You’ve seen the news – one U.S.-based DRTV company after another has pulled up its international distribution stakes and called it a day. Yet, at the same time, we keep hearing about the growth in consumer acceptance of direct response marketing across the globe.
To achieve international DRTV success, it is important to gain a thorough understanding of each market and to develop an appropriate business model.
Success requires an integrated marketing strategy that plans for and includes sales through all channels of distribution: TV, print media, Internet, mail order and retail.
For example, conducting business only via television sales with fixed, long-term media contracts and fixed, long-term overhead structures has failed. It means going from one product to the next, creating awareness for new product categories through a single channel of distribution rather than exploiting all available channels. You create the awareness on TV and leave the long-terms profits to your competitors that sell in mail order and retail while you move on to the next product.
Market share is the name of the game. Infomercials are a great way to create new product categories. When an infomercial company brings out a product, it must realize that it will create a huge market for it of which it will capture a share that will vary between 30 percent to 80 percent depending on how well the plan is put together and executed.
Coming up with a hit product every month is an impossibly difficult way to run a business. Making sure that maximum sales are generated from every hit is the only way to go.
We are not in the electronic retailing business, nor are we in the business of transactional television. Those definitions are too narrow. We are in the business of selling consumer products through all available channels of distribution (even if we make money only in one). Only such a broad definition of our business allows long-term growth and profitability and goes a long way toward explaining the reasons the industry has been declining outside the United States.
Instead of releasing products in rapid succession, take the time to work each product; come out with different versions that meet the international market’s varied consumer requirements. Test different price points. Gain a thorough understanding of each country’s distribution strengths. Anticipate your competitors’ moves and plan accordingly.
Germany is an exciting direct response market. However, infomercial media are limited. The key to Germany is its mail-order business. For any product to succeed in Germany it has to make it in mail order. The mail order business in Germany is so huge, a product can achieve extraordinary success in this vibrant market even without television.
In the United Kingdom, DRTV also is limited because of lack of media. Here, 24-hour infomercial channels reach about 25 percent of the country’s households, meaning 75 percent does not receive any exposure to infomercial advertising. Again, you must carefully plan to achieve as much product exposure as possible, driving awareness through spot television and print, including newspapers, Sunday supplements and magazines.
Properly planned for, the international marketplace is filled with revenue-generating opportunities. Achieving success internationally is about building product categories, brands and product lines that will carry across multiple channels of distribution. It is about carefully timing your media – such as having your product on television for three to six months before the mass distribution of mail-order catalogs, many of which are published twice a year. It is about concentrating on building one brand at a time and not trying to do too much at the same time.
The international marketplace has as many obstacles at possibilities. Understand both, and you can achieve your business objectives.