Direct Marketing expected to explode in India

Here are some projected figures for India DM growth

* These figures are derived from several different sources and economic surveys.



Click here to view full table

* retail is set for exponential growth

For more information on international data and analytical solutions, contact me at doug@focus-worldwide.com

Cultural Differences are a Major Obstacle for Global Business

A linked-in message from a friend in Singapore alerted me to an interesting website.

http://www.geert-hofstede.com/

Professor Geert Hofstede, author of Cultures Consequences, has identified five "cultural dimensions."
At this website one can click on a country to see how the five dimensions influence that country's culture which may help develop a better understanding as to what one may expect when doing business there.
As Professor Hofstede says, "" Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster."

Power Distance Index (PDI) suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'.

Individualism (IDV) On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty.

Masculinity (MAS) versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men's values and women's values.

Uncertainty Avoidance Index (UAI) deals with a society's tolerance for uncertainty and ambiguity; it indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth;

Long-Term Orientation (LTO) Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, however, the dimension also applies to countries without a Confucian heritage.

Plain & Simple

The trend in most forms of writing, political speeches and even business-speak has become laughably wordy and confusing.

For direct marketing copy this holds an added danger. If the intention is to confuse, then we have another credibility problem in the industry. Take a look at a dozen or so direct mail offers and see if they are written in plain English or in “direct marketing-ese.” And I don’t just mean the credit card, bank and insurance offers which are so full of small print and legalese that the reader needs a degree from the Wharton School to decipher them. I mean take a look at the basic direct mail offers. The ones that should be…. well…. direct.

Many seem to lack what was once the art of what we called “Plain Speaking.” Once we praised our politicians, like Harry Truman, for plain speaking. Now, with the lengthy recession and wars, endless political and celebrity scandals and just plain bad behavior we witness every day, I predict that, at least subliminally we are longing for more Harry Trumans. Or Teddy Roosevelts who said speak softly and carry a big stick! Direct marketers may be wise to tap into this undercurrent and use it to their advantage. Speak plainly. Speak softly. The big stick they carry can simply be a fair offer, explained in plain English which allows the consumer to decide if it has value. Plain and simple. Perhaps this is a trend direct marketers can champion and with any luck it will be embraced by every aspect of society.

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For more information on international data and analytical solutions, contact me at doug@focus-worldwide.com.

Circle The Wagons

This month's column looks at two threats to society and business-protectionism and rude behavior.

A bad economy often leads to renewed protectionist legislation regarding tariffs, duties, import restrictions. This is happening not just in the U.S. but around the world. Here, the "Buy American" program is hurting those companies it was intended to help as many component parts are manufactured or assembled in Canada and Mexico for finished goods with the made in USA label. How this plays out would be amusing if it weren't so serious. Again, those who enact the laws have no idea what the repercussions will be nor do they understand commerce in general.

Rude beahvior is making headlines in the U.S. Is it a national epidemic or a global pandemic? Is there a cure? And will it affect how marketers work and are perceived?

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Thought Of The Week

New German Privacy Law in Effect Sept. 1, 2009

Thanks go to Stephan Merz of www.d-2m.de for supplying this update.

There will be a change from opt-out to opt-in for the receipt of postal mailings and the use of postal addresses. For this significant change the government is allowing a transition period of 3 years for data collected before September 1, 2009 and not changed since. But as from September 2012 on there will be a full need for opt-in.

The new law lists 5 exceptions for non-sensitive data for advertising purposes:

1. Addresses can still be used for advertising for own purposes by the data owner. Mailings to a company's own customers for similar offers are still allowed without opt-in.

2. B2B advertising. This covers general business addresses and business addresses with a named decision maker. Mailings must be for business purposes.

3. Advertising for charities and non-profit organizations.

4. When a mailer states the (original) data source on the mail-piece and can document the delivery chain. Not with a code, but as clear information (e.g. this address was obtained from "name and address of the mailer). The information must be stored for 2 years by the list owner and the user! This includes the permission to use lists from list brokers within the so-called lettershop method.

5. When the address owner can be clearly identified. This is the case for so-called recommendation mailings or for package inserts, catalog inserts and other similar insert options.

This is a significant change from the previous law yet not the drastic and draconian version of the new law that was expected a year ago. But it impacts the German DM industry with “legal uncertainty” now, as the new law is set up quite generally and intentionally leaves room for interpretation. We also expect some companies will be taking their files off of the list rental market.

