In recent years the use of direct marketing has met with widening application and growth. This growth is being generated by technological change and a number of other changing environmental factors which are presenting opportunities. The objective of this thesis has been to identify key areas of opportunity in the application of direct marketing methods. The approach used to achieve this objective has been a qualitative evaluation of the literature. The methodology employed within the framework of this approach was the Strategic Management Model which involved an environmental analysis. The interacting trends that emerged from this analysis revealed areas of key opportunities for the application of direct marketing. The key opportunities that were identified from the results of this strategic process included international direct marketing, particularly to Asian countries and the opportunity for retailers in Australia to adopt customer loyalty programmes. As part of the strategic process towards opportunity identification in direct marketing a situation analysis was carried out, which involved an examination of the meaning and concepts of direct marketing, the current structure of the industry, the application and scope of direct marketing and current management issues. This process revealed that there are many opportunities currently being lost as a result of ineffective implementation of direct marketing methods. Therefore the research conducted, revealed that opportunities exist in improving current direct marketing activities as well as in taking strategic advantage of key trends.