FEER(3/6)

  (From The Far Eastern Economic Review)
  By Geoffrey A. Fowler in Hong Kong

TO BREAK INTO the Philippine market last year, food maker Heinz sent 150,000 housewives in Manila samples of Heinz tomato ketchup in bright red cans. A surprising 8% of the recipients responded by signing on to Heinz's mailing list, even without a deadline or the offer of another freebie. A similar campaign in the United States might net 2% of recipients at best, say several ad agencies. The responses gave Heinz valuable data about young shoppers willing to switch from the Del Monte ketchup their mothers used.

"When you've got that level of interest in a new product, it offers you a rich seam to mine for future database building and further product launches," says Ichay Bulaong, managing director of iLeo, the direct-marketing arm of Leo Burnett Asia Pacific, which ran the campaign.

After years of trying, direct marketers have finally figured out how to pitch to Asian consumers. The trick, they say, is to make the pitch in a medium that's culturally relevant, that meets a local need or targets particular characteristics of a consumer segment. One reason the Heinz mailing was successful, says Bulaong, is that Filipinos generally receive only a few pieces of mail a week, so that even a random solicitation can seem special. Another reason is the relative novelty of this kind of advertising in most of Asia. "Direct marketing is still young here, and women have fewer mailings sent to them, so they're not yet as cynical," explains Bulaong.

Other direct mail campaigns -- the term "junk mail" is industry taboo--have prompted not just high response rates, but highly personal responses. John Goodman, Asia-Pacific president of OgilvyOne, the direct-marketing arm of Ogilvy & Mather, recalls a recent direct mailing of back-to-school tips from food company Nestle that prompted a letter from a Malaysian mother. "I was shocked and excited because you really keep track of my family and advise me on how to prepare for the first day in school. I would say you have touched my heart with your care and good service," she wrote.

Direct marketers in Asia started out by just copying American junk-mail flyers, but they've slowly caught on that what works best is tapping into modes of communication that resonate with local cultures -- whether it's through mailings, telemarketing, free test-drives of luxury cars or even sponsoring a village well. "The medium is the message," says Kent Wertime, vice-president of OgilvyOne.

TELEMARKETING SELLS

Telemarketing helped iLeo to solve a low repeat-buyer rate for Jansenn Pharmaceutica's Retin-A anti-wrinkle ointment in the Philippines. Marketers called buyers to explain that the ointment might cause stinging and peeling. "They thought they were allergic, not realizing this was part of the treatment," says Bulaong. The buyers were so talkative that the telemarketing force was doubled to deal with the long calls. After the campaign, the retention rate quadrupled.

And one culture's junk mail can be another culture's community. In Japan, Grey Direct Interactive had to pitch Clearasil, an anti-acne cream from Boots Healthcare, to media-saturated teenagers. The marketer messaged girls on their hi-tech mobile phones, inviting them to join a phone-based on-line "Clearasil Club" where they traded sisterly advice. Nearly 7,000 teens have joined since last April. With Japan's birth rate falling "most of these teens are single kids. They don't have sisters with whom they can talk about their boyfriends," explains Miho Shiozaki, managing director of Grey Direct in Tokyo.

These localization successes are fuelling what has already become a $20-billion-a-year business in direct mail, Internet and other direct marketing within the $88 billion Asian advertising industry, according to Richard Pinder, Hong Kong-based regional managing director of Leo Burnett Asia Pacific.

The biggest problem now is building accurate consumer databases. "Given that most Asian countries are still largely agrarian and poor, we don't have qualified data on the vast majority of consumers," says Wertime. Bad databases make bad targeting, which could ruin receptiveness among Asian consumers to direct marketing and make them as jaded as Americans. Says iLeo's Bulaong: "Rather than wait for laws to be passed and risk over-regulation, which can stifle creativity, practitioners should regulate themselves, abide by a code of ethics and use permission marketing."

Updated February 26, 2003 5:19 p.m.