Home Based Businesses

Direct and Interactive Marketing

Consumers are becoming increasingly demanding and sophisticated in their service requirements and expectations, and able to defend their bargaining stance/purchase position.

The product under analysis is a rail travel discount card Railcard. The main marketing objective is to attract new customers, young people and students allowing them to save money and increase the average number of journeys made by them. Customer service therefore plays a pivotal role in relation¬ship marketing. Absence of online marketing limits the company’s potential to attract new customers.

A core budget of the campaign covers £170,000 and includes leaflets and station posters to inform customers about new services and discounts. Greater access to informa¬tion, growth in self-assisted services, and the widespread change from a sellers’ to a buyers’ market, are just a few of the drivers of consumer empowerment. The main techniques employed by the company include: communication, creative work, media advertising and proposals. The main objective of interactive marketing is that “all communications should promote a consistent overall message”. The company employed age segmentation to attract new holders. Young people segment (ages of 16 and 25) is attractive both in terms of its size and its million-dollar purchasing power. Some students are financially dependent on their parents, but some of them are relatively independent. Most of the potential holders see train as a “retrograde step” in their life. As for psychographic segmentation, the holders of Railcards inclide people from different groups and lifestyles: “from people who still live at home, to poverty-stricken graduates”. This strategy allows Railcard to attract a wide audience of potential buyers and focuses on value orientation of consumers.

In spite very attractive Railcard proposition, many young people prefer to use competitive transport, mainly cars. The competition in the industry is strong, and Railcard tried to follow differentiation strategy. Rivalry among car and train transport companies is also changing in response to developments in competition. Price competition, backed by improved efficiency, are likely to feature highly as firms fight for survival in markets faced with over-capacity. Within rapidly changing environment this kind of development ensures that long-term survivors are those firms who are more competitive and are better able to satisfy consumer needs and adapt to the new competitive environment. The achievement of these goals is dependent on investing in an appropriate set of critical resources to create the potential for doing business and ensure that performance targets can be sustained in the long term.

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