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in this issue
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Dear Reader,
We are returning to our ongoing series about
international distribution and getting glimpses of how it
works on foreign soils. Australia and New Zealand have
strong similarities to the USA and are fertile territories
for sales. Whatever holds true for Australia also holds
true for New Zealand, so this article is focused on both
countries at the same time. Enjoy!
What Works/Sells in Australia/New Zealand?
Generally-our "Downunder" contacts use their instincts
to determine if they will risk testing a product. If the
quality of the commercial is acceptable to good-that is
a very important factor. If the product has an American
flavor about it that is a positive, and they are willing to
revise a spot or infomercial according to any
appropriate need-in order to make it sell.
In most cases an American made commercial will be
used in the initial test. If they do revise the commercial
(before the test) it usually involves the offer. Any
products that could be ingested or require claims have
to be thoroughly substantiated and REAL. The
Australian and New Zealand governments have very
strict guidelines covering these issues, and if the
backup is not up to government standard, those claims
or elements of the offer have to be edited out.
Both countries sell products that also sell well in the
USA. Cleaning products, exercise equipment, music
offers, etc.. The volume of sales is less because the
populations are 20% that of the USA, but all categories
are strong sellers and consistent.
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How Do You Test Products? |
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The cost of television airtime is much greater than the
US. Marketers in these two countries are extremely
selective about where and when they test, the risks
are much greater for loss. They test on broadcast
stations and cable, similar to USA media testing. They
can utilize 30, 60, and 120 second spots, 30 minute,
and 15 minutes spots. Since the TV time is limited, they
also use home shopping and catalogues as part of their
initial product testing.
The use of home shopping and catalogues provides two
additional dimensions of testing and more options for
success. Marketers in Australia will buy New Zealand
airtime and the same is true for New Zealand Marketers
buying Australian airtime. Either country will test both
populations. Media time is available 24 hours a day and
7 days a week.
The Australian dollar is worth about 1/2 that of the US
dollar, and duties can mount up to 40% based on
certain products. There are financial challenges facing
import of products and selling via TV. Marketers in both
countries need a 5 to 1 mark up in order to sell
successfully in all areas of distribution, just like the US.
These are reasons why home shopping and catalogue
sales are a vital part of the testing process.
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Rolling Out Successful Products |
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Pricing is a very critical factor for TV time, so these
marketers will look to retail sooner than their American
counterparts. Everything depends upon the sales power
of the product, but pricing limitations and a smaller
population will pave the way faster for retail distribution
in Australia/NewZealand. Marketers in both countries
continue to air commercials that are over four years
old, so TV can play a powerful role in supporting retail
placement and still be profitable.
The magic price point for Australia and New Zealand
TV products is somewhere around $39.95 Australian
(that is $19.95 US). It isn't an issue whether a product
is from the USA or not, that can serve as a positive-
however today products are manufactured from
numerous parts of the world and customers are use to
that fact.
They like to have 250-500 products on hand for a
market test. If the "proof is in the pudding" then they
want a container-full of product immediately. The top
categories for this market is health, fitness, and
household items. Remember if a product sells for $30 in
the USA that translates into $60 Downunder, and that
does not include transportation and duties to get it
there. Yes, there are challenges, but opportunities
abound Downunder!
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