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Integrated Marketing Communications and International Advertising

CHAPTER LEARNING OBJECTIVES

What you should learn from Chapter 16:

LO1 Local market characteristics that affect the advertising and promotion of products

LO2 The strengths and weaknesses of sales promotions and public relations in global marketing

LO3 When global advertising is most effective; when modified advertising is necessary

LO4 The communication process and advertising misfires

LO5 The effects of a single European market on advertising

LO6 The effect of limited media, excessive media, and government regulations on advertising and promotion budgets

CHAPTER OUTLINE Global Perspective: Barbie versus Mulan

Sales Promotions in International Markets

International Public Relations

International Advertising

Advertising Strategy and Goals Product Attribute and Benefit Segmentation Regional Segmentation

The Message: Creative Challenges Global Advertising and the Communications Process Legal Constraints Linguistic Limitations Cultural Diversity Media Limitations Production and Cost Limitations

Media Planning and Analysis Tactical Considerations

Campaign Execution and Advertising Agencies

International Control of Advertising: Broader Issues

16 Chapter

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For years, Barbie dolls sold in Japan looked different from their U.S. counterparts. They had Asian facial features, black hair, and Japanese-inspired fashions. Then Mattel Inc. con- ducted consumer research around the world and learned something surprising: The original Barbie, with her yellow hair and blue eyes, played as well in Hong Kong as it did in Hollywood. Girls didn’t care if Barbie didn’t look like them. “It’s all about fantasies and hair,” concluded Peter Broegger, general manager of Mattel’s Asian operations in 2003. “Blond Barbie sells just as well in Asia as in the U.S.” Major toy makers were rethinking one of the basic tenets of their $55 billion global industry—that children in differ- ent countries want different playthings. The implications ended up being significant for both kids and companies. In the past, giants such as Mattel, Hasbro Inc., and LEGO Co. produced toys and gear in a variety of styles. Increasingly, they designed and marketed one version worldwide. This shift led to a series of massive merchandise blitzkriegs, with companies deluging boys and girls around the globe simul- taneously with identical dolls, cars, and gadgets. For example, Mattel’s Rapunzel Barbie, whose ankle-length blonde locks cascade down her pink ball gown, was released on the same day that fall in 59 countries including the United States—the company’s biggest product launch ever. In 2003, the first year, Rapunzel Barbie and related merchandise gener- ated $200 million in global sales, nearly half of that outside the United States. Mattel no longer makes Asian-featured Barbies. Two developments at the time were changing kids’ tastes. One was the rapid worldwide expansion of cable and satel- lite TV channels, which along with movies and the Internet exposed millions of kids to the same popular icons. For ex- ample, Walt Disney Co. then operated 24 Disney-branded cable and satellite channels in 67 countries outside the United States—up from 0 a few years earlier. The other development was the widening international reach of retailing giants such as Walmart Stores Inc., Toys “R” Us Inc., and Carrefour SA, which had opened thousands of stores outside their home markets. Increasingly, the mass retailers entered into exclusive deals with toy and consumer-products companies, allowing them to stage huge, coordinated promotional campaigns. For example, when Rapunzel Barbie had its debut, Walmart stores in South Korea and China hired local women to dress up like the doll and greet children as they entered. At the same time, the Mattel TV ad campaign was broadcast around the world in 15-, 20-, and 30-second spots—in 35 different languages. Mattel’s Barbie website, which has eight

language options, featured Rapunzel stories and games. A computer-animated movie, called Barbie as Rapunzel , was broadcast on TV and released on video and DVD around the world, and it was even shown in some theaters overseas. In Madrid, the launch was accompanied by a “premiere” of the movie and special promotions of comb sets and other acces- sories at Carrefour stores across Spain. After attending the pre- miere, the kids could and did buy the dolls. For some parents, this meant Christmas shopping later in the year at the often fre- netic Toys “R” Us in Madrid for stuffed dragons from the movie or a Barbie laptop computer, a Barbie kitchen set, a Barbie travel van, and a host of other Barbie gadgets and accessories. Nowadays, few American companies sell toys in the Is- lamic world. Mattel, the world’s largest toy company, has no plans to do so. Perhaps Disney’s Jasmine will well sell there, though she’s actually inappropriately dressed for many of Islamic faith. Jasmine is just one of the series of “Princess” dolls aimed directly at Barbie’s dominance of the doll cat- egory. Snow White, Pocahontas, Mulan, and, most recently, Princess Tiana are others in the band. Their diversity may have broader appeal. Disney uses pink in the packaging. Disney is also mindful of the fashion-conscious Barbie crit- ics. Disney Princess is more about tiaras and wands rather than handbags and high heels. Where Barbie is more a role model, and therefore more objectionable to parents, Disney is putting its emphasis on the fantasy. Too bad someone isn’t emphasizing education. Indeed, too bad for Mattel—despite the comprehensive- ness of the integrated marketing communications plan, sales of Barbie have remained volatile. At times, competitors’ more ethnically diverse product lines have sold better, including Mulan, Bratz, and Fulla, as described in Chapter 5. Recent sales increases have been due to two important strategic changes for Barbie: (1) buying a license to produce the Disney Prin- cesses and (2) releasing a line of ethnically diverse dolls—the So in Style Barbies are touted as “having a more authentic ap- pearance, from their hair to their varying skin tones.” But at the same time, profits have been hurt by a $310 million court award to Barbie’s Bratz competitor and the closing of a high- profile store in Shanghai.

Sources: Lisa Bannon and Carlta Vitshum, “One-Toy-Fits-All: How Industry Learned to Love the Global Kid,” The Wall Street Journal , April 29, 2003, p. A1; Charisse Jones, “Disney Adds African-American Princess Tiana to Royal Family,” USAToday , February 16, 2009; David Pierson, “Barbie Closes Shop in Shanghai,” Los Angeles Times, March 8, 2011, pp. B1, B5; Andrea Chang, “Mattel Profit Down 33%,” Los Angeles Times, April 16, 2011, p. B2.

Global Perspective BARBIE VERSUS MULAN

PART FOUR

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466 Part 4 Developing Global Marketing Strategies

Integrated marketing communications (IMC) are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations—almost all are included in the Barbie campaign described in the Global Perspective. Indeed, even the original Wall Street Journal story was most likely prompted by a company press release. All these mutually reinforcing elements of the promotional mix have as their common objec- tive the successful sale of a product or service. In many markets, the availability of appro- priate communication channels to customers can determine entry decisions. For example, most toy manufacturers would agree that toys cannot be marketed profitably in countries without commercial television advertising directed toward children. Thus, product and service development must be informed by research regarding the availability of communi- cation channels. Once a market offering is developed to meet target market needs, intended customers must be informed of the offering’s value and availability. Often different mes- sages are appropriate for different communications channels, and vice versa.

For most companies, advertising and personal selling are the major components in the marketing communications mix. In this chapter, the other elements of IMC are briefly dis- cussed first. The goal of most companies, large and small, 1 is to achieve the synergies pos- sible when sales promotions, public relations efforts, and advertising are used in concert. However, the primary focus of this chapter is on international advertising. The topic of the next chapter is global sales management.

LO1 Local market characteristics that affect the advertising and promotion of products

1 Ho Yin Wong and Bill Merrilees, “Determinants of SME International Marketing Communications,” Journal of Global Marketing 1, no. 4 (2008), pp. 293–306.

Sales Promotions in International Markets Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and coop- eration. Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, con- tests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-of-purchase displays are types of sales promotion devices designed to supplement advertising and personal selling in the promotional mix. The Rapunzel Barbie movie pre- miere is too.

Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer intro- duction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts. For example, Procter & Gamble’s introduction of Ariel detergent in Egypt included the “Ariel Road Show,” a puppet show (not the Little Mermaid!) that was taken to local markets in villages, where more than half of all Egyptians still live. The show drew huge crowds, entertained people, told about Ariel’s better performance without the use of additives, and sold the brand through a distribution van at a nominal discount. Besides creating brand awareness for Ariel, the road show helped overcome the reluctance of the rural retailers to handle the premium-priced Ariel. Perhaps our all-time favorite example in this genre is the Simpsons’ international festival, sponsored by Fox in Hollywood. Spain’s Simpson trivia champion defeated 11 other global contestants in the “Bart Bowl World Finals.” Finally, while all software firms decry piracy in foreign markets as a costly crime, most recognize that in some sense it is actually a form of product trial.

In markets in which the consumer is hard to reach because of media limitations, the per- centage of the promotional budget allocated to sales promotions may have to be increased. In some less developed countries, sales promotions constitute the major portion of the pro- motional effort in rural and less accessible parts of the market. In parts of Latin America, a portion of the advertising sales budget for both Pepsi-Cola and Coca-Cola is spent on carnival trucks, which make frequent trips to outlying villages to promote their products. When a carnival truck makes a stop in a village, it may show a movie or provide some other kind of entertainment; the price of admission is an unopened bottle of the product pur- chased from the local retailer. The unopened bottle is to be exchanged for a cold bottle plus a coupon for another bottle. This promotional effort tends to stimulate sales and encourages

LO2 The strengths and weaknesses of sales promotions and public relations in global marketing

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Chapter 16 Integrated Marketing Communications and International Advertising 467

local retailers, who are given prior notice of the carnival truck’s arrival, to stock the product. Nearly 100 percent coverage of retailers in the village is achieved with this type of promo- tion. In other situations, village merchants may be given free samples, have the outsides of their stores painted (see page 481), or receive clock signs in attempts to promote sales.

An especially effective promotional tool when the product concept is new or has a very small market share is product sampling. Nestlé Baby Foods faced such a problem in France in its attempt to gain share from Gerber, the leader. The company combined sampling with a novel sales promotion program to gain brand recognition and to build goodwill. Because most French people take off for a long vacation in the summertime, piling the whole family into the car and staying at well-maintained campgrounds, Nestlé provided rest-stop structures along the highway where parents could feed and change their babies. Sparkling clean Le Relais Bébés were located along main travel routes. Sixty-four hostesses at these rest stops welcomed 120,000 baby visits and dispensed 600,000 samples of baby food during the program. There were free disposable diapers, a changing table, and high chairs for the babies to sit in while dining.

In China, Kraft began a grassroots IMC campaign to educate consumers about the American tradition of pairing milk with cookies. The company created an Oreo apprentice program at 30 Chinese universities that drew 6,000 applicants. Three hundred were trained to become Oreo ambassadors. Some rode around major Chinese cities on bicycles outfitted with wheel covers resembling Oreos, handing out samples to more than 300,000 consum- ers. Others held Oreo-themed basketball games to reinforce the idea of dunking cookies in milk. Television commercials showed kids twisting apart Oreo cookies, licking the cream center, and dipping the halves into glasses of milk. After languishing for many years in China, now Oreo is the best-selling biscuit in the country.

One of our favorite sales promotions is the Microsoft/Burger King collaboration in Japan. To publicize the release of Windows 7, the two companies concocted a seven-patty, 2,120- calorie “Windows 7 Whopper” to sell for ¥777 (you can calculate the US$ price). The first 30 burgers sold each day at each of the company’s 15 outlets sold at that price, and then the price doubled the rest of the day. Sales tallied more than 15,000 burgers the first week; YouTube videos showed customers trying to get their mouths around the monster. The publicity was a welcome change for Burger King since reentering the country in 2007. It had been chased out during a price war with 3,200-store-strong McDonald’s in 2001. Burger King’s return to Japan is part of its larger global strategy, involving expansion into Egypt, Hong Kong, and Poland. 2

As is true in advertising, the success of a promotion may depend on local adaptation. Furthermore, research has shown that responses to promotions can vary across promo- tional types and cultures. Major constraints are imposed by local laws, which may not per- mit premiums or free gifts to be given. Some countries’ laws control the amount of discount given at retail, others require permits for all sales promotions, and in at least one country, no competitor is permitted to spend more on a sales promotion than any other company selling the product. Effective sales promotions can enhance the advertising and personal selling efforts and, in some instances, may be effective substitutes when environmental con- straints prevent the full utilization of advertising.

International Public Relations Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations (PR) . The job consists of not only encouraging the press to cover positive stories about companies (as in the Barbie story) but also managing unfavorable rumors, stories, and events. 3 Regarding the latter, the distinction between advertising and public relations has become an issue now considered by the United States Supreme Court. Nike was criticized for using “sweatshop” labor in Asia and responded to critics with paid advertising. The Court decided that freedom of speech issues did not

2 Kenji Hall, “The (Hard to Install) Windows 7 Whopper,” BusinessWeek, November 16, 2009, p. 28. 3 Yi Zhao, Ying Zhao, and Kristiaan Helsen, “Consumer Learning in a Turbulent Market Environment: Modeling Consumer Choice Dynamics After a Product-Harm Crisis,” Journal of Marketing Research 48, no. 2 (2011), pp. 255–67 .

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468 Part 4 Developing Global Marketing Strategies

pertain to the ads, and the associated civil suit against the firm for false advertising could go forward. Indeed, Nike appears to have exacerbated and extended the problem from a public relations standpoint by taking the case all the way to the Supreme Court.

The importance of public relations in international marketing is perhaps best demon- strated by several recent controversies: (1) the Google China political fight over censor- ship and hacking; 4 (2) a wave of suicides by employees at Foxconn’s factories in China, which makes electronics products for the likes of Apple, Hewlett-Packard, and Dell; 5 and (3) the Toyota brake pedal problem mentioned in Chapter 13. The most remarkable scene of all was Akio Toyoda, CEO of Toyota and grandson of the founder, bowing and profusely apologizing at a congressional hearing in Washington, then only days later again bowing in contrition in Beijing. The spectacle was demanded by supporters (there are many in Congress) and critics among the publics and the governments in both countries. 6 Going from the centuries-old “bowing and apologizing” to the 21st-century approach, we note that Toyota is also using social media to address the problem. To both disseminate informa- tion and monitor the fluid waters of public opinion, Toyota launched a branded channel of Tweetmeme with the help of Federated Media. Called Toyota Conversations, the channel features news stories, videos, and other information. It also shares tweets from Toyota’s Twitter account and its own AdTweets, such as “5 Reasons to Buy a Toyota.” Tweetmeme channels can be programmed to pick up only select news sources. So in contrast to the sober tone of stories in the Los Angeles Times and elsewhere, the mood is positive and light. 7

The Toyota PR problem is strikingly reminiscent of the Bridgestone/Firestone Tires safety recall disaster of 2000. The Japanese company then was blamed for over 100 deaths in the United States because of its defective tires. True to form in such corporate disasters, the Japanese CEO of the American subsidiary “declared his full and personal responsibility” for the deaths at a U.S. Senate hearing. Such an approach is good public relations in Japan. However, in Washington, senators were not interested in apologies. Moreover, the company blamed its customer, Ford Motor Company, for the problems as well, accusing Ford of tell- ing customers to underinflate the tires for a smoother ride. The problem spread to other markets—Saudi Arabia banned imports of vehicles equipped with Firestone tires. Unbe- lievably, the company’s response to the Saudi action has been to denounce it as a violation of WTO agreements. Perhaps the company would have been better off promoting its ISO 9000 rating—remember the picture in Chapter 14 on page 417 ? By now the Bridgestone problem is certainly forgotten by almost all Americans; we wonder how long it will take the American public to forgive Toyota.

Public relations firms’ billings in the international arena have been growing at double- digit rates for some years. Handling such international PR problems as global workplace standards and product safety recalls has become big business for companies serving corpo- rate clients such as Mattel Toys, 8 McDonald’s, and, of course, Nike. Fast growth is also being fueled by the expanding international communications industry. New companies need public relations consultation for “building an international profile,” as the marketing man- ager of VDSL Systems explained when hiring MCC, a prominent British firm. Surprising growth is occurring in emerging markets like Russia as well. The industry itself is experi- encing a wave of mergers and takeovers, including the blending of the largest international advertising agencies and the most well-established PR firms.

