LATIN AMERICA;NEW WAYS TO REACH CUSTOMERS; DIRECT MARKETING BECOMES MORE WIDELY USED THROUGHOUT REGION

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American express Co., Nestle, AT&T and IBM Corp. are just some of the major marketers who are discovering the power of direct marketing in Latin America.

"In Brazil, Chile and Argentina-boom-companies are discovering direct marketing," said Fernando Peydro, president and founder, Clienting Group, an Argentine direct marketing and telemarketing agency that has handled AmEx, Nestle, AT&T, Microsoft and Time.

Nestle and IBM use direct marketing in Brazil, and AmEx uses it in Argentina, he said.

"Most companies feel it is very expensive to do a huge sales force effort to the street, that it is better to relay that same force to a direct marketing operation," Mr. Peydro said.

Increasingly, international companies are asking their marketing staff to step up direct marketing efforts.

Mr. Peydro, in a recent speech at a DMA International conference, estimated that Argentina, Brazil, Chile and Peru amount to about 230 million consumers.

While there are no firm direct marketing industry figures for Latin America, direct marketing volume is said to be growing as much as 30% annually in many places, he said.

Direct marketers in Latin America should be aware of differences in language and dialect, measurements of prestige, and market realities-cosmopolitan city and conservative country cultures, he said.

A shift in politics and values from "Yankees go home" to market economies, a free trade agreement and a common market help the industry, he said.

Response rates are higher than in North America and Europe due to a smaller volume of direct mail offers to consumers.

Also, large distances and traditional distribution channel inefficiencies, and open and increasingly stable economies, make direct marketing a more attractive tool for marketers than in the past, Mr. Peydro said.

However, direct marketing's growth is restricted by less-sophisticated consumers, smaller average incomes and infrastructure services with lower quality and higher costs than other regions.

Local agencies have staffers that best understand the market. Similarly, global strategies tend to be less successful than local ones, so strategies may have to be adapted and refined, he said.

Categories beginning to heavily use direct marketing include financial services such as banks and credit cards; airlines; subscriptions; fundraising; and lotteries, Mr. Peydro said.

Package goods marketers are just beginning to become active.

He forecasts that direct marketing sales and usage will continue having higher growth rates than local economies.

Also boding well for future direct marketing growth: the expected increase in household income, he said. Trained manpower will be a key factor and the technological infrastructure will be state of the art in a few years, he said.

"Find the right partner, use a global strategy, but local tactics," Mr. Peydro said.

Another speaker at the DMA conference suggested that Latin American direct mail campaigns must be more eye catching and colorful than campaigns used in the U.S., with more image and less content.

Steve Carr, international circulation manager for Spanish-language business/finance monthly America Economia, said, "Try to include some association for the recipient: a club membership is key-belonging to an exclusive group or having been one of the lucky few selected to enjoy an offer" are powerful draws for this market.

"Use of memberships, certificates, clubs," are highly effective, Mr. Carr said.

"If you are producing a piece for Latin America, always produce it in Spanish, or Portuguese for Brazil, even if your product is an English language publication," he said.

"If you absolutely have to put something in English," he said, "keep it very simple. Also, when referring to the U.S., say U.S.A. and not America

Target your piece at decision makers, not end users, Mr. Carr said.

"In general, Latin Americans feel uncomfortable about approaching their boss with purchase requests of this nature, even though benefits for the whole company may be obvious," he said.

Mr. Carr also cited characteristics of the Latin American mentality: age and birthdays are highly respected; consumers are extremely family oriented; consumers have total respect for immediate authority and aren't prone to question superiors.

Other points to consider: credit card usage is very low; mail is generally slow; the volume of direct mail is low; lists are expensive and unreliable; and the phone system is poor but improving.

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