Download ch17 Hollensen - Warsaw School of Economics

Svend Hollensen
GLOBAL MARKETING
4th Edition
Lecture by Ewa Baranowska-Prokop, Ph.D.
Communication decisions
De Beers: forward integration
What could be De Beers motives for making forward
integration into the retail & consumer market?
Is it a wise decision?
How should De Beers develop its Internet strategy
following this forward integration strategy?
Would it be possible for De Beers, with its branded
diamonts, to standardize the international marketing
strategy across borders?
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BMW Motorcycles:
A case study (1)
 Should BMW use standardization or
adaptation in promoting the motorcycles
outside the US and Germany?
Requires web access
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BMW Motorcycles:
A case study (2)
 Why is BMW using its website as a virtual
showroom rather than also selling online
directly to consumers?
 Should BMW develop and promote a new
motorcycle brand to differentiate its
motorcycles from competing motorcycle
brands as well as differentiating them from
BMW cars?
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Learning objectives
Define and classify the different types of
communication tools
Describe and explain the major steps in
advertising decisions
Describe the techniques available and
appropriate for setting the advertising
budget in foreign markets
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Learning objectives (2)
 Discuss the possibilities of marketing via the
Internet
 Explain how important personal selling and sales
force management are in the international
marketplace
 Define and explain the concept of ‘viral
marketing’
 Discuss how standardized international
advertising has both benefits and drawbacks
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Figure 17.1 The shift
from seller initiative
to buyer initiative
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Figure 17.2 Elements
of the international
communication process
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Figure 17.3 The major
international
advertising decisions
Objectives setting
Budget decisions
Message decisions
Media decisions
Agency selection
Advertising evaluation
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What is this?
Which form of budgeting means that the
firm simply allocates a fixed proportion
of sales to the advertising budget?
Percentage of sales method
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Percentage of sales method
Advantages
 Guarantees equality
among markets
 Easy to justify
 Guarantees only what is
affordable is spent
Disadvantages
Based on historical
performance
Ignores necessity of
increased spending during
declining sales
Does not consider goals
Fails to address
relationship between
advertising and sales
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What is this?
Which form of budgeting simply
duplicates the amounts spent on
advertising by major rivals?
Competitive parity
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What is this?
Which form of budgeting starts with
determining the advertising objectives
and then ascertaining the tasks needed
to attain the objectives?
Objective and task approach
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What is this?
What term refers to the total portion of
the target market exposed to at least
one ad in a given time period?
Reach
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What is this?
What term refers to the average number
of times within a given timeframe that
each potential customer is exposed to
the same ad?
Frequency
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European agency
selection factors
National
 Supports national
subsidiary
 Investment in existing
brand best handled
nationally
 Closer to marketplace
 Personalized service and
greater creativity
 Diversity of ideas
Pan-European
Reflects new European
reality
Economies of scale in
new product development
and branding
Uniformity of treatment
across Europe
Resources and skills of
major agency
Easier to manage one
agency group
Source: adapted from Lynch, 1994, Table 11-4.
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Aspects of
advertising evaluation
Communication impact
Pretesting of print and broadcast ads
Testing finished ad
Sales impact
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Public relations
Possible PR methods
Event sponsorship
Prizes at events
Press releases
Announcements
Lobbying
Possible PR targets
Employees
Shareholders
Suppliers
Customers
General public
Governments
Financial markets
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What is this?
What term refers to a short-term effort
directed primarily to the consumer
and/or retailer to achieve specific
objectives such as product trial?
Sales promotion
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Factors leading to expansion
of sales promotion activities
Greater retail competition
Higher levels of brand awareness
Improved retail technology
Greater integration of promotional mix in
media campaigns
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Factors leading to expansion
of international direct
marketing activities
Developments in mailing technology
Escalating costs of other forms of
promotion
Increasing availability of quality lists
Developments in information technology
Increasing availability throughout
developed world of interactive television
facilities
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Questions to ask
when assessing
sales force effectiveness
Is the selling effort structured for effective market coverage?
Is the sales force staffed with the right people?
Is strong guidance provided?
Is adequate sales support in place?
Does the sales compensation plan provide the proper motivation?
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Using expatriates
Advantages
Product knowledge
Training for promotion
Greater home control
Disadvantages
Highest costs
High turnover
High training costs
Source: Reprinted from Industrial Marketing Management, Vol. 24, Honeycutt, E.D. and Ford, J.B. (1995) ‘Guidelines for managing an international sales force’, p. 138, Copyright 1995, with permission from Elsevier.
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Staffing the sales force
from the host country
Advantages
Economical
High market knowledge
Language skills
Best cultural knowledge
Faster implementation
Disadvantages
Needs product training
May be held in low
esteem
Importance of language
skills declining
Difficult to ensure loyalty
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Staffing the sales force
from a third country
Advantages
Cultural sensitivity
Language skills
Economical
Allows regional sales
coverage
May allow sales in a
country in conflict with
home country
Disadvantages
Face identity
problems
Blocked promotions
Income gaps
Needs
product/company
training
Loyalty assurances
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What is this?
What term refers to a marketing
technique that seeks to exploit existing
social networks to produce exponential
increases in brand awareness through
online word-of-mouth communication?
Viral marketing
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Viral marketing
Advantages
Inexpensive
Active and
participatory
Effectively targeted
through peer-to-peer
networks
Disadvantages
Requires
technologically
compatible programs
Filtering programs
may prevent receipt
Must be easy
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Developing a viral
marketing campaign
Step 1: Create compelling content
Step 2: Target the right audience
Step 3: Seed the message
Step 4: Control/ measure results
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Courvoisier cognac used
a localization strategy
http://www.courvoisier.com/
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Negotiation
A negotiation process can be defined as
a process in which two or more entities
come together to discuss common and
conflicting interests in order to reach an
agreement of mutual benefit
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Figure 18.1 The cross-cultural
negotiation process
Non-task related interaction
Seller’s cultural
background
1 Status distinction
2 Impression formation accuracy
3 Interpersonal attraction
Task related interaction
Cultural distance
between
seller and buyer
4 Exchange of information
5 Persuasion and bargaining strategy
6 Concession making and agreement