CHAPTER NO. 11. INTRODUCTIONDirect marketing involves communication by a marketer to a prospect, without an intermediary, via a medium that supports some degree of interaction. The concept has largely merged with the idea of database marketing, which involves the establishment and maintenance of quantities of data about prospects and customers, which is exploited in order to enhance the probability of making a sale to each of them.

Direct marketing is intrusive, both in relation to the privacy of personal behaviour, and into the privacy of personal data. The degree of sensitivity varies greatly, depending on the person, the data and the context.

This paper examines the privacy concerns arising in relation to direct marketing. It commences by examining direct marketing, defining the nature of privacy concerns, and showing how the privacy factor is becoming an increasingly important business strategic factor. It then identifies specific issues arising in relation to the various direct marketing channels, and suggests approaches that can achieve an appropriate balance between the interests of marketers and individuals. Finally, it addresses the question of regulatory measures.

1.1INTRODUCTION ABOUT DIRECT MARKETING

If a person is a Citibank, Visa or Master card holder, living in a metro or class one town, by now he would probably be accustomed to receive some unexpected mail inviting him to a launch function of a new product, a live demonstration of a gadget, an exhibition of designer jewellery or a music concert sponsored by some business firm. He may also get some promotional literature about an investment scheme or some share application forms for public issues of companies, or be offered a hefty discount on subscription of a magazine or an early bird incentive on booking a residential flat.

Even in the class two and smaller towns, people are getting surprise gifts and greeting cards on occasions like anniversaries, birthdays and the new year. This is an indication that direct market is catching up in the post-liberalization ere in India. Several firms, otherwise marketing their products through conventional channels, are now also using the direct approach to communicate with and retain their customers. Different firms use different methods to zero in on the prospects included in their hit lists.

Direct marketing as a concept has evolved to its present-day form through various stages of transformation. Originally a form of marketing in which goods moved from producer to consumers without involving middleman, firms selling directly to the end users through their own retail outlets and / or salespersons were said to be involved in direct marketing. With the development of other form of personal communication, such as the telephone, direct marketing was redefined.

According to the Direct Marketing Association of the USA (as quoted in Kotler 1991), Direct Marketing is an international system of marketing which uses one or more advertising media to effect a measurable response and/ or transaction at any location.

Direct Marketing thus includes any activity whereby firms reach the customer directly as an individual, who responds to them directly. It differs from conventional marketing in the sense that it talks directly to the prospect on a one- to-one basis without involving any intermediary. Direct Marketing programs are usually designed to achieve a measurable result in a relatively short duration of time. These differ from other promotional activities, though they may use the same media or sometimes the same techniques, such as coupons and samples.

In the absence of conceptual clarity, direct marketing is often defined very narrowly as a synonym of some simple specific function such as direct selling, mail-order selling or direct distribution. In fact, it is much more than all these. A complete system of integrated functions aimed at satisfying customer needs more effectively, it is by no means a short-term quick buck affair.

In conventional marketing, firms wait for the customer to walk into their stores, whereas in direct mode firms prefer to go out ad get the customer before he steps out of his home. It is a very focused activity that follows a firm to concentrate on a chosen segment of customers and interacts with them more effectively through different media. Being a more precise and goal-oriented activity it is more suitable for firms operating in specific niche markets.

According to the number one direct-selling firm in the world, Amway Corporation of the USA (estimated sales for 1995US$6.3billion), Direct selling moves products from the manufacturer/supplier to the seller and consumer without intermediaries. It differs from direct marketing in the sense that direct marketing companies depend more on mailing, catalogue sales, direct response and coupon sales, telephone and telemarketing and the like; and now they are also selling via computer networks such as the Internet. In contrast, direct selling is always performed through the salesperson.(As quoted at the CII-Amway Seminar1996).

In direct marketing goods move from

Manufacturer

ConsumerIn direct selling goods move from

Manufacturer

Distributor Consumer

Some newer forms of direct selling such as multiplayer marketing (MLM) may involve different layers of distributors and salespersons selling to the customers directly. Amways definition notwithstanding, direct selling as a concept is nothing more than a mode of direct distribution.

The early practitioners of direct marketing in India include Readers Digest magazine, Bullworker exerciser, and some regional language publications that used mail coupons to increase circulation. Of late, catalogue-shopping firms such as Burlingtons have also made forays into the Indian market, but achieved only limited success. However, in the late1980s, it was the success of Eureka Forbes vacuum cleaners and Real Value Appliances Cease Fire brand of fire extinguishers (will you call it direct marketing or direct selling?) that signaled the dawn of direct marketing in India.

At the professional level, the credit of pioneering direct marketing in India goes to the media person Ram Nathan Sridhar who founded O&M Direct in 1987, exclusively to handle and promote direct-marketing activities in a professional manner. Since then, he has been selling the idea of direct marketing to savvy marketers with missionary zeal and spirit.

Today, all major advertising agencies in the country such as Hindustan Thompson Associates (HTA), Lintas, Mudra, Trikaya Grey, Response, Contract and many others have set up separate divisions to cope with the growing demand for direct marketing. Presently, direct marketing accounts for only about 14 percent of the Rs 45,000 million Indian ad spend, but going by the current trend of 35 percent annual increment in expenditure on direct marketing, it is going to be a big business in the next couple of years.

According to the official definition of the Direct Marketing Association (DMA), direct marketing is an "interactive system of marketing which uses one or more advertising media to affect a measurable response and/or transaction at any location." While there are many other possible definitions, the DMA captures the four basic concepts that set direct marketing apart from traditional marketing.

The notion of interactivity, or one-to-one communication between the marketer and the prospect or customer, is one factor that distinguishes direct marketing keting from general advertising and other types of marketing. Direct marketing makes an offer and asks for a response. By developing a history of offers and responses, direct marketers acquire knowledge of their prospects and customers, resulting in more effective targeting.

Measurability also sets direct marketing apart from general advertising and other forms of marketing. Direct marketers can measure the response to any offer. Measurability allows direct marketers to test a variety of lists, offers, mediavirtually any aspect of a campaignin order to allocate marketing resources to the most effective combination of elements.

Direct marketing uses a variety of media, including mail, magazine ads, newspaper ads, television and radio spots, infomercials (also television but longer format), free standing inserts (FSIs), and card decks. This flexibility allows direct marketing to provide interactivity and measurability and still take advantage of new technologies. By being adaptable to virtually any media, direct marketing will lead marketers into the twenty-first century as interactive television, the information superhighway, and other new technologies become a reality.

Finally, in direct marketing, the transaction may take place at any location and is not limited to retail stores or fixed places of business. The transaction may take place in the consumer's home or office via mail, over the phone, on the Internet, or through interactive television. It may also occur away from the home or office, as at a kiosk, for example.

It is necessary to distinguish direct marketing from direct mail or mail-order businesses, although direct marketing encompasses those two concepts. Direct mail is an advertising medium, one of several media that direct marketers utilize. Mail order is a distribution channel, as are retail outlets and personal selling.

The Direct Marketing Association (DMA) defines direct marketing as follows:

Direct marketing is an interactive marketing system that uses one or more advertising media to affect a measurable response and /or transaction at any location.This definition emphasizes a measurable response; typically a customer order. Thus direct marketing is sometimes called direct-order marketing.

Today, many direct marketers see direct marketing as playing a broader role, that of building a long-term relationship with the customer (direct relationship marketing). Direct marketers occasionally send birthday cards, information materials, or small premiums to select members in their customer base. Airlines, hotels, and other businesses build strong customer relationships through frequency award programs and club programs.

According to the direct marketing association of the U.S.A (as quoted in Kotler 1991 ), Direct Marketing is a international system of marketing which uses one or more advertising media to effect a measurable response and/ or transaction at any location.1.2 WHAT IS DIRECT MARKETING

Direct Marketing is an interactive mode of marketing through which the marketer reaches out to his target market at any location. . An analysis of this definition brings out three key elements, namely:

1) It is an interactive system in the sense that there is a two-way communication between the marketer and his/her target market; the response or non response of the customer completes the communication loop in the direct marketing programme. For example, when the customer fills in the response coupon in an advertisement or a catalogue and mails it, he/she communicates to the marketer and hence completes the communication loop.