Corporate sponsorships might be classified as an aspect of sales promotions or public relations, though their connections to advertising are also manifest. Tobacco companies

6 David Pierson, “Toyota’s President’s Whirlwind Apology Tour Lands in China,” Los Angeles Times , March 2, 2010, pp. B1, B6. 7 Jessica Guynn, “Toyota Taps Twitter for Positive Spin,” Los Angeles Times , March 4, 2010, p. B3. 8 “Mattel Apologizes to China over Recall,” Associated Press , September 21, 2007.

4Amir Efrati and Loretta Chao, “Google Softens Tone on China,” The Wall Street Journal, January 12, 2012. 5David Barboza, “Foxconn Resolves Pay Dispute with Workers,” The New York Times, January 12, 2012; Charles Duhigg and David Barboza, “In China, Human Costs Are Built into an iPad,” The New York Times, January 25, 2012. The latter source offers a quite complete discussion of the issue, which seems to have been resolved for the time.

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Chapter 16 Integrated Marketing Communications and International Advertising 469

have been particularly creative at using sports event sponsorships to avoid countries’ ad- vertising regulations associated with more traditional media. Other prominent examples are Coca-Cola’s sponsorship of European football (soccer) matches or Kia Motor’s sponsor- ship of the Australian Open tennis tournament. McDonald’s executed huge international IMC campaigns surrounding its sponsorship of the 2000 Sydney Olympics. Included were Olympic-themed food promotions, packaging and in-store signs, TV and print ads, and Web chats with superstar athletes such as American basketball player Grant Hill. In ad- dition to the various promotions targeting the 43 million daily customers in their 27,000 restaurants around the world, the firm targeted the athletes themselves. As the official res- taurant partner, McDonald’s got to operate seven restaurants in Sydney, including the two serving the Olympic Village. During the three weeks of the Games, nearly 1.5 million burg- ers were served to the athletes, officials, coaches, media staffers, and spectators. McDonald’s continued this sort of official corporate support for the Athens (2004), Beijing (2008), and London (2012) games as well. Finally, one of the more innovative sponsorship arrange- ments was Intel’s agreement with the Tour de France to support the official Tour website, www.letour.com. Of course, all these aspects of IMC work best when coordinated and rein- forced with a consistent advertising campaign, the topic covered in the rest of the chapter.

CROSSING BORDERS 16.1 PR in the PRC

In 1999 an industry was born in China when the Ministry of Labor and Social Security recognized public relations as a profession. These excerpts from the China Daily illus- trate how institutions evolve in emerging economies:

More laws are needed to regulate China’s fledgling public relations profession, an industry leader said yesterday in Beijing. “To seize the enormous business opportunities promised by China’s upcoming entry in the World Trade Organization, we need specific laws to regulate the market, curb malpractice and promote competency of local PR firms,” said Li Yue, vice-director of the China International Public Relations Association. Her comments were made during a national sympo- sium on public relations, also known as PR. Symposium delegates said they were concerned about the disorder in the PR industry and the fre- quent personnel changes in PR firms. They urged the passage of more laws to put an end to what many consider to be the chaos in the profession. Industry insiders cited a limited talent pool, cut-throat price

wars and low professional standards as the industry’s major problems. In the 1980s, most Chinese people would think of reception girls, lavish banquets, and the use of connections when public relations were mentioned. Now, public relations firms are seen as helping their clients gain better name recognition of their compa- nies. They also manage corporate images. Finally, it is interesting to see how corporate and press relations differ across cultures. In China and Taiwan, it is both ethical and legal to offer press organizations compensation for coverage. Arms’- length objectivity of the press is not an issue at the current stage of development of systems there.

Sources: “China: More Regulation of PR Sought,” China Daily, January 20, 2000, p. 3; “PRW: The Top European PR Consultancies 2000,” PR Week, June 23, 2000, p. 7; “PR Firms Gaining Experience by Working with Multinational Firms,” Industry Updates, June 20, 2005; “Ogilvy Public Relations Worldwide/China and JL McGregor Announce Strategic Alliance,” PR Newswire, June 13, 2007; “Gov’t Should Not Buy Media Coverage: Official,” China Post, December 28, 2010.

International Advertising Since the turn of the century, growth in global advertising expenditures has become quite volatile. Worldwide expenditures of the 100 largest advertisers bounced from $117.9 billion in 2008 to $108.6 billion in 2009 and back to $121.6 in 2010. Advertising expenditures grew on average by more than 20 percent in developing countries in 2010, though with slower growth in the United States, Europe, and Japan. Amid this choppy global economic environment and fast technological churn, the advertising industry con- tinues to undergo substantial restructuring. Also related to the technological revolution in media is a general conundrum about counting. That is, keeping track of the 100 biggest advertisers and their agencies is a relatively simple matter of record keeping and reporting.

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Integrated Marketing Communications (IMC) at Quiksilver In marketing high-quality branded lifestyle products, image is everything. Quiksilver has been one of the most innovative companies in creating new ways to deliver the “the mountain and the wave” im- ages around the world.

With global revenues of almost $2 billion in recent years, Quiksilver has grown quite fast since its 1969 beginnings in Torquay, Australia. There Alan Green had started working on prototypes for a new kind of board short, using aspects of wetsuit technology such as snaps and Velcro fl ies. The new design proved more suitable for the demands of big-wave wipeouts. The “mountain and wave” logo followed in 1970.

Now Quiksilver is headquartered in Huntington Beach, California (aka Surf City), and is one of the leading fi rms in “Velcro Valley”—the actionwear capital of the world in Orange County. The Quik silver brand family includes 10 brands, led by Quiksilver, Roxy, DC, and Lib Technologies. It counts among its markets six continents, over 90 countries, and 236 million youths. The major- ity of its sales are overseas: 47 percent in the Americas, 39 percent in Europe, and 14 percent in Asia Pacifi c. Quiksilver distributes its products worldwide through 547 company-owned stores, 223 licensed stores, and 71 stores in licensed and joint venture territories. The Quiksilver sales mix is composed of 61 percent apparel, 23 percent footwear, and 16 percent accessories and related products.

As exhibited on the front cover of this book, Quiksilver’s sponsorship of 11-time Surfi ng World Champion Kelly Slater is just a representative part of the breadth of Quiksilver’s integrated marketing communications:

A billboard and store front in Moscow, Russia.

Roxy has sponsored Torah Bright, the 2010 Olympic gold medal–winning snowboarder from Australia.

At home in the OC, the company supports the Ocean Institute financially and with a visit from its Indies Trade boat, which travels the world promoting clean water environments and, of course, the company image.

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Quiksilver sponsored the 2005 Great Wall of China first-ever leap by Danny Way, a southern California skateboarder.

Greg Macias, Vice President of Central Marketing explains how IMC decisions are made:

Globally, Quiksilver has three major centers of management: U.S. (Huntington Beach, CA), Europe (Biarritz, France), and Asia Pacifi c (Torquay, Australia). There are other management offi ces in China, Indonesia, Korea, Brazil, Argentina, South Africa, Canada, and Japan.

The marketing leaders in each of the three major regions meet three times a year formally to discuss goals, strategy, global effi ciencies, and best practices. This also happens in the general management and retail disciplines.

Media decisions are made on a regional level. There are no “global buys.”

We have a global brand manager, and he oversees a plan and budget that supports global initiatives, that is, initiatives that can have a signifi cant global effect and be utilized by each region. The best examples of this are globally recognized athletes and webcasts of key events.

We agree to share a common brand promise, global goals, brand identity elements (logo and word marks), and an annual graphic design palette. Each region builds their own specifi c communication executions but many assets are shared so messaging is consistent.

Like most businesses, we are constantly changing and trying to improve our products, operations, relationships, and business practices. In my opinion, our biggest asset is our ability to evolve and not get entrenched in one method.

The firm uses perhaps the broadest array of advertising media as well— from walls in Istanbul to an entertainment loaded website.

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472 Part 4 Developing Global Marketing Strategies

But as the nature, use, and monitoring of media churn, it becomes more difficult to define bases of comparison that support useful analyses.

Global mass media advertising is a powerful tool for cultural change, 9 and as such, it receives continuing scrutiny by a wide variety of institutions. One important study has shown that ad- vertising expenditures are generally cyclical, though less so in relationship-oriented countries where managers and regulators favor stability and long-term performance. 10 Most scholars agree that we are just beginning to understand some of the key issues involved in international advertising, but our knowledge will continue to be quite perishable as the revolution continues.

Exhibits 16.1 and 16.2 illustrate the biggest companies and product categories for interna- tional advertising. Procter & Gamble was the global champion of spending. Also, not ice the strong growth across categories and companies, mainly due to a snap back from a miserable 2009. We also broke out the spending patterns for two emerging markets in Exhibit 16.3a .

Exhibit 16.1 Top 20 Global Advertisers

2010 Advertiser Headquarters 2010

(billions) Percent Change from

2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Procter & Gamble Co. Unilever L’Oreal General Motors Nestlé Toyota Coca-Cola Reckitt Benckiser Kraft Foods Johnson & Johnson McDonald’s Corp. Volkswagen Ford Motor Co. Sony Corp. Mars Inc. Fiat (Chrysler Group) Pfizer Danone Group GlaxoSmithKline PepsiCo

Cincinnati London/Rotterdam Clichy, France Detroit,MI Vevey, Switzerland Toyota City, Japan Atlanta, GA Slough, Berkshire, UK Northfield, IL New Brunswick, NJ Oak Brook, IL Wolfsburg, Germany Dearborn, MI Tokyo McLean, VA Auburn Hills, MI New York Paris Brentford, Middlesex UK Purchase, NY

$11.43 6.62 4.98 3.59 3.19 2.86 2.46 2.43 2.34 2.32 2.32 2.24 2.14 2.04 1.99 1.79 1.72 1.68 1.61 1.59

31.4% 8.0

10.9 11.5 19.3 19.3

4.3 8.5

11.1 20.1 11.2 14.0

7.5 17.3 23.9 32.2

25.5 24.7 20.1

9.9

Category 2010 (billions) Percent Change

from 2009 Percent of

Total Personal Care Automotive Food Drugs Entertainment & Media

$29.47 23.57 13.63

9.73 9.68

17.7 17.4 13.5

21.6 8.8

24.2 18.5 11.1 9.1 8.0

10Barbara Deleersnyder, Marnik G. Dekimpe, Jan-Benedict E.M. Steenkamp, and Peter S.H. Leeflang, “The Role of National Culture in Advertising’s Sensitivity to Business Cycles: An Investigation across Continents,” Journal of Marketing Research 46, no. 5 (2009), pp. 623–36.

9Xin Zhao and Russell W. Belk, “Politicizing Consumer Culture: Advertising’s Appropriation of Political Ideology in China’s Social Transition,” Journal of Consumer Research 35, no. 2 (2008), pp. 231–44.

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Chapter 16 Integrated Marketing Communications and International Advertising 473

Demonstrated is a key difference in stages of development between China and Russia. Al- though relatively low in position in Exhibit 16.3b, four Chinese firms appear on the list, but for Russia only one firm is local. We also note the historical dominance of Pepsi in Russia, where Coca-Cola still has not caught up since the days of vodka-for-Pepsi trades with the Soviet Union. Judging by the relative progress of the two countries on this single criterion, China looks like it is further up the ladder of economic development.

Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets. Consumers respond in terms of their culture, style, feelings, value systems, attitudes, beliefs, and perceptions. Because advertising’s function is to interpret or translate the qualities of products and services in terms of consumer needs, wants, desires, and aspirations, the emotional appeals, symbols, persuasive approaches, and other characteristics of an advertisement must coincide with cultural norms if the ad is to be effective.

Reconciling an international advertising campaign with the cultural uniqueness of mar- kets is the challenge confronting the international or global marketer. The basic frame- work and concepts of international advertising are essentially the same wherever employed. Seven steps are involved:

1. Perform marketing research. 2. Specify the goals of the communication. 3. Develop the most effective message(s) for the market segments selected. 4. Select effective media. 5. Compose and secure a budget based on what is required to meet goals. 6. Execute the campaign. 7. Evaluate the campaign relative to the goals specified.

Advertiser 2010 Percent Change

from 2009 Procter & Gamble Co. L’Oreal PepsiCo Nestle Mars Inc. Henkel Unilever Reckitt Benckiser Kraft Foods Megafon

$117.4 78.7 72.2 63.9 57.0 54.2 43.6 41.4 38.1 34.5

21.2% 22.4 25.1 29.9 12.8 7.8 29.4 18.4 19.2 25.5

Advertiser 2010 Percent Change

from 2009

Procter & Gamble Co. L’Oreal Unilever Yum Brands Coca-Cola Hangzhou Wahaha Group Colgate-Palmolive Co. Tinghsin International Group China Mobile Beijing Outsell Health Product Development Co.

$1879.6 634.9 554.0 438.8 355.2 292.0 273.4 270.4 262.8 255.3

78.0% 12.7 27.9 15.8 34.9 7.7

14.6 7.2 5.5 3.8

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474 Part 4 Developing Global Marketing Strategies

Of these seven steps, developing messages almost always represents the most daunting task for international marketing managers. So, that topic is emphasized here. Nuances of international media are then discussed. Advertising agencies are ordinarily involved in all seven steps and are the subject of a separate section. Finally, the chapter closes with a dis- cussion of broader issues of governmental controls on advertising.

Advertising Strategy and Goals The goals of advertising around the world vary substantially. For LO3 When global advertising is most effective; when modified advertising is necessary

example, Chinese manufacturers are establishing new brands as their economy expands; Unilever is introducing a new product-line extension, Dove Shampoo, in East Asian mar- kets; and Russia’s airline Aeroflot is seeking to upgrade its quality image. All these market- ing problems require careful marketing research and thoughtful and creative advertising campaigns in country, regional, and global markets.

Intense competition for world markets and the increasing sophistication of foreign consum- ers have led to the need for more sophisticated advertising strategies. Increased costs, problems of coordinating advertising programs in multiple countries, and a desire for a broader com- pany or product image have caused multinational companies (MNCs) to seek greater control and efficiency without sacrificing local responsiveness. In the quest for more effective and re- sponsive promotion programs, the policies covering centralized or decentralized authority, use of single or multiple foreign or domestic agencies, appropriation and allocation procedures, copy, media, and research are being examined. More and more multinational companies can be seen to be managing the balance between standardization of advertising themes and cus- tomization. 11 And recently, as described in Chapter 13, more companies are favoring the latter.

A case in point is the Gillette Company, which sells 800 products in more than 200 countries. Gillette has a consistent worldwide image as a masculine, sports-oriented com- pany, but its products have no such consistent image. Its razors, blades, toiletries, and cos- metics are known by many names. Trac II blades in the United States are more widely known worldwide as G-II, and Atra blades are called Contour in Europe and Asia. Silkience hair conditioner is known as Soyance in France, Sientel in Italy, and Silkience in Germany. Whether or not global brand names could have been chosen for Gillette’s many existing products is speculative. However, Gillette’s current corporate philosophy of globalization provides for an umbrella statement, “Gillette, the Best a Man Can Get,” in all advertisements for men’s toiletries products in the hope of providing some common image.

A similar situation exists for Unilever, which sells a cleaning liquid called Vif in Switzerland, Viss in Germany, Jif in Britain and Greece, and Cif in France. This situation is a result of Unilever marketing separately to each of these countries. At this point, it would be difficult for Gillette or Unilever to standardize their brand names, because each brand is

11Charles R. Taylor, “Who Standardizes Advertising More Frequently, and Why Do They Do So? A Comparison of U.S. and Japanese Subsidiaries’ Advertising Practices in the European Union,” Journal of International Marketing 14 (2006), pp. 98–120; Kineta H. Hung, Stella Yiyan Li, and Russell W. Belk, “Global Understandings: Female Readers’ Perceptions of the New Woman in Chinese Advertising,” Journal of International Business Studies 38 (2007), pp. 1034–51.

