August 1998


REACHING CONSUMERS IN ASIA THROUGH DIRECT TV ADVERTISING


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  • Reaching Consumers in Asia Through Direct TV Advertising
  • Airfare Pricing Strategy Under Review by Major US Airlines
  • Proctor & Gamble Launches New Facility in Northern China
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  • ASIA -- Because nearly one-third of products sold by the US are purchased by Asian consumers, there is a direct connection between the economies of the USA and Asian markets. With Asia's recent economic turmoil and more than a billion consumers in the region, it is no wonder that US companies and many from other countries continue to eye Asia as a market of opportunity. But the drawbacks become evident when we dissect the market and remind companies that Asia is made up of many countries, customs and cultures and separate business practices.

    It always comes back to marketing lesson #1. Know your customer. Know your market.

    For many companies with an eye on Asia, China appears to be a ripe, and developing market. It is true that Asia (including China/Hong Kong, Japan, N/S Korea, Malaysia, Philippines and Singapore) has a population of over 1 billion people, which translates to approximately 350 million TV households. And China has a population of over 1 billion people, alone, with more than a quarter of a billion TV households (281,000,000). But the money spent by businesses to advertise on TV is disproportionately low in China -- only US$1.7 billion per year, compared with Japan, which spends more than US$16 billion/year to reach 43 million of its TV households.

    For direct TV marketers, the differences become even more pronounced. For example, Chinese consumers rarely have credit cards to make immediate purchases, and the penetration of telephones makes direct-selling nearly impossible, relying much more heavily on retail outlets. Clearly the impact of TV, specifically direct TV advertising is stronger in Japan than in China.

    [continued]








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    There are other obstacles, in a general sense, to doing business in Asia and selling products to the mass market through TV advertising. For example, in China, airtime is not booked based on a specific campaign, but rather it is purchased to fill available slots. And beware in Japan where TV stations have favored clients. In Indonesia, it is against the law to broadcast an infomercial with foreign footage. In Korea, it is altogether against the law to broadcast infomercials on any stations other than cable and terrestrial broadcast channels dedicated to home shopping.

    While the next largest market in this Asian group is N/S Korea, with a combined population of 68.2 million, there are only 13.5 million television sets and spending is only around US$2 billion per year -- certainly more than that spent in China on 1.2 billion people. But in Korea, the product approval process can be so extensive that without a local partner, it would be imminently difficult to get a foreign product on the air.

    Partnering with a well-established company in Asia will be critical to a successful TV advertising product launch -- and to selecting the specific markets for entry. Besides the media regulations, not all products do well in all countries. Working with consultants that have direct ties to established local businesses -- advertising agencies, marketing research companies, media firms, attorneys, etc. will directly impact your chances for success in Asia.

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    AIRFARE PRICING STRATEGY UNDER REVIEW BY MAJOR US AIRLINES

    USA -- In a market that showed steady and significant price increases from 1995 through 1997 (3%, 9% and then 16% increases, respectively), it seems that US business airfares have finally begun to stabilize during the last 8 months. This stability is attributed mostly to corporate customers negotiating for lower fares and reducing corporate travel. While travel is being cut back at even the top 100 travel spending companies in the US (including 3M, Chrysler, DuPont, Ford, GM, Mobil, Proctor & Gamble, Oracle and RJR Nabisco), some of the interesting changes in travel are the drastic measures companies are taking to reduce travel fares, including buying nonrefundable tickets. As such, airlines are re-thinking their pricing strategy, but need to do so without alienating their leisure travelers who comprise the majority of their passengers and who offer the greatest growth potential for airline business.

    (Source: YOUR LINK HERE)

    PROCTOR & GAMBLE LAUNCHES NEW FACILITY IN NORTHERN CHINA DUPONT INVESTS IN PACKAGING INDUSTRY IN EUROPE
    TIANJIN, China -- Proctor & Gamble (P&G), the largest consumer goods company in the world began production in northern China early this month in the municipality of Tianjin. This facility will manufacture shampoos and sanitary napkins as well as products specifically designed for the Chinese market. P&G first started operations in China a decade ago in Guangzhou and has since established 11 joint ventures dispersed throughout China.
    (Source: YOUR LINK HERE)

    WILMINGTON, Del., USA -- DuPont's new facility, LeTrait, France, represents an important move for DuPont. This is DuPont's first polyethylene based shrink film line outside the USA. The DuPont LeTrait site is now the first European Clysar(R) manufacturing line for polyethylene films. ClysarR was the first polyolefin shrink film introduced into Europe in the late 1970's.

    This move capitalizes on DuPont's commitment to meeting the needs of the 21st century, "as global demand increases the need for more packaging shrink wrap.... The LeTrait plant positions us well to deliver what our customers need, when they want it," according to VP and General Manager of DuPont's Packaging and Industrial Plymers business unit. ClysarR shrink film is sold worldwide through distributors and is used for packaging food, toys and printed materials, among other things.
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    Updated 8/31/98