For more information on this, international marketing logistics, regulations, market entry strategies, please contact doug@focus-worldwide.com.

Thought Of The Week

Best Laid Plans

Last week we looked at the growing trend of protectionism that many countries are practicing now or are contemplating by either increasing tariffs on foreign-made goods or restricting their use entirely. Here in the U.S. we are witnessing an object lesson that shows that it is much easier to think up and enact protectionist legislation than it is to deal with the consequences. Consequences the lawmakers don’t have the expertise to consider or even imagine.

In February 2009, the U.S. Congress, as part of its Economic Stimulus Program, imposed "Buy American" provisions which bar projects from receiving federal money that buy goods or materials from abroad. The theory is that this will help U.S. businesses. In reality it has created a distributional and logistical nightmare and now has the U.S. in a polite and relatively minor dispute with our largest trading partner and very good neighbor to the North-Canada. Many products in a variety of the industries use dozens of components. Many of these are manufactured in Canada. So a company using or manufacturing products or systems that have one or two Canadian-made parts may lose or be disqualified from receiving federal contracts due to the Buy American program. Also, many products, in the process of being finished have components passing back and forth across our border with Canada. So how is it calculated if these are Made in the USA or not? Many U.S. companies are saying their businesses are suffering huge potential losses (of contracts) due to the Buy American program. They cannot change the complex and highly integrated supply chain systems already in place with Canada. This could affect over 4 billion dollars worth of business in the water and wastewater systems industries alone.

Plus these types of sanctions always provoke retaliatory measures. China has announced it will curb imports of chicken and auto parts to combat the tire tariff. President Obama and Canadian Prime Minister Harper have to sit down and work through such important issues as charter flights for sports teams. If you are a hockey or baseball fan, this is serious business.

For more information on this, international marketing logistics, regulations, market entry strategies, please contact doug@focus-worldwide.com.

Thought Of The Week

Market Alert: Protectionism on the Rise.

International marketers need to watch the current trend of protectionist tariffs that are increasing around the world and coming to a head just before the Group of 20Summit in Pittsburgh, September 24-25.

While no one disputes the need for global expansion and the tremendous lift and leverage it can give any company’s bottom line, trend-spotting and the proper strategic positioning that responds to these trends are critical.

The major headline here has been the tariff the U.S. government is placing upon Chinese automobile tires and China’s reaction of taking this issue before the WTO. The proposed tariff increase of 25%-35% could price out of the market 17% of all tires sold in the U.S. China says this could affect 100,000 Chinese jobs. The price of rubber on world commodity markets and share prices in certain tire companies has already been affected.

U.S. companies are coming under increasing pressure from their unions and labor forces to stem the flow of products flooding into the market from China and elsewhere. The U.S. government meanwhile is walking a tightrope as the Chinese and U.S. economies are so tightly intertwined now. China will be watching very carefully how the Obama Administration reacts as this could set the tone for the remainder of Obama's term.

It may be a hackneyed phrase but “tip of the iceberg” seems appropriate when looking at the global protectionist trend. There is much more to follow. GTA’s research indicates over 100 protectionist measures are due to be implemented around the world. Countries being targeted the most by these measures are China, U.S., Japan, Germany and France. The leading industries seeking protection are machinery, food, financial services, and agricultural goods.

If your products/services may be affected by this, it is time to pay close attention.

For more information on this, international marketing logistics, regulations, market entry strategies, please contact doug@focus-worldwide.com.

Thought Of The Week

China Marketing Update

General Motors announced yesterday that it expects its sales in China to increase by 40% this year. Ford sales have doubled in a year. And many luxury goods manufacturers and consumer goods companies are seeing that China is not as affected by the global recession as other countries.

That’s good news for manufacturers and marketers. At the same time, great strides are underway to create, enhance and improve B2B and B2C databases in China. We at Focus Worldwide are working on just such a project right now. So many factors are lining up favorably to provide greater access to, and response from, the Chinese consumer marketplace.

But like all international marketing endeavors, the road is bumpy, seldom straight and smooth. Those whose nervous systems require tranquility and few surprises beware. International marketing can be hazardous to your health.

China announced earlier this year that it is enacting greater privacy restrictions as it pertains to the access, release and use of personal data. Personal data can be defined as national ID number, mobile telephone number, email address and residential address. So B2C direct mail may need to be addressed to “Occupant.” B2B direct marketing has no such restrictions.