2) Another element is measurability of response. As mentioned above the number of coupons received indicates the response rate to the marketers communication.

3) Direct marketing activities are not location specific; it is not necessary for the customer to physically interact with the marketer, he/she can establish a contact through mail, phone, fax, or the internet.

As mentioned above, direct marketing is an efficient way to promote and sell products and services in a highly competitive market. The goal of direct marketing is always a response

from the customer. Direct marketing has also been known by other terms like direct selling, mail order selling or catalogue selling.

Today direct marketing uses all these tools and is based on a customer database. In fact the key to successful direct marketing is the development of this database.

Direct marketing is just what it sounds like - directly reaching a market (customers and potential customers) on a personal (phone calls, private mailings) basis, or mass-media basis (infomercials, magazine ads, etc.).

Direct marketing is often distinguished by aggressive tactics that attempt to reach new customers usually by means of unsolicited direct communications. But it can also reach out to existing or past customers. A key factor in direct marketing is a "call to action." That is, direct marketing campaigns should offer an incentive or enticing message to get consumers to respond (act).Direct marketing involves the business attempting to locate, contact, offer, and make incentive-based information available to consumers.

Direct marketing occurs when the producer connects with the end user. The end user may be a consumer or a business.Direct marketing applies to product and service-oriented businesses, and to nonprofits organizations. In all situations, there is no intermediary involved. Direct marketing describes this interactive communication with the end user.Direct marketing is not synonymous with mass marketing. The most effective direct marketing takes place when there is a clear connection to reach the target market.

Organizations may use several ways to leverage direct marketing as they communicate with and deliver products to their customers. This may include using a direct sales force, catalogs, websites, email, direct mail, telemarketing, seminars, trade shows, and other one-to-one techniques to communicate and sell to their customers and clients.Some of these direct marketing methods have grown dramatically, especially with the growth of marketing over the Internet. There is evidence that other direct marketing approaches have diminished, such as reports that the response to direct mail is often below one percent compared to the five percent+ response rate numbers more commonly experienced in the past.

Any medium that you choose to use to communicate directly to your prospects is being employed in direct marketing. These 5 methods are examples of direct marketing that you can use to obtain prospects and increase sales for your business.1.3 MEANING OF DIRECT MARKETING

Direct Marketing is the interactive use of advertising media, to stimulate and (immediate) behaviour modification in such a way that this behaviour can be tracked, recorded, analyzed, and stored on a database for future retrieval and use. Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. The second characteristic is that it is focused on driving purchases that can be attributed to a specific call-to-action. This aspect of direct marketing involves an emphasis on trackable, measurable positive responses from consumers regardless of medium.

1.4 WHY DIRECT MARKETING?The growth of direct marketing in India can be attributed to environmental complexities and the concept of bargaining power. Customer life styles have changed especially in metros and large cities. Todays customer looks for convenience in shopping and getting the product or service delivered in the comfort of his/her house. Teleshoppings, home shopping channels, catalogue marketing and online shopping are some of the tools that enable companies to cater to this core customer value.

Globalization of markets and the internet direct marketing. Today a firm have further facilitated the growth of need not have operations in all its markets but can still cater to the world demand. Dell computers and Amazon are two leading examples of successful direct marketing around the world.

Today the cost of a retail shelf at outlets in major cities is prohibitive. Fragmentation of media and audiences also imply higher advertising budgets. With customer loyalty on the wane and the costs of marketing increasing, firms margins have come under pressure. Productivity of marketing resources is now as much of a concern as that of any other resource. Direct marketing helps

Direct marketing may not be for everyone. It can be very labour and time intensive. It can also be socially

Demanding and may not fit your product mix. Cash flow can be uncertain. However, there are several reasons to consider direct marketing:

Direct marketing allows you to set the price of products;

Products are sold closer to retail prices, capturing more of the food dollar or overall value;

Regular sales increase liquidity and regular cash flow;

Most products do not need to be sized or graded and can be sold in small quantities;

Customers give you feedback on your products and may generate ideas for new ones; and

Customers get to know you and may develop loyalties to your products and items.

Direct marketing is also a means of diversifying your markets by having more than one outlet for sales and helping

You to manage your farms overall market risk.

1.5 WHY GO FOR DIRECT MARKETING?Over the years direct marketing has gained unprecedented proportions. It has grown into a fully fledged sector and is a growing industry everywhere in the world. People everywhere are associated with direct marketing. Lots of people are working, either part-time or full-time and making much out of it. So why at all should we go for direct marketing? What are the merits? Let's examine: It provides an excellent opportunity to interact with people and widen our horizons, in term of social interactions.

It offers the most flexible of working schedules so that you can weave it all into your busy schedules.

It can be done on a part-time basis, thus giving you an extra-income. You can also choose it as a full-time thing and make the most out of it.

It gives you the opportunity to bring out the marketing professional in you and to hone your skills in the best possible manners.

It helps you set goals for yourself and set out to accomplish the same within a limited span of time.

It lets you be an owner and even have people working for you.

It helps you think of new, innovative ideas and bring out the strategist in you.

All this and much more are the benefits of Direct Marketing, which is perhaps destined to be the marketing mode of the future.1.6 HOW DIRECT MARKETING WORKS

Direct marketing, as practiced by professionally managed firms is a four-step process:

1. Identifying prospects

2. Establishing contact

3. Booking the order

4. Maintaining contacts to develop a mutually beneficial, long-term business relationship.

Identifying prospects and segmenting them into various categories based on certain specific criteria is critical to the success of direct marketing. This is done in different phases. In the first phase, a preliminary list of potential or may be customers is made through random mailing, house calls, or mass media advertisements using coupons or some other contact device. In marketing parlance it is termed cold listing.

This cold list is thoroughly scrutinized and attempts are made to identify those who are not likely to use the proposed product or service due to incompatibility of need, income, age, sex, occupation or any other reason. All such people who dont qualify as prospects are dropped from the list. The residual list is then known as the hot list. Firms may sometimes seek to gather additional information about those included in the initial list by contacting them on telephone or through other convenient media.

The next step is to draw a detailed profile of the prospect. This may include information on consumption habits, purchase behaviour, personality and lifestyle, social class, exposure to media; and demographic particulars such as age, income, education, profession, family size, domicile and complete postal address. Technically this step is known as profiling the respondent or response graphic.

The list is further split into separate clusters of identical groups, using some demographic, psycho graphic or behavioural parameters. This exercise is termed segmentation. Firms now adopt many innovative ways of clustering, using novel parameters such as travelling habits, food preferences, ownership of automobiles, possession of assets and durables, and taste for music and art.

Finally, each cluster is researched using some predetermined criteria, to identify the specific segment or segments to be targeted for marketing the product. This exercise is known as targeting. If the product is a high-value item such as jewellery, a computer or an expensive gadget, direct marketing goes into further details and makes an elaborate study of each individual included in the target segment. This is known as individualization. Now the firm may focus on the specific needs of the individual customer. Let us now see how it works in actual practice.

Having identified the customer and prepared a database of individual profiles, the next step is to call at the residence of individual prospects for live demonstration or to offer a free sample of the product. Since the individualistic approach ensures better chances of being heard, it is far less difficult to get an order for the product. In the afore-said example, the firm was successful not only in selling its gadget to a majority of the host-listed respondents, but in the future too, this database may be of immense help in identifying and targeting customers if it introduces some related product such as a blood sugar or body weight monitor, or a self testing kit for diabetic patients.

Finally, having been able to sell the product or service to a customer. it is essential to keep in touch with him/her through mail, telephone or any other means of communication, to retain him / her as a customer. To create a lasting relationship, firms must maintain regular contact and update their data according to the changing needs and tastes of the customers.