These vehicular ads make an effective advertising medium even in a dense London fog. Because most London cabs are black, the Snickers ad catches the eye immediately.

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Chapter 16 Integrated Marketing Communications and International Advertising 475

established in its market and therefore has equity. Nortel Networks has used a “local heroes” approach in its international advertising. The company picks local celebrities to pitch stan- dardized messages across national markets for its telecommunications services.

In many cases, standardized products may be marketed globally. But because of dif- ferences in cultures, they still require a different advertising appeal in different markets. For instance, Ford’s model advertising varies by nation because of language and societal nuances. Ford advertises the affordability of its Escort in the United States, where the car is seen as entry level. But in India, Ford launched the Escort as a premium car. “It’s not un- usual to see an Escort with a chauffeur there,” said a Ford executive.

Finally, many companies are using market segmentation strategies that ignore national boundaries—business buyers or high-income consumers across the globe are often targeted in advertising, for example. Others are proposing newer global market segments defined by “consumer cultures” related to shared sets of consumption-related symbols—convenience, youth, America, internationalism, and humanitarianism are examples. Other, more tradi- tional segments are product and region related; those are discussed next.

As discussed in the chapters on product and services development (Chapters 13 and 14), a market offering really is a bundle of satisfactions the buyer receives. This package of satisfac- tions, or utilities, includes the primary function of the product or service, along with many other benefits imputed by the values and customs of the culture. Different cultures often seek the same value or benefits from the primary function of a product—for example, the ability of an automobile to get from point A to point B, a camera to take a picture, or a wristwatch to tell time. But while usually agreeing on the benefit of the primary function of a product, consum- ers may perceive other features and psychological attributes of the item differently.

Consider the different market-perceived needs for a camera. In the United States, excel- lent pictures with easy, foolproof operation are expected by most of the market; in Germany and Japan, a camera must take excellent pictures, but the camera must also be state of the art in design. In Africa, where penetration of cameras is less than 20 percent of the house- holds, the concept of picture taking must be sold. In all three markets, excellent pictures are expected (i.e., the primary function of a camera is demanded), but the additional utility or satisfaction derived from a camera differs among cultures. Many products produce expec- tations beyond the common benefit sought by all.

Dannon’s brand of yogurt promotes itself as the brand that understands the relationship between health and food, but it communicates the message differently, depending on the market. In the United States, where Dannon yogurt is seen as a healthy, vibrant food, the brand celebrates its indulgent side. In France, however, Dannon was seen as too pleasure oriented. Therefore, Dannon created the Institute of Health, a real research center dedicated to food and education. The end result is the same message but communicated differently— a careful balance of health and pleasure.

The Blue Diamond Growers Association’s advertising of almonds is an excellent example of the fact that some products are best advertised only on a local basis. Blue Diamond had a very successful ad campaign in the United States showing almond growers knee-deep in almonds while pleading with the audience, “A can a week, that’s all we ask.” The objective of the campaign was to change the perception of almonds as a special-occasion treat to an everyday snack food. The campaign was a success; in addition to helping change the per- ception of almonds as a snack food, it received millions of dollars’ worth of free publicity for Blue Diamond from regional and national news media. The successful U.S. ad was tested in Canada for possible use outside the United States. The Canadian reaction was vastly differ- ent; to them, the whole idea was just too silly. And further, Canadians prefer to buy prod- ucts from Canadian farmers, not American farmers. This response led to the decision to study each market closely and design an advertisement for each country market. The only similarity among commercials airing in markets in New York, Tokyo, Moscow, Toronto, or Stockholm is the Blue Diamond logo.

The emergence of pan-European communications media is enticing many companies to push the balance toward more standardized promotional efforts. As media coverage across Europe

Product Attribute and Benefit

Segmentation

Regional Segmentation

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476 Part 4 Developing Global Marketing Strategies

IMC at Microsoft Microsoft’s mission is “to enable people and businesses throughout the world to realize their full potential … via creating technology that transforms the way people work, play, and communicate.” Of its $70 billion in worldwide revenue, Microsoft spent more than $1 billion in integrated marketing communications (IMC) in 2011. International revenues remained more than 40 percent of the total. Represented on these pages are international IMC campaigns for two of Microsoft’s key market offerings, Windows 7 and Halo3: ODST .

The fi rm has fi ve divisions:

1. With more than $8 billion in 2011 revenues, “Client” market offerings include Windows operating systems, the newest of which was Windows 7. Key competitors for the division are Unix, Apple, Canonical, and Red Hat.

2. “Server and Tools” offerings include the Windows Server operating system and associated prod- ucts and services. Sales in 2011 were more than $16 billion, and competitors include Linux, IBM, and Sun Microsystems.

3. “Online Services Business” offerings include Bing, Microsoft adCenter/ adExpert, and other online advertising products and services. Revenues were $2.5 billion, and competitors are AOL, Google, and Yahoo!, among others.

4. “Microsoft Business Division” offerings are software and online services, such as Microsoft Of- fi ce and Microsoft Dynamics CRM. Adobe, Apple, and Google are among its major competitors.

Revenues amounted to more than $21 billion in 2011.

5. The “Entertainment and Devices Division” offers the new Kinect system, Xbox 360 con- soles and games, Xbox Live, Zune, and several other products and services, including the most successful video game, Halo3: ODST . Rev- enues in 2011 were greater than $11 billion, with a competitor list including Nintendo and Sony.

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Chapter 16 Integrated Marketing Communications and International Advertising 477

Windows 7 Windows 7 is primarily sold to original equip- ment computer manufacturers (OEM) and sec- ondarily to consumers worldwide. The OEM customers include Hewlett-Packard, Dell, Toshiba (Japan), Lenovo (China), and even Apple. The ads presented here were developed by a new advertising agency for Microsoft, Crispin Porter + Bogusky. You can see the same imagery used in all countries, but the copy theme, “I’m a PC, and Windows 7 was my idea,” was translated and adapted for the German and French markets. The French version says, “I said I wanted a more intui- tive PC, and there it is, more intuitive. No one can refuse me anything.” The German reads, “I said, ‘Improve the security,’ and they did. Did I do that or did I do that?” While ease of use is an important product attribute in France, in Germany, security is more important. “I’m a PC” does not make much sense outside the United States.

Because the potential users of Windows 7 around the world often share key demographic char- acteristics and usage patterns, advertising needs only a modicum of adaptation. The campaign has included television, print, online, and outdoor media, as well as student discounts in several coun- tries. Windows 7 was an important success for Microsoft (particularly in relation to Vista), selling more than 90 million licenses worldwide its fi rst year.

HALO3: ODST Video games sold by Microsoft add to revenues directly while stimulating Xbox sales as well. Halo3: ODST (Or- bital Drop Shock Trooper) is a fi rst-person shooter video game developed by Bungie and published by Micro- soft. Upon its release in the fall of 2009, it quickly be- came the top-selling Xbox 360 game, with more than 3 million copies sold worldwide at $60 for the two-disk set. Approximately 40 percent of these sales were international.

Marketing the game began with hints in the media in 2008, and then a full trailer for the game was shown at the Tokyo Game Show in October 2008. Before the game’s release, it topped Amazon.com’s preorder list for 107 days. The advertising campaign included numerous promotional materials released through Xbox Live, online outlets, print, and televised advertising. Marvel Comics also published a limited-edition comic series featuring ODST’s main characters. Bungie and Microsoft spon- sored an offi cial launch event at the Experience Music Project and Science Fiction Museum and Hall of Fame in Seattle; it included discussion panels and advance looks. GameStop put on more than 3,500 launch parties across the United States.

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478 Part 4 Developing Global Marketing Strategies

While the game itself is offered only in English, advertising copy is translated into a dozen lan- guages. See three banner ads as examples above. The look of the advertising (and the game itself) is little adapted for international markets—the demographics and usage patterns of gamers are relatively consistent around the world. You will notice from the warning labels that Japan has adopted the U.S. approach, whereas the Spanish-speaking markets are more diverse, just listing that it is appropriate for ages “16+.” As mentioned earlier in the text, Germany has special restrictions with respect to violence in video games, and the fi rst-person shooter genre is less popular there than in other cultures.

Project Natal, Branded “Kinect” International advertising and marketing communications became much more interesting for the Enter- tainment and Devices Division of Microsoft in 2010. Around Christmas of that year, Natal (branded as Kinect), a controller-free gaming and entertainment experience, was launched globally. The fi rm expects the revolutionary product to give birth ( natal means “birth” in English and, conveniently, “Christmas” in Portuguese) to a variety of new associated products and services for Microsoft, in an effect similar to Apple’s iPhone. See YouTube.com for previews of the new levels of interactivity sup- ported by the device. Project Natal was fi rst announced on June 1, 2009, at the E3 2009 Trade Show, and more than 1,000 development kits were shipped to game developers that same day.

Because the potential array of games and interactivities is so great and thus appeals to broad swathes of consumers around the world, international marketing efforts for Kinect required new levels of cultural adaptation of Microsoft’s associated products, services, and consumer communications. Kinect has proven to be one of the company’s most successful new product launches, using all aspects of Microsoft’s IMC capabilities.

Courtesy of Microsoft Corporation.

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Chapter 16 Integrated Marketing Communications and International Advertising 479

expands, it will become more common for markets to be exposed to multiple messages and brands of the same product. To avoid the confusion that results when a market is exposed to mul- tiple brand names and advertising messages, as well as for reasons of efficiency, companies strive for harmony in brand names, advertising, and promotions across Europe.

Along with changes in behavior patterns, legal restrictions are slowly being eliminated, and viable market segments across country markets are emerging. Although Europe will never be a single homogeneous market for every product, that does not mean that companies should shun the idea of developing European-wide promotional programs. A pan- European promotional strategy would mean identifying a market segment across all European coun- tries and designing a promotional concept appealing to market segment similarities.

The Message: Creative Challenges International communications may fail for a variety of reasons: A message may not get through because of media inadequacy, the message may be received by the intended audi- ence but not be understood because of different cultural interpretations,12 or the message may reach the intended audience and be understood but have no effect because the marketer did not correctly assess the needs and wants or even the thinking processes 13 of the target market.

In the international communications process, each of the seven identifiable steps ul- timately can affect the accuracy of the process. As illustrated in Exhibit 16.4 , the process consists of the following:

1. An information source. An international marketing executive with a product mes- sage to communicate.

2. Encoding. The message from the source converted into effective symbolism for transmission to a receiver.

3. A message channel. The sales force and/or advertising media that convey the encoded message to the intended receiver.

4. Decoding. The interpretation by the receiver of the symbolism transmitted from the information source.

LO4 The communication process and advertising misfires

Global Advertising and the

Communications Process

Encoding

Noise

Decoding

Message channel

Feedback

Receiver

Cultural Context B

Cultural Context A

Information source

Message translated into appropriate meaning

Competitive activities, other salespeople, confusion, and so on Encoded

message interpreted into meaning

Advertising media and/or personal sales force

Evaluation of communications process and measure of action by receiver

Action by consumer responding to decoded message

Marketer with a product

Exhibit 16.4 The International Communications Process

12Ana Valenzuela, Barbara Mellers, and Judy Strebel, “Pleasurable Surprises: A Cross-Cultural Study of Consumer Responses to Unexpected Incentives,” Journal of Consumer Research 36 (2010). 13Jennifer Aaker, “Accessibility or Diagnosticity? Disentangling the Influence of Culture on Persuasion Processes and Attitudes,” Journal of Consumer Research 26, no. 4 (March 2000), pp. 340–57.

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480 Part 4 Developing Global Marketing Strategies

5. Receiver. Consumer action by those who receive the message and are the target for the thought transmitted.

6. Feedback. Information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process.

7. Noise. Uncontrollable and unpredictable influences such as competitive activities and confusion that detract from the process and affect any or all of the other six steps.

Unfortunately, the process is not as simple as just sending a message via a medium to a receiver and being certain that the intended message sent is the same one perceived by the receiver. In Exhibit 16.4 , the communications process steps are encased in Cultural Context A and Cultural Context B to illustrate the influences complicating the process when the message is encoded in one culture and decoded in another. If not properly considered, the different cultural contexts can increase the probability of misunderstandings. Research in the area suggests that effective communication demands the existence of a “psychological overlap” between the sender and the receiver; otherwise, a message falling outside the re- ceiver’s perceptual field may transmit an unintended meaning. It is in this area that even the most experienced companies make blunders.

Most promotional misfires or mistakes in international marketing are attributable to one or several of these steps not properly reflecting cultural influences or a general lack of knowledge about the target market. Referring to Exhibit 16.4 , the information source is a marketer with a product to sell to a specific target market. The product message to be conveyed should reflect the needs and wants of the target market; however, often the actual market needs and the marketer’s perception of them do not coincide. This disconnect is especially true when the marketer relies more on the self-reference criterion (SRC) than on effective research. It can never be assumed that “if it sells well in one country, it will sell in another.” For instance, bicycles designed and sold in the United States to consum- ers fulfilling recreational exercise needs are not sold as effectively for the same reason in a market where the primary use of the bicycle is transportation. Cavity-reducing fluoride toothpaste sells well in the United States, where healthy teeth are perceived as important, but has limited appeal in markets such as Great Britain and the French areas of Canada, where the reason for buying toothpaste is breath control. From the onset of the communi- cations process, if basic needs are incorrectly defined, communications fail because an in- correct or meaningless message is received, even though the remaining steps in the process are executed properly.

The encoding step causes problems even with a “proper” message. At this step, such fac- tors as color, 14 timing, values, beliefs, humor, tastes, and appropriateness of spokespersons 15 can cause the international marketer to symbolize the message incorrectly. For example, the marketer wants the product to convey coolness so the color green is used; however, people in the tropics might decode green as dangerous or associate it with disease. Another example of the encoding process misfiring was a perfume presented against a backdrop of rain that, for Europeans, symbolized a clean, cool, refreshing image but to Africans was a symbol of fertility. The ad prompted many viewers to ask if the perfume was effective against infertility.

Problems of literacy, media availability, and types of media create challenges in the communications process at the encoding step. Message channels must be carefully selected if an encoded message is to reach the consumer. Errors such as using the Internet as a medium when only a small percentage of an intended market has access to the Internet, or using print media for a channel of communications when the majority of the intended users cannot read or do not read the language in the medium, are examples of ineffective media channel selection in the communications process.

14Elizabeth G. Miller, “Shades of Meaning: The Effect of Color and Flavor Names on Consumer Choice,” Journal of Consumer Research 32 (2005), pp. 86–92. 15Drew Martin and Arch G. Woodside, “Dochakuka: Melding Global Inside Local: Foreign-Domestic Advertising Assimilation in Japan,” Journal of Global Marketing 21 (2007), pp. 19–32.

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Chapter 16 Integrated Marketing Communications and International Advertising 481

18Ron Nixon, “Little Green for (Red),” The New York Times , February 6, 2008, pp. C1, C5.

16Elisabeth A. Sullivan, “Color Me Profitable,” Marketing News , October 15, 2008, p. 8; Andrew J. Ellion and Daniela Niesta, “Romantic Red: Red Enhances Men’s Attraction to Women,” Journal of Personality and Social Psychology 95, no. 5 (2008), pp. 1150–64; Ravi Mehta and Rui (Juliet) Zhu, “Blue or Red? Exploring the Effect of Color on Cognitive Task Performances,” Science 323 (2009), pp. 1226–29. 17Kristen Korosec, “Manchester United Red,” Marketing News, September 30, 2010, pp. 14–18.