There may also be restrictions on the printing of direct marketing materials that have China as a final destination.

Anyone doing business in China would be advised to check with their experts there.

For more information on international data and analytical solutions, contact me at doug@focus-worldwide.com.

Thought Of The Week

While working on a project in Mexico this week, I was reminded of the great cultural differences that exist between there and the U.S. Not just those that affect consumers and their buying preferences but the business culture as well and how one must adapt to how partners, vendors and suppliers go about their business everyday.

Cultural bias affects us all. Those who think they have no bias are in denial. The challenge for each of us is how to confront our own bias, determine how it affects our business relationships in other countries and then try and tame it. I don’t say eliminate it. That’s delusional. All we can do, realistically, is recognize we each have it and try and mitigate how it affects us. Everyone is different and bias is intensely personal.

In my classes at NYU before I began each semester, I gave my students bias tests just to show them, in a humorous way, how we are all affected by it and just how ingrained it is. It can be influenced by personal experience but often is more generational as how people act in a culture and how they are perceived by others changes over time. My students’ biases were not mine as there was a generation gap between us. But theirs were just as inaccurate and misleading as mine. Some things never change.

To succeed in international marketing each of us has to recognize and control our bias demons. If you are interested in testing yourself, drop me a line and I’ll send some self-tests. In a week or two I’ll post these on our website. It’s fun and doesn’t hurt! Not much anyway. My e-mail is: doug@focus-worldwide.com

Point Systems

Following up last week's "Thought" about the French being French. Now the Brits are acting...well..very British. Let’s examine the highly protective UK environment where legislation may soon be enacted not to keep just things or institutions more British, but the actual people. "The Plan" is to tighten the requirements for citizenship by assigning a point system that all the undesirable foreign types invading the shores of the Mother country would have to score to reach the goal of British-hood. Points would be added for things like having talents that provide positive contributions to British life, being really good at football, owning Harrods, or not killing anyone for at least 5 years. Deductions would be taken for breaking the law, being anti-social (meaning not being very good at football), displaying disregard for British values, or for questioning why celebrities like Elton John receive knighthoods. OK. Some of these are my additions but I think they are good ones.

The fact that the UK would even consider such a point system is indicative of the national culture just as what the French do to try to preserve their institutions is very French. But this UK Plan may send the wrong message although I sympathize with many of the factors that have led to this rather extreme step.

Here in the U.S. I question whether every citizen really should have the right to vote. I know this sounds incendiary but if people are totally ignorant of the people and issues, on what basis are they deciding who to vote for? I don’t worry about the foreign born who have become citizens as they had to pass a Citizenship test that proves they understand issues and how our government works. I’m concerned with the native born idiots. And if this group becomes the majority of the voting public (I think it is getting there), then the candidates will become even more evasive about their stance of the issues and just run either a popularity contest or a mud-slinging negative campaign against their opponents. Neither serves our voters nor our institutions. And this ignorance crosses all social, ethnic, racial and religious lines. The uninformed are everywhere. And their voting decisions can affect us all in a very negative way. So let’s have at least a very elementary point system to determine if someone should be granted that priceless gift of being able to make an informed decision and vote. Our Founding Fathers didn’t think the average person had the brains to make informed decisions and that’s why we had Electors and the Electoral College. Maybe they were on to something.

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Thought Of The Week

More Support for Global Expansion.

Front page of today's (August 14, 2009) Wall Street Journal has a story on how Wal-Mart is adapting its strategy globally after failing initially. This article is directly under another saying that the EU, Asia and India are all recovering from the recession ahead of the U.S. The U.S. remains mired in consumer no-confidence due to continued job losses, tight credit and a weak housing market.

Back to Wal-Mart. What have they learned that we all eagerly wish to hear? That you can’t force ideas germinated in Bentonville, Arkansas USA on the rest of the world. Who would have thunk it? I’m shocked. The “one size fits all approach” is being scrapped in favor of adapting to local tastes. Even local infrastructures where things like chronic traffic congestion in many foreign cities make the vast big-box store model inefficient are influencing local retail marketing adaptations.

Why does Wal-Mart bother? Well, Wal-Mart and most other uber-corporations recognize that flaccid domestic sales need a dose of Viagra they can only get from expanding globally. While Wal-Mart’s U.S. sales declined 1.2% in 2nd Q 2009, overseas sales increased 11.5% and profits rose 13%. Wal-Mart has 1,300 stores in 14 countries overseas and estimates it will be spending an additional 5.3 billion dollars on foreign expansion this fiscal year..

