International Marketing REPORT
ibrhim4
week_9_-_international_marketing_communication.pptxWeek 9 - International marketing communication
Prepared by Alistair Hodgson & Robin Roberts
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Key Themes
After attending this week’s lecture and studying chapter 11 you should be able to:
Explain the influence of culture on marketing communication
Describe the methods used to set an international advertising budget
Discuss the main drivers of creative strategy
Explain how international media decisions are made
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Key Themes
Assess differences in marketing communication regulations around the globe
Explain core factors in choosing a suitable advertising agency
Understand that the benefits of diverse elements of the marketing communication mix differ around the globe
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Scene Setter: HSBC
Global operations > global consumers with varied cultural backgrounds
Logical to expect customisation?
In reality, advertising has been standardised, but focused on cultural differences
Combination of both video/televised advertising and print-based > strategy is consistent across both, however.
Scene Setter: HSBC
Scene Setter: HSBC
International advertising and culture
Culture provides a big hurdle in international marketing communication
Language barriers
things don’t always translate the way they should
“Body by Fisher” becomes “Corpse by Fisher”
“When I used this shirt, I felt good.” becomes “Until I used this shirt, I felt good.”
Other cultural barriers
the culture itself can throw up challenges to a marketing communication strategy (conceptual translation)
Refer to header: International advertising and culture
Advertising is to some extent a cultural phenomenon.
When advertising appeals are not in sync with the local culture, the campaign will falter.
In the worst-case scenario, the advertisement might even discourage product purchase.
Effective advertisement campaigns also do a great job in leveraging local culture phenomena.
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Language barriers
The challenge of idioms
how to translate the Australian saying ‘Wrap your laughing gear around this’
translates roughly to ‘eat this’
Translations don’t always translate
in the United States the Pepsi slogan, ‘Come alive with the Pepsi Generation’
in Taiwan it becomes, ‘Pepsi will bring your ancestors back from the dead’
Refer to header: International advertising and culture
As you have seen in previous chapters, language is one of the most formidable barriers that international advertisers need to surmount.
Many marketing communication efforts have misfired because of language-related mishaps.
Apart from translation another challenge is the proper interpretation of ideas.
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Other cultural barriers
Involve local advertising agencies
they have a greater sensitivity to the local language
Can translate conceptually, as well as literally
Don’t translate
‘Sheer Driving Pleasure’ for BMW worldwide
‘Don’t crack under pressure’ for TAG Heuer
Refer to header: International advertising and culture
Many of the trickiest marketing communication issues occur in the domain of religion.
In Saudi Arabia, for example, because of Islamic practices for feminine modesty, face veils are used.
Hence, only veiled women can be shown from the front in television advertisements.
As you can imagine, such restrictions lead to horrendous problems for hair care advertisers.
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Other cultural barriers
Political sensitivities
referring to Hong Kong and Taiwan as ‘countries’ when in China
Poor taste
what is poor taste in one country is not necessarily poor taste in another
Value systems are different
is it reasonable to use comparative advertising in all cultures?
Refer to header: International advertising and culture
Political sensitivities are also crucial.
Just as with language barriers, advertisers can escape falling into cultural traps by getting input from local staff, distributors or advertising agency people.
One framework that helps with studying the influence of culture on international advertising is the Hofstede cultural grid discussed in Chapter 4.
Although such cultural schemes can be useful, it is important to bear in mind that value systems change over time.
Otherwise, marketers risk falling into the trap of cultural stereotyping.
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Other cultural barriers
Sunsilk shampoo: Saudi Arabia
Foster’s (UK): “Don’t lose your head”
Viewed as insensitive in the UK, despite apparent cultural similarities between the UK and Australia:
Humour often doesn’t translate exactly
Australian humour generally more irreverent than in the UK
Refer to header: International advertising and culture
Political sensitivities are also crucial.
Just as with language barriers, advertisers can escape falling into cultural traps by getting input from local staff, distributors or advertising agency people.
One framework that helps with studying the influence of culture on international advertising is the Hofstede cultural grid discussed in Chapter 4.
Although such cultural schemes can be useful, it is important to bear in mind that value systems change over time.
Otherwise, marketers risk falling into the trap of cultural stereotyping.
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Other cultural barriers: Comparative Advertising
Figure 11.1
Refer to header: International advertising and culture
This figure shows how, for instance, the Hofstede grid can be handled to assess the suitability of comparative advertising campaigns where one brand is contrasted with a competing brand.
The upper left-hand quadrant is the combination of collectivism/feminine values.
In group orientated culture, comparison with the competition is not acceptable because the other party risk losing face.
For feminine cultures, comparative advertising is too aggressive.