Red Works! Since we first wrote about the color’s power some 10 years ago, a lot has been happening. 16 Notice the Coke advantage at work—the red contrasts with the outdoor environment, while the Cristal aqua blends more with the blue sky and trees. Cristal is a popular brand of bottled water actually owned by Coca-Cola and sold in the Yucatan Peninsula in Mexico. The Coke ads are emblazoned on a café in the central plaza of Canas, Costa Rica. Or you can spend it like Beckham—in addition to Vodafone and Nike on his jersey, David Beckham, here in his Manchester United red, also represented Pepsi, Adidas, Castrol, Upper Deck, Marks & Spencer, Police, Meiji, Tokyo Beauty Center, etc., etc., etc. The Spanish soccer power Real Madrid spent $40 million buying Beckham’s contract from his British home team, and then the Los Angeles Galaxy moved him there. One disadvantage of the moves south—the white jerseys of the Spanish and American teams don’t catch the eye as did the Manchester United red.17 Most recently Beckham has teamed up with the Red campaign (along with Oprah and Bono) to promote products of firms that donate revenues to the Global Fund to Fight AIDS. Other firms involved in the project include Dell, Microsoft, American Express, Armani, Converse, Hallmark, Apple, and The Gap. 18 We also note that the world’s most famous athlete is not Beckham, or even last-day-red-shirt-wearing Tiger Woods. Instead, it’s Formula 1 racecar driver Michael Schumacher. The German has made more money than any other sports figure as he dominates the sport most watched on television globally. And the flamboyant red jumpsuit and red Ferraris helped. The other red brands—Marlboro and Vodafone—loved him too. Alas, now Schumacher, like Beckham, has aged and has shed his Ferrari red for Mercedes white, and his performance has lagged. Maybe it’s the color? Finally, we note how well the mostly red SFR (a French mobile phone company with more than 20 million clients that sponsored the 2010 European X Games) logo stands out against Torah Bright’s Roxy black on page 470.

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Why would both Coke and McDonald’s shed their eye-catching red logos for black and white? You can see the answers at the bottom of page 505 at the end of this chapter. The stadium pictured is in Buenos Aires, is popularly called La Bombonera, is officially named Albierto Armano , is the home of the club team Boca Junior , and was the home team for Argentina’s most famous futbol player ever, Maradona. The McDonald’s (yes, the arches are usually gold, but the brand name is red) sits adjacent to the city square in the old Inca Empire capital at Cuzco, Peru. Finally, even PepsiCo is blushing over Coke’s dominance: It’s introducing an all-red can in China. If it succeeds there, perhaps Pepsi will just match other countries’ flags as well—red, white, and blue works not only in the United States but in Russia and France as well.

Decoding problems are generally created by improper encoding, which caused such er- rors as Pepsi’s “Come Alive” slogan being decoded as “Come out of the grave.” Chevrolet’s brand name for the Nova model (which means new star) was decoded into Spanish as No Va!, meaning “it doesn’t go.” In another misstep, a translation that was supposed to be de- coded as “hydraulic ram” was instead decoded as “wet sheep.” In a Nigerian ad, a platinum blonde sitting next to the driver of a Renault was intended to enhance the image of the automobile. However, the model was perceived as not respectable and so created a feeling of shame. An ad used for Eveready Energizer batteries with the Energizer bunny was seen by Hungarian consumers as touting a bunny toy, not a battery.

Decoding errors may also occur accidentally, as was the case with Colgate-Palmolive’s selection of the brand name Cue for toothpaste. The brand name was not intended to have any symbolism; nevertheless, it was decoded by the French into a pornographic word. In some cases, the intended symbolism has no meaning to the decoder. In an ad transferred from the United States, the irony of tough-guy actor Tom Selleck standing atop a mountain with a steaming mug of Lipton tea was lost on eastern Europeans.

Errors at the receiver end of the process generally result from a combination of factors: an improper message resulting from incorrect knowledge of use patterns, poor encoding producing a meaningless message, poor media selection that does not get the message to the receiver, or inaccurate decoding by the receiver so that the message is garbled or incor- rect. Even bad luck comes into play. Recall that French’s mustard was boycotted (along with French wines, fries, etc.) by Americans when the Paris government did not go along with the attack on Iraq in 2003—even though the brand name has nothing to do with the coun- try and is an American brand.

Finally, the feedback step of the communications process is important as a check on the effectiveness of the other steps. Companies that do not measure their communications ef- forts are likely to allow errors of source, encoding, media selection, decoding, or receiver to continue longer than necessary. In fact, a proper feedback system (ad testing) allows a company to correct errors before substantial damage occurs.

In addition to the problems inherent in the steps outlined, the effectiveness of the in- ternational communications process can be impaired by noise. Noise comprises all other external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end, that can detract from the ultimate effectiveness of the communication. Noise is a disruptive force interfering with the process at any step and is frequently beyond

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Chapter 16 Integrated Marketing Communications and International Advertising 483

the control of the sender or the receiver. As Exhibit 16.4 illustrates with the overlapping cultural contexts, noise can emanate from activity in either culture or be caused by the in- fluences of the overlapping of the cultural contexts.

The model’s significance is that one or all steps in the process, cultural factors, or the marketer’s SRC can affect the ultimate success of the communication. For example, the message, encoding, media, and intended receiver can be designed perfectly, but the inability of the receiver to decode may render the final message inoperative. In developing advertis- ing messages, the international marketer can effectively use this model as a guide to help ensure that all potential constraints and problems are considered so that the final commu- nication received and the action taken correspond with the intent of the source.

The growing intensity of international competition, coupled with the complexity of multinational marketing, demands that the international advertiser function at the high- est creative level. The creative task is made more daunting by other kinds of barriers to effective communications—legal, linguistic, cultural, media, production, and cost considerations.

Laws that control comparative advertising vary from country to country in Europe. In Germany, it is illegal to use any comparative terminology; you can be sued by a competitor if you do. Belgium and Luxembourg explicitly ban comparative advertising, whereas it is clearly authorized in the United Kingdom, Ireland, Spain, and Portugal. The directive cov- ering comparative advertising allows implicit comparisons that do not name competitors but bans explicit comparisons between named products. The European Commission issued several directives to harmonize the laws governing advertising. However, member states are given substantial latitude to cover issues under their jurisdiction. Many fear that if the laws are not harmonized, member states may close their borders to advertising that does not respect their national rules.

Comparative advertising is heavily regulated in other parts of the world as well. In Asia, an advertisement showing chimps choosing Pepsi over Coke was banned from most satel- lite television; the phrase “the leading cola” was accepted only in the Philippines. An In- dian court ordered Lever to cease claiming that its New Pepsodent toothpaste was “102% better” than the leading brand. Colgate, the leading brand, was never mentioned in the advertisement, though a model was shown mouthing the word “Colgate” and the image was accompanied by a “ting” sound recognized in all Colgate ads as the ring of confidence. Banning explicit comparisons will rule out an effective advertising approach heavily used by U.S. companies at home and in other countries where it is permitted. Finally, even as

Legal Constraints

LO5 The effects of a single European market on advertising

City streets in Singapore are alive with advertising. California Fitness Centers in Southeast Asia are owned by America’s 24-hour Fitness Centers. Obviously the image of “bodyland” southern California sells well around the world. However, there’s an interesting irony in that brand name for Muslim customers. The word California first appears in the eleventh-century epic poem The Song of Roland; there it literally means the “caliph’s domain”—the Caliph of Baghdad ruled the Islamic Empire then. The Spaniards who named California in the early 1500s thought they were in Asia! Moreover, the deeper meaning of the brand name is lost even on the modern Muslims who comprise 15 percent of Singapore’s current population!

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comparative advertising restrictions are lifted, international marketers will have to carefully consider consumers’ responses to novel advertising campaigns in this genre. 19

A variety of restrictions on advertising of specific products exist around the world. Ad- vertising of pharmaceuticals is restricted in many countries. For example, critics in Canada complain that laws there have not been revised in 50 years and have been rendered obsolete by the advent of TV and, more recently, the Internet. Toy, tobacco, and liquor advertising is restricted in numerous countries. The French government until recently forbade TV ads for retailers, publishing, cinema, and the press.

Advertising on television is strictly controlled in many countries. China is relaxing some regulations while strengthening others. For example, recently the government began to re- quire concrete proof of ad claims and banned pigs in advertising—the latter in deference to its Muslim minorities. While the Chinese government is doing little to regulate prod- uct placement advertisements, the European Union limits product placement in foreign programming but not EU-produced material. In Kuwait, the government-controlled TV network allows only 32 minutes of advertising per day, in the evening. Commercials are controlled to exclude superlative descriptions, indecent words, fearful or shocking shots, indecent clothing or dancing, contests, hatred or revenge shots, ethnic derision, and attacks on competition. Russian law forbids subliminal advertising, but it is still prevalent there because enforcement resources are lacking.

Some country laws against accessibility to broadcast media seem to be softening. Australia ended a ban on cable television spots, and Malaysia is considering changing the rules to allow foreign commercials to air on newly legalized satellite signals. However, with rare exceptions, all commercials on Malaysian television still must be made in Malaysia.

19Carolyn White Nye, Martin S. Roth, and Terence A. Shimp, “Comparative Advertising in Markets where Brands and Comparative Advertising Are Novel,” Journal of International Business Studies 39, no. 5 (2008), pp. 851–63.

Joe Canuck Bashes America

Standing foursquare in front of a screen flashing Canadian symbols—beavers, Ottawa’s Peace Tower, the Maple Leaf flag—an average Joe Canuck in a checked flannel shirt rips into American misperceptions about his country. “I have a prime minister, not a president. I speak English or French, not American,” he says, voice swelling with emotion. “And I pronounce it ‘about,’ not ‘aboot.’” “I believe in peacekeeping, not policing; diversity, not assimilation,” he goes on in the 60-second television spot as the national icons loom over his shoulder. “And that the beaver is a proud and noble animal.” Strangely, in a country known for its aversion to the sort of rah-rah jingoism associated with its southern neighbor, this nationalistic tirade became an overnight sensation: taped and shown in bars, filling megascreens at hockey games, performed live in movie theaters. Stranger still was the revved-up public reaction the ad evoked in this notoriously reticent land: wild cheers, stamping feet, frantic flag waving, and fists punching the air. And perhaps strangest of all, the spot was not the

cunning propaganda of some ultrapatriot cabal but a commercial for Molson Canadian beer. The irony—the director of the commercial is an American, Kevin Donovan. Perhaps they’ll make him an honorary Canuck! Finally, the Canadians’ latest cause to celebrate is its hockey gold medal in the Vancouver Olympics. Since the United States was gracious in its loss, now the Europeans are the focus of their ire—according to a Canadian fanatic commenting on American hockey, “They play North American style hockey, the hockey we Canadians play on the beaver ponds and flooded fields and outdoor rinks up here, not the wimpy, whiny, cry-to- the-ref European style, which doesn’t even deserve to be played on North American rinks.”

Sources: Colin Nickerson, “Anti-U.S. Beer Ad Is So Canada,” Orange County Register, April 15, 2000, pp. 29, 42; Paula Lyon Andruss, “Understanding Canada,” Marketing News, March 15, 2001, pp. 1, 11; Sam Bufalini, “Cheap Thrills South of the Border,” Globe and Mail, June 13, 2007, p. T3; The Wall Street Journal, March 15, 2008; Michael Devolin (Tweed, Ontario), The New York Times , March 2, 2010, p. B15.

CROSSING BORDERS 16.2

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Companies that rely on television infomercials and television shopping are restricted by the limitations placed on the length and number of television commercials permitted when their programs are classified as advertisements. The levels of restrictions in the Eu- ropean Union vary widely, from no advertising on the BBC in the United Kingdom to member states that limit advertising to a maximum of 15 percent of programming daily. The Television without Frontiers directive permits stricter or more detailed rules to the broadcasters under jurisdiction of each member state. In Germany, for example, commer- cials must be spaced at least 20 minutes apart and total ad time may not exceed 12 minutes per hour. Commercial stations in the United Kingdom are limited to 7 minutes per hour.

Internet services are especially vulnerable as EU member states decide which area of regu- lation should apply to these services. Barriers to pan-European services will arise if some member states opt to apply television-broadcasting rules to the Internet while other coun- tries apply print-media advertising rules. The good news is that the European Union is ad- dressing the issue of regulation of activities on the Internet. Although most of the attention will be focused on domain names and Internet addresses, the European Commission does recognize that online activities will be severely hampered if subject to fragmented regulation.

Some countries have special taxes that apply to advertising, which might restrict creative freedom in media selection. The tax structure in Austria best illustrates how advertising taxation can distort media choice by changing the cost ratios of various media: Federal states, with the exception of Bergenland and Tyrol, tax ad insertions at 10 percent; states and municipalities tax posters at 10 to 30 percent. Radio advertising carries a 10 percent tax, except in Tyrol, where it is 20 percent. Salzburg, Steiermark, Karnten, and Voralbert impose no tax. There is a uniform tax of 10 percent throughout the country on television ads. Cinema advertising has a 10 percent tax in Vienna, 20 percent in Bergenland, and 30 percent in Steiermark. There is no cinema tax in the other federal states.

Language is one of the major barriers to effective communication through advertising. The problem involves different languages of different countries, different languages 20 or dialects within one country, and the subtler problems of linguistic nuance, argument style, 21 ver- nacular, and even accent. Indeed, recently an Irish accent was voted “sexiest” in Britain and Ireland, beating the competition from the Scots, Welsh, Geordies, Brummies, West Coun- try, and “posh English” contenders. For many countries language is a matter of cultural pride and preservation—France is the best example, of course.

Incautious handling of language has created problems in all countries. 22 Some examples suffice. Chrysler Corporation was nearly laughed out of Spain when it translated its U.S. theme that advertised “Dart Is Power.” To the Spanish, the phrase implied that buyers sought, but lacked, sexual vigor. The Bacardi Company concocted a fruity bitters with a made-up name, Pavane, suggestive of French chic. Bacardi wanted to sell the drink in Germany, but Pavane is perilously close to pavian, which means “baboon.” A company marketing tomato paste in the Middle East found that in Arabic the phrase “tomato paste” translates as “tomato glue.” In Spanish-speaking countries, you have to be careful of words that have different meanings in the different countries. The word ball translates in Spanish as bola, which means ball in one country, revolution in another, a lie or fabrication in another, and an obscenity in yet another. Most recently, the product name iPad has raised issues around the world. Even in the United States, women reflexively relate the word “pad” to hygiene products. In Ireland consumers complain that the names iPod and iPad sound exactly the same, and Japanese does not have a

Linguistic Limitations

20David Luna and Laura A. Peracchio, “Advertising to Bilingual Consumers: The Impact of Code-Switching on Persuasion,” Journal of Consumer Research 31, no. 2 (2005), pp. 57–73; David Luna, Dawn Lerman, and Laura A. Peracchio, “Structural Constraints in Code-Switched Advertising,” Journal of Consumer Research 32 (2005), pp. 416–23. 21 Lefa Teng and Michel Laroche, “Interactive Effects of Appeals, Arguments, and Competition across North American and Chinese Cultures,” Journal of International Marketing 14 (2006), pp. 110–28; Sharon Begley, “What’s in a Word,” Newsweek, January 8, 2010, p. 31. 22 See http://www.engrish.com for a wide range of (mostly) humorous translation problems related to the use of English for Japanese products, signage, and so on.

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sound for the letter “a” in iPad. Adding injury to insult, but in a legal way, other companies in the United States, Switzerland, and Japan already have trademarks for the name. 23

Tropicana brand orange juice was advertised as jugo de China in Puerto Rico, but when transported to Miami’s Cuban community, it failed. To the Puerto Rican, China trans- lated into orange, but to the Cuban-American it was China the country—and the Cuban- Americans were not in the market for “communist” juice. “A whole new range of products” in a German advertisement came out as “a whole new stove of products.”

