Direct Marketing in International Markets - Assignment Example

Direct Marketing in International Markets Executive Summary This paper describes about the importance of direct marketing in international markets and its value for success in business. Direct marketing plays an important role for a product while it tries to develop its market globally. There are various tools of direct marketing such as telemarketing, email, direct mail and SMS, which play a great role in influencing the customers. By utilising these tools, the marketers can understand the interest of the prospective customers of the new market. Direct marketing has various advantages over other marketing methods, but it also suffers from criticisms at times due to its unwanted and fake activities with the customers. 1.0 Introduction Direct marketing has emerged as one of the most significant marketing tools in the hands of the marketers over the last few decades. Direct marketing is the selling of goods or services directly to the prospective customers without using any intermediaries, but by using databases of customers and through one or more media. With the increasing globalisation of world trade ‘international direct marketing’ has enhanced its performance and relevance. Several companies in the direct marketing ground are gradually looking to enter the foreign market for expansion of business. Efficient international transportation system and improvement in international payment system have eventually encouraged the direct marketers to expand their businesses beyond their national boundaries (Kraft & Et. Al., 2007). According to ‘Advertising Age 2006’, marketers have used over $52.2 million in 2005 on direct marketing. Direct marketing such as traditional direct mail as well as telemarketing have been considered as an efficient method for advertisers and marketers. After the introduction of the Internet, the whole marketing communication strategies of direct marketing have changed drastically (Morimoto & Chang, 2006). In this paper the use of direct marketing in international market and its value and importance have been described. Its distinction from the mass marketing has been mentioned in the paper. In addition, the direct marketing acts as a valuable tool for marketing communication. This has been discussed in the paper. Though direct marketing is beneficial for consumers and marketers, it faces criticism from the consumers’ perspective, which has been discussed clearly as well. 2.0 Discussion 2.1 Use of Direct Marketing in International Markets Direct Marketing is considered as one of the fastest growing areas in present day marketing practice. Direct marketing utilises various multiple channels such as Internet, leaflet drop, telephone, direct mail, E-mail and mass media so as to reach particularly to the target foreign customers in international market in order to obtain an effective response immediately for ultimate sale (George Sate University, n.d.). Direct marketing in the USA developed into boom industry during 1980s. Due to direct mail, sales growth had risen from $15 billion to $46 billion. The direct marketer had also risen to 13,000. Direct marketing broadened the demand of various companies such as blue chip industrial in addition to consumer companies which include American Express, IBM, Westinghouse, Sony, 3M, GEICO, Time Inc., along with retail sectors such as Neiman-Marcus, J.C. Penney and Marshall Field. The US corporations are generally reluctant to take direct marketing methods in order to enter the possible foreign market potential, but certain smaller companies for e.g. “Franklin Mintand Carolina Biological Supply Co.” and other multinationals are successful abuser of foreign direct marketing methods. Time Life captures 90% market in Europe by their sales through direct marketing methods and it has also grown business in Latin America as well as in Asia. Likewise, Soloflex, through direct marketing became a successful direct marketer in selling exercise equipments in Japan (Iyer & Hill., 1995). 2.2 Characteristic of Direct Marketing Direct marketing assists to generate a specific response from targeted groups of customers. It is a cost effective form of marketing mix. It is a particular tool for business because limited resources are required to create result. It helps to determine the success of campaigns correctly by evaluating responses. It provides the customers with better accuracy from direct mail, leaflet drops to telemarketing along with email marketing. There are several approaches in relation to direct marketing which include traditional methods such as telemarketing, mail shots along with electronic methods as SMS (short message service) marketing, email marketing and social media. The suitability of the method for international business will depend upon the target customer, the type of message to be delivered and response that should be generated. Use of database is an effective way of directing marketing as it helps to sell it to the existing customer instead of finding a new one. In international market if data base is already there then it will help a lot for marketing the products. In the data base record along with the name of the international customers, their choice, interest should be included too, as it helps in effective marketing. Direct mail is an effective way of informing the potential customers about the products and services. Mailing letter may include varieties of enclosed items such as product brochure, order-form and pre-paid reply envelope. Leaflet drop