1.7 THE ROLE OF DIRECT MARKETINGIn the literature, direct marketing has been treated and identified in various ways. The dominant stream of authors of major marketing textbooks have treated direct marketing as a communication/promotion tool (Booth 1992, Mercer 1992, Anderson 1993, Kotler 1998), and as both a marketing channel and a form of promotion (Katzenstein and Sachs 1986, McCarthy and Perreault 1987, Stanton, Etzel, and Walker 1991, Evans and Berman 1992). Others have identified it as a marketing strategy (Rapp 1986), and as a marketing system (Jenkins 1984, Bauer and Miglautschs 1992).

Reasons to use and implement the direct marketing approach differ widely First, the field where direct marketing is applied is one factor that determines the role of direct marketing. For example, direct marketing could be used as a sole distribution channel in financial service firms. However, in retail businesses it may be best used as a promotional tool. Second, the stage which the organisation reaches in developing direct marketing affects the understanding of its role and use. Different marketers and firms will be at different stages in its development and use. Some are still sales-oriented users. Others reach a development stage where direct marketing is used as a communication tool that ensures and maintains a long-term customer relationship.

The third factor is the fact that certain elements of direct marketing are best used for certain roles. As explained in the previous chapters, direct mail is commonly used as advertising or as a promotional tool, while mail order, on the other hand, is commonly utilised as a distribution channel. Even though they are different in nature and use, they are both still called direct marketing.

To consolidate these views, an intensive review of the existing literature has been undertaken, out of which two significant functions are identified as the major purposes of implementing and using direct marketing from the supply side. These two functions are: enhancing promotional activities, and supporting distribution channels. These functions are naturally interrelated and they overlap. It is difficult to isolate them from each other. However, the purpose of such an artificial classification is to identify a base to which direct marketing can be related. Since the researchs concern is the use of direct marketing from the supply side, this chapter will discuss thoroughly the reasons for using direct marketing, and some of its roles and functions. It will first discuss how direct marketing is related to promotion and distribution by reviewing some of the available direct marketing literature. Secondly, it will discuss how direct marketing is used as a promotional tool. Next, direct marketing as a distribution channel will be reviewed thoroughly, as this is going to be the focus of this book.

1.8 DIRECT MARKETING MIX

The marketing mix in direct marketing mode, by and large, remains the same except for the communication programme and customer service, which have acquired new meaning. For example, if the marketer guarantees delivery of the product within a defined time frame, also promises to take it back in case it fails to live up to customer expectations and return his/her money, then the customer service executive cannot refuse a claim. This is opposed to general marketing where the marketing can put several disclaimers and may refuse the customer. In direct marketing, refusal to accept customer claim without any question may cost the marketer significant losses as he not only loses that customer but subsequent prospects as well. In general marketing, the loss can be contained through other elements of the marketing mix. In addition to marketing mix decisions, the direct marketer has to pay special attention to the following factors in decision making:

1) Communication Programme: This involves both creative and media decisions. The creative decisions centre around the copy platform, graphic design elements, mailers, stickers and so forth.

The media used by direct marketers are mailers, telephone, television and the internet. Direct response print and television advertising are particularly effective in generating response to the offer, especially if it is complex to understand. Also, the direct marketer today uses various outdoor, retail panels (Just Talk and BPL MOTS brands of prepaid Sims cards in Mumbai) and even stickers to retain the brand at the top of customers mind. These also serve the purpose of a reminder.

2) Customer Service:

Customer service is a key input in direct marketing. In a direct marketing, physical contact with the customer is low, and it is the quality of service that facilitates customer decision making. Service, therefore, is an investment and cannot be ignored. The customer service mix today involves speed and accuracy of order fulfilment, immediate customer complaint resolution, etc.

3) Timing and Sequencing:

This factor involves determination of whether the product or service is offered once, as a part of the campaign or continuously. This will obviously involve campaign decisions like whether to have bursts, pulsing or a continuous campaignCHAPTER NO. 22. RESEARCH METHODOLOGYIn order to achieve the research objectives, this thesis will employ a rigorous research methodology which will address five research principles: research philosophy, research method, research design, data collection, and data analysis. First, a positivist stance will be adopted as the research philosophy in this thesis. This research philosophy was adopted because of its suitability to address the research objectives. Similarly, a qualitative approach will be adopted to analyse the findings. This approach is appropriate where the research question is followed by How and What, as will be

Discussed in the research methodology chapter. Second, a case study method will be used to perform the conceptual framework evaluation. Third, the research design will provide the overall structure of the thesis, with clear guidelines and procedures on the tasks needed to complete the research aim and objectives. Fourth, the data collection will be done from three organisations operating in the retailing, telecommunications, and higher education sectors. The data collected will be used to evaluate the conceptual framework performance in an organisational context. Finally, analytical strategies of the

Case study method will be used to assess each case study individually and collectively. Specifically, the relying on theoretical propositions, using both qualitative and quantitative data, and examining rival explanations analytical strategies will be used to examine the findings of the three case studies.

2.1 MEANING OF RESEARCHResearch in common parlance refers to a search for knowledge. Once can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The Advanced Learners Dictionary of Current English lays down the meaning of research as a careful investigation or inquiry especially through search for new facts in any branch of knowledge. 1 Redman and Mary define research as a systematized effort to gain new knowledge. 2 Some people consider research as a movement, a movement from the known to the unknown. It is actually a voyage of discovery. We all possess the vital instinct of inquisitiveness for, when the unknown confronts us, we wonder and our inquisitiveness makes us probe and attain full and fuller understanding of the unknown. This inquisitiveness is the mother of all knowledge and the method, which man employs for obtaining the knowledge of whatever the unknown, can be termed as research.

Research is an academic activity and as such the term should be used in a technical sense. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organising and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. D. Slesinger and M. Stephenson in the Encyclopaedia of Social Sciences define research as the manipulation of things, concepts or symbols for the purpose of generalising to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art. 3 Research is, thus, an original contribution to the existing stock of knowledge making for its advancement. It is the persuit of truth with the help of study, observation, comparison and experiment. In short, the search for knowledge through objective and systematic method of finding solution to a problem is research. The systematic approach concerning generalization and the formulation of a theory is also research. As such the term research refers to the systematic method

1 The Advanced Learners Dictionary of Current English, Oxford, 1952, p. 1069.

2 L.V. Redman and A.V.H. Mory, The Romance of Research, 1923, p.10.

3 The Encyclopaedia of Social Sciences, Vol. IX, MacMillan, 1930.

Consisting of enunciating the problem, formulating a hypothesis, collecting the facts or data, analysing the facts and reaching certain conclusions either in the form of solutions(s) towards the concerned problem or in certain generalisations for some theoretical formulation.

2.2 OBJECTIVES OF RESEARCH

The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own specific purpose, we may think of research objectives as falling into a number of following broad groupings:

1.To gain familiarity with a phenomenon or to achieve new insights into it (studies with this object in view are termed as exploratory or formulative research studies);

2.To portray accurately the characteristics of a particular individual, situation or a group (studies with this object in view are known as descriptive research studies);

3.To determine the frequency with which something occurs or with which it is associated with something else (studies with this object in view are known as diagnostic research studies);

4.To test a hypothesis of a causal relationship between variables (such studies are known as hypothesis-testing research studies).

2.3 MOTIVATION IN RESEARCH

What makes people to undertake research? This is a question of fundamental importance. The possible motives for doing research may be either one or more of the following:

1.Desire to get a research degree along with its consequential benefits;

2.Desire to face the challenge in solving the unsolved problems, i.e., concern over practical problems initiates research;

3.Desire to get intellectual joy of doing some creative work;

4.Desire to be of service to society;

5.Desire to get respectability.

