Direct marketing in Panama

Citation

(2007), "Direct marketing in Panama", Direct Marketing: An International Journal, Vol. 1 No. 2. https://doi.org/10.1108/dmij.2007.32501bab.001

Direct marketing in Panama

Panama is truly a success story of, and example for, how emerging markets can move from an economy based on unskilled manufacturing and low-end services to a skill-dependent business environment in a very short period of time. In the early 1990s, the Panamanian market was in disarray with all the earmarks of long-term problems: an unstable government, high unemployment, and economic growth that was anchored in subsistence manufacturing and poor value-added services. Within 15 years, Panama has risen to be the technological and financial services hub of Latin America and the pivotal link between Latin America and the North American, European, and Asian Market (China, in particular).

With the maintenance of the $US as the local currency, and the recently approved Panama Canal expansion, the country is poised according to J. Enrique Tellez, Senior Commercial Specialist for the US Embassy in Panama, to be a classic example of “a country on track for sustained economic growth.” With a steady increase in GDP (over 6 per cent each of the past several years with an 8 per cent increase in 2006), large international banking and legal institutions, and impressive technological growth rates in the past five years (data 25 per cent, mobile technology 20 per cent, internet use 42 per cent), the Panamanian market is an excellent environment to explore the role of direct marketing activities.

In the fall of 2006, a standardized 24 question survey instrument was administered to selected businesses located in, and around, Panama City. These businesses ranged from large multinationals to small family-owned firms, but were drawn primarily from the service sector which accounts for just over 60 per cent of Panama's GDP. The results are based on 127 completed surveys. The key findings include:

(1) Of the respondents, 94 per cent reported an increase in direct marketing activities in Panama in the past five years.

(2) About 78.2 per cent indicated they anticipated a high level of growth in direct marketing activities in Panama in the next five years.

(3) About 80 per cent stated that the overall perception of direct marketing amongst consumers in Panama was somewhat to very positive.

(4) Of the respondents, 86.7 per cent believed that the Panamanian business community has a positive perception of direct marketing activities in general.

Editor's note: In the last issue, we had glimpse inside an emerging market in the European Union. This issue we will look at a market rapidly emerging as a crucial linchpin in the global economy – Panama. The author of this report has extensive business experience in emerging markets, with a particular emphasis on Latin America. As a dual US-Panamanian citizen Andrew R. Thomas provides a unique view on Panama and the role of direct marketing in that economy.

(5) Of the two direct marketing industry organizations actively involved in the Panamanian market (The US Direct Marketing Association and Cámara de Comercio, Industrias y Agricultura de Panamá (CCIYAP), 71.3 per cent indicated that the local association was moderately influential in setting direct marketing standards in the market.

(6) Based on the experience of their individual businesses, the most successful direct marketing activities in Panama are:

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  telemarketing;

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  electronic/online; and

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  infomercials.

(7) Based on the experience of their individual businesses, the least successful direct marketing activities in Panama are:

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  direct mail; and

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  mail order/catalogs

(8) In terms of revenue derived from direct marketing, 53.5 per cent reported earning between $100,000-$300,000 annually through direct marketing activities.

(9) Clearly, as a major distribution and technology center in the global economy, Panama cannot be ignored as a significant force in the twenty-first century marketplace. The results of this survey show that not only does the market possess the capability to be a hotbed for direct marketing activities, but it can also be a learning center for how to employ direct marketing tools in other rapidly emerging markets.

Andrew R. ThomasTaylor Institute of Direct Marketing, The University of Akron, Akron, Ohio, USA