is one of the cheapest forms of direct marketing. As leaflet is less targeted it cannot personalise the message to the recipients. Thus, it is best to use leaflets for services or products in a universal basis. Telemarketing can generate more benefit as compared to other forms of marketing. The interests of foreign people are not known to the company, thus by telephonic conversation it would be helpful to judge the interest of the customers and any critical messages can be easily explained to them. Email and fax are also cheap because a single message can be sent to thousands of people in the international market. An exact person can easily be targeted through this marketing. SMS messaging has become a more attractive method of marketing. Mobile messages are read frequently by people than email, thus there is no possibility of ignoring the message by the customer. In order to start a new business in international market, direct marketing helps a lot than other mixes of marketing. This method helps to attract and retain maximum foreign customers (Business Link, n.d.). 2.3 Difference from Mass-Marketing Approach Direct marketing involves in two ways of interactions with customers (SU Classes Web Server, n.d.). Direct marketing allows targeting specific customers. Database is a key component of direct marketing. It is a vital tool in customer relationship management (CRM) programs. It assists to develop good relationship with the customers, so that the customers do not get shifted to competitors. Direct marketing campaigns use several vehicles and stages in order to improve and enhance response rates and revenues (Robert Morris University, n.d.). Direct marketing saves money as well as time and there is no need to visit a store. There is no intermediary person in between producer and customer; and there is no disturbance with sales people. In direct marketing various technological issues are being used in order to deal with the customer profiles. International growth of direct marketing is totally depended on the technology (Rohan Academic Computing, n.d.). By the use of direct marketing, the customers do not need to visit a retail store; instead they can purchase the products through Internet, direct mail and telemarketing. The customer can respond directly to any offer by making a call at a toll-free number, sending in an order form or by attending an event. The exchange of products between the buyer and the seller is not done at a retail store or through a personal sales call. The order can be made by the customer at any time and at any location and the product can be delivered to the consumer's home (Walker, n.d.). Mass marketing involves one way communication aiming only consumer. Mass marketing aims to reach as many people as possible without targeting any specific groups of consumer. This type of marketing treats the overall market as one large market which creates groups of possible customers. The firm builds a single marketing strategy for targeting the whole mass market. This huge market potential may be able to yield great economies of scale in production, promotion and distribution which in turn may result in cost reductions as well as lower prices for customers. In mass marketing, products that are being used by large numbers of people are advertised to a large audience (UNT Webmaster Dashboard, 2002). 2.4 Assessment of the Primary Concern That Consumers May Have About the Use of Direct Marketing Consumers are scared by emails from marketers because certain mails may contain dangerous contents which may harm the operating system of their PC. According to National Cyber Security Alliance, 20% of people’s computers are infected by viruses and 80% have spyware or adware. All these are due to email messages sent by trustworthy marketers. Thus, email marketing is facing challenging in present situation (Wilbur, n.d.). Consumers are averse of telemarketing calls because various frauds and tricks are associated with it. As there are no visual contacts, the consumer may not understand the real motives of the telesales. The price is also high in this technique (PR Log, 2010). The factors which are negatively influencing consumers’ attitude towards direct marketing are fake advertisements and irksome marketing communication techniques. While promotion of any product, the consumers receive unwanted direct mail, telemarketing and spam which may ultimately results in feeling more irritated. Direct mail as well as spam containing unwanted advertisement is equally considered as an intrusion to customer’s privacy (Morimoto & Chang, 2006). 2.5 The Methods Which Can Be Employed By the Direct Marketing Industry to Counter These Criticisms The marketers in order to remove fear and to answer to these criticisms have adopted and followed multifarious effective methods. The marketer can highlight the good messages before sending. The company’s logo can be sent along with the message to prove its authenticity. The consumers when they receive such messages make sure that it is delivered by a trusted source and the highlighted contents are authentic. Consumers can update their existing email clients for receiving icon based email. The email sent by the marketer will contain the company’s logo and thus the consumer can be free to open the valuable mail without suspecting. Eliminating fear from the minds of consumer can facilitate consumer to contact more effectively with the marketers; and marketers in the meantime will achieve success. Thus, once trust is established between consumer and marketer both will be benefitted from one another (Wilbur, n.d.). The consumer in order to make sure about the call from an authentic marketer can save the number with the name of prospective marketer. Thus, the consumer can attend the number from a desired call and as a result it would be helpful for the marketer to clearly explain the queries of the consumers. In both ways, both consumer and marketer will be benefited (PR Log, 2010). 