However, this is not an exhaustive list of factors motivating people to undertake research studies. Many more factors such as directives of government, employment conditions, curiosity about new things, desire to understand causal relationships, social thinking and awakening, and the like may as well motivate (or at times compel) people to perform research operations.

2.4 TYPES OF RESEARCH

The basic types of research are as follows:

(I)Descriptive vs. Analytical: Descriptive research includes surveys and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. In social science and business research we quite often use

The term Ex post facto research for descriptive research studies. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening. Most ex post facto research projects are used for descriptive studies in which the researcher seeks to measure such items as, for example, frequency of shopping, preferences of people, or similar data. Ex post facto studies also include attempts by researchers to discover causes even when they cannot control the variables. The methods of research utilized in descriptive research are survey methods of all kinds, including comparative and correlation methods. In analytical research, on the other hand, the researcher has to use facts or information already available, and analyze these to make a critical evaluation of the material.

(Ii)Applied vs. Fundamental: Research can either be applied (or action) research or fundamental (to basic or pure) research. Applied research aims at finding a solution for an immediate problem facing a society or an industrial/business organisation, whereas fundamental research is mainly concerned with generalisations and with the formulation of a theory.

Gathering knowledge for knowledges sake is termed pure or basic research. 4 Research concerning some natural phenomenon or relating to pure mathematics are examples of fundamental research. Similarly, research studies, concerning human behaviour carried on with a view to make generalisations about human behaviour, are also examples of fundamental research, but research aimed at certain conclusions (say, a solution) facing a concrete social or business problem is an example of applied research. Research to identify social, economic or political trends that may affect a particular institution or the copy research (research to find out whether certain communications will be read and understood) or the marketing research or evaluation research are examples of applied research. Thus, the central aim of applied research is to discover a solution for some pressing practical problem, whereas basic research is directed towards finding information that has a broad base of applications and thus, adds to the already existing organized body of scientific knowledge.

(iii)Quantitative vs. Qualitative: Quantitative research is based on the measurement of quantity or amount. It is applicable to phenomena that can be expressed in terms of quantity. Qualitative research, on the other hand, is concerned with qualitative phenomenon, i.e., phenomena relating to or involving quality or kind. For instance, when we are interested in investigating the reasons for human behaviour (i.e., why people think or do certain things), we quite often talk of Motivation Research, an important type of qualitative research. This type of research aims at discovering the underlying motives and desires, using in depth interviews for the purpose. Other techniques of such research are word association tests, sentence completion tests, story completion tests and similar other projective techniques. Attitude or opinion research i.e., research designed to find out how people feel or what they think about a particular subject or institution is also qualitative research. Qualitative research is especially important in the behavioural sciences where the aim is to discover the underlying motives of human behaviour. Through such research we can analyse the various factors which motivate people to behave in a particular manner or which make people like or dislike a particular thing. It may be stated, however, that to apply qualitative research in practice is relatively a difficult job and therefore, while doing such research, one should seek guidance from experimental psychologists.

(iv)Conceptual vs. Empirical: Conceptual research is that related to some abstract idea(s) or theory. It is generally used by philosophers and thinkers to develop new concepts or to reinterpret existing ones. On the other hand, empirical research relies on experience or observation alone, often without due regard for system and theory. It is data-based research, coming up with conclusions which are capable of being verified by observation or experiment. We can also call it as experimental type of research. In such a research it is necessary to get at facts firsthand, at their source, and actively to go about doing certain things to stimulate the production of desired information. In such a research, the researcher must first provide himself with a working hypothesis or guess as to the probable results. He then works to get enough facts (data) to prove or disprove his hypothesis. He then sets up experimental designs which he thinks will manipulate the persons or the materials concerned so as to bring forth the desired information. Such research is thus characterised by the experimenters control over the variables under study and his deliberate manipulation of one of them to study its effects. Empirical research is appropriate when proof is sought that certain variables affect other variables in some way. Evidence gathered through experiments or empirical studies is today considered to be the most powerful support possible for a given hypothesis.

(v)Some Other Types of Research: All other types of research are variations of one or more of the above stated approaches, based on either the purpose of research, or the time required to accomplish research, on the environment in which research is done, or on the basis of some other similar factor. Form the point of view of time, we can think of research either as one-time research or longitudinal research. In the former case the research is confined to a single time-period, whereas in the latter case the research is carried on over several time-periods. Research can be field-setting research or laboratory research or simulation research, depending upon the environment in which it is to be carried out. Research can as well be understood as clinical or diagnostic research. Such research follows case-study methods or in-depth approaches to reach the basic causal relations. Such studies usually go deep into the causes of things or events that interest us, using very small samples and very deep probing data gathering devices. The research may be exploratory or it may be formalized. The objective of exploratory research is the development of hypotheses rather than their testing, whereas formalized research studies are those with substantial structure and with specific hypotheses to be tested. Historical research is that which utilizes historical sources like documents, remains, etc. to study events or ideas of the past, including the philosophy of persons and groups at any remote point of time. Research can also be classified as conclusion-oriented and decision-oriented. While doing conclusion-oriented research, a researcher is free to pick up a problem, redesign the enquiry as he proceeds and is prepared to conceptualize as he wishes. Decision-oriented research is always for the need of a decision maker and the researcher in this case is not free to embark upon research according to his own inclination. Operations research is an example of decision oriented research since it is a scientific method of providing executive departments with a quantitative basis for decisions regarding operations under their control.

2.5 RESEARCH APPROACHESThe above description of the types of research brings to light the fact that there are two basic approaches to research, viz., quantitative approach and the qualitative approach. The former involves the generation of data in quantitative form which can be subjected to rigorous quantitative analysis in a formal and rigid fashion. This approach can be further sub-classified into inferential, experimental and simulation approaches to research. The purpose of inferential approach to research is to form a data base from which to infer characteristics or relationships of population. This usually means survey research where a sample of population is studied (questioned or observed) to determine its characteristics, and it is then inferred that the population has the same characteristics. Experimental approach is characterised by much greater control over the research environment and in this case some variables are manipulated to observe their effect on other variables. Simulation approach involves the construction of an artificial environment within which relevant information and data can be generated. This permits an observation of the dynamic behaviour of a system (or its sub-system) under controlled conditions. The term simulation in the context of business and social sciences applications refers to the operation of a numerical model that represents the structure of a dynamic process. Given the values of initial conditions, parameters and exogenous variables, a simulation is run to represent the behaviour of the process over time. 5 Simulation approach can also be useful in building models for understanding future conditions.

Qualitative approach to research is concerned with subjective assessment of attitudes, opinions and behaviour. Research in such a situation is a function of researchers insights and impressions. Such an approach to research generates results either in non-quantitative form or in the form which are not subjected to rigorous quantitative analysis. Generally, the techniques of focus group interviews, projective techniques and depth interviews are used. All these are explained at length in chapters that follow.

2.6 SIGNIFICANCE OF RESEARCHAll progress is born of inquiry. Doubt is often better than overconfidence, for it leads to inquiry, and inquiry leads to invention is a famous Hudson Maxim in context of which the significance of research can well be understood. Increased amounts of research make progress possible. Research inculcates scientific and inductive thinking and it promotes the development of logical habits of thinking and organisation.

The role of research in several fields of applied economics, whether related to business or to the economy as a whole, has greatly increased in modern times. The increasingly complex nature of business and government has focused attention on the use of research in solving operational problems. Research, as an aid to economic policy, has gained added importance, both for government and business.

Research provides the basis for nearly all government policies in our economic system. For instance, governments budgets rest in part on an analysis of the needs and desires of the people and on the availability of revenues to meet these needs. The cost of needs has to be equated to probable revenues and this is a field where research is most needed. Through research we can devise alternative policies and can as well examine the consequences of each of these alternatives.

