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19 International Advertising and Promotion McGraw-Hill/Irwin Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed Importance of International Markets Stagnation of domestic markets Company survival Growth and profit opportunities Trade Balance 19-2 Tourism Australia Uses Global Advertising 19-3 International Advertising & Promotion Rank Advertiser Outside U.S. Inside U.S. $6,364 $3,367 1 Proctor & Gamble 2 Unilever 4,965 752 3 L’Oreal 3,242 798 4 General Motors 1,442 2,232 5 Toyota Motor Corp. 2,181 1,022 6 Coca-Cola Co. 2,231 442 7 Johnson & Johnson 1,181 1,402 8 Ford Motor Co. 1,436 1,012 9 Reckitt Benckiser 1,842 544 Nestlé 1,696 618 10 Ad Spending in Millions of U.S. dollars 19-4 International Economic Environment Economic Environment Cultural Environment International Marketing & Promotional Decisions Demographic Environment Political/Legal Environment 19-5 International Economic Environment Economic Environment • • • • • • • Stage of economic development Economic infrastructure Standard of living Per capita income Distribution of wealth Currency stability Exchange rates International Marketing And Promotional Decisions 19-6 Liu Xiang Endorses Nike in China 19-7 International Demographic Environment International Marketing And Promotional Decisions Demographic Environment • • • • • • • • Size of population Number of households Household size Age distribution Occupation distribution Education levels Employment rate Income levels 19-8 International Cultural Environment Cultural Environment • • • • • • Language Lifestyles Values Norms and customs Ethics and moral standards Taboos International Marketing And Promotional Decisions 19-9 TaylorMade Translation Issues Tagline Translation Issues 19-10 New Balance Markets in France 19-11 International Political/Legal Environment International Marketing And Promotional Decisions Political/legal Environment • • • • • Government policies Laws and regulations Political stability Nationalism Attitudes toward multinational companies 19-12 Advertising Areas Subject to Regulation Products that may be advertised Content or creative approach used Media advertisers are allowed to use The amount of advertising allowed Use of foreign languages in ads Materials from outside the country Local vs. international ad agencies Specific taxes levied on advertising 19-13 Global Marketer’s Dilemma Offer the same product, marketing, & advertising everywhere? Adapt the product, marketing, & advertising to each society? 19-14 Global Marketing & Advertising Advantages Economies of scale in production, distribution Lower costs due to less planning and control Lower advertising production costs Ability to exploit good ideas worldwide Consistent international brand, company image Simplification of ad coordination and control 19-15 Mandarin Oriental’s Global Ads 19-16 Problems With Global Advertising Differences in culture, market & economic development Consumer needs & usage patterns Media availability or usage Legal restrictions 19-17 Consumer Usage Patterns & Perceptions Nescafé Instant Coffee United States Great market penetration, but minor share Continental Europe Major market share, but idea of instant coffee was new Tea-drinking Countries Conversion not only to coffee, but to instant coffee Latin America Preferred coffee couldn’t be duplicated with instant version Scandinavia Ingrained habit of keeping coffee on stove all day long 19-18 NESCAFE President Ad From Japan 19-19 Adapting to Different Countries 19-20 When is globalization appropriate? Globalization works best for… Brands that can be adapted for visual appeal Brands promoted with image campaigns playing to universal needs, values, emotions High-tech products, new to the world Products with a nationalistic flavor Products appealing to universally similar tastes, interests, needs, values 19-21 TAG Heuer’s Global Campaign 19-22 TAG Heuer’s Global Campaign 19-23 Global Products, Local Messages In-between Approach Standard Marketing Strategies Standard Products Localizing Ad Messages Adapt messages to… Culture Language Market Conditions 19-24 TaylorMade Pattern Advertising 19-25 Decision Areas in International Advertising Organization Style Coordination of Other IMC Tools Agency Selection Decision Areas Media Strategy and Selection Advertising Research Creative Strategy & Execution 19-26 Centralization of International Advertising Budgeting Media Strategy Agency Selection Central Authority Campaign Development Creative Strategy Research 19-27 Decentralized International Advertising Campaigns Region One Creative Media Research Budgets Campaigns Central Authority Region Two Creative Media Research Budgets Campaigns Region Three Creative Media Research Budgets 19-28 Combination Structure Home Office Policy Guidelines Operations International Manager Local Managers Sets Objectives Approves Budgets Approves Creatives Approves Media 19-29 Criteria for Selecting an Agency 1. Ability of agency to cover relevant markets. 2. Quality of agency work. 3. Market research, public relations, and other services offered by the agency. 4. Relative roles of company advertising department and strategy. 5. Level of communication and control desired by company. 19-30 Criteria for Selecting an Agency 6. Ability of agency to coordinate international campaign. 7. Size of company’s international business. 8. Company’s desire for local versus international image. 9. Company organizational structure for international business and marketing (centralized versus decentralized). 10. Company’s level of involvement with international operations. 19-31 Advertising Research Demographic characteristics of markets Cultural differences such as norms, lifestyles, and values Consumers’ product usage, brand attitudes and media preferences Media usage and audience size Copy testing Effectiveness in foreign markets 19-32 Creative Decisions Creative decisions should be based on advertising and communication objectives Copy platforms must be developed that include major selling ideas Specific appeals and execution styles must be selected Appeals may have to be adapted for local market conditions 19-33 Adapting to Local Markets 19-34 International Media Selection Issues Types of media available How much time is spent watching TV Amount of commercial time available Clutter Tolerance for advertising Coverage, cost, quality, restrictions Political climate Limited and unreliable media information 19-35 Jelly is a Popular Fashion Magazine in Japan 19-36 International Media • U.S. media with international editions • Time • Newsweek • Reader’s Digest • National Geographic • USA Today • Good Housekeeping • Seventeen • Popular Mechanics • BusinessWeek 19-37 Direct Broadcast by Satellite (DBS) 19-38 International Sales Promotion Economic Development Major Creation Considerations Market Maturity Consumer Perceptions Trade Structure Regulations 19-39 WD-40 Used Product Samples in Russia 19-40 Public Relations in Global Marketing Deal with local governments, media, trade associations, and the general public Present the company as a good corporate citizen Serve as part of the IMC program and help market the product or service Deal with specific issues and problems the company may face in foreign markets 19-41 Worldwide Growth of the Internet 19-42