Thursday, November 5, 2009

Marketing Strategy: Direct marketing is the buzz word that will gain a new clout

For instance, Danish beer is vying for a slice in Asia’s competitive Lager beer market, a beer stored from six weeks to six months for aging before use.

One will notice the gap between the seller (restaurant owner) and the buyer (customer) narrowed considerably, can see both meeting face to face. And this kind of promotion is useful.


Looking at the growth potential in the region, many more companies are seeking a marketing strategy to suit it, giving new clout to the ages-old tool of bringing products directly to consumers.

Now many more companies, from FMCG firms to delivery firms such as Fedex, are adopting direct marketing methods to sell their products at increasingly crowded markets.

Direct marketing, defined as, any sales technique from pop-up stores or commercial gift bag giveaways to free sample handouts making sellers directly in touch with target customers, compared to indirect marketing such as advertising, product placement or sponsorships.

Traditionally, Asian consumers are accustomed to do business with trusted family or friends to avoid scam. Here, we can see the traders’ ancient way of doing business with direct marketers as safe avenues.

Not to wonder, people still reply to direct mail in this world of E-commerce.

Across the world, majority of firms uses both direct and indirect marketing, with the direct portion growing.

Due to expanding markets such as India where Direct marketing is much prevalent has seen last year direct sales increased 1.25 percent, up from a 0.4 percent increase in 2007, according to data from market research firm Euromonitor International.

Much accredited sectors in Asia's direct marketing are alcoholic beverages, delivery firms such as Fedex with pre-existing address databases and common household goods sold by the likes of Amway.

Apparently, Direct marketing costs far less than mass advertising -- and marketing officials say gives them more bang for their buck.

Online advertising may be a cost effective measure for marketing, but depends on the geography. For example, Sri Lanka Apparel reached 100,000 customers beginning with 300 customers, spending only $150,000, by joining online communities such as student activist groups and the same outreach via conventional advertising would have cost at least $20 million.

Almost 70 percent of consumers in Bangladesh and Sri Lanka bought something in a door-to-door sale last year, according to a study.

Talking about India, taking advantage of the popularity of door-to-door sales in India, 10 years ago Hindustan Unilever Ltd began a direct-sales scheme in rural areas with populations of less than 2,000. About 100,000 villages are involved. Some 45,000 women go door-to-door with Unilever hair oil, soap, shampoo and cream in baskets or cardboard cartons on bicycles. And the turnout to the surprise, they bought Unilever inventory worth 4.5 billion rupees ($94 million) in 2008.

A boom in electronic marketing is expected as Asian consumers adopt the latest technologies faster than peers elsewhere and welcome ads via mobile phone messages or online communities.

About 60 percent of Internet users in the Asia Pacific region have made purchases based on e-mail advertisements, compared with less than half in North America and just over 40 percent in Europe.

Direct plus digital is growing, while conventional advertising is definitely not, in terms of budgets and activity.

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