The “true ting” in Jamaica is a grapefruit-flavored soft drink. The slogan is, of course, a take-off on “the real thing” advertising of Coca- Cola some decades ago. “Ting” is obviously a Creole version of “thing” for Jamaicans. Perhaps the best billboards ever are the giant bulls posted on hillsides around rural Spain. They were originally meant to advertise Osborne Brandy, but they have evolved into a national symbol. Not even Coca-Cola can make that strong a claim. Finally, GE joined with the Chinese government in promoting a green 2008 Olympics. Ironically, many folks around the world see outdoor advertising itself as a kind of pollution!

23Brad Stone, “What’s in a Name? For Apple, iPad Said More than Intended,” The New York Times , January 10, 2010, pp. A1, A3.

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Language raises innumerable barriers that impede effective, idiomatic translation and thereby hamper communication. This barrier is especially apparent in advertising materials and on the Internet. Abstraction, terse writing, and word economy, the most effective tools of the advertiser, pose problems for translators. Communication is impeded by the great diversity of cultural heritage and education that exists within countries and that causes varying interpretations of even single sentences and simple concepts. Some companies have tried to solve the translation problem by hiring foreign translators who live in the United States. This option often is not satisfactory because both the language and the translator change, so the expatriate in the United States is out of touch after a few years. Everyday words have different meanings in different cultures. Even spelling and pronunciation can cause problems: Wrigley had trouble selling its Spearmint gum in Germany until it changed the spelling to Speermint.

In addition to translation challenges, low literacy in many countries seriously impedes communications and calls for greater creativity and use of verbal media. Multiple languages within a country or advertising area pose another problem for the advertiser. Even a tiny country such as Switzerland has four separate languages. The melting-pot character of the Israeli population accounts for some 50 languages. A Jerusalem commentator says that even though Hebrew “has become a negotiable instrument of daily speech, this has yet to be converted into advertising idiom.” And, we are only just beginning to learn the complex of considerations regarding advertising to bilinguals. 24 Advertising communications must be perfect, and linguistic differences at all levels cause problems. In-country testing with the target consumer group is the only way to avoid such problems.

The problems associated with communicating to people in diverse cultures present one of the great creative challenges in advertising. One advertising executive puts it bluntly: “International advertising is almost uniformly dreadful mostly because people don’t un- derstand language and culture.” Communication is more difficult because cultural factors largely determine the way various phenomena are perceived. 25 If the perceptual framework is different, perception of the message itself differs. 26

Existing perceptions based on tradition and heritages often render advertising campaigns ineffective or worse. For example, marketing researchers in Hong Kong found that cheese is associated with Yeung-Yen (foreigners) and thus rejected by some Chinese. Toyota introduced the Prado SUV in China only to learn that the name sounded like the Chinese word for “rule by force.” This name reminded some Chinese of the 1937 invasion by Japan—not a nice memory at all. The effectiveness of sex appeals, 27 music, 28 and celebrities 29 varies across cultures as well.

Cultural Diversity

24Aradhna Krihna and Rohini Ahluwalia, “Language Choice in Advertising to Bilinguals: Asymmetric Effects for Multinationals versus Local Firms,” Journal of Consumer Research 35, no. 4 (2008), pp. 692–705; Jaime Noriega and Edward Blair, “Advertising to Bilinguals: Does the Language of Advertising Influence the Nature of Thoughts?” Journal of Marketing 72, no. 5 (2008), pp. 69–83. 25 Nader T. Tavassoli and Yih Hwai Lee, “The Differential Interaction of Auditory and Visual Advertising Elements with Chinese and English,” Journal of Marketing Research 40, no. 4 (2003), pp. 468–80; Guillaume D. Johnson, Roger M. Elliott, and Sonya A. Grier, “Conceptualizing Multicultural Advertising Effects in the ‘New’ South Africa,” Journal of Global Marketing 23, no. 3 (2010), pp. 171–76; Edwin J. Nijssen and Susan P. Douglas, “Consumer World-Mindedness and Attitudes toward Product Positioning in Advertising: An Examination of Global versus Foreign versus Local Positioning,” Journal of International Marketing 19, no. 3 (2011), pp. 113–32. 26Some of the most important work being done in the area of culture and advertising is represented by Jennifer Aaker and Patti Williams’s “Empathy and Pride: The Influence of Emotional Appeals across Cultures,” Journal of Consumer Research 25 (December 1998), pp. 241–61; Ulrich R. Orth and Denisa Holancova, “Men’s and Women’s Responses to Sex Role Portrayals in Advertisements,” International Journal of Research in Marketing 21, no. 1 (2004), pp. 77–88. 27Geng Cui and Xiaoyan Yang, “Responses of Chinese Consumers to Sex Appeals in International Advertising: A Test of Congruency Theory,” Journal of Global Marketing 22, no. 3 (2009), pp. 229–45. 28Ashok K. Lalwani, May O. Lwin, and Pee Beng Ling, “Does Audiovisual Congruency in Advertisements Increase Persuasion? The Role of Cultural Music and Products,” Journal of Global Marketing 22 (2009), pp. 139–53. 29Somdutta Biswas, Mahmood Hussain, and Kathleen O’Donnell, “Celebrity Endorsements in Advertisements and Consumer Perception: A Cross-Cultural Study,” Journal of Global Marketing 22 (2008), pp. 121–37.

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Procter & Gamble’s initial advertisement for Pampers brand diapers failed because of cultural differences between the United States and Japan. A U.S. commercial that showed an animated stork delivering Pampers diapers to homes was dubbed into Japanese with the U.S. package replaced by the Japanese package and put on the air. To P&G’s dismay, the advertisement failed to build the market. Some belated consumer research revealed that consumers were confused about why this bird was delivering disposable diapers. According to Japanese folklore, giant peaches that float on the river bring babies to deserving parents, not storks.

In addition to concerns with differences among nations, advertisers find that subcul- tures within a country require attention. 30 People in Hong Kong have 10 different patterns of breakfast eating. The youth of a country almost always constitute a different consuming culture from the older people, and urban dwellers differ significantly from rural dwell- ers. Besides these differences, there is the problem of changing traditions. In all countries, people of all ages, urban or rural, cling to their heritage to a certain degree but are willing to change some areas of behavior. Indeed, due to the early efforts of Nestlé and the most recent expansion by Starbucks, in tea-drinking Japan, coffee has become the fashionable beverage for younger people and urban dwellers who like to think of themselves as cosmopolitan and sophisticated.

Media are discussed at length later, so here we note only that limitations on creative strategy imposed by media may diminish the role of advertising in the promotional program and may force marketers to emphasize other elements of the promotional mix. A marketer’s creativity is certainly challenged when a television commercial is limited to 10 showings a year with no two exposures closer than 10 days, as is the case in Italy. Creative advertisers in some countries have even developed their own media for overcoming media limitations. In some African countries, advertisers run boats up and down the rivers playing popular music and broadcasting commercials into rural areas as they travel.

Creativity is especially important when a budget is small or where there are severe produc- tion limitations, such as poor-quality printing and a lack of high-grade paper. For example, the poor quality of high-circulation glossy magazines and other quality publications in east- ern Europe has caused Colgate-Palmolive to depart from its customary heavy use of print media in the West for other media. Newsprint is of such low quality in China that a color ad used by Kodak in the West is not an option. Kodak’s solution has been to print a single-sheet color insert as a newspaper supplement.

The necessity for low-cost reproduction in small markets poses another problem in many countries. For example, hand-painted billboards must be used instead of printed sheets because the limited number of billboards does not warrant the production of printed sheets. In Egypt, static-filled television and poor-quality billboards have led companies such as Coca-Cola and Nestlé to place their advertisements on the sails of feluccas, boats that sail along the Nile. Feluccas, with their triangle sails, have been used to transport goods since the time of the pharaohs and serve as an effective alternative to attract attention to company names and logos.

Media Limitations

Production and Cost Limitations

30Victoria Jones, “It’s Not Black and White: Advertising and Race in Cultural Context,” Journal of Global Marketing 23, no. 1 (2010), pp. 45–64.

Media Planning and Analysis Few doubt that a revolution in communications is under way. Your LO6 The effect of limited media, excessive media, and government regulations on advertising and promotion budgets

authors notice it because the changes that occur between the two-year revisions of this textbook are the greatest when it comes to media. Yes, political events and natural disas- ters can dramatically impact many millions of people overnight, but the network effects of the burgeoning electronic communication media—in the form of PCs, the Internet, and mobile phones—influence not only political events and responses to national disas- ters but also everyday life for everyone on the planet, from camel markets in Egypt to

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the international space stations where humans are living off the planet! Perhaps the most eloquent description of the communications revolution comes from Bob Garfield’s book, The Chaos Scenario :

… let me just share the 2007 comments of Sir Martin Sorrell, chairman of the WPP Group, the world’s largest advertising agency holding company: “Slowly, the new media will cease to be thought of as new media; they will simply be ad- ditional channels of communication. And like all media that were once new but are now just media, they’ll earn a well-deserved place in the media repertoire, perhaps through reverse takeovers— but will almost certainly displace none .” The italics are mine. The absurdity was Sir Martin’s. Does he not see that the internet is not just some newfangled medium—like TV displacing radio? No, it is a revolutionary ad- vance, along the lines of fire, agriculture, the wheel, the printing press, gunpowder, electricity, radio, manned flight, antibiotics, atomic energy. . . . The digital revolution is already having far- ranging effects on every aspect of our lives, from socialization to communication to informa- tion to entertainment to democracy, and these Brave New World effects will only be magnified as the Cowardly Old World collapses before our eyes. Not that this will happen. This is happening. Right now. 31

Strong words from Mr. Garfield, but we agree with his principle point. The changes in media in the 21st century are proceeding at a blinding speed. Next we try to capture them, with due respect to the disrupted world of Sir Sorrell.

Although nearly every sizable nation essentially has the same kinds of media, a number of specific considerations, problems, and differences are encountered from one nation to another. In international advertising, an advertiser must consider the availability, cost, cov- erage, and appropriateness of the media. And the constant competitive churn among these media makes for a tricky and dynamic landscape for decisions. For example, billboard ads next to highways cannot include paragraphs of text. Moreover, recent research has dem- onstrated that effectiveness varies across media types,32 cultures, and products; Chinese consumers in both Taiwan and China view print ads more positively than Americans, for example. 33 Local variations and lack of market data require added attention. Major multi- nationals are beginning to recognize the importance of planning communications chan- nels as media companies continue to rationalize and evolve. Indeed, media giants such as Disney and Time Warner cover an increasingly broad spectrum of the electronic media, necessitating that MNCs rethink their relationships with media service providers.

Imagine the ingenuity required of advertisers confronted with these situations:

• In Brazil, TV commercials are sandwiched together in a string of 10 to 50 commer- cials within one station break.

• National coverage in many countries means using as many as 40 to 50 different media.

• Specialized media reach small segments of the market only. In the Netherlands, there are Catholic, Protestant, socialist, neutral, and other specialized broadcasting systems.

• In Germany, TV scheduling for an entire year must be arranged by August 30 of the preceding year, with no guarantee that commercials intended for summer viewing will not be run in the middle of winter.

• In Vietnam, advertising in newspapers and magazines is limited to 10 percent of space and to 5 percent of time, or three minutes an hour, on radio and TV.

Tactical Considerations

31Bob Garfield, The Chaos Scenario (Nashville, TN: Stielstra Publishing, 2009), p. 11. 32Kineta Hung, Stella Yiyan Li, and David K. Tse, “Interpersonal Trust and Platform Credibility in a Chinese Multibrand Online Community,” Journal of Advertising 40, no. 3 (2011), pp. 99–118. 33 Carrie La Ferle, Steven M. Edwards, and Wei-Na Lee, “Culture, Attitudes, and Media Patterns in China, Taiwan, and the U.S.: Balancing Standardization and Localization Decisions, Journal of Global Marketing 21, no. 3 (2008), pp. 191–206.

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Availability. One of the contrasts of international advertising is that some countries have too few advertising media and others have too many. In some countries, certain adver- tising media are forbidden by government edict to accept some advertising materials. Such restrictions are most prevalent in radio and television broadcasting. In many countries, there are too few magazines and newspapers to run all the advertising offered to them. Conversely, some nations segment the market with so many newspapers that the adver- tiser cannot gain effective coverage at a reasonable cost. One head of an Italian advertising agency commented about his country: “One fundamental rule. You cannot buy what you want.”

In China the only national TV station, CCTV, has one channel that must be aired by the country’s 27 provincial/municipal stations. Recently CCTV auctioned off the most popular break between the early evening news and weather; a secured year-long, daily five-second billboard ad in this break went for $38.5 million. For this price, advertisers are assured of good coverage—more than 96 percent of households have TV sets. One of the other options for advertisers is with the 2,828 TV stations that provide only local coverage.

Cost. Media prices are susceptible to negotiation in most countries. Agency space dis- counts are often split with the client to bring down the cost of media. The advertiser may find that the cost of reaching a prospect through advertising depends on the agent’s bar- gaining ability. The per contract cost varies widely from country to country. One study showed that the cost of reaching 1,000 readers in 11 different European countries ranged from $1.58 in Belgium to $5.91 in Italy; in women’s service magazines, the page cost per 1,000 circulation ranged from $2.51 in Denmark to $10.87 in Germany. Shortages of ad- vertising time on commercial television in some markets have caused substantial price in- creases. In Britain, prices escalate on a bidding system. They do not have fixed rate cards; instead, there is a preempt system in which advertisers willing to pay a higher rate can bump already-scheduled spots.

Coverage. Closely akin to the cost dilemma is the problem of coverage. Two points are particularly important: One relates to the difficulty of reaching certain sectors of the population with advertising and the other to the lack of information about coverage. In many world marketplaces, a wide variety of media must be used to reach the majority of the markets. In some countries, large numbers of separate media have divided markets into uneconomical advertising segments. With some exceptions, a majority of the population of less developed countries cannot be reached readily through the traditional mass medium of advertising. In India, video vans are used to reach India’s rural population with 30-minute infomercials extolling the virtues of a product. Consumer goods companies deploy vans year-round except in the monsoon season. Colgate hires 85 vans at a time and sends them to villages that research has shown to be promising.

Because of the lack of adequate coverage by any single medium in eastern European countries, companies must resort to a multimedia approach. In the Czech Republic, for ex- ample, TV advertising rates are high, and the lack of available prime-time spots has forced companies to use billboard advertising. In Slovenia the availability of adequate media is such a problem that companies resort to some unusual approaches to get their messages out. For example, in the summer, lasers are used to project images onto clouds above major cities. Vehicle advertising includes cement-mixers, where Kodak ads have appeared. On the positive side, crime is so low that products can be displayed in freestanding glass cabinets on sidewalks; Bosch Siemens (Germany) and Kodak have both used this method.

Lack of Market Data. Verification of circulation or coverage figures is a difficult task. Even though many countries have organizations similar to the Audit Bureau of Cir- culation in the United States, accurate circulation and audience data are not assured. For example, the president of the Mexican National Advertisers Association charged that news- paper circulation figures are grossly exaggerated. He suggested that as a rule, agencies should divide these figures in two and take the result with a grain of salt. The situation in China is no better; surveys of habits and market penetration are available only for the cities of Beijing, Shanghai, and Guangzhou. Radio and television audiences are always difficult

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to measure, but at least in most countries, geographic coverage is known. Research data are becoming more reliable as advertisers and agencies demand better quality data.

Even where advertising coverage can be measured with some accuracy, there are ques- tions about the composition of the market reached. Lack of available market data seems to characterize most international markets; advertisers need information on income, age, and geographic distribution, but such basic data seem chronically elusive except in the larg- est markets. Even the attractiveness of global television (satellite broadcasts) is diminished somewhat because of the lack of media research available.