Decision-making may not be a part of research, but research certainly facilitates the decisions of the policy maker. Government has also to chalk out programmes for dealing with all facets of the countrys existence and most of these will be related directly or indirectly to economic conditions. The plight of cultivators, the problems of big and small business and industry, working conditions, trade union activities, the problems of distribution, even the size and nature of defence services are matters requiring research. Thus, research is considered necessary with regard to the allocation of nations resources. Another area in government, where research is necessary, is collecting information on the economic and social structure of the nation. Such information indicates what is happening in the economy and what changes are taking place. Collecting such statistical information is by no means a routine task, but it involves a variety of research problems. These days nearly all governments maintain large staff of research technicians or experts to carry on this work. Thus, in the context of government, research as a tool to economic policy has three distinct phases of operation, viz., (I) investigation of economic structure through continual compilation of facts; (ii) diagnosis of events that are taking place and the analysis of the forces underlying them; and (iii) the prognosis, i.e., the prediction of future developments.

Research has its special significance in solving various operational and planning problems of business and industry. Operations research and market research, along with motivational research, are considered crucial and their results assist, in more than one way, in taking business decisions. Market research is the investigation of the structure and development of a market for the purpose of formulating efficient policies for purchasing, production and sales. Operations research refers to the application of mathematical, logical and analytical techniques to the solution of business problems of cost minimisation or of profit maximisation or what can be termed as optimisation problems. Motivational research of determining why people behave as they do is mainly concerned with market characteristics. In other words, it is concerned with the determination of motivations underlying the consumer (market) behaviour. All these are of great help to people in business and industry who are responsible for taking business decisions. Research with regard to demand and market factors has great utility in business. Given knowledge of future demand, it is generally not difficult for a firm, or for an industry to adjust its supply schedule within the limits of its projected capacity. Market analysis has become an integral tool of business policy these days. Business budgeting, which ultimately results in a projected profit and loss account, is based mainly on sales estimates which in turn depend on business research. Once sales forecasting is done, efficient production and investment programmes can be set up around which are grouped the purchasing and financing plans. Research, thus, replaces intuitive business decisions by more logical and scientific decisions.

Research is equally important for social scientists in studying social relationships and in seeking answers to various social problems. It provides the intellectual satisfaction of knowing a few things just for the sake of knowledge and also has practical utility for the social scientist to know for the sake of being able to do something better or in a more efficient manner. Research in social sciences is concerned both with knowledge for its own sake and with knowledge for what it can contribute to practical concerns. This double emphasis is perhaps especially appropriate in the case of social science. On the one hand, its responsibility as a science is to develop a body of principles that make possible the understanding and prediction of the whole range of human interactions. On the other hand, because of its social orientation, it is increasingly being looked to for practical guidance in solving immediate problems of human relations. 6

6 Marie Jahoda, Morton Deutsch and Stuart W. Cook, Research Methods in Social Relations, p. 4.

In addition to what has been stated above, the significance of research can also be understood keeping in view the following points:

(a)To those students who are to write a masters or Ph.D. thesis, research may mean a careerism or a way to attain a high position in the social structure;

(b)To professionals in research methodology, research may mean a source of livelihood;

(c)To philosophers and thinkers, research may mean the outlet for new ideas and insights;

(d)To literary men and women, research may mean the development of new styles and creative work;

(e)To analysts and intellectuals, research may mean the generalisations of new theories.

Thus, research is the fountain of knowledge for the sake of knowledge and an important source of providing guidelines for solving different business, governmental and social problems. It is a sort of formal training which enables one to understand the new developments in ones field in a better way.

2.7 RESEARCH METHODS VERSUS METHODOLOGYIt seems appropriate at this juncture to explain the difference between research methods and research methodology. Research methods may be understood as all those methods/techniques that are used for conduction of research. Research methods or techniques*, thus, refer to the methods the researchers

*At times, a distinction is also made between research techniques and research methods. Research techniques refer to the behaviour and instruments we use in performing research operations such as making observations, recording data, techniques of processing data and the like. Research methods refer to the behaviour and instruments used in selecting and constructing research technique. For instance, the difference between methods and techniques of data collection can better be understood from the details given in the following chartTypeMethodsTechniques

library researchanalysis of historical recordsRecording of notes, content analysis, tape and film listening and analysis

analysis of documentsStatistical compilations and manipulations, reference and abstract guides, contents analysis.

field researchNon-participant direct observationObservational behavioural scales, use of score cards, etc.

Participant observationInteractional recording, possible use of tape recorders, photo graphic techniques.

Mass observationRecording mass behaviour, interview using independent observers in public places.

Mail questionnaireIdentification of social and economic background of respondents.

OpinionativeUse of attitude scales, projective techniques, use of sociometric scales.

Personal interviewInterviewer uses a detailed schedule with open and closed questions.

Focused interviewInterviewer focuses attention upon a given experience and its effects.

Group interviewSmall groups of respondents are interviewed simultaneously.

Telephone surveyUsed as a survey technique for information and for discerning opinion; may also be used as a follow up of questionnaire.

Case study and life historyCross sectional collection of data for intensive analysis, longitudinal collection of data of intensive character.

laboratory researchSmall group study of random behaviour, play and role analysisUse of audio-visual recording devices, use of observers, etc.

TABLE NO: 2.1 RESEARCH METHOD AND TECHNIQUESFrom what has been stated above, we can say that methods are more general. It is the methods that generate techniques. However, in practice, the two terms are taken as interchangeable and when we talk of research methods we do, by implication, include research techniques within their compass.

Use in performing research operations. In other words, all those methods which are used by the researcher during the course of studying his research problem are termed as research methods. Since the object of research, particularly the applied research, it to arrive at a solution for a given problem, the available data and the unknown aspects of the problem have to be related to each other to make a solution possible. Keeping this in view, research methods can be put into the following three groups:

1.In the first group we include those methods which are concerned with the collection of data. These methods will be used where the data already available are not sufficient to arrive at the required solution;

2.The second group consists of those statistical techniques which are used for establishing relationships between the data and the unknowns;

3.The third group consists of those methods which are used to evaluate the accuracy of the results obtained.

Research methods falling in the above stated last two groups are generally taken as the analytical tools of research.

Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology. Researchers not only need to know how to develop certain indices or tests, how to calculate the mean, the mode, the median or the standard deviation or chi-square, how to apply particular research techniques, but they also need to know which of these methods or techniques, are relevant and which are not, and what would they mean and indicate and why. Researchers also need to understand the assumptions underlying various techniques and they need to know the criteria by which they can decide that certain techniques and procedures will be applicable to certain problems and others will not. All this means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem. For example, an architect, who designs a building, has to consciously evaluate the basis of his decisions, i.e., he has to evaluate why and on what basis he selects particular size, number and location of doors, windows and ventilators, uses particular materials and not others and the like. Similarly, in research the scientist has to expose the research decisions to evaluation before they are implemented. He has to specify very clearly and precisely what decisions he selects and why he selects them so that they can be evaluated by others also.

From what has been stated above, we can say that research methodology has many dimensions and research methods do constitute a part of the research methodology. The scope of research methodology is wider than that of research methods. Thus, when we talk of research methodology we not only talk of the research methods but also consider the logic behind the methods we use in the context of our research study and explain why we are using a particular method or technique and why we are not using others so that research results are capable of being evaluated either by the researcher himself or by others. Why a research study has been undertaken, how the research problem has been defined, in what way and why the hypothesis has been formulated, what data have been collected and what particular method has been adopted, why particular technique of analysing data has been used and a host of similar other questions are usually answered when we talk of research methodology concerning a research problem or study.