3.0 Conclusion It has been concluded that direct marketing in present situation brings advantages for the marketers while operating in international markets. Through various tools of direct marketing, the marketer can understand the interests and views of foreign customers. Along with the marketers, customers will also be benefitted from such marketing methods. They can acquire the information details of the products from their own place by contacting with the desired marketer. Direct marketing has gained enough importance as it is less time and cost consuming, easy to contact with the target customers. This marketing method though it gains popularity and benefits, faces criticism for its various fraudulent natures. The marketers have taken effective steps in order to come up with such criticisms. They are adopting effective methods to retain the existing customers because due to lack of trust, the customer may get shifted to competitors’ market. 4.0 Recommendation Although direct marketing is considered to be one of the effective tools for marketing communication methods, it lacks trust from the customers due to certain reasons. When there is authentic and valid information, it plays a great role for both marketers as well as consumers. As direct marketing brings positive result for the marketer, they need to develop authentic methods and procedures while dealing and contacting with the consumers. In today’s marketing communication methods in both national and international market, various tools are used such as direct mail, email, SMS and telemarketing. These play a great role; thereby marketers should develop and send all the valid advertisement messages and information of the product to their prospective customers. They must build trust and popularity among the customers by providing valuable data related to the products and services over their competitors. Once trust is built up between customers and marketers, direct marketing performs great which benefits both the parties. Table of Contents Executive Summary 1 1.0 Introduction 1 2.0 Discussion 2 2.1 Use of Direct Marketing in International Markets 2 2.2 Characteristic of Direct Marketing 3 2.3 Difference from Mass-Marketing Approach 4 2.4 Assessment of the Primary Concern That Consumers May Have About the Use of Direct Marketing 7 2.5 The Methods Which Can Be Employed By the Direct Marketing Industry to Counter These Criticisms 8 3.0 Conclusion 9 4.0 Recommendation 10 Table of Contents 11 References 12 References Business Link, No Date. Why Use Direct Marketing? Direct Marketing: The Basics. [Online] Available at: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073790746&type=RESOURCES [Accessed March 11, 2011]. George Sate University, No Date. Direct Marketing. MK Marketing. [Online] Available at: http://www2.gsu.edu/~catalogs/20102011/undergraduate/9000/course_descriptions/marketing.htm [Accessed March 11, 2011]. Iyer, T. R. & Hill, S. J., 1995. Literature Review. International Direct Marketing Strategies: A US-European Comparison. [Online] Available at: http://www.tmcatoday.org/MembersOnly/Archives/PDFs/2008/TMCA_Direct_Marketing_Strategies_A_US_EU_Comparision.pdf [Accessed March 11, 2011]. Kraft, M. & Et. Al., 2007. International Direct Marketing: Principles, Best Practices, Marketing Facts. Springer. Morimoto, M. & Chang, S., 2006. Introduction. Consumers' Attitudes toward Unsolicited Commercial E-mail and Postal Direct Mail Marketing Methods: Intrusiveness, Perceived Loss of Control, and Irritation. [Online] Available at: http://jiad.org/article83 [Accessed March 11, 2011]. PR Log, 2010. World Wide Outbound Telemarketing Services. Press Releases. [Online] Available at: http://www.prlog.org/11096037-world-wide-outbound-telemarketing-services.html [Accessed March 11, 2011]. Robert Morris University, No Date. Electronic Marketing: Internet Marketing, Database Marketing, and Direct Marketing. Direct Marketing. [Online] Available at: http://academics.rmu.edu/~karadag/Marketing%20My%20Slides%2017.ppt [Accessed March 11, 2011]. Rohan Academic Computing, No Date. Direct Marketing. Integrated Marketing Communications, & Direct Marketing. [Online] Available at: http://www-rohan.sdsu.edu/~renglish/370/notes/chapt18/index.htm [Accessed March 11, 2011]. SU Classes Web Server, No Date. Mass Marketing and Direct Marketing. Principles of Marketing. [Online] Available at: http://classes.seattleu.edu/business/mktg350/obermiller/distribution.stu.ppt [Accessed March 11, 2011]. UNT Webmaster Dashboard, 2002. Mass-Marketing & the Production Concept. Defining Markets & Market Segments. [Online] Available at: http://courses.unt.edu/kt3650_7/sld002.htm [Accessed March 11, 2011]. Walker, K., No Date. Chapter 15 Notes -- Direct-Response Marketing. Com 121 -- Discussion #6. [Online] Available at: http://virtual.parkland.edu/kwalker121/disc6.htm [Accessed March 11, 2011]. Wilbur, J., No Date. Email Marketing – Eliminating the Fear Factor. Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association. [Online] Available at: http://www.nmoa.org/articles/dmnews/emailfearfactor905.htm [Accessed March 11, 2011]. Read More