Moving to the right there is mixture of collectivism and masculinity.
Overt comparative advertising that focuses on competing brands is again limited because of the ‘losing face’ issue.
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Other cultural barriers: Comparative Advertising
Q: Why is comparative advertising not acceptable in collectivist countries?
Subtle vs. Direct Comparative Advertising
Refer to header: Setting the international advertising budget
One of the delicate decision that marketers face when planning their communication strategy centres around the ‘money’ issue.
Global media spending is expected to register US$500 billion and increase to US$1.9 trillion by 2015. China, being one of the fastest-growing markets, is expected to increase advertising expenditure by over 11% in the next five years.
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Setting the international advertising budget
Many of the approaches used in domestic communications are also used in international communications:
Percentage of sales
Competitive parity
Objective and task
Resource allocation
Refer to header: Setting the international advertising budget
One of the delicate decision that marketers face when planning their communication strategy centres around the ‘money’ issue.
Global media spending is expected to register US$500 billion and increase to US$1.9 trillion by 2015. China, being one of the fastest-growing markets, is expected to increase advertising expenditure by over 11% in the next five years.
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Setting the international advertising budget
Percentage of sales
using a percentage of past sales or future sales or a combination of both to determine the budget
still one of the most common methods
Key benefit: Keeps advertising budgets in check (sales determine the budget)
Key cost: Promotion follows the number of sales; contrast with the usual process (advertise > higher sales)
Refer to header: Setting the international advertising budget
The rule based on percentage of sales is the most widely used method as it simply sets the overall advertising budget as a percentage of sales.
The base is either past or expected sales revenues.
The principle of the competitive parity rule is extremely simple: use the competitors advertising spending as a benchmark.
Share of Voice – brand advertising as a share of total advertising
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Setting the international advertising budget
Competitive parity
determining budget based on activities of one or more competitors
allows the organisation to maintain its ‘share of voice’
Key benefit: spending follows a pre-existing, optimised amount for the local market
Key cost: new entrants should really spend more than pre-existing competitors
Current spending levels within an industry could be questionable
Refer to header: Setting the international advertising budget
The rule based on percentage of sales is the most widely used method as it simply sets the overall advertising budget as a percentage of sales.
The base is either past or expected sales revenues.
The principle of the competitive parity rule is extremely simple: use the competitors advertising spending as a benchmark.
Share of Voice – brand advertising as a share of total advertising
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Setting the international advertising budget
Objective and task
relating the advertising budget to the sales objectives
one of the most appealing methods amongst marketing communicators
Key benefit: communications meet the company’s primary objectives (or at least aim to)
Also encourages well-developed understanding of the local market
Key cost: the advertising budget can spiral
Refer to header: Setting the international advertising budget
The most widely used budgeting method is the so-called objective-and-task method. Conceptually, this is also the most appealing budgeting rule: marketing communication efforts are treated here as a means to achieve the advertiser’s stated objectives.
The budgeting process also involves the allocation of resources across the different countries.
At one extreme are organisations such as Microsoft and FedEx, where each country subsidiary independently determines how much should be spent within its market and then request the desired resources from headquarters. This is known as bottom-up budgeting.
Top-down budgeting is the opposite approach, whereby head-quarters sets the overall budget and then splits up the pie among its different affiliates.
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Setting the international advertising budget
Resource allocation
involves the allocation of resources across different countries
subsidiaries determining their own budgets (bottom-up budgeting)
headquarters determines budgets (top-down budgeting)
Refer to header: Setting the international advertising budget
The most widely used budgeting method is the so-called objective-and-task method. Conceptually, this is also the most appealing budgeting rule: marketing communication efforts are treated here as a means to achieve the advertiser’s stated objectives.
The budgeting process also involves the allocation of resources across the different countries.
At one extreme are organisations such as Microsoft and FedEx, where each country subsidiary independently determines how much should be spent within its market and then request the desired resources from headquarters. This is known as bottom-up budgeting.
Top-down budgeting is the opposite approach, whereby head-quarters sets the overall budget and then splits up the pie among its different affiliates.
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Creative strategy
To standardise or adapt
similar argument to that of product adaptation vs standardisation
can still be considered standardised if a global campaign is used and only minor changes to comply with local regulations are undertaken (i.e. language)
substantial changes would be considered an ‘adapted creative strategy’
Refer to header: Creative strategy
One of the thorniest issues that marketers face when developing a communication strategy is the choice of a proper advertising theme.
The major elements of a campaign are the message (strategy, selling proposition, platform) and the execution.
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Creative strategy: Advantages of Global Advertising
Table 11.1
Refer to header: Creative strategy
This table highlights some advantages and disadvantages of global advertising.
