International Direct Marketing

Zhongguo, the “Central Country” (or mainland China as it is called in English), has made an impressive transition from an agricultural economy to a booming industrialized nation. GDP in 2005 is nearly 9.5% above the figure for the previous year. The record-setting pace of economic development has a positive effect on the purchasing power of the Chinese consumer which makes this a very attractive market indeed. However, success will come only to those companies that make careful preparations to operate in this multi-ethnic country where the business environment is dominated by personal relationships. Direct marketing with colorful, personalized mailings which inspire trust and confidence is one way to achieve access to this consumer market.

Hong Kong has one of the world’s best infrastructures of information technology. This indicates a market that despite being a part of greater China deserves special attention. This international financial capital is considered to be extremely secure. It can claim a GDP for 2005 that has grown more than 7% from the previous year and consumer spending here, badly shaken during the Asian market crisis, has been on the rise since 2004. Effective direct marketing requires a targeted offer that acknowledges the following: selecting the target group with interest in the product is success factor number one, sampling of products achieves additional consideration.

Japan’s economy is on the rebound: in 2005, the Japanese economy grew by nearly 3% over the previous year and is expected to grow by another 2.4% in the year 2006. The consumer confidence index once again reflects a positive trend and spending in this sector over the next few years is expected to increase by 1.5% annually. Patience — coupled with respect — is rewarded in Japan and this is true for business as well. The Japanese are receptive to direct marketing and like mailings, especially those that include a product sample.

Possessing very few natural resources, this city state has managed to achieve an economic prosperity based on know-how that is without equal. In 2005, the GDP grew by 6.4% over the previous year. Private-sector spending increased nearly 9% in 2005 which is mainly attributed to the improved situation in the job market and multiplied further still by higher base wage rates. Communications here should consider the cultural diversity which Singapore represents. These various segmentation opportunities are very promising for successful direct marketing: A very good response can be expected, for example, from mailings that include product samples.

Australia is enjoying a period of solid economic growth accompanied by a very positive job market. In 2005, the GDP increased by 2.5% from the previous year. A country of many nationalities, Australia absorbs numerous immigrants each year which demands selective target-group marketing. Here, direct marketing has a good chance for success: one of every two people responding to surveys — males and females of all ages alike — reports his/her curiosity is generally increased by mailings. This is even more effective when well prepared mailings present a special offer targeted at the specific product interests of the recipient.

Again in 2005, the New Zealand economy was one that can be diagnosed as being very healthy. Thanks to solid corporate profits and a positive wage situation for employees, the willingness to invest remains high. The increase from last year in the value of the GDP was 3.6%. International comparisons show consumers in New Zealand respond positively to mailings: one out of ten recipients reacts to a mailing at least once per quarter — most often when the letter is direct, informative and designed with a personal touch.

Some experts expect the economy to lose some of the dynamics of its upswing, even though the projected increase in GDP was 3.5% for 2005 in comparison to the previous year. Consumer spending still consistently breaks the 3% barrier and is projected to increase even further in 2006. The average American consumer is confronted each day with more than 100 TV commercials. For this reason, direct marketing, with its unlimited opportunities to deliver personalized messages, is especially effective at gaining their attention. The recipients of sales letters put great stock in the content of the mailings: product samples and coupons are equally well received and, especially by the female audience, are rewarded with high response rates.

The forecasts of economic growth in Austria for 2006 remain at approximately 2.4%. The government here is placing hope on a tax reform package that is designed to deliver equal support to both the employer and the employee. Higher wages and salaries of up to 2.5% are expected to have a positive effect on private investment, so that the increase in consumption is projected to be approximately 2.3% in 2006 over one year earlier. The country is also gaining importance as an economic center due to its central European location. The Austrians are positively inclined to direct marketing and 17% of the mailing recipients respond several times per quarter to commercial mailings.

Solid growth is projected for the Belgian economy over the coming years. The GDP is projected to increase each year from 2005 to 2010 by approximately 2.2%. The positive economic outlook is strengthening consumer confidence and is reflected in the forecasts of 2.3% growth in private consumption in 2006 over the previous year. Here, direct marketing has overtaken TV-ads in the rankings: In the category of overall acceptance, amusement and information value, mailings are now preferred over TV-commercials.

Despite the small, mid-year slump in the French economy in 2005, a positive investment impulse was observed from the private household and business segments. Not least on account of the increase in basic wages, the growth in private consumption for 2006 — as already seen in 2005 — is expected to be approximately 2% over the previous year. In France, direct marketing has established itself as being both long term and successful: Provided an interest in the product exists, mailings - especially those with coupons included - can be expected to have a large resonance.

Germany is hoping for world class consumer spending in 2006, encouraged by the World Soccer Championships as a strong motor for consumption. By the same time, the new coalition government gives hope for a sustainable improvement in the economic situation. Direct marketing continues to gain in significance. Targeted mailings that hit the product interests of the recipients and reflect a high degree of personalization can still achieve a respectable success even in this country where mailing density is quite high.

The pleasant, positive trend visible in the economy now for over ten years continued in 2005. Both the consumer goods sector as well as the entire health industry registered big gains. Confidence is also observed above all in the communications and IT industries. The rising trend is continuing: private consumption in 2006 should hit 2.4% compared to the previous year. This growth is slightly better than that achieved in 2005 (2.2%). This country is known for its peculiar brand of humor. A similar subtle, disarming approach in direct marketing will also have a positive effect on the response rates.