They have found that strategies from the U.S. don’t often transplant overseas but strategies developed overseas often can be transplanted into other foreign markets. Interesting!

Going Biblical

“I have been a stranger in a strange land.” I don’t think I fit in, in America, anymore. I am nearly positive that I am the only guy who hasn’t reaped mega-bucks through some form of scam, stock fraud or Ponzi scheme. OK maybe I’m exaggerating. But I am convinced that I’m the only guy who doesn’t qualify for a mortgage bailout because I didn’t buy a house I couldn’t afford or borrow so much money against the equity in my home that now I owe more than the house is worth.

Quiz time! What does it mean that a company is too big to fail? For decades America have been strong-arming the WTO and World Bank into forcing the American economic model upon hapless countries that were quite happy and prosperous with their own systems. And the fundamental tenet was a free market system. Well, in that system, competition reigns. The weak and inefficient give way to the strong and innovative. So let AIG, GM, Chrysler, monster banks and others fail. It’s what they deserve for obscene CEO payouts and only looking ahead 3 months to the next quarterly report. Let them fail! It’s the American way. Subsidizing these companies with government tax revenues and nationalizing banks. Why that’s un-American. It’s downright European!!!

Big companies are not that important to the economic health of America. The backbone of America has always been and will always be small companies, small farmers, small business owners. 99% of America’s +27 million companies have fewer than 500 employees. For the past decade small businesses have generated 60-80% of net new jobs and produce 13 times more patents per employee than large companies.

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Thought Of The Week

Be Like the French

France made the Wall Street Journal the other day regarding the strong objection to store openings on Sunday. Retailers claim that with the economy sagging, extended hours will bring in more profits. Stores and areas that cater to tourists are open but many others remain closed as Sunday is a day reserved for family. France is a protectionist society. They take all kinds of measures to protect their language, food, wine and culture. Part of their culture is leisure time. Here in the U.S. we make fun of cultures that pride themselves on leisure time. We forget that our Puritan founders shut things down on Sunday as this was a day to devote to prayer (and family). Now we worship at the mall on Sundays.

Productivity, efficiency, competitiveness are the watchwords here. But it’s really a myth.

We confuse quantity with quality. We may work more hours per week on average. But is this really efficient? Are we putting in the hours but wasting time on the job BECAUSE we have to be visible for so many hours? I think so. Happy and efficient workers make for efficient companies. Balancing family, work and leisure time is no easy task and our society does little to tackle this issue. Forward thinking companies here find that most of their innovation comes from employees during free or unstuctured time. And perhaps other cultures understand the balancing act better.

And I bet they are more efficient. Should we live to work or work to live?

If we think we are more competitive, we are fooling ourselves. Just look at our educational system. It is greatly inferior to many systems especially those in Asia. Japanese families are concerned when they move here because they fear their children will suffer if mired in the U.S. schools and fall behind when they return home.

So let’s be more French. Protect our leisure and family time. Closing things on Sundays won’t be the end of American society. It won’t happen here where the “Almighty” refers to the dollar.. But we shouldn’t judge other cultures for not following our inefficient model.

“No one cares about privacy anymore.”

Facts: new technologies are being adopted with such wild abandon that it is hard to believe these are just passing fads-as once television was considered. And acceptance is crossing all generational lines so it’s not just the tweens, teens and those generations ending with letters. And the type of personal information willingly being exchanged through these channels may indeed indicate that the issue of privacy is not as important as it once was. Let’s look at this stuff.

- Cell phones
- Cell phones with cameras
- Cell phones with cameras
- You Tube
- Sext-ing
- Facebook faithful and all social networks-posting the minutiae of life
- Twitterers
- Chat rooms

Do you use any or all of these? Do you really care about this type of privacy? Or is it a very subjective “caring” I guess it depends upon whether you have anything to be private about. Right now, in the U.S. with emphasis on all the real-time forms of social and business communication, many people don’t care. Some do. I don’t. In fact I’d love it if a bank called me-texted me- e-mailed me-mailed me- saying they have reviewed my monthly mortgage payment, checked my FICO score and can offer a much better rate and save me $500 a month. Just sign here. Or a hotel or airline I do business with…or not…offering me deals based upon my travel history and preferences. Sounds like highly targeted and relevant direct marketing to me. Save me money, make life more convenient or give me some simple pleasure and I’ll volunteer some information.