An attempt to evaluate specific characteristics of each medium is beyond the scope of this discussion. Furthermore, such information would quickly become outdated because of the rapid changes in the international advertising media field. It may be interesting, how- ever, to examine some of the unique international characteristics of various advertising media. In most instances, the major implications of each variation may be discerned from the data presented.

Newspapers. The newspaper industry is suffering from lack of competition in some countries and choking because of it in others. Most U.S. cities have just one or two major daily newspapers, but in many countries, there are so many newspapers that an advertiser has trouble achieving even partial market coverage. Uruguay, population 3 million, has 21 daily newspapers with a combined circulation of 553,000. Turkey has 380 newspapers, and an advertiser must consider the political position of each newspaper so that the prod- uct’s reputation is not harmed through affiliation with unpopular positions. Japan has only five national daily newspapers, and the complications of producing a Japanese-language newspaper are such that they each contain just 16 to 20 pages. But the circulation num- bers are unusually large (see Exhibit 16.5 ). Connections are necessary to buy advertising space; Asahi, Japan’s largest newspaper, has been known to turn down over a million dollars a month in advertising revenue. And even the Japanese giants face a graying population whose younger members are increasingly choosing the electronic media. Circulation rates have been steadily declining there. 34

In many countries, there is a long time lag before an advertisement can be run in a news- paper. In India and Indonesia, paper shortages delay publication of ads for up to six months. Furthermore, because of equipment limitations, most newspapers cannot be made larger to accommodate the increase in advertising demand.

Separation between editorial and advertising content in newspapers provides another basis for contrast on the international scene. In some countries, it is possible to buy editorial

34“The Teetering Giants,” The Economist, February 10, 2010, pp. 72–73.

Exhibit 16.5 Media Penetration in Selected Countries (% of households)

Country Color TV Cable TV Satellite TV Telephone

Lines Internet Users*

Daily Newspapers*

China Japan Australia Russia Argentina Israel South Africa Canada USA Germany

96.8 99.5 99.3 97.6 97.1 89.9 74.7 99.0 99.2 98.6

52.9 66.0 24.6 36.6 57.6 85.7 —

67.1 57.7 50.0

0.0 40.6 13.9 7.8 13.3 41.1 6.7 24.8 28.8 43.5

82.8 95.4 97.0 60.3 73.7 81.5 15.1 99.1 94.9 94.2

16 74 70 25 26 46 8 73 75 75

9 39 12 — 4 14 3 17 15 24

*Percentages of Internet users and/or newspaper readers.

Source: Euromonitor International, 2012.

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space for advertising and promotional purposes; the news columns are for sale to anyone who has the price. Because there is no indication that the space is paid for, it is impossible to tell exactly how much advertising appears in a given newspaper.

Magazines. The use of foreign national consumer magazines by international adver- tisers has been notably low for many reasons. Few magazines have a large circulation or provide dependable circulation figures. Technical magazines are used rather extensively to promote export goods, but as with newspapers, paper shortages cause placement problems. Media planners are often faced with the largest magazines accepting up to twice as many advertisements as they have space to run them in—then the magazines decide what adver- tisements be included just before going to press by means of a raffle.

Such local practices may be key factors favoring the growth of so-called international media that attempt to serve many nations. Increasingly, U.S. publications are publish- ing overseas editions. Reader’s Digest International has added a new Russian-language edition to its more than 20 other language editions. Other American print media available in international editions range from Playboy to Scientific American and even include the National Enquirer , recently introduced to the United Kingdom. Advertisers have three new magazines through which to reach women in China: Hachette Filipachi Presse, the French publisher, is expanding Chinese-language editions of Elle , a fashion magazine; Woman’s Day is aimed at China’s “busy modern” woman; and L’Evénement Sportif is a sports magazine. These media offer alternatives for multinationals as well as for local advertisers.

Radio and Television. Possibly because of their inherent entertainment value, radio and television have become major communications media in almost all nations. Now high- definition television (HDTV) appears to be starting to take off worldwide as well. In China,

Advertising Themes that Work in Japan, Including a Polite Duck CROSSING BORDERS 16.3

Respect for tradition: Mercedes ads stress that it was the first to manufacture passenger cars.

Mutual dependence: Shiseido ads emphasize the part- nership (with beauty consultants) involved in achieving beauty.

Harmony with nature: Toyotas are shown in front of Mt. Fuji.

Use of seasons: Commercials are often set in and products are often used in specific seasons only.

Newness and evolution: Products are shown to evolve from the current environment slowly.

Distinctive use of celebrities, including gaijin ( foreigners): A recent study showed that 63 per- cent of all Japanese commercials featured hired celebrities.

Aging of society: Seniors are featured often.

Changing families: The changing role of fathers— more time spent at home—is a common theme.

Generation gaps and individualism: Younger charac- ters are shown as more individualistic.

Self-effacing humor: A dented Pepsi can was used in an ad to demonstrate its deference to the more popu- lar Coke.

Polite ducks: The AFLAC duck is going to Japan but with a softer quack. Instead of the American version’s abrasive quack, the Japanese actor portrays the duck with a more soothing tone. “The Japanese culture does not like being yelled at,” says an AFLAC spokes- person. About 70 percent of the firm’s international revenues come from Japan, or some $8 billion. Al- though this campaign is the first to be shot specifically for Japan, the Japanese have met the duck before. The company, now Japan’s largest insurer in terms of individual policies, has also used dubbed voices for American ads, including the loud “quacker.” The latest version of the duck ad has been so popular that the jingle associated with it became the most downloaded ringtone in Japan!

Sources: George Fields, Hotaka Katahira, and Jerry Wind, Leveraging Japan, Marketing to the New Asia (San Francisco: Jossey-Bass, 2000); “ALFAC Tames Its Duck for Japanese Market,” Los Angeles Times, May 13, 2003, p. C7; Lavonne Kuykendall, “Aflac CEO: The Duck Helps Drive Sales in Japan, Dow Jones Newswire , February 24, 2010.

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virtually all homes in major cities have a television, and most adults view television and listen to radio daily. Radio has been relegated to a subordinate position in the media race in countries where television facilities are well developed. In many countries, however, radio is a particularly important and vital advertising medium when it is the only one reaching large segments of the population.

Television and radio advertising availability varies between countries. Some countries do not permit any commercial radio or television, but several of the traditional noncom- mercial countries have changed their policies in recent years because television production is so expensive. Until recently, France limited commercials to a daily total of 18 minutes but now has extended the time limit to 12 minutes per hour per TV channel. South Korea has two television companies, both government owned, which broadcast only a few hours a day. They do not broadcast from midnight to 6:00 a.m., and they usually cannot broadcast between 10:00 a.m. and 5:30 p.m. on weekdays. Commercials are limited to 8 percent of air- time and shown in clusters at the beginning and end of programs. One advertiser remarked, “We are forced to buy what we don’t want to buy just to get on.”

Satellite and Cable TV. Of increasing importance in TV advertising is the growth and development of satellite TV broadcasting. Sky Channel, a United Kingdom–based commercial satellite television station, beams its programs and advertising into most of Eu- rope to cable TV subscribers. The technology that permits households to receive broadcasts directly from the satellite via a dish the size of a dinner plate costing about $350 is adding greater coverage and the ability to reach all of Europe with a single message. The expan- sion of TV coverage will challenge the creativity of advertisers and put greater emphasis on global standardized messages. For a comparison of penetration rates by cable TV, comput- ers, and the Internet in the several countries, see Exhibit 16.5 .

Advertisers and governments are both concerned about the impact of satellite TV. Gov- ernments are concerned because they fear further loss of control over their airwaves and the spread of “American cultural imperialism.” Notice in Exhibit 16.5 that China does not allow the medium. European television programming includes such U.S. shows as Laguna Beach: the Real Orange County . Wheel of Fortune is the most popular foreign show in the United Kingdom and France, where both the U.S. and French versions are shown. American im- ports are so popular in France and Germany that officials fear lowbrow U.S. game shows, sitcoms, and soap operas will crush domestic producers. This battle has even reached politi- cal levels associated with differences in worldviews represented in the news. The govern- ment of France invested in developing, not surprisingly, a French-language “CNN” called France 24 but has stopped subsidizing an English-language version. Al-Jazeera , initially subsidized by Qatar government loans, is currently struggling to break even. Nevertheless, it is the now widely recognized Arabic “CNN” and is commensurately influential in the Middle East.

Parts of Asia and Latin America receive TV broadcasts from satellite television networks. Univision and Televisa are two Latin American satellite television networks broadcasting via a series of affiliate stations in each country to most of the Spanish-speaking world, as well as the United States. Sabado Gigante, a popular Spanish-language program broadcast by Univision, is seen by tens of millions of viewers in 16 countries. Star TV, a new pan- Asian satellite television network, has a potential audience of 2.7 billion people living in 38 countries from Egypt through India to Japan, and from Russia to Indonesia. Star TV was the first to broadcast across Asia but was quickly joined by ESPN and CNN. The first Asian 24-hour all-sports channel was followed by MTV Asia and a Mandarin Chinese–language channel that delivers dramas, comedies, movies, and financial news aimed at the millions of overseas Chinese living throughout Asia. Programs are delivered through cable networks but can be received through private satellite dishes.

One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single mes- sage is broadcast throughout a wide area. This span may not be desirable for some prod- ucts; with cultural differences in language, preferences, and so on, a single message may not be as effective. PVI (Princeton Video Imaging) is an innovation that will make regional

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advertising in diverse cultures easier than it presently is when using cable or satellite tele- vision. PVI allows ESPN, which offers this service, to fill visual real estate—blank walls, streets, stadium sidings—with computer-generated visuals that look like they belong in the scene. For instance, if you are watching the “street luge” during ESPN’s X-Games, you will see the racers appear to pass a billboard advertising Adidas shoes that really is not there. That billboard can say one thing in Holland and quite another in Cameroon. And if you are watching in Portland, Oregon, where Adidas might not advertise, you will see the scene as it really appears—without the billboard. These commercials can play in different languages, in different countries, and even under different brand names.

Most satellite technology involves some government regulation. Singapore, Taiwan, and Malaysia prohibit selling satellite dishes, and the Japanese government prevents domestic cable companies from rebroadcasting from foreign satellites. Such restrictions seldom work for long, however. In Taiwan, an estimated 1.5 million dishes are in use, and numerous illicit cable operators are in business. Through one technology or another, Asian households will be open to the same kind of viewing choice Americans have grown accustomed to and the advertising that it brings with it.

Direct Mail. Direct mail is a viable medium in an increasing number of countries. It is especially important when other media are not available. As is often the case in inter- national marketing, even such a fundamental medium is subject to some odd and novel quirks. For example, in Chile, direct mail is virtually eliminated as an effective medium because the sender pays only part of the mailing fee; the letter carrier must collect ad- ditional postage for every item delivered. Obviously, advertisers cannot afford to alienate customers by forcing them to pay for unsolicited advertisements. Despite some limitations with direct mail, many companies have found it a meaningful way to reach their markets. The Reader’s Digest Association has used direct mail advertising in Mexico to successfully market its magazines.

Given the ubiquitous Guinness advertising in Dublin, it’s not surprising that Irish livers need assurance. Ireland is behind only the Czech Republic when it comes to per capita consumption of beer. Actually, Royal Liver Assurance is a British pension/insurance company with offices in Dublin (it was established in the 1850s as the Liverpool Liver Burial Society). “Hurling” is a rather brutal form of field hockey popular in Ireland. The Irish government recognizes the causal effects of advertising on consumption—beer ads are not allowed on radio or TV before sports programs and may not be shown more than once per night on any one channel. See http://www.eurocare.org for more information on the consumption of alcohol in Ireland and other European countries.

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In Southeast Asian markets, where print media are scarce, direct mail is considered one of the most effective ways to reach those responsible for making industrial goods purchases, even though accurate mailing lists are a problem in Asia as well as in other parts of the world. In fact, some companies build their own databases for direct mail. Industrial adver- tisers are heavy mail users and rely on catalogs and sales sheets to generate large volumes of international business. Even in Japan, where media availability is not a problem, direct mail is successfully used by marketers such as Nestlé Japan and Dell Computer. To promote its Buitoni fresh-chilled pasta, Nestlé is using a 12-page color direct mail booklet of recipes, including Japanese-style versions of Italian favorites.

In Russia, the volume of direct mail has gone from just over 150,000 letters per month to over 500,000 per month in one year. The response rate to direct mailings is as high as 10 to 20 percent in Russia, compared with only 3 to 4 percent or less in the United States. One suggestion as to why it works so well is that Russians are flattered by the attention— needless to say, that will probably change as use of the medium grows.

The Internet. Although we are still learning about its effectiveness, particularly across cultures,35 the Internet has emerged as a viable medium for advertising and must be included in a company’s possible media mix. Its use in business-to-business communica- tions and promotion via catalogs and product descriptions is rapidly gaining in popularity. Because a large number of businesses have access to the Internet, the Internet can reach a large portion of the business-to-business market.

Although limited in its penetration of households in some countries, the Internet is being used by a growing number of companies as an advertising medium for consumer goods. Many consumer goods companies have e-stores, and others use the Internet as an advertising medium to stimulate sales in retail outlets. Waterford Crystal of Ireland set up its website specifically to drive store traffic. The aim is to promote its products and attract people into stores that sell Waterford crystal. Sites list and display almost the entire catalog of the Waterford collection, while stores like Bloomingdale’s that stock Waterford support the promotional effort by also advertising on their websites.

For consumer products, the major limitation of the Internet is coverage (see Exhibit 16.5 ). In the United States, growing numbers of households have access to a computer, but there are fewer in other countries. However, the growing number of Internet households acces- sible outside the United States generally constitutes a younger, better-educated market seg- ment with higher-than-average incomes. For many companies, this group is an important market niche. Furthermore, this limitation is only temporary as new technology allows access to the Internet via television and as lower prices for personal computers expand the household base. Exhibit 16.6 gives you some idea of the distribution of website visitors in three major markets. Notice the American brand names included in the lists: five for Brazil, six for Portugal, and four for South Korea; also consider the overlap in the Portuguese web- sites in Brazil and Portugal, as well as the dominance of Google and Microsoft. The great majority of visitors are viewing the local versions of these websites—that is, .br, .pt, and .kr. The most visited in the United States during the same period were Google, Microsoft, Yahoo!, Facebook, AOL, Ask Network, Glam Media, Turner Digital, and Wikipedia, in that order.

As the Internet continues to grow and countries begin to assert control over what is now a medium with few restrictions, increasing limitations will be set. Beyond the control of un- desirable information, issues such as pay-per-view, taxes, unfair competition, import duties, and privacy are being addressed all over the world. In Australia, local retailers are calling for changes in laws because of the loss of trade to the Internet; under current law, Internet purchases do not carry regular import duties. The Internet industry is lobbying for a global understanding on regulation to avoid a crazy quilt of confusing and contradictory rules.

35Shaojing Sun and Ying Want, “Familiarity, Beliefs, Attitudes, and Consumer Responses toward Online Advertising in China and the United States,” Journal of Global Marketing 23, no. 2 (2010), pp. 127–38; Jana Moller and Martin Eisend, “A Global Investigation into the Cultural and Individual Antecedents of Banner Advertising Effectiveness,” Journal of International Marketing 18, no. 2 (2010), pp. 80–98.