The Italian economy was still struggling to pick up the pace in 2005 because of increasing competitive pressures stemming from lower prices in Asia. Now however, several large-scale projects such as the “Citta della Moda” in Milan are expected to propel economic growth forward. Private consumption is projected to increase by almost 1% in 2006 over the previous year. Direct marketing, with its potential for personalized messages, not only addresses the regional differences of the Italian people, but is also well received among the consumers there. For example, with respect to the scale of popularity, direct mailings rank higher than both TV and print media advertising.

The upturn forecasted for 2005 did not materialize, but by the end of the year and into the year 2006, the economy of The Netherlands should begin to advance. The upswing will be driven especially by a rising demand for investment goods. Direct marketing reflects a positive message: of the 77% of the Dutch population that receive direct mailings, 21% say they respond favorably several times per quarter — a percentage far above the average in western Europe and good enough for 2nd place among all the countries served by this publication. Straightforwardness is just as important here for direct marketing as it is for routine business transactions.

The Spanish economy appears to be in an updraft. The GDP has been increasing at a rate of 3.3% in 2005 and is expected to grow by the same rate in 2006. An important lynchpin and the largest source of income for the Spanish economy remains, as in the past, tourism. Private consumption also showed satisfactory development and in 2006 — as was the case in 2005 — it is expected to grow more than 3% over the previous year. The Spanish consumer can be reached by direct marketing — especially colorful mailings are met here with curiosity and wide acceptance. Nearly 60% of the Spanish recipients take the time to read the direct mailing.

Exports and private consumption are expected to continue to fuel the economic growth in Switzerland — even when this proceeds at a moderate pace. The Swiss are hoping for an upturn in consumer sentiment thanks to the slight drop in the numbers of unemployed and higher real wages. Accordingly, growth for 2006 is forecasted at 2% higher than the previous year. The generally positive attitude of the quality minded Swiss consumer is reflected by their assessment of their living conditions: on a scale of 1 to 10, this is rated on average at 8.4. A colorful and witty approach to direct marketing finds success and success factor number one is choosing the right words for the target group.

Thanks to the sustained strength of private consumption and the rising investments, the Danish economy continued the positive growth evident in 2005. In particular, the strong demand for new cars, furniture and luxury goods kept consumer spending at a high level. A comparison to the previous year shows that consumption in 2005 increased by about 5.6% and 2006 it is projected to grow by an additional 3.5%. The fact that the Danes are among the most satisfied people and the country is one of the wealthiest in the world provides two more sound reasons to pursue business in this country. A straightforward argumentation — in advertising as in business — is the best way to convince the Danes.

Finland’s economy grows steadily even though the business situation in 2005 appears to have hit a slower period. Private consumption in 2005 increased by 3.4% and, for 2006, is projected to add another 3% compared to the previous year. The country is a world leader in the microelectronics and mobile telephone industries. Direct marketing is used on a wide scale here and the most popular mean of response is the order card.

The Norwegian economy continued to experience a strong upswing in 2005. The increase in the GDP for the year 2006 is expected to reach 3.4%; private consumption rose in 2005 and projections for 2006 are calling for about a 3.6% increase. Direct marketing is widely used in Norway and also widely accepted — above all when providing information about a quality product in a clever way and emphasizing the benefits of the product.

Sweden was unable to maintain the pace of the 2004 economic growth because of slower export sales. However, a rising level of private consumption provided an important impulse for the growth achieved in 2005 which was slightly below 3% and forecasts call for a further increase of 3.5% in 2006. Here, new records were achieved in direct marketing. Of all 24 countries in the study, Sweden leads in the response ranking: 26% of all recipients of direct mailings respond frequently.

The Czech Republic can look back on an exciting second year as a member state of the EU. GDP rose in 2005 in comparison to the previous year by 6%. The private consumption in 2006, as in 2005, should continue to grow by almost 3%. The statistically rapid rise may be attributed to the outstanding preparation by the business community for the membership in the EU. The automotive industry forms the foundation of this success. The results of direct marketing are also very respectable: in terms of popularity and information value, mailings rank higher than television, radio and internet ads. Every fifth recipient of a direct mailing replies frequently.

The economic growth expected to accompany EU membership and the start provided by development funds should begin to show clearly visible returns by the early year 2006. Growth industries of the future like biotechnology, information technology and logistics should support structural change in Hungary and move the country closer to EU levels in the near future. The private consumption shows a rise of 3.5 to 4.0% in 2006. Direct marketing enjoys a great popularity in Hungary and even ranks ahead of TV-ads. Nearly 70% of the recipients of direct mailings regularly take the time to read it.

Given wings by its membership in the EU, the Polish economy has experienced uninterrupted growth. The GDP is projected to grow in 2006 by an amount somewhere between 4.1 and 4.7%. The rising private consumption, with 3.2% in 2005 and around 3.7% forecasted for 2006, further confirms the positive business situation in a country that is held up as a model among other new EU nations. The mailing density is still relatvively low in Poland, offering interesting opportunities for direct marketing campaigns. Aesthetic qualities in direct mailings are appreciated by the Polish consumer. Direct marketing is frequently used and effective, especially in the growing premium and luxury goods segment.

Private consumption — stimulated by an increase in real wages and lower interest rates — is driving the continued economic growth in Slovakia. Gross Domestic Product increased again by more than 6% in comparison to the previous year. Consumption is expected to be higher both in 2005 and 2006 by nearly 5% over the respective previous year. A positive mood among consumers is also good for direct marketing: mailings with product samples are met with approval by a large portion of the population and hold the promise of a high response rates.