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Thought of the Week

Global Markets Add Fizz as Soda Sales Go Flat in U.S. & EU

Coca-cola announced higher than expected 2nd Q profits due to strong sales in emerging markets with India and China leading the way. Nothing new here. 80% of Coke’s earnings come from overseas markets.

• North American sales fell by 1%.


• EU sales grew by 1%.


• India grew by 33%.


• China by 14%.

Overall, global volume grew 4%.

How many other companies are profitable largely due to their overseas expansion strategies?

How many other companies could be profitable if they expanded into at least one overseas market?

Jerks and spammers, swines and scammers

Let’s look at a swinish virus then segue into swinish tendencies by certain marketers. Hard to fathom, I know. I am very happy the Swine flu didn’t become a global pandemic. But I didn’t really think it would. Just so much hype. Another case of the media “crying wolf.” And losing a bit more of its rapidly disintegrating credibility. What happens if/when there is a global pandemic or something? Will anyone believe it before it is too late? Here in the U.S. we saw a barrage of news reports, daily, almost hourly, at the local, state and national level. Were these designed to inform or just scare? If the latter, it guaranteed a steady steam of viewers at least until the crisis had passed. Here everything on the news is scary. Don’t eat that. Don’t go there. Don’t buy this. Don’t do that. Don’t fly. Don’t drive. Don’t breathe. But don’t die either.

But for certain roguish marketers, global pandemic scares = money-making opportunities. The entrepreneurial spirit continues to thrive here in America. Not just vaccine producers saw a goldmine in the recent Swine flu hysteria. It didn't take scammers long to latch on to the latest hot-button topic to try to make a quick buck. Scams built on fears of Swine flu spread like, well, a highly contagious virus, across the Internet. The U.S. Computer Emergency Readiness Team issued an alert warning of a number of e-mail scams related to the Swine flu. The attacks arrive via an unsolicited e-mail message typically containing a subject line related to the Swine flu. Dozens of new Swine flu domain names were registered in the days following the media scare. The Federal Trade Commission and Food & Drug Administration sent out alerts about bogus products related to this “killer flu.”

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Recession Indicators

Many have heard about the “McDonald’s or Big Mac Index, as a method of determining salaries and disposable income and thus how well off a nation is. It is based upon how many minutes or hours a worker in a major world city earning an average salary needs to work in order to purchase a Big Mac. Tokyo used to be the winner with something like seven minutes. New York and London were not far behind. Some cities in developing countries could take as long as 20 hours. Sounds simple but it was a very effective indicator, really.

But times have changed. That was a 90’s Index. Now we are entering the second decade of a new century and need a new index. So I am proposing the Pole Dancer index. Certain “industries” are considered recession proof. Most have to do with sin or vice depending upon whether you are religious or a police official. For average folk, we call these necessities. These would include gambling, drinking, smoking, fraternizing with women who demand cash upfront, etc. The “Gentlemen’s Club” one would think, would fall into this category. But wait. A few years ago, these clubs were thriving. Believe it or not, there are publicly-traded strip club corporations that were seeing 300-400% gains in their stock price by an aggressive expansion strategy. Use the word expansion anyway you see fit. But recession anxiety, like performance anxiety, manifests itself in mysterious ways. With the onset of the recession, sales began receeding at these clubs faster than their clientele’s hairlines.

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Marketing Celebrity Worship!

RIP Michael Jackson-a supremely talented individual. Robbed of a normal childhood by exploitative parents.

Is the marketing and media blitz out of control?

I am convinced that we hold celebrities and athletes in such high regard, well out of proportion to reality, that someday we may even worship one. The “Gloved One” is definitely a candidate for deification. But the #1 candidate has to be Elvis. Think about it. He’s already referred to as “The King.” People have “altars” to his memory in their homes. His home, Graceland, is a pilgrimage destination. I predict he will be worshipped and people will wear little gold guitars around their necks in his honor. Maybe another 200 years.

Right now, the worshipping is being done by the marketers but who can blame them as fanatical Michael Jackson fans are ready to buy, read, listen, view, or do anything Jackson related.

Welcome to Doug's Corner

This blog is designed to comment upon U.S. and international financial, cultural, demographic, social and political events that affect marketing, media, data, trends and consumer behavior.

It will draw upon research from my monthly column in DMI www.dmionline.net but will have many additional features and observations.

It will be written from a global perspective to offer hands-on, practical information for all those involved in or considering taking their business international.