adopting a number of innovative methods to ensure they reach their customers, including direct marketing, as company director, John Ellul Vincenti, explains to Miriam Dunn

Can you explain what direct marketing is?

Direct marketing has been used by market research companies abroad for some time now, but is still very new to Malta.
As a marketing tool, it has a number of advantages, the most important of which is that it is very specific and enables clients to identify their target market sectors rather than having to adopt a "hit and miss" approach, which has been the most common method until now. Until a few years ago, for example, marketing was about sending leaflets to people’s houses.
People in business will not be able to ignore the importance of having information at hand
By collating information in questionnaires and surveys, with our company, the Research Bureau, we have been able to ask consumers questions on a variety of subjects, gather the information and put it on a database.
From that we extrapolate statistical data and we prepare market situation profiles.
The advantage we have is that the market research we carry out is in bulk, which helps keep the price down for people who want to buy the information from us.
We have about 10,000 people on our database, who were asked some 1,800 questions in the last general survey we carried out. From this, we can give companies answers to certain questions about market trends, for example, not just who is interested in buying an air conditioner, but how much various people want to spend on one.
One survey we recently completed looked at trends for visiting Gozo. We collated specific information, which informed us who was going to Gozo, in terms of age and sex, and how often they went.
The data provided companies targeting specific markets with important, detailed information about their potential clients, which they could then work on.
The same principles were adopted in our wide-ranging annual consumer survey.
Here, we asked 50,000 households about their lifestyle, with questions, for example, on home, leisure and buying patterns.
The data is then sold to companies that request it for direct marketing purposes, obviously always in line with data protection legislation.

Why are companies turning to the direct marketing approach?

I believe consumers are becoming more demanding, while, simultaneously, competition between companies is getting fiercer all the time.
We’ve reached a stage where people in business can’t simply sell anything to anybody; they have to target their products at specific, niche markets.
But when we were conducting our questionnaire, it was also interesting to note that there seemed to be a demand from consumers for detailed, specific information about products.
People whom we approached wrote back saying they’d been waiting for something like our questionnaire to be sent out because they were fed up with going out and looking haphazardly for goods. They said they’d rather the companies approached them and explained what products they had on offer.
Companies have also begun realising that cold mailing is very impersonal.
Direct marketing involves a more personal approach, building up a better relationship with the consumer, while enabling companies to identify what customers want.
The key is helping companies to find their market, while also discovering what kind of person they’re writing to.

As competition becomes fiercer, do you think companies will have to adopt strategies such as direct marketing?

I think the market has changed somewhat, and companies have had to accept this and move with it.
Some traders still adopt the approach of importing one type of product only, rather than noting the consumer’s demands, but they are likely to suffer as customers become choosier.
I believe that as the competition continues to grow, people in business will not be able to ignore the importance of having information at hand and acting upon it.
But the good news is that obtaining data, such as the information we collate, is now becoming much more reasonable in terms of price, because we work in bulk.
In the past, the large companies had an advantage because they had the funds to get hold of statistics, which were costly to produce.
Now, research companies like ours conduct surveys on a large scale, which might have a couple of questions in that will be useful to a company. Since we are working in bulk, it is not expensive for us to sell questions in our surveys to a client. We send out 50,000 questionnaires, with 200 – 1,500 different questions, for example, so if someone wants to buy certain information on leisure patterns, for example, it would be much cheaper than if they commissioned a mini-survey just on their subject.
But I believe there could be a danger for companies that do not recognise the importance of acquiring information.
Nowadays, information is gold, and people that still regard it as something extra rather than vital and are not willing to pay for it will fall back.

How have the foreign markets reacted to the introduction of direct marketing in Malta?

We have found that a number of companies overseas welcomed our incentive, primarily because this information did not exist before in bulk and was not being generated in the fashion they required.
Most large companies that export to Malta like to have information about the market they’re dealing with. They are also always interested in seeking out new markets, especially if they have new products and they are unsure of whether there is a local market for them.
In this way, our surveys can be useful to them since they can see what consumers in Malta may require or be looking for, and identify such market sectors and approach them.
Procter and Gamble is a perfect example in this regard.
They have sponsored questions in our survey because they didn’t have information on certain sectors of the local market, even though they’ve been in Malta for years through their agent. Today we can supply the information they want and give them an accurate picture of the market. Through the information we provide, they can identify new niche markets and get in touch with possible clients from our surveys. They are happy with our system because it provides them with a full process - finding a new market, getting in touch with it and selling to it.

Have you noticed any change in consumer spending patterns during your research?

Our surveys have shown us that trends are on the move, and we are expecting our next questionnaire, which will be carried out in February, to once again show new patterns of consumer spending.
At this point in time it is not that easy to say what those trends are going to be, and every time we undertake a questionnaire, there are always some surprises.
I was interested to note, for example, that in our survey on how often the Maltese visit Gozo, eight per cent of our participants said they don’t go there at all.
In our general questionnaire, I was also quite surprised to observe that within certain age brackets, not many consumers have started buying goods over the Net.
Our data showed us that in the 24-35-age bracket, the figure is below 10%, while under-18 and over 35 is slightly higher than 10%. This indicates that for Malta, using the Internet to buy goods is still very new, but hopefully, this is one trend that will have caught on somewhat in our next survey.
Our information also showed us that although people have aspirations to improve their quality of life, they are becoming more cautious about what they are going to buy, due to the fiscal changes that are taking place on an annual basis.
The answers they gave us showed that people were shying away from certain products and thinking ahead of possible impacts. For example, people told us they were thinking of buying a new car, but were cautious about buying one over 2000cc because of increases they think they might see in the next budget.
Our analysis also showed us that consumers’ priorities have changed where certain products are concerned, to the extent that price has become the bottom line.
We had questions about some goods, such as butter or margarine, where we asked customers to tell us what was most important – price or taste.
In the past, price was not necessarily the most important factor to customers, but our last survey showed us that for many products, it has become the overriding factor.
In fact, when we relayed the information back to some supermarkets they were surprised, because although price has always been important, in past surveys they may have undertaken themselves, other factors such as parking and cleanliness may have taken a priority.
These are examples of how the trends are changing, and companies will undoubtedly have to take account of them.

Photos by Paul Blandford

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt