The Road to Success

Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer

Before embarking upon international direct marketing, companies need to analyze each of the target countries and select one of them. The simultaneous selection of several countries has proven to be impractical, even though doing so would allow the enterprise to spread its risk.

Important criteria:

• Economic strengths
• Population
• Local purchasing behavior
• Regulatory environment
• Taxes (on profit, VAT, etc.)
• Direct marketing infrastructure
• Political stability
• Cultural factors
• Regional differences
• Competitive environment
• General direct marketing affinity

Ergo

Companies have a tendency to select markets to which they have psychologically close ties (e.g. the US towards the UK, Australia, New Zealand).
Selling online might be most appropriate for niche offers to directly address a global segment in a cost-effective manner.
Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer

After selecting the target country, companies have to specify the target group and produce an operational description. In practice, the first step is usually to focus on a domestic target group that has proved to be a good starting point in the past. Detailed profiles are usually available for a company's own regular customers based on many years of experience in the home market. Consequently, such groups are often the starting point for selecting addresses in the target market.

Selecting foreign target groups:

• Customer profiles from the home market often form a good initial basis
• Consumer's overall experience with direct marketing is a good indicator
• Consumer shopping behavior is different in each country
• Internal tests and market research to adapt the customer profile
• 72% of all companies adjust international direct marketing strategy (vs. 6% new & 9% old strategy)

Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer

At the same time as selecting the target group, companies have also to specify a suitable product or product range. Hardly any company will decide to develop a foreign market using its full product program and service range.
Management is often in a quandary when faced with the selection of a product and/or product range. On the one hand, the product program should be attractive to the foreign target group, with the largest possible range of products and services contained in the first offer. On the other hand, risk has to be contained. This latter consideration usually predominates. So, when marketing abroad, companies choose products from their portfolio which require little explanation and have low service needs.
Additionally, because of the associated costs, products with lower return ratios are seen as more desirable, as are products cheap enough to justifiably be left with the customer in case of complaints.

In practice

• Selection of a suitable line or product
• Hardly any companies start with a complete product line
• Dichotomy: simple product with low risk vs. low chances?
• Minimizing risk often takes priority when selecting the product
• Test potential product adaptation on foreign target groups
• Important note: Have the legal framework reviewed

Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer

The selection of the target group and the product forms the basis for the selection of a suitable direct marketing platform. Now, many countries offer the same portfolio of direct marketing media:

• addressed and unaddressed direct mail
• door-to-door and household distributions
• group advertising media
• advertisements with coupons
• inserts
• radio and TV advertisements
• telemarketing

It is recommended to use in parallel the Internet as a direct marketing and communication tool. For example many small enterprises also regard their sales force as a direct marketing medium.

In practice

• Analyze local advertising environment in the target country.
• Review relative media usage based on intended use and product environment.
• Customize campaign and mix of media to local practices.
• Run test campaigns in individual media outlets.
• Integrate electronic media: Adapt website to the target country / response channel.
• Important note: The use of media can vary greatly in different countries.

Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer

Processing operational details usually takes up the most time. The points addressed above provide the framework for action. Iterative steps are usually taken during which even prior decisions need to be re-examined on the basis of new insights drawn from operational implementation. These insights may relate to any one of the following operational aspects:

• Address lists
• Typical payment methods
• Local communication and adaptation of advertising message
• Possible product adaptation (purchasing power and preferences)
• Implementation of local regulations
• Lettershop
• Fulfillment (order, warehouse, shipping, customs and taxes, returns, non-deliverables, etc.)

In practice

• Regular testing of all aspects has proven its worth
• Local support is highly recommended, whether from local advisers or from a well-represented international service provider

Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer

The entry and ongoing support phases of international direct marketing should be accompanied by good controlling. In this context, controlling contains the entire planning, continual progress monitoring, analysis of deviations from the plan, and subsequent countermeasures taken within the team. In general, controlling of international direct marketing is closely related to controlling for domestic direct marketing. Proven processes can usually be transferred directly with minor adjustments.

The controlling process for international direct marketing

• Development of a plan
• Concrete objectives (short-term and long-term goals)
• Definition of the process and responsibilities
• Evaluation of the tests and regular campaigns
• Routine adaptation to the new results
• Set up and use of an early warning system

In practice

• Entry into new markets requires special attention
• Controlling processes must routinely implement the new data gathered on the foreign market and target group

Source: M. Krafft, J. Hesse and K. Peters (2007), International Direct Marketing - the book (Editors: M. Krafft, J. Hesse, J. Höfling, K. Peters, D. Rinas), p. 19 f., Springer