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Another limitation that needs to be addressed soon is the competition for Internet users. The sheer proliferation of the number of websites makes it increasingly difficult for a cus- tomer to stumble across a particular page. Search engines have now become crucial directors of Internet users’ attention. Also, serious Internet advertisers or e-marketers will have to be more effective in communicating the existence of their Internet sites via other advertising media. Some companies are coupling their traditional television spots with a website; IBM, Swatch watches, AT&T, and Samsung electronics are among those going for a one-two punch of on-air and online presences. Television spots raise brand awareness of a product regionally and promote the company’s website. In addition, a company can buy ad banners on the Web that will lead enthusiastic consumers to the company’s site, which also promotes the product.

Social Media. 36 Word-of-mouth (WOM) advertising and peer recommendations have always been key influencers of brand choice, but the power of the Internet has changed the pace and reach of WOM. Social media (such as social networking, blogs, virtual worlds, and video sharing) can be powerful marketing tools, but marketers are just beginning to loosen control and let consumers interact with brands on their own terms. Consumer- generated content is having an impact on brands (both positive and negative), and new media are on the agendas of marketers of all products, not just those targeted at young people. Consumers will create content about brands whether the marketers of those brands like it or not. Thus, it is vital that marketers follow, and participate in, the conversations consumers are having online.

The Internet is not delineated by national boundaries, though we note that word-of- mouth seems to work better in more information-oriented and uncertainty avoidant cul- tures. 37 In any case, consumers from many different countries and cultures can and do interact online. We are just beginning to understand the potential uses and pitfalls of this medium and the characteristics of its users. One recent study 38 distinguishes social net- work uses in the United States and those for a sample from abroad (that is, an aggregate of 11 countries: Brazil, Canada, China, France, Germany, India, Japan, Mexico, Russia, South Korea, and the United Kingdom). For the purposes of the study, the users consisted of consumers who had visited at least one social networking site, such as MySpace, Cyworld, Mixi, and/or Facebook. By the way, at more than 400 million per month, Facebook receives

Exhibit 16.6 Top Ten Websites in Three Countries (visitors per month)

Rank Brazil 31.9 million visitors Portugal 3.8 million visitors South Korea 28.1 million visitors

1 2 3 4 5 6 7 8 9 10

Google sites Microsoft sites UOL Yahoo! sites Terra-Telefonica Organizacoes Globo Grupo Brasil Telecom Wikimedia sites WordPress BuscaPe.com Inc.

26.2 25.2 20.6 17.4 16.8 16.7 16.6 10.8 10.1

Google sites Microsoft sites Portugal Telecom Hi5.COM Yahoo! sites UOL Grupo Impresa Wikimedia sites Grupo Brasil Telecom WordPress

3.6 3.4 2.4 2.3 1.4 1.3 1.2 1.1 1.1 1.1

NHN Corporation Daum SK Group gretech Yahoo! sites KT Group Microsoft sites Google sites eBay JMnet

22.7 20.5 20.2 14.7 12.2 11.8 11.4 10.4 10.0 10.0

Source: comScore Media Metrix, 2012, online. Reprinted with permission.

36For an excellent summary of the exploding influence of social media circa 2010 see “A World of Connections,” Special Report, The Economist , January 30, 2010, pp. 1–12. 37Desmond Lam, Alvin Lee, and Richard Mizerski, “The Effects of Cultural Values in Word-of-Mouth Communication,” Journal of International Marketing 17, no. 3 (2009), pp. 55–70; Jan H. Schumann, Florian v. Wangenheim, Anne Stringfellow, Zhilin Yang, Vera Blazevic, Sandra Praxmarer, G. Shainesh, Marcin Komor, Randall M. Shannon, and Fernando R. Jimenez, “Cross-Cultural Differences in the Effect of Received Word-of-Mouth Referral in Relational Service Exchange,” Journal of International Marketing 18, no. 3 (2010), pp. 62–80. 38“Social Networkers Are Also Heavy Technology Users,” Research Brief from the Center for Media Research , November 14, 2007, http://www.centerformediaresearch.com.

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nearly three times the number of unique visitors of its closest rival, Windows Live. Face- book dominates social networking around the world and has more than 800 million users, of whom only 175 million are in the United States.

More than half the Americans in the sample had watched TV shows or video streams online. In addition, the Americans were significantly more likely to download TV programs, burn or copy a movie or TV show, and download a feature-length film. The Americans also owned significantly more technology than their international counterparts, and both samples owned more technology than those who had never visited a social networking site. More than half of the Americans had used their mobile devices to send or receive SMS (short message service) text and e-mails, browse the Internet for news and information, and receive digital images. Although the international users exhibited similar behaviors, their mobile devices were richer with features. For example, international users are significantly more likely to have MP3s on their mobile devices than those in the United States. Also, see in Exhibit 16.7 that Israelis spend more time on social media sites than any users in any other country.

Mobile Phone Applications. As the number of mobile phones continues to explode around the world, now at 5.9 billion,39 so do the number of applications available to users. In- deed, it was recently reported that the top 1 percent of mobile phone users consume half of the world’s bandwidth, and the gap is growing!40 As one expert has most eloquently put it, “There is a big shift from holding a phone to your ear to holding it in your hand. It opens the door of information services. It’s not the web, but it’s a web of services that can be offered on mobile devices. It allows consumers to ask questions and marketers to deliver answers in new ways. Around the world creative people are finding ways to use mobile phones in new ways.” 41

39“Global Mobile Statistics 2012,” http://www.mobithinking.com, January 25, 2012. 40Kevin J. O’Brien, “Top 1% of Mobile Users Consume Half of World’s Bandwidth, and the Gap is Growing,” The New York Times, January 5, 2012. 41Rajeesh Veeraraghavan, Naga Yasodhar, and Kentaro Toyama, “Warana Unwired: Replacing PCs with Mobile Phones in a Rural Sugar Cane Cooperative,” Information Technology & International Development 5, no. 1 (2009), pp. 81–95.

Social Media Users

Israel

Argentina

Russia

Turkey

Chile

Philippines

Colombia

Average time spent on social-networking sites

Peru

Venezuela

Canada

0 1 2 3 4 5 6 7 8 9 10 11 12

Exhibit 16.7 Top 10 Social Media Users: Average Time Spent on Social Networking Sites, October 2011 (hours per user) Source: Michael Jung, “Social Networking Is the Most Popular Online Activity,” http://www.thenewage. co.za/38836-1021-53-Social_ networking_is_the_most_popular_ online_activity, December 26, 2011, online.

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498 Part 4 Developing Global Marketing Strategies Procter & Gamble Experiments with Social Media P&G was one of the fi rst companies to have its virtual world headquarters on an island in Second Life, the web-based virtual world where users interact via avatars. Sergio dos Santos, Global Hair Care— Digital Marketing Manager, and Gerry Tseng, Digital Marketing Innovation, were involved in P&G’s Second Life marketing effort. They explain:

The corporate team sponsored a contest to fi nd the right brand interested in co-creating a Second Life experiment. An open-invite P&G event was hosted in the form of a 2-hour “Second Life University” event to learn about the medium’s capabilities, followed by a call-to-action for interested brands to participate in a contest to win co-sponsorship funding. It received seventy-one event attendees, ten contest entries, four close- scoring fi nalists, and the selection of one winner: Wella Shockwaves brand in Europe.

Shockwaves, with their tag line of “Style—Attract—Play” targets both young men and women with hair styling products such as gel, spray, mousse, and wax. They tested their hypothesis that branded functional- ity, which brought their “play” equity to life, would be receptive to and used by avatars. As an extension

to their TV campaign, the brand created a virtual waterfi ght utility that allowed avatars to throw water balloons at each other. As incentive, a 3-wave con- test was held to give fans the opportunity to team up and compete to win L$1 million (Linden dollars, the basic currency of Second Life) in each round. Each wave involved points for thrown water balloons and accumulated medallions from scavenger hunts, and allowed some time for Shockwaves to learn and ad- just accordingly for the next wave.

While Shockwaves products were sold only in Western and Eastern Europe at the time, P&G found that people from the United States and else- where wanted to participate in the “Shockwaves Water Fight” with their avatars. Initially, P&G thought about excluding non-Europeans, but ulti- mately decided to allow all avatars to participate. While these consumers would be unable to pur-

chase Shockwaves products, the brand elected to study the global nature and behaviors of Second Life. P&G learned the following from the Second Life (SL) execution:

• Second Life is not a reach mechanism: Second Life is a small pond versus today’s traditional Internet channels, best suited for experimentation, research, and press release in the areas of community and socialization. If a brand is simply interested in reaching as many eyeballs as possible, perhaps a well-designed flash site with provocative content on an Internet site would better suffice as reach in SL is more difficult to do. Due to today’s Second Life learning curve for average users, one can expect avatars there to be generally more creative and competitive, perhaps ideal for a brand looking for co-contributors and creative partners. SL proves to be a thriving world for a specific consumer segment, the “critics” and “creators,” who are producers themselves. In the end, match your needs to each platform’s focus/strength. Perhaps the use of a more globally recognized brand with increased consumer awareness may have also further driven adoption/trial in this experiment.

• Fun, simple & socialization is more important: While a contest was employed as an incentive to trial, we now hypothesize that fun, simple & socialization are more important to SL avatars than prizes & complexity. Celebrity status of their avatars may also be more important than monetary gain as well. This is also supported by other learning from the development agency’s SL experiments to date. We learned that in making the game more complex, we risk lower adoption/trial of the execution as avatars may have been intimidated by the process (i.e., game rules and prize money distribution across countries and winning team avatars, interpretation of traditional contest-required legal guidelines into virtual worlds).

This image was posted within the Second Life world to enroll participants in the Water Fight contest. It was not posted on other websites or used to advertise the contest to anyone outside of Second Life.

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Chapter 16 Integrated Marketing Communications and International Advertising 499• Community managers and media support are key: The experiment did not receive media support; however, we utilized a community manager from the development agency who brought the contest to life via ongoing communications and in-world activities throughout all 3 waves. Word of Mouth was the primary driver to promote the contest, which would have been enhanced with media support if taken beyond experimental expectations. Word of Mouth works in SL but not as well as traditional Internet mechanisms. Should Second Life be used in a future brand execution for its unique strengths, the use of appropriate media support should compensate and increase its trial.

• Keep experiment budgets low: Keeping the experiment costs low through simple design executions allows ongoing tests in new digital channels with less ROI risk and more learning opportunities. We learned that most of our experiment’s cost went to making the game’s complex elements but perhaps may have been better saved in creating a fun and simple build for avatars to play with each other. This particular experiment realized more accountability to ROI than learning as it approached spending levels close to other digital tools such as online advertising and sampling.

• Maintain appropriate guidelines and principles: Expect that consumers will find loopholes and plan to embrace/adjust for them. Our experiment’s game rule complexity within each wave’s contest resulted in unexpected cheating allegations within waves 2 & 3. It was interesting to see how competitively close wave 3 became as we apologized for a discovered loophole in wave 2, held to the principle that we’d stay within our predefined game rules, and encouraged players to be more competitive for wave 3. This loophole could have been better prevented through the use of agency experts proficient in traditional contest rules and regulations. However, for this purpose, the Shockwaves brand authorized its bypass due to our need to learn/experiment the application of traditional rules into virtual worlds. Eliminating the contest component would have also avoided this scenario.

• Passionate consumers may not be vocal outside SL: While we received many messages in-world, not everyone wanted to be heard publicly via our external non-SL blogs as we encouraged them to do. This may have been due to the barrier of having them leave SL to perform an action elsewhere despite our promise to act on it in future potential executions if they did.

• Online conversations assisted in trial: The experiment generated over 400 blog posts around the world, most of them linked or driving traffic to Shockwaves Second Life’s website, which represented over 104,000 unique visitors in our website during the period of the experiment without having any additional online advertising. This “popularity” positioned our website into 1st place on Google’s results page when searching for “shockwaves water fight.”

Source: Gerry Tseng, Digital Marketing Innovation for P&G, and Sergio dos Santos, Global Hair Care—Digital Marketing Manager.

The Shockwaves products shown are available in 15 European countries: Austria, Belgium, Denmark, Finland, Germany, Greece, Hungary, the Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, and the United Kingdom. See www.shockwaves .com for more details.

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In Uganda, rice farmers who had trouble with aphids texted Farmer’s Friend for advice and received a message telling them how to make a pesticide using soap and paraffin. A farmer with blighted tomato plants learned how to control the problem by spraying the plants with a milk- based mixture. Farmer’s Friend is one of a range of phone-based services launched in 2009 by MTN, Google, and the Grameen Foundation’s “Application Laboratory,” or App Lab. 42

Google Trader is another text-based system that matches buyers and sellers of agricul- tural produce and commodities. Sellers send a message to say where they are and what they have to offer, which will be available to potential buyers within 30 km for seven days. The user is charged about ten cents per posting. In its first five weeks of operation, the service received one million queries.

Perhaps the best measure of the importance of this creative medium was the incredible re- sponse to the Haiti earthquake of 2010. Texting the phrase “Haiti” to the number 90999 auto- matically donates $10 to the Red Cross. The relief agency received more than $2 million dollars within 24 hours of the earthquake. Twitter also was used as an essential communication me- dium during the relief efforts and another medium for soliciting and accepting donations. 43

Other Media. Restrictions on traditional media or their availability cause advertisers to call on lesser media to solve particular local-country problems. The cinema is an impor- tant medium in many countries, as are billboards and other forms of outside advertising. Billboards are especially useful in countries with high illiteracy rates. Hong Kong is clearly the neon capital of the world, with Tokyo’s Ginza and New York’s Times Square running close seconds. Indeed, perhaps the most interesting “billboard” was the Pizza Hut logo that appeared on the side of a Russian Proton rocket launched to carry parts of the international space station into orbit. Can extraterrestrials read? Do they like pizza?

In Haiti, sound trucks equipped with powerful loudspeakers provide an effective and widespread advertising medium. Private contractors own the equipment and sell adver- tising space, much as a radio station would. This medium overcomes the problems of il- literacy, lack of radio and television set ownership, and limited print media circulation. In Ukraine, where the postal service is unreliable, businesses have found that the most effec- tive form of direct business-to-business advertising is direct faxing.

In Spain, a new medium includes private cars that are painted with advertisements for products and serve as moving billboards as they travel around. This system, called Publi- coche (derived from the words publicidad , meaning advertising, and coche , meaning car), has 75 cars in Madrid. Car owners are paid $230 a month and must submit their profession and “normal” weekly driving patterns. Advertisers pay a basic cost of $29,000 per car per month and can select the type and color of car they are interested in and which owners are most suited to the campaign, based on their driving patterns.

Campaign Execution and Advertising Agencies The development of advertising campaigns and their execution are managed by advertising agencies. Just as manufacturing firms have become international, so too have U.S., Japanese, and European advertising agencies ex- panded internationally to provide sophisticated agency assistance worldwide. Local agen- cies also have expanded as the demand for advertising services by MNCs has developed. Thus, the international marketer has a variety of alternatives available. In most commercially significant countries, an advertiser has the opportunity to employ a local domestic agency, its company-owned agency, or one of the multinational advertising agencies with local branches. There are strengths and weaknesses associated with each. The discussion regard- ing firm and agency relations in Chapter 8 on pages 250–251 and Exhibit 8.2 are quite perti- nent here. Moreover, the agency-company relationships can be complicated and fragile in the international context—Ford and Disneyland Paris recently changed agencies, for example.

42For much more information on this topic see The Economist’s “Mobile Marvels,” A Special Report, September 26, 2009, pp. 1–19. 43Jenna Wortham, “$2 Million in Donations for Haiti, via Text Message,” The New York Times , January 13, 2010, online.

