Download INTERNATIONAL DIRECT MARKETING

INTERNATIONAL DIRECT MARKETING
Firms with only domestic markets have found it increasingly difficult to sustain their
historical sales and profit growth rates.
The same processes of concepts and principles are used in international marketing; 1)
Target your audience; 2) Come up with a creative strategy that makes a great offer; and
3) Give your target an easy response mechanism
The differences between domestic and international marketing are:
1. Infrastructure
2. Customer preferences
3. Political/legal forces
4. Customs and cultural norms
5. Economics
6. Structure of distribution
All of these are uncontrollable environmental elements that the marketer must adapt to.
To limit the risk many firms enter international markets through a variety of models.
1. Exporting - ship goods from a firms home base overseas
2. Licensing - a foreign licensee buys the right to manufacture a firm’s product in it’s
country for a negotiated fee. The fee normally consists of royalty payments on the
number of units sold.
3. Franchising - is similar to licensing, except that franchising involves much longer term
commitments.
4. Joint Ventures - usually a 50/50 venture. Rarely used by direct marketing firms. The
local partner’s knowledge of the host country’s competitive conditions, culture, language
and politics.
5. Strategic alliances - agreements between potential or actual competitors that allow
firms to operate cooperatively in a market.
RESEARCH, TESTING, EXPERIMENTATION and STATISTICAL MODELS
Direct Marketers have the ability to forecast or estimate their probability of success with
a relatively high degree of accuracy, allowing marketers to allocate resources to the
programs with the highest expected value in terms of sales, profits, and or building a
customer base.
Market research involves studies conducted among consumers or businesses. Generally
the research focuses on why thing happen. Usually market research is done before a
campaign is created.
Testing and experimentation help direct marketers understand what happens in terms of
sales when marketing campaigns are varied.
Testing - different versions of a marketing campaign are “tested” in alternating
magazines or through the mail.
Experimentation - control all factors and then test for a variety of conditions.
Direct Marketing Models - are mathematical and statistical representations of how
markets work and how customers respond to campaigns or individual offers. They use
historical data which are analyzed and summarized to give marketers information about
the probability of future purchase behavior.
DIRECT MARKETING PROFITABILITY
In any business, the primary purpose is to make a profit. A firm must develop a business
plan to include how that will be achieved.
Profit and Loss Statement (P&L) - estimates of sales, expenses and income are put in the
P&L to predict what will happen as a result of a firms marketing activities.
There are many different plans. Most companies have an overall operating plan. Then
companies will have a product/category or brand plan.
Direct Marketers use P&L statements to describe expenses and potential profits based on
a particular campaign. It allows management to judge the financial consequences of any
action and make a decision as to proceed or not.
Ways for a company to make more money:
1. Attempt to get more business from current customers
2. Invest in new customer acquisition
3. Invest in new direct marketing tools
4. Add new products or services to the business
Concepts
LTV - Lifetime Value of Customer - describes the contribution of that person to a firm
for the entire period that he or she does business with a company.
Break Even - minimum number of items needed to sell to make back costs.
THE FULFILLMENT PROCESS
The term fulfillment is used in a variety of ways. However, the core activity of
fulfillment is filling a customer’s order after it has been received.
This fulfillment encompasses order forms, receiving orders, processing orders, inventory
management, warehousing, customer service and planning.
Fulfillment companies offer a variety of services and usually charge on a per-transaction
basis.