Organisations that sell the same product in multiple markets need to establish how much their advertising campaign should be standardised.
Standardisation means the one or more elements of the communication campaign are kept the same.
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Merits of standardisation
Economies of scale
Consistent image
Nike ‘swoosh’
Global consumer segments
‘business-class traveler’; ‘emerging middle-class’
Crossfertilisation
Mazda’s ‘Zoom-Zoom’ tagline. Introduced in Japan > becomes a huge success in the US > introduced to Australia and Europe
Refer to header: Creative strategy
What makes the case for standardisation so compelling in the eyes of many marketers?
A variety of reason have been offered to defend global, if not pan regional advertising campaigns. The major ones are:
Economies of scale
Consistent image
Global consumer segments
Cross fertilisation
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Barriers to standardisation
Cultural differences
advertising cosmetics in the Middle East
Japanese advertising creates new icons, music, and stories
Advertising regulations
foreign-made advertisements featuring Caucasians not allowed in Malaysia
Market maturity
Body Shop is not the dominant ‘eco-friendly’ provider in some mature markets (Lush as a key rival)
Not invented here (NIH) syndrome
Local subsidiary reluctance to use standardised creative approach
Refer to header: Creative strategy
Given the list of arguments for standardisation, advocates of adaptation can easily compile an equally compelling list for adaptation.
The four major barriers to standardisation relate to cultural differences, advertising regulations, differences in the degree of market development and the ‘not invented here’ (NIH) syndrome.
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International media decisions
Media buying is a critical element
variations exist across different countries
published readership levels of magazines are accurate in Australia but less so in China
Creative approach is often less-important than gaining media presence
Media infrastructure
issues of access and affordability
television media in the Philippines is relatively cheap
internet bandwidth is large in China
fibre optic point-to-point across China
Refer to header: International media decisions
Another task that international marketers need to confront is the choice of the media in each of the countries where the organisation is doing business.
In some countries, media decisions are much more critical than the creative aspects of the campaign.
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International media decisions
Media limitations
cost
availability of certain types in some markets/sub-markets
Traffic/Road-based media better in markets with severe congestion
overall quality of media
in some countries is questionable
- issues with media contracts
Refer to header: International media decisions
Availability of media is a major limitation in many markets.
The lack of standard media options challenges marketers to use their imagination by coming up with ‘creative’ options.
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International media decisions
Developments
growing spread of interactive marketing
Most obvious examples are online (Facebook etc.)
growing popularity of mobile marketing
Again, previous video has relevance here too
media fragmentation
Digital ad agencies becoming more prominent; companies must adapt to media fragmentation and use new channels for promotion
Refer to header: International media decisions
Pinpointing some major trends illustrates the rapid changes in the media landscape.
growing spread of interactive marketing
growing popularity of mobile marketing
media fragmentation
rise of global and regional media companies
growing commercialisation and deregulation of mass media
improved television viewership measurement
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International media decisions
Developments
rise of global and regional media companies
Local media often difficult to access > global & regional media offers a way into particular markets
Increasing similarity amongst consumers a factor too
growing commercialisation and deregulation of mass media
Privatisation of state-owned media entities
Digital television and additional channels
improved television viewership measurement
Refer to header: International media decisions
Pinpointing some major trends illustrates the rapid changes in the media landscape.
growing spread of interactive marketing
growing popularity of mobile marketing
media fragmentation
rise of global and regional media companies
growing commercialisation and deregulation of mass media
improved television viewership measurement
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Advertising regulation
Advertising of some products comes under greater scrutiny
for example, alcohol and pharmaceuticals
Heineken Cup (Rugby tournament) now referred to as the ‘H’ cup in France
Advertising clutter
lobby groups and government regulate to reduce clutter
Comparative advertising
common in Australia,
but constrained or prohibited
in many Asian countries
Refer to header: Advertising regulation
International advertising in unfamiliar environments can be a minefield for potential advertisers.
A major roadblock that global marketers face is the bewildering set of advertising regulations they need to cope with in foreign markets.
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Advertising regulation
Content of advertising messages
can be subject to certain rules or guidelines
Due to health & safety regulation
Targeting children
some advertisements are excluded from children’s viewing
Greece bans television advertisements of toys between 7am-10pm.
Fast food advertising restrictions
Refer to header: Advertising regulation
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Choosing an advertising agency
What is their market coverage?
Can they develop/be part of a global campaign?
Creative reputation
Scope and quality of services
Local know-how (often contradicts previous consideration)
Size of agency
big isn’t always best
small agencies could be more creative/innovative
Refer to header: Choosing an advertising agency
Most multinational corporations rely heavily on the expertise of an advertising agency to develop large advertising campaigns in consultation with in-house marketing departments.
