chapter 7 implementing global direct marketing campaigns

Chapter 7

Implementing Global Direct Marketing

Campaigns

Why the Global Market for Direct Marketing?

• 90% of the world’s population lives outside the U.S.

• Response rates are 2-5 times higher in emerging markets (less competition in mail boxes)

• Emerging markets–Growing middle class–Disposable income to buy big ticket items–Younger consumers (50-60% of pop.)

entering marketplace and starting families

Why the Global Market for Direct Marketing? (cont.)

• Range from highly developed to emerging

• DM in U.K. Ex. 7-1

• DM in Australia Ex. 7-2

• Levels of direct mail development Ex. 7-3

Why the Global Market for Direct Marketing? (cont.)

• Mkt. comm. currently dominated by traditional advertising

• The characteristics of direct marketing appealing to emerging markets

–Precise

–Accountable

–More measurable

The Growth of International Markets

• Focus primarily on direct mail

• Marketers and Consumers both need education on how direct marketing works

• Consumers outside U.S. facing same stresses in maintaining lifestyles

• Same challenge to understand underlying drivers of response behavior

The Growth of International Markets (cont.)

• While U. S. consumption and companies are a substantial portion of the world economy, rest of the world growing faster

• Largest Non-U. S. markets are:– Japan– Germany– U.K.– France– Italy– Spain

• All non U. S. markets are also aging and shrinking


• Brazil, Russia, Italy, China (BRIC)

–will be half the size of the six largest world economies by 2025

–will exceed be the size of the six largest world economies by 2050

–Middle classes in China and India each are larger than entire U. S. market

–Substantial diversity in each group


• Segmentation required in markets because variation in each market:– Income– Geography– Climate– Culture– Habits– Language– Religion

• Direct marketing makes it possible to develop good marketing strategy in one segment and then extended to other segments


Most direct marketing activities for now are concentrated in large multi-national companies

Multinational Direct Marketing Methods

• Challenges and Barriers

– Communication due to diversity of foreign cultures (language, literacy, . . .)

– Limited mailing lists, list hygiene cause direct marketing to be used more for traditional mass marketing methods

– B to B exceeds B to C

–Many local direct marketing organizations started in large multi-nationals

Multinational Direct Marketing Methods (cont.)

• Different models but almost all direct marketing campaigns end with local implementation

• Centralism

• Adoption

• Localism


• Centralism

– Central brand administration, production, local media placement

–More common in B to B

– Larger organizations use for efficiency, savings

– Getting local implementation to use centralized material can be problematic

– Funding provided to locals for implementation can help


• Adoption

–Centrally developed image templates provided with local input and changes

• Localism

–Local market creates and implements

–Requires sharing of best practices found in global efforts to maintain brand and messaging integrity

Challenges of Global Direct Marketing

• Marketers cannot just apply U. S. DM techniques to global markets because–Business and Consumer Lack of DM

familiarity–Lack of infrastructure–Data and privacy laws–Lack of address standardization, address

updates, and data hygiene–Postal systems

Challenges of Global Direct Marketing (cont.)

• Culture and Society–Most of peoples’ behavior influenced by culture– Consumers unaware of why they behave the way

they do• Collectivist vs. Individualistic societies– Collectivist most common in Asia, Middle Eastern,

and Latin American cultures– Group orientation, loyalties, tradition, family ties

most important• Skill, education, and health important


• Collectivist vs. Individualistic societies– Individualistic most common in U. S.,

Australia, Europe, and Canada• Emphasis on individual goals and

accomplishments• Individual and immediate family

orientation•Western cultures value time, freedom,

personal challenges


• Collectivist –High context of messages most important–Best reached by mood, image appeals–Use personal networks and family

connections for information and content–Direct mail and web sites use symbols local

consumers understand–Be careful to avoid symbols with religious

significance


• Individualistic

– Low context of messages

–Words have value and stand alone rather than based on context in which delivered

–Messages need to have enough words to provide information and understanding

– Efficiency versus image more important in message delivery (plainer documents)

