Magazine article Marketing

Targeting the Top 40

Magazine article Marketing

Targeting the Top 40

Article excerpt

This year's direct marketing league table reveals support services have been hard hit. But it's not all doom and gloom, says Ken Gofton

Of all the sectors put under the microscope in Marketing league tables, the direct marketing support services seem to have been particularly hard hit.

You need look no further than the largest supplier of all, the Colorgraphic group. This is a one-time general printer which developed the eminently sensible strategy of specialising in the growing direct marketing area, and diversified into mailing, DM software, and telemarketing.

Fine until the direct marketing graph finally faltered. As our figures show, Colorgraphic's turnover dropped 15% to 46.4m [pounds] last year. And a 2m [pounds] profit (4m [pounds] in 1989) became a 2.3m [pounds] loss. Sales were down, prices were down, and of course interest charges were up.

At last month's annual meeting, chief executive Nick Winks said losses had continued into 1992, but both the volume and profitability of new orders had improved.

Alan Bigg, chairman of Brann Direct Marketing, taking an industry view, says that it's the printing and mailing houses that have been most under pressure-price competition has been "very intense, due to the over-capacity that the industry built up during the boom years of the late 80s".

It's a view echoed by Mailcom, where the direct mail production divisional director John Lowden says: "Everyone has been affected by the recession, and as a result prices have been strangled by increasing competition".

Bigg says that at Brann he notices an increase in smaller mailing, up to 50,000, resulting from improved targeting. "As a comment on the marketplace," he adds, "we have also seen significantly increased demand in telephone and fulfilment/response handling due to the increased number of advertisements that now carry response devices. We are also seeing strong demand in the area of database development."

The figures for lifestyle database specialist ICD are for the year to February, 1991, but its performance has continued to strengthen. So it's not all gloom out there. Bristol-based Mail Marketing-a company which benefited greatly from the big share flotations of the 80s - has continued to expand and improve its profitability.

Turnover was up 15% last year at nearly 16m [pounds], and there was a five-fold increase in pre-tax profits to 1. …

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