2.8 RESEARCH AND SCIENTIFIC METHODFor a clear perception of the term research, one should know the meaning of scientific method. The two terms, research and scientific method, are closely related. Research, as we have already stated, can be termed as an inquiry into the nature of, the reasons for, and the consequences of any particular set of circumstances, whether these circumstances are experimentally controlled or recorded just as they occur. Further, research implies the researcher is interested in more than particular results; he is interested in the repeatability of the results and in their extension to more complicated and general situations. 7 On the other hand, the philosophy common to all research methods and techniques, although they may vary considerably from one science to another, is usually given the name of scientific method. In this context, Karl Pearson writes, The scientific method is one and same in the branches (of science) and that method is the method of all logically trained minds the unity of all sciences consists alone in its methods, not its material; the man who classifies facts of any kind whatever, who sees their mutual relation and describes their sequences, is applying the Scientific Method and is a man of science. 8 Scientific method is the pursuit of truth as determined by logical considerations. The ideal of science is to achieve a systematic interrelation of facts. Scientific method attempts to achieve this ideal by experimentation, observation, logical arguments from accepted postulates and a combination of these three in varying proportions. 9 In scientific method, logic aids in formulating propositions explicitly and accurately so that their possible alternatives become clear. Further, logic develops the consequences of such alternatives, and when these are compared with observable phenomena, it becomes possible for the researcher or the scientist to state which alternative is most in harmony with the observed facts. All this is done through experimentation and survey investigations which constitute the integral parts of scientific method.

Experimentation is done to test hypotheses and to discover new relationships. If any, among variables. But the conclusions drawn on the basis of experimental data are generally criticized for either faulty assumptions, poorly designed experiments, badly executed experiments or faulty interpretations. As such the researcher must pay all possible attention while developing the experimental design and must state only probable inferences. The purpose of survey investigations may also be to provide scientifically gathered information to work as a basis for the researchers for their conclusions.

The scientific method is, thus, based on certain basic postulates which can be stated as under:

1.It relies on empirical evidence;

2.It utilizes relevant concepts;

3.It is committed to only objective considerations;

4.It presupposes ethical neutrality, i.e., it aims at nothing but making only adequate and correct statements about population objects;

5.It results into probabilistic predictions;

6.Its methodology is made known to all concerned for critical scrutiny are for use in testing the conclusions through replication;

7.It aims at formulating most general axioms or what can be termed as scientific theories.

7Bernard Ostle and Richard W. Mensing, Statistics in Research, p. 2

8Karl Pearson, the Grammar of Science, Part I, pp. 1012.

9Ostle and Mensing: op. cit., p. 2.

Thus, the scientific method encourages a rigorous, impersonal mode of procedure dictated by the demands of logic and objective procedure. 10 Accordingly, scientific method implies an objective, logical and systematic method, i.e., a method free from personal bias or prejudice, a method to ascertain demonstrable qualities of a phenomenon capable of being verified, a method wherein the researcher is guided by the rules of logical reasoning, a method wherein the investigation proceeds in an orderly manner and a method that implies internal consistency.

2.9 IMPORTANCE OF KNOWING HOW RESEARCH IS DONEThe study of research methodology gives the student the necessary training in gathering material and arranging or card-indexing them, participation in the field work when required, and also training in techniques for the collection of data appropriate to particular problems, in the use of statistics, questionnaires and controlled experimentation and in recording evidence, sorting it out and interpreting it. In fact, importance of knowing the methodology of research or how research is done stems from the following considerations:

(I)For one who is preparing himself for a career of carrying out research, the importance of knowing research methodology and research techniques is obvious since the same constitute the tools of his trade. The knowledge of methodology provides good training especially to the new research worker and enables him to do better research. It helps him to develop disciplined thinking or a bent of mind to observe the field objectively. Hence, those aspiring for careerism in research must develop the skill of using research techniques and must thoroughly understand the logic behind them.

(ii)Knowledge of how to do research will inculcate the ability to evaluate and use research results with reasonable confidence. In other words, we can state that the knowledge of research methodology is helpful in various fields such as government or business administration, community development and social work where persons are increasingly called upon to evaluate and use research results for action.

(iii)When one knows how research is done, then one may have the satisfaction of acquiring a new intellectual tool which can become a way of looking at the world and of judging every day experience. Accordingly, it enables use to make intelligent decisions concerning problems facing us in practical life at different points of time. Thus, the knowledge of research methodology provides tools to take at things in life objectively.

(iv)In this scientific age, all of us are in many ways consumers of research results and we can use them intelligently provided we are able to judge the adequacy of the methods by which they have been obtained. The knowledge of methodology helps the consumer of research results to evaluate them and enables him to take rational decisions.

2.10 RESEARCH PROCESSBefore embarking on the details of research methodology and techniques, it seems appropriate to present a brief overview of the research process. Research process consists of series of actions or steps necessary to effectively carry out research and the desired sequencing of these steps. The chart shown in Figure 1.1 well illustrates a research process.

10 Carlos L. Lastrucci, the Scientific Approach: Basic Principles of the Scientific Method, p. 7.2.11 CRIATERIA OF GOOD RESEARCHWhatever may be the types of research works and studies, one thing that is important is that they all meet on the common ground of scientific method employed by them. One expects scientific research to satisfy the following criteria:1.The purpose of the research should be clearly defined and common concepts be used.

2.The research procedure used should be described in sufficient detail to permit another researcher to repeat the research for further advancement, keeping the continuity of what has already been attained.

3.The procedural design of the research should be carefully planned to yield results that are as objective as possible.

4.The researcher should report with complete frankness, flaws in procedural design and estimate their effects upon the findings.

5.The analysis of data should be sufficiently adequate to reveal its significance and the methods of analysis used should be appropriate. The validity and reliability of the data should be checked carefully.

6.Conclusions should be confined to those justified by the data of the research and limited to those for which the data provide an adequate basis.

7.Greater confidence in research is warranted if the researcher is experienced, has a good reputation in research and is a person of integrity.

In other words, we can state the qualities of a good research12 as under:

1.Good research is systematic: It means that research is structured with specified steps to be taken in a specified sequence in accordance with the well defined set of rules. Systematic characteristic of the research does not rule out creative thinking but it certainly does reject the use of guessing and intuition in arriving at conclusions.

2.Good research is logical: This implies that research is guided by the rules of logical reasoning and the logical process of induction and deduction are of great value in carrying out research. Induction is the process of reasoning from a part to the whole whereas deduction is the process of reasoning from some premise to a conclusion which follows from that very premise. In fact, logical reasoning makes research more meaningful in the context of decision making.

11James Harold Fox, Criteria of Good Research, Phi Delta Kappan, Vol. 39 (March, 1958), pp. 28586.

12See, Danny N. Bellenger and Barnett, A. Greenberg, Marketing ResearchA Management Information Approach , p. 107108. 3.Good research is empirical: It implies that research is related basically to one or more aspects of a real situation and deals with concrete data that provides a basis for external validity to research results.

4.Good research is replicable: This characteristic allows research results to be verified by replicating the study and thereby building a sound basis for decisions.

2.12 Problems Encountered by Researchers in India

Researchers in India, particularly those engaged in empirical research, are facing several problems. Some of the important problems are as follows:

1.The lack of a scientific training in the methodology of research is a great impediment for researchers in our country. There is paucity of competent researchers. Many researchers take a leap in the dark without knowing research methods. Most of the work, which goes in the name of research is not methodologically sound. Research to many researchers and even to their guides, is mostly a scissor and paste job without any insight shed on the collated materials. The consequence is obvious, viz., the research results, quite often, do not reflect the reality or realities. Thus, a systematic study of research methodology is an urgent necessity. Before undertaking research projects, researchers should be well equipped with all the methodological aspects. As such, efforts should be made to provide short-duration intensive courses for meeting this requirement.

2.There is insufficient interaction between the university research departments on one side and business establishments, government departments and research institutions on the other side. A great deal of primary data of non-confidential nature remain untouched/untreated by the researchers for want of proper contacts. Efforts should be made to develop satisfactory liaison among all concerned for better and realistic researches. There is need for developing some mechanisms of a universityindustry interaction programme so that academics can get ideas from practitioners on what needs to be researched and practitioners can apply the research done by the academics.