• Perception of color varies in different cultures


• Religion–Religious beliefs strongly held and do not

yield easily to objective appeals–Christianity, Islam, and Hinduism largest

segments–Other sizable segments– Islam most rapidly growing–Religion affects images and language used

in DM messages and offers


• Language and Literacy– Translations from one language to another are fraught with

difficulties not only for the word meaning, but also nuances and tones

– Back translation useful tool • Message translated from original language to second

language by one interpreter• First translation then retranslated by different interpreter

back into original language• If original information and meaning still retained then

translation considered successful• Best to use local translators who understand nuances of

local target audience


• Language and Literacy– Some markets like India can use a common second

language like English– Other markets might have too many small language

segments to be feasible, esp. for large centralized multi-national operations

– Literacy can be a problem, especially in large potential markets like India where an estimated 400 million cannot read or write in any language

– Language remains critical part of Direct Marketing communications so must address


• Legal Structure

– All countries have laws affecting DM and vary widely in each country and region

– Trade tariffs, foreign business ownership, tax laws, privacy laws

– Restrictions also on marketing communications and use of business and consumer data

– Laws cannot be ignored, wise to consult knowable legal sources

The Multinational Direct Marketing Value Chain

• Model based on Direct Mail Advisory Board of the Universal Postal Union www.upu.int

• Model organized in three activity groups [Ex. 7-6, p. 158]

– Planning - business case, message prep.

– Execution/Distribution - select target, produce message, distribute message, fulfill orders

– Customer Service – manage customer relations

http://www.upu.int/

Creating the Business Case

• Starts with research and market knowledge• Most countries do not have wealth of readily available

information• U. S. government has many information resources about

foreign markets– NY Times, Wall Street Journal, . . – CIA World Factbook– Euromonitor International www.euromonitor.com

• Credit card issuance rates measure potential• Low usage of credit cards in developing country markets still

obstacle to DM growth

http://www.euromonitor.com/

Preparing the Direct Marketing Message

• Good authority sources exist in

–Multinational DM offices

– Local DM offices

– National Direct Marketing Associations (DMA)

The Role of the Post Office

• Post offices in many countries encourage direct mail as a replacement for those segments being drawn away by electronic communication

• Direct mail increasing as traditional mail decreasing

• The reliability of postal services varies widely in the international market

• Some alternative postal methods, illegal in the U. S., are popular in international markets

The Role of the Post Office (cont.)

• Unaddressed mail has no destination address

–Targeted by postal code or regional location

–No need for mailing lists

•Good where no reliable lists

• Lower costs

• Couriers also deliver

• Example Ex. 7-7, p. 162

International Database, Name and Address Issues

• Proper name and address conventions vary widely in international market and other variances are:

• Usage of salutations (Ms., Mrs., . . . ) and honorifics (Dr., M.D., C.P.A, . . . )

• Order and usage of given and family names• Address order and number of lines• Requirement to use official language• Wide usage of postal codes but not format• Good sources of information are the universal postal

union and local postal authorities

Evaluating Global Mailing Lists

• Mailing lists most important tool in DM

• Development and sharing of mailing lists much less accepted in other countries

• Response lists and compiled lists available

• Good places to start

– Response lists

–Global catalog lists

Evaluating Global Mailing Lists (cont.)

• Responses to list/country responses need to be tested• Get to know list sources• Other list sources– Mail order– Magazine subscription• Paid vs controlled circulation files• Trade directory • Telephone lists• Internet• Test, test, test

Producing Direct Marketing

• There are printing production facilities in most countries, but the personalization, quality, and size variation requirements may not be available everywhere

• Look for partners with direct marketing experience

–Consult local marketers

–Check with local direct marketing associations

Conclusion

• Direct marketing is growing in the international marketplace

• The accountability and measurability of direct marketing makes it appealing

• Direct marketers who enter the international market need to make sure they do their research and know what they are doing and do plenty of testing to be successful

chapter 7 implementing global direct marketing campaigns

Documents

direct marketing activities

direct marketing campaigns

measurable slide

group slide

shrinking slide

direct mail marketers

good marketing strategy

mail boxes emerging