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A local domestic agency may provide a company with the best cultural interpretation in situations in which local modification is sought, 44 but the level of sophistication can be weak. Moreover, the cross-cultural communication between the foreign client and the local agency can be problematic. However, the local agency may have the best feel for the market, especially if the multinational agency has little experience in the market. Eastern Europe has been a problem for multinational agencies that are not completely attuned to the market. In Hungary, a U.S. baby care company’s advertisement of bath soap, showing a woman holding her baby, hardly seemed risqué. But where Westerners saw a young mother, scandalized Hungarians saw an unwed mother. The model was wearing a ring on her left hand; Hungarians wear wedding bands on the right hand. It was obvious to viewers that this woman wearing a ring on her left hand was telling everybody in Hungary she wasn’t married. A local agency would not have made such a mistake. Finally, in some emerging markets like Vietnam, local laws require a local advertising partner.

The best compromise is a multinational agency with local branches, because it has the so- phistication of a major agency with local representation. Furthermore, a multinational agency with local branches is better able to provide a coordinated worldwide advertising campaign. 45 This ability has become especially important for firms doing business in Europe. With the inter- est in global or standardized advertising, many agencies have expanded to provide worldwide representation. Many companies with a global orientation employ one, or perhaps two, agencies to represent them worldwide.

Compensation arrangements for advertising agencies throughout the world are based on the U.S. system of 15 percent commissions. However, agency commission patterns through- out the world are not as consistent as they are in the United States; in some countries, agency commissions vary from medium to medium. Companies are moving from the commission system to a reward-by-results system, which details remuneration terms at the outset. If sales

Two novel media are shown here: (1) Not only do the Russians sell space for space tourists on their rockets; they also sell advertising space! (2) The Japanese beverage company Suntory promotes its products with “Monitor Man” during a football match at National Stadium. “Monitor Man” puts on an LCD display, showing ads for Pepsi and other products, and walks around the stadium. The job requires some muscle, as the equipment weighs about 15 pounds. All this effort is perhaps purposely reminiscent of the Simpson’s “Duff Man.” Ohhh yaaaa!

44Morris Kalliny and Salma Ghanem, “The Role of the Advertising Agency in the Cultural Message Content of Advertisements: A Comparison of the Middle East and the United States,” Journal of Global Marketing 22, no. 4 (2009), pp. 313–28. 45Among multinational advertising agencies, there appears to be an advantage to early arrival in new markets. See Peter Manusson, Stanford A Westjohn, and David J. Boggs, “Order-of-Entry Effects for Service Firms in Developing Markets: An Examination of Multinational Advertising Agencies,” Journal of International Marketing 17, no. 2 (2009), pp. 23–41.

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rise, the agency should be rewarded accordingly. This method of sharing in the gains or losses of profits generated by the advertising is gaining in popularity and may become the standard. Services provided by advertising agencies also vary greatly, but few foreign agen- cies offer the full services found in U.S. agencies. (See Exhibit 16.8 for the largest.)

Exhibit 16.8 World’s Top Ten Advertising Agencies

2010 Agency (parent) Headquarters Global Revenues ($ billion) 2010

Percent Change from 2009

1 WPP Dublin $14.4 6.0% 2 Omnicom Group New York 12.5 7.0 3 Publicis Groupe Paris 7.2 14.1 4 Interpublic Group New York 6.5 8.4 5 Dentsu Tokyo 3.6 15.6 6 Aegis London 2.3 7.0 7 Havas Suresner, France 2.1 3.0 8 Hakuhodo DY Holdings Tokyo 1.7 10.7 9 Acxiom Corp. Little Rock, AK 0.8 0.4

10 MDC Partners Toronto/New York 0.7 28.0

International Control of Advertising: Broader Issues In a previous section, specific legal restrictions on advertising were presented. Here broader issues related to the past, present, and future of the international regulation of advertising are considered.

Consumer criticisms of advertising are not a phenomenon of the U.S. market only. Con- sumer concern with the standards and believability of advertising may have spread around the world more swiftly than have many marketing techniques. A study of a representative sample of European consumers indicated that only half of them believed advertisements gave consumers any useful information. Six of ten believed that advertising meant higher prices (if a product is heavily advertised, it often sells for more than brands that are sel- dom or never advertised); nearly eight of ten believed advertising often made them buy things they did not really need and that ads often were deceptive about product quality. In Hong Kong, Colombia, and Brazil, advertising fared much better than in Europe. The non- Europeans praised advertising as a way to obtain valuable information about products; most Brazilians consider ads entertaining and enjoyable.

European Commission officials are establishing directives to provide controls on ad- vertising as cable and satellite broadcasting expands. Deception in advertising is a thorny issue, because most member countries have different interpretations of what constitutes a misleading advertisement. Demands for regulation of advertising aimed at children is a trend appearing in both industrialized and developing countries.

Decency and the blatant use of sex in advertisements also are receiving public attention. One of the problems in controlling decency and sex in ads is the cultural variations found around the world. An ad perfectly acceptable to a Westerner may be very offensive to someone from the Middle East, or, for that matter, another Westerner. Standards for appropriate behav- ior as depicted in advertisements vary from culture to culture. Regardless of these variations, concern about decency, sex, and ads that demean women and men is growing. International advertising associations are striving to forestall laws by imposing self-regulation, but it may be too late; some countries are passing laws that will define acceptable standards.

The difficulty that business has with self-regulation and restrictive laws is that sex can be powerful in some types of advertisements. European advertisements for Häagen-Dazs, a pre- mium U.S. ice cream maker, and LapPower, a Swedish laptop computer company, received criti- cism for being too sexy. Häagen-Dazs’s ad showed a couple in various stages of undress, in an embrace, feeding ice cream to each other. Some British editorial writers and radio commentators

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Chapter 16 Integrated Marketing Communications and International Advertising 503

were outraged. One commented that “the ad was the most blatant and inappropriate use of sex as a sales aid.” The ad for LapPower personal computers that the Stockholm Business Coun- cil on Ethics condemned featured the co-owner of the company with an “inviting smile and provocative demeanor displayed.” (Wearing a low-cut dress, she was bending over a LapPower computer.) The bottom line for both these companies was increased sales. In Britain, ice cream sales soared after the “Dedicated to Pleasure” ads appeared, and in Sweden, the co-owner stated, “Sales are increasing daily.” Whether laws are passed or the industry polices itself, advertising and its effect on people’s behavior have engendered international concern.

Advertising regulations are not limited to Europe. In Quebec, Canada, not only was adver- tising to children banned, but a careful study of the effects demonstrated the substantial ef- fectiveness of the ban in reducing consumption of the fast-food products targeted. 46 The city of Sao Paulo, Brazil, has successfully banned all outdoor advertising in that important commercial center. 47 Indeed, there is an enhanced awareness of the expansion of mass communications and the perceived need to effect greater control in developing countries as well. Malaysia consis- tently regulates TV advertising to control the effect of the “excesses of Western ways.” The gov- ernment has become so concerned that it will not allow “Western cultural images” to appear in TV commercials. No bare shoulders or exposed armpits are allowed, nor are touching or kiss- ing, sexy clothing, or blue jeans. These are just a few of the prohibitions spelled out in a 41-page advertising code that the Malaysian government has been compiling for more than 10 years.

The assault on advertising and promotion of tobacco products is escalating. In the United States, tobacco firms have agreed to curtail promotion as part of government-supported class-action lawsuits. The European Union Parliament approved larger health warnings on cigarette packs. Most significantly, the World Health Organization (WHO) has launched a global campaign against the tobacco industry. 48 Dr. Gro Harlem Brundtland, director- general of the WHO, explains, “Tobacco is a communicable disease—it’s communicated through advertising, marketing and making smoking appear admirable and glamorous.” A worldwide ban of tobacco advertising is just one of the stated goals of the new WHO action.

Product placement within TV programming is another area of advertising receiving the attention of regulators. In the United States, complaints have been aired regarding ciga- rette smoking in movies and on TV. Product placements avoid some of the regulations in markets like China, where ad time is limited. Because these practices are new to China, the growth rate has been initially dramatic. It will be interesting to follow how product place- ment will be regulated as the practice proliferates.

The advertising industry is sufficiently concerned with the negative attitudes and skepticism of consumers and governments and with the poor practices of some advertisers that the Inter- national Advertising Association and other national and international industry groups have de- veloped a variety of self-regulating codes. Sponsors of these codes feel that unless the advertisers themselves come up with an effective framework for control, governments will intervene. This threat of government intervention has spurred interest groups in Europe to develop codes to en- sure that the majority of ads conform to standards set for “honesty, truth, and decency.” In those countries where the credibility of advertising is questioned and in those where the consumer- ism movement exists, the creativity of the advertiser is challenged. The most egregious control, however, may be in Myanmar (formerly Burma), where each medium has its own censorship board that passes judgment on any advertising even before it is submitted for approval by the Ministry of Information. There is even a censorship board for calendars. Content restrictions are centered on any references to the government or military, other political matters, religious themes, or images deemed degrading to traditional culture. In many countries, there is a feeling that advertising, and especially TV advertising, is too powerful and persuades consumers to buy what they do not need, an issue that has been debated in the United States for many years.

48“Russian Government Approves Accession to WHO Tobacco Control Convention,” Interfax , January 10, 2008.

46Tirtha Dhar and Kathy Baylis, “Fast-Food Consumption and the Ban on Advertising Targeting Children: The Quebec Experience,” Journal of Marketing Research 48, no. 5 (2011), pp. 799–813. 47Patrick Burgoyne, “Sao Paulo: The City that Said No to Advertising,” BusinessWeek, June 18, 2007.

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504 Part 4 Developing Global Marketing Strategies

Summary

An integrated marketing communications (IMC) program in- cludes coordination among advertising, sales management, public relations, sales promotions, and direct marketing. Global marketers

face unique legal, language, media, and production limitations in every market. These must be considered when designing an IMC program. During the late 1990s, many large firms moved toward

Is the World Wide Web Actually Building Borders?CROSSING BORDERS 16.4

We close the chapter with a chilling excerpt from Neil Strauss’s article in The Wall Street Journal. Food for thought!

If you happen to be reading this article online, you’ll notice that right above it, there is a button labeled “like.” Please stop reading and click on “like” right now.

Thank you. I feel much better. It’s good to be liked.

There’s a growing cultural obsession with being blogged, digged, tweeted and liked. Now add Google’s +1 to the mix and it’s just like being in high school all over again.

Don’t forget to comment on, tweet, blog about and StumbleUpon this article. And be sure to “+1” it if you’re on the newly launched Google+ social net- work. In fact, if you don’t want to read the rest of this article, at least stay on the page for a few minutes before clicking elsewhere. That way, it will appear to the site analytics as if you’ve read the whole thing.

Once, there was something called a point of view. And, after much strife and conflict, it eventually be- came a commonly held idea in some parts of the world that people were entitled to their own points of view.

Unfortunately, this idea is becoming an anachro- nism. When the Internet first came into public use, it was hailed as a liberation from conformity, a floating world ruled by passion, creativity, innova- tion and freedom of information. When it was hi- jacked first by advertising and then by commerce, it seemed like it had been fully co-opted and brought into line with human greed and ambition.

But there was one other element of human nature that the Internet still needed to conquer: the need to belong. The “like” button began on the website

FriendFeed in 2007, appeared on Facebook in 2009, began spreading everywhere from YouTube to Amazon to most major news sites last year, and has now been officially embraced by Google as the agreeable, supportive and more status-conscious “+1.” As a result, we can now search not just for information, merchandise and kitten videos on the Internet, but for approval.

You ‘like’ me! Even rock stars agonize over their Facebook and Twitter stats.

Just as stand-up comedians are trained to be funny by observing which of their lines and expressions are greeted with laughter, so too are our thoughts online molded to conform to popular opinion by these buttons. A status update that is met with no likes (or a clever tweet that isn’t retweeted) becomes the equivalent of a joke met with silence. It must be rethought and rewritten. And so we don’t show our true selves online, but a mask designed to conform to the opinions of those around us.

Conversely, when we’re looking at someone else’s content—whether a video or a news story—we are able to see first how many people liked it and, often, whether our friends liked it. And so we are encour- aged not to form our own opinion but to look to others for cues on how to feel.

“Like” culture is antithetical to the concept of self- esteem, which a healthy individual should be de- veloping from the inside out rather than from the outside in. Instead, we are shaped by our stats, which include not just “likes” but the number of com- ments generated in response to what we write and the number of friends or followers we have. I’ve seen rock stars agonize over the fact that another artist has far more Facebook “likes” and Twitter fol- lowers than they do.

Source: Excerpted from Neil Strauss’, “The Insidious Evils of ‘Like’ Culture,” The Wall Street Journal, July 2, 2011.

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Chapter 16 Integrated Marketing Communications and International Advertising 505

Questions

1. Define the key terms listed above. 2. “Perhaps advertising is the side of international marketing with

the greatest similarities from country to country throughout the world. Paradoxically, despite its many similarities, it may also be credited with the greatest number of unique problems in international marketing.” Discuss.

3. Someone once commented that advertising is America’s great- est export. Discuss.

4. With satellite TV able to reach many countries, discuss how a company can use satellite TV and deal eff ectively with diff er- ent languages, diff erent cultures, and diff erent legal systems.

5. Outline some of the major problems confronting an interna- tional advertiser.

6. Defend either side of the proposition that advertising can be standardized for all countries.

7. Review the basic areas of advertising regulation. Are such reg- ulations purely foreign phenomena?

8. How can advertisers overcome the problems of low literacy in their markets?

9. What special media problems confront the international advertiser?

10. Aft er reading the section in this chapter on direct mail, de- velop guidelines to be used by a company when creating a di- rect mail program.

11. Will the ability to broadcast advertisements over TV satellites increase or decrease the need for standardization of advertise- ments? What are the problems associated with satellite broad- casting? Comment.

12. In many of the world’s marketplaces, a broad variety of media must be utilized to reach the majority of the market. Explain.

13. Cinema advertising is unimportant in the United States but a major media in such countries as Austria. Why?

14. “Foreign newspapers obviously cannot be considered as homo- geneous advertising entities.” Explain.

15. Borrow a foreign magazine from the library. Compare the foreign advertising to that in an American magazine.

16. What is sales promotion and how is it used in international marketing?

17. Show how the communications process can help an interna- tional marketer avoid problems in international advertising.

18. Take each of the steps in the communications process and give an example of how culture diff erences can aff ect the fi nal mes- sage received.

19. Discuss the problems created because the communica- tions process is initiated in one cultural context and ends in another.

20. What is the importance of feedback in the communications process? Of noise?

Key Terms

Integrated marketing communications (IMC)

Sales promotions Public relations (PR) Noise

an advertising strategy of standardization. However, more recently even the most multinational companies have changed emphasis to strategies based on national, subcultural, demographic, or other market segments. The major problem facing international advertisers is designing the best messages for each market served. The potential for cross- cultural misunderstandings is great in both public relations and the various advertising media. The availability and quality of advertis- ing media also vary substantially around the world. Marketers may

be unable to enter markets profitably for the lack of appropriate advertising media—for example, some products require the avail- ability of TV. Advances in communication technologies (particularly the Inter- net) are causing dramatic changes in the structure of the international advertising and communications industries. New problems are being posed for government regulators as well. Despite these challenges, the industry is experiencing dramatic growth as new media are devel- oped and as new markets open to commercial advertising.

(From page 482) Why would Coke and McDonald’s shed the red in their logos? For the blue-and-yellow-uniformed Maradona and his team Boca Junior , Coke’s red and white are also the hated colors of their main futbol competitor in Buenos Aires, River Plate . The negotiations between Coco- Cola and the Boca Junior club executives must have been fascinating with millions of dollars on the table, with many thousands of raucous fans acting as a very much involved, and potentially riotous, audience. So, a black-and-white Coke logo was the creative solution. We note that Sinteplast, a large paint company and local sponsor, was able to include its red, white, and blue logo on the stadium—the colors of passion! The red and gold of McDonald’s was traded for black in Cuzco because the area is an official UNESCO World Heritage Site, and the money that supports this designation includes rules that preclude “intrusive” advertising.

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