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Brazil - Dreamland for Advertising Companies
Favorable conditions for direct marketing campaigns
November 2006By Klaus M. Knappik and Dr. Diane Rinas (published in the trade journal DIREKT MARKETING, December 2006 issue)
Very favorable conditions await companies wishing to advertise in Brazil because Brazilian consumers have an above-average affinity to advertising media - a good prerequisite for direct marketing campaigns.
The Brazilian economy is on a sound footing. The world's fifth largest country in terms of area and population, Brazil has enormous economic potential. The reason for this is ongoing industrialization, political stability and the huge abundance of raw materials, particularly iron. At the same time, the South American Customs Union Mercosul is strengthening the market in Latin America, which is having a positive effect on the Brazilian economy. Falling interest rates, the expected recovery of the agricultural sector and Government initiatives are also helping to boost the economy. Besides the Latin American countries, the US and the European Union are Brazil's most important trading partners. Forecasts for 2006 expect gross domestic product to grow by between 3.5 and 5 percent. Experts also expect imports to rise sharply.
One particularly pleasing development is that rising real wages and falling unemployment will continue to fuel private consumption among Brazil's population of approximately 186 million. Advertising media are particularly popular in Brazil, with TV commercials ranking first with the Brazilians, who are avid television viewers. However, mailings are also extremely popular, ranking a creditable third. In Brazil, the proportion of young consumers (under the age of 30), at 38 percent, is relatively high compared to the reference countries of Australia, Canada, Mexico and the US (30 percent). In 2004, 28.2 percent of the population were under the age of 15, 65.8 percent fell into the 15-to-64 age bracket and just 6 percent were over the age of 65. However, the proportion of consumers who have a higher level of education is low at just 26 percent.
However, of the consumers who receive advertising mailings, 93 percent fall into the category of people who have an affinity to mailings, in other words, people who read their mailings at least occasionally.
In the reference countries, the figure is just 90 percent on average. All in all, 65 percent of respondents indicate that they read their mailings regularly and as many as 46 percent respond to mailings at least once a year. Two-person households (56 percent) and consumers with a high level of education (55 percent) are particularly keen respondents. Contrary to the general trend of preferring to respond by e-mail, the preferred response medium of the majority of Brazilians (47 percent) is the telephone. 41 percent of respondents use the reply card and just 25 percent respond by e-mail.
One particularly pleasing development is that rising real wages and falling unemployment will continue to fuel private consumption among Brazil's population of approximately 186 million. Advertising media are particularly popular in Brazil, with TV commercials ranking first with the Brazilians, who are avid television viewers. However, mailings are also extremely popular, ranking a creditable third. In Brazil, the proportion of young consumers (under the age of 30), at 38 percent, is relatively high compared to the reference countries of Australia, Canada, Mexico and the US (30 percent). In 2004, 28.2 percent of the population were under the age of 15, 65.8 percent fell into the 15-to-64 age bracket and just 6 percent were over the age of 65. However, the proportion of consumers who have a higher level of education is low at just 26 percent.
Mailings are well accepted by consumers
Although the mailing density in Brazil is lower than the average in the reference countries, mailings are very popular with consumers. Surveys conducted by Direct Marketing Monitor International 2006, published by Deutsche Post Global Mail, show that just 26 percent of respondents receive mailings at least once a month, as opposed to 48 percent in the reference countries.However, of the consumers who receive advertising mailings, 93 percent fall into the category of people who have an affinity to mailings, in other words, people who read their mailings at least occasionally.
In the reference countries, the figure is just 90 percent on average. All in all, 65 percent of respondents indicate that they read their mailings regularly and as many as 46 percent respond to mailings at least once a year. Two-person households (56 percent) and consumers with a high level of education (55 percent) are particularly keen respondents. Contrary to the general trend of preferring to respond by e-mail, the preferred response medium of the majority of Brazilians (47 percent) is the telephone. 41 percent of respondents use the reply card and just 25 percent respond by e-mail.
What goes down well with consumers?
One thing is true in all countries: well-known companies have good prospects of arousing interest with mailings. That also applies to Brazil. An above-average 63 percent of respondents (compared to 46 percent in the reference countries) attach great importance to this aspect. However, Brazilian consumers (77 percent) attach top priority to the targeting approach used.51 percent appreciate it if they are addressed personally, by name. A large number of consumers prefer a creative and high-quality design, which is less important to consumers in the reference countries. And 55 percent of those who have an affinity to mailings are pleased if the advertising mailing includes a sample - this applies equally to men and to women. However, coupons and vouchers are more appealing to women (43 percent).
Interests of the target group
Wellness themes are at the very top of the popularity list in Brazil. 57 percent of all respondents and as many as 63 percent of those willing to respond to mailings are interested in this area. Entertainment media are no less popular. This means that, unlike in the reference countries, a large target group can be reached in Brazil (55 percent compared to 45 percent). Fashion products also have good prospects of success with consumers because 40 percent of all respondents and 45 percent of those willing to respond to mailings are interested in fashion. Tour operators, too, can expect a positive response. This can also be achieved very effectively with the themes of culture and entertainment, which are particularly popular with Brazilians. This is stated by 59 percent of all respondents and by as many as 63 percent of those willing to respond to mailings. In the target group of women, there is a particularly high proportion of 30 to 50-year-olds, while in the men's target group, the under-30s are well-represented at an above average rate, at 54 percent.The mail-order business still offers potential
Surveys conducted by International Direct Marketing Monitor show that the mail-order sector in Latin America still offers untapped potential. In Brazil, only 35 percent of consumers order goods from mail-order companies, compared to 46 percent in the reference countries. Consumers with a higher level of education (46 percent), single and two-person households (44 percent, respectively) and men evidently have a special affinity to the mail-order business. On average, Brazilian consumers are very loyal to their brands (82 percent), attach importance to quality (64 percent) and are guided by price (61 percent). As the surveys conducted by International Direct Marketing Monitor show, Brazilians are ahead of consumers in the reference countries in terms of all these decision-making attributes. At the same time, they are extremely receptive to new products (60 percent). This offers international companies good prospects of positioning themselves in the Brazilian market with the aid of direct marketing and the relevant know-how.Klaus Knappik, Chairman of the MAIL International Divisional Board, Deutsche Post World Net
Dr. Diane Rinas, Senior Marketing Manager, Deutsche Post World Net
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