3.Most of the business units in our country do not have the confidence that the material supplied by them to researchers will not be misused and as such they are often reluctant in supplying the needed information to researchers. The concept of secrecy seems to be sacrosanct to business organisations in the country so much so that it proves an impermeable barrier to researchers. Thus, there is the need for generating the confidence that the information/data obtained from a business unit will not be misused.

4.Research studies overlapping one another are undertaken quite often for want of adequate information. This results in duplication and fritters away resources. This problem can be solved by proper compilation and revision, at regular intervals, of a list of subjects on which and the places where the research is going on. Due attention should be given toward identification of research problems in various disciplines of applied science which are of immediate concern to the industries.

5.There does not exist a code of conduct for researchers and inter-university and inter-departmental rivalries are also quite common. Hence, there is need for developing a code of conduct for researchers which, if adhered sincerely, can win over this problem

Many researchers in our country also face the difficulty of adequate and timely secretarial assistance, including computerial assistance. This causes unnecessary delays in the completion of research studies. All possible efforts be made in this direction so that efficient secretarial assistance is made available to researchers and that too well in time. University Grants Commission must play a dynamic role in solving this difficulty.

6.Library management and functioning is not satisfactory at many places and much of the time and energy of researchers are spent in tracing out the books, journals, reports, etc., rather than in tracing out relevant material from them.

7.There is also the problem that many of our libraries are not able to get copies of old and new Acts/Rules, reports and other government publications in time. This problem is felt more in libraries which are away in places from Delhi and/or the state capitals. Thus, efforts should be made for the regular and speedy supply of all governmental publications to reach our libraries.

8.There is also the difficulty of timely availability of published data from various government and other agencies doing this job in our country. Researcher also faces the problem on account of the fact that the published data vary quite significantly because of differences in coverage by the concerning agencies.

9.There may, at times, take place the problem of conceptualization and also problems relating to the process of data collection and related things.CHAPTER NO. 33.LITERATURE REVIEW3.1 FUNDAMENTALS

It is particularly critical to the analysis conducted in this document to appreciate that privacy is not a simple concept, but rather a compound of several interests. Of especial relevance to this discussion are the privacy of personal behaviour, and the privacy of personal data.The following materials are relevant:

an introduction and definition of terms;

the mainstream principles that underlie privacy protections, the OECD Guidelines; and

an outline of a recent survey of public attitudes to privacy.A separate paper examines privacy as a strategic consideration for corporations ( Clarke 1996d). This includes the following segments:

an examination of public opinion;

a summary of existing laws;

harbingers of change;

alternative approaches to corporate strategy; and

the elements of a privacy strategy.

A minimalist regulatory environment has applied to the Australian private sector until now, but is rapidly coming to an end.

3.2 ISSUES

(a) Privacy of Personal BehaviourPeople's interest in enjoying 'private space' is abused by the intrusions that are inherent in most direct marketing techniques. A further problem is the manipulation of personal behaviour that is the primary purpose of marketing databases and consumer profiles. A related matter that disturbs some consumers is the presumption by marketers that computer-generated communications based on database content represents a relationship with a person.(b) Privacy of Personal DataPeople have a strong interest in controlling the use of data that relates to themselves. Conventional direct marketing practice abuses many aspects of privacy protection principles. On the list of most serious public concerns, financial data appears very high (e.g. PC 1995, Clarke 1997a).The abuse of personal data is being extended by the endeavour on the part of marketers to convert hitherto anonymous transactions into identified ones, through such means as so-called 'loyalty' schemes. This matter is addressed in Clarke ( 1995d, 1996e, and 1996i).Public concern is evidenced through the periodic media coverage of such matters as abuse of data collections such as the telephone white pages, council records of dog registrations and building approvals, and State government land titles and marriage registration data. The question of so-called 'public registers' is examined in Clarke ( 1997g).(c) Consumer ProfilingConsumer profiling involves the accumulation, acquisition and cross-referencing of data about individuals, possibly combined with geo-demographic data; followed by its use for various micro-marketing purposes. Its privacy-invasiveness is examined in Clarke ( 1993e and 1997f).(d) Consumer Interests More GenerallyPrivacy is one of a number of contentious issues that arise in the relationship between marketers and consumers, in such areas as conditions of contract, and the recourse and sanctions available in the event of malperformance by the marketer.

Although considerable progress has been made in relation to consumer rights, the regulatory arrangements are not technology-neutral, and much of it evaporates in the electronic context. For an examination of consumer issues in marketing through electronic channels, see Clarke ( 1996h, 1997h and 1997i).3.2.1 OVERVIEWThis chapter will review the existing and published literature on direct marketing. It begins with the description of the origin of direct marketing. Then the definitions of direct marketing provided by various authors will be reviewed. Further, the factors contributing to the growth of direct marketing will be appreciated. Furthermore, the various forms of direct marketing and its cornerstones will be described. The benefits and limitations of direct marketing will also be analysed. The chapter will then discuss the implications of information in direct marketing. Finally, the chapter will report on the ethical considerations and social responsibility in direct marketing and the legislations and regulations that regulate the direct marketing activities. 3.2.2 ORIGINThe term direct marketing was first used in the year 1960 by Lester Wunderman (OMalley et al., 1999; p4). However, the origin of direct marketing dates back to the year 1498 when a book catalogue was published by Aldus Manutius in Venice. In England, the direct marketing began in the year 1667, when William Lucas published a gardening catalogue. (Evans et al., 2004; p1) Direct marketing has evolved in the UK from mail order. In the beginning of 20th century, the UK mail order began to develop. One of the mail order catalogues of that period is the Freemans catalogue which was launched in 1905 (McCorkell, 1997). After the war, the mail order grew at a fast and steady pace. The share of direct channels in the retail sales grew steadily between 1950 and 1970 (McGoldrick, 1990; p 60). In the mid 1980s, mail order lost some of its share because of the competition from the larger high street stores who also started providing credit facilities (Stewart, 1992). In the late 1980s, the mail order again gained popularity. This was fuelled by retailers such as Marks & Spencer and Next, who helped the direct marketing sector grow by improving the convenience of catalogue shopping by improving the product range and credit terms. (OMalley et al., 1999; pp 5-6) Since then, direct marketing has grown tremendously such that it has been regarded as the fastest growing sector of marketing communication.3.2.3 DEFINITIONS Defining direct marketing is a difficult task as it is very much under debate that what exactly constitutes direct marketing. The reason for such definitional difficulties is direct marketing is neither a medium nor a channel of distribution (Evans et al., 1995; p16). The UK Direct Marketing Association has defined direct marketing as communications where direct contact is made, or invited, between a company and its existing and perspective customers, and results are measured to assess return on investment (Ng, 2005; p628) According to the American Direct Marketing Association (ADMA), Direct marketing is an interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location. This is the most comprehend definition that is offered by ADMA (Cited in Lindgren and Shrimp, 1996; p 520). Although this is the most accepted definition it has attracted criticism because it focuses attention primarily on using a particular type of advertising to effect a measurable response (Bauer and Miglautsch 1992). As a result a different definition has been offer by Bauer and Miglautsch (1992), Direct Marketing is a cybernetic marketing process which uses direct response advertising in prospecting, conversion and maintenance. This definition has been accepted by the UK Direct Marketing Association. (OMalley et al., 1999; p7)3.2.4 FACTORS CONTRIBUTING TO THE GROWTH OF DIRECT MARKETINGThere has been tremendous growth in the expenditure on direct marketing. In the UK, the total estimated expenditure for the year 2003 on direct marketing was 13.7 billion. This was 15 % more than the previous year (Ng, 2005; p629). There are a number of reasons for the growth of direct marketing in usage. Following are the major factors that have contributed to the growth of direct marketing: i. Market Fragmentation

According to Smith (1993), the fragmentation of consumer markets is an important factor that has led to growth of direct marketing. Market fragmentation has decreased the application of traditional mass marketing channels. Whereas direct marketing channels offer better capacity to target distinct consumer groups in market segments, and therefore more organisations are now using direct marketing techniques. (Cited in Jobber and Lancaster, 2006; p328)ii. Changing demographics and lifestyles