In selecting an agency, the international marketer has several options:
Work with the agency that handles the advertising in the organisation’s home market
Pick a purely local agency in the foreign market
Choose the local office of a large international agency
Select an international network of advertisement agencies that spans the globe
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Coordinating international advertising
Monetary incentives to local distributors
‘co-operative advertising’
providing incentives at a local level to reward those who are consistent in their delivery of the global message
Advertising manuals
brand books, DVD, CD, online etc. to provide some structure
International or global meetings
Refer to header: Coordinating international advertising
International advertising approaches often require a great deal of coordination and communication among the various subsidiaries.
Several mechanisms that can be used to make this easier are:
Monetary incentives
Advertising manuals
International global meetings
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Other elements of the marketing communication mix
Advertising is a critical element of the marketing mix but not the only element
An integrated approach is needed
Integrated Marketing Communication (IMC)
other elements which need to be considered
sales promotion
direct marketing
event sponsorship
trade shows
personal selling
Refer to header: Other elements of the marketing communication mix
For most organisations, media advertising is only one part of the marketing communication package.
Although advertising is the most visible form, other communication tools often play a vital role in an organisation's international marketing communication mix strategy.
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Sales promotion
Usually a local effort
Many of the same promotions as domestic sales promotion
point of sale
coupons
discounts
Refer to header: Other elements of the marketing communication mix
Sales promotions refer to a collection of short-term incentive tools that lead to quicker or larger sales of a particular product by consumers or the trade.
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Sales promotion
Why so local?
level of economic development
developing countries like sampling
Market maturity
products in an early stage of their introduction may warrant promotions that allow the consumer to trial the product
Government regulations
coupons are used heavily in the US and less so in Australia, New Zealand, and Europe
Refer to header: Other elements of the marketing communication mix
For most organisation, the sales promotion policy is a local affair.
Several rationales explain the local character of promotions:
Economic development
Market maturity
Cultural perceptions
Trade structure
Government regulations
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Direct marketing
Telemarketing
Direct mail
Online
internet
social media
mobile
Refer to header: Other elements of the marketing communication mix
Direct marketing presents various forms of interactive marketing where the organisation uses media that enable it to gain direct access to the end-consumer and to establish a one-to-one relationship.
Direct marketing is growing rapidly internationally, and many organisations have been able to successfully transplant their direct marketing model to other markets.
Telemarketing: Japanese telemarketing firms based in Shanghai now
Direct mail – demonstrations; Mary Kay cosmetics throughout Asia
Databases: Developing home grown data bases. internal customer data used to build an effective Customer Relationship Management system (CRM)
Interactive and web based
Dell utilises both phone and internet to market its product directly in Thailand
Hangzhou (China) based Alibaba is a centre for buyers and sellers worldwide
on the internet
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Event sponsorship
Globally one of the fastest growing promotional tools
Heavily skewed towards sports
other events gaining ground
concerts
There is the risk of ‘ambush marketing’
non-sponsors giving the impression to consumers they are in fact sponsors
Nike in 2014 World Cup
Sponsor of individual players
& teams but not the tournament
Refer to header: Other elements of the marketing communication mix
Sponsorship is one of the fastest-growing promotional tools.
Major sponsors of the 2012 London Olympic Games paid many millions for their sponsorship rights.
Why? The Olympic Games is the biggest sporting spectacle in the world.
Its worldwide partners include: Acer, Coca-Cola, General Electric, McDonalds, Omega, Panasonic, Samsung and Visa.
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Trade shows
Over 15,000 trade shows a year
Good opportunity for business-to-business
Can provide immediate access to customers in foreign markets
Refer to header: Other elements of the marketing communication mix
Trade shows (also trade fairs or trade exhibitions) are a vital part of the communication package for many international business-to-business marketers.
Trade shows tend to have a small direct sales effect – the sales coming from visitors of the trade show booth – and large indirect impacts on the exhibitions’ sales.
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Personal selling
Used more extensively by industrial companies
Need to be aware of cultural differences between countries
‘down to business’ Western approach
subtle approach in Asia
Refer to header: Other elements of the marketing communication mix
Most industrial companies rely on a professional sales force to locate prospects, develop them into customers and grow the business.
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Summary
You should now have an understanding of:
The influence of culture on marketing communication
The methods used to set an international advertising budget
The main drivers of creative strategy
How international media decisions are made
Refer to header: Summary
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Summary
Differences in marketing communication regulations around the globe
Core factors when choosing a suitable advertising agency
The benefits of diverse elements of the marketing communication mix differ around the globe
Refer to header: Summary
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