There have been significant changes in the demographics and lifestyles of people. As a result, the compositions of the households have also changed. Now-a-days, more women are working; there are more single parent families, etc. All these changes have left less time with the consumers, and therefore they are more attracted towards the convenience of shopping online, by phone, or by mail. This has led to growth of direct marketing. (Brassington, and Pettitt, 2000; p732)iii. Declining effectiveness of traditional media

Nowadays, there is more intense competition between organisations for consumers time and attention. The amount of advertising on T.V, radio, press and other forms of media has increased tremendously. This has led to a problem of clutter where advertising is highly unfocused and untargeted. Also the costs of these traditional marketing channels have increased considerably. All these factors have reduced the effectiveness of traditional media. (Evans et al., 1995; p17)iv. Rise of the database

There have been significant decreases in the cost of manipulating and storing information in the recent years. Today, more firms can develop and manage marketing database. The costs of the hardware have also decreased and the data processing capabilities have improved. Therefore it is now easier to hold vast amount of customer information and update it on time (Roberts and Berger, 1989). This has contributed to the growth of direct marketing. v. Sophisticated analytical techniques

The developments in the sophisticated analytical techniques have further boosted the growth of direct marketing. This is because these analytical techniques enhance the targeting of consumers as it helps to analyse the information about the consumers. These analytical techniques along with the database technology have contributed to the growth of direct marketing. (OMalley et al., 1999; p18)vi. Impact of new communications technology

The new communications technology has paved the way for the growth of direct marketing. It is now possible to handle hundreds of customers at a time, thus reducing the chances of losing of customers. For instance, by using automated systems, it is possible to handle hundreds of calls of the potential customers simultaneously. Also the costs of communication technology have decreased considerable, making it a cost effective option for firms (Brassington, and Pettitt, 2000; pp.733-4).vii. Increased customer confidence

Direct marketing helps the businesses to build trust and confidence within an ongoing relationship with an individual customer. This makes the customers more receptive and loyal to the company. Such benefits have led more and more companies use direct marketing strategies and thus the growth of direct marketing (Brassington, and Pettitt, 2000; pp.733-4).3.2.5 FOUR COMERSTONES OF DIRECT MARKETINGAccording to Holder (1998), (cited in Sargeant and West, 2001) there are four cornerstones of direct marketing. They are,

a.Continuity

b.Interaction

c.Targeting

d.Control.

Continuity: Continuity is an important feature of direct marketing. In direct marketing, the aim is to utilise the customer information to establish a continuous relationship with the customers. That is, the direct marketing aims at the lifetime value that can be achieved from the relationship with the customers.

Interaction: Another important feature of direct marketing is the concept of interaction. Direct marketing offers opportunities to firms to engage with the customers and interact with them.

Targeting: Direct marketing also has a better ability to target customers. The availability of customer information databases such as modern geodemographic and lifestyle lists improves the ability of direct marketing to target customers with relevant messages and relevant marketing offers.

Control: Lastly, direct marketing is characterized by control. It means that direct marketing campaigns can be pre-tested in order to measure the effectiveness of the campaigns on the target group. For instance, three or four types of mailings may be developed and pre-tested on a sample of target audience. The response can be assessed and the most effective mailing can then be selected and used on the rest of the target audience. 3.2.6 FORMS OF DIRECT MARKETINGDirect marketing consists of all those methods that facilitate distribution of products, information and promotional benefits to target consumers through interactive communication in a way which allows response to be measured (Jobber and Lancaster, 2000; p168). It should be noted that these direct marketing techniques are often integrated with other marketing techniques such as sales promotion and public relations (Groucutt et al., 2004; p356). The major forms of direct marketing are the following: i. Direct mail marketing

ii. Catalogue marketing

iii. Telemarketing

iv. Direct response television marketing

v. Kiosk marketing

vi. New digital technologies

vii. Online marketing

viii. Face-to-face selling

i.Direct mail marketing: Direct mail is the material distributed to the home or business address to promote a product or service or to maintain an ongoing relationship through the postal service. It may be a simple letter, a comprehensive catalogue or a sample product. Direct mail is the one of most widely used direct marketing technique in the consumer and organisational markets (Brassington and Pettitt, 2000; p734). ii.Catalogue marketing: Catalogue marketing is the direct marketing through print, video or electronic catalogues that are made available to customers through postal service, through stores or through internet. Catalogue is an effective sales and relationship builder. A recent study conducted by Frank About Women, a marketing-to-women communication company found that a majority of women who receive catalogue are actively engaged with them. (Kotler et al., 2008; p486)iii.Telemarketing: Telemarketing is the use of telephone to create and exploit a direct relationship between the customer and the seller. The main benefits of telemarketing are that it provides for interaction, allows for an instant feedback, is flexible and offers an opportunity to over come objection. Other qualities include development of customer goodwill, is highly measurable and accountable i.e. the effectiveness can be easily analysed. The growth of telemarketing in the UK has been phenomenal over the past decade. This is because it is comparatively cheaper than personal selling but offers almost same benefits (Fill, 2002; p 675).iv.Direct response television marketing: Direct response television marketing consists of two forms. The first is Direct Response Television Advertising (DRTV) and the other is Home shopping channels. DRTV consists of those advertisements that are on air for 60 or 120 seconds which persuasively describes a product and gives customers a toll-free number or a website for ordering. The other form of Direct response television marketing is Home Shopping Channels. Home Shopping Channels are television programs or entire channels fully dedicated to selling goods and services. The most popular examples of Home Shopping Channels are Quality Value Channel (QVC), Home Shopping Network (HSN), and ShopNBC (Kotler et al., 2008; p488).

v.Kiosk marketing: A kiosk is a smalldvert stand alone unit that without management involvement performs a function, generally to provide information to its user. Kiosks have become an important tool of direct marketing. Kiosks are now used by businesses for displaying information about their products and along with ordering mechanism. Business marketers also use kiosks to collect sales leads and to provide information at the trade shows. (Anderson, 2006; p12)vi.New digital technologies: The rapid advances in the technology have enabled direct marketers to reach and interact with consumers almost everywhere and at anytime. Some of the new direct marketing technologies are mobile phone marketing, podcasts and vodcasts, and interactive TV. Mobile phone marketing includes things such as ring-tone giveaways, mobile games, and ad-supported content. Podcasts and vodcasts are audio and video files respectively that can be downloaded by internet to a mp3 player or any other handheld device. Interactive TV allows viewers to interact with programming and advertising using their remote controls (Kotler et al., 2008; p492).vii.Online marketing: Online marketing is the use of internet to market goods and services and to build customer relationship over the internet. The technological advances have given birth to a digital age and increasing use of internet has made online marketing the fastest growing sector of direct marketing. Direct marketers have used internet for the following marketing purposes: i. Research and planning tool ii. Distribution and customer service iii. Communication and promotion (Brassington and Pettitt, 2000; p761). viii.Door-to-door selling (personal selling): Personal selling is the personal presentation by the firms sales force for the purpose of making sales and building relationship. Although personal selling has been argued by several authors as being a part of direct marketing, Kotler et al. (2008) argues that personal selling is a important part of direct marketing as its facilitates distribution of products, information and promotional benefits to the target consumers through interactive communication. Also the door-to-door selling allows response to be measured, which restates that personal selling is an important form of direct marketing.3.2.7 BENEFITS OF DIRECT MARKETINGDirect marketing approaches by organisations offers a number of benefits to both organisations and consumers. Following are the benefits that both buyers and sellers can accrue from direct marketing: a. Benefits to sellersi. Accountable returns:

Direct marketing provides direct marketers with opportunities to link cause with effect. That is, the sellers can easily calculate the ROI (Return On Investment) of the campaigns. Moreover, the results from marketing activities carried out in various media can be accounted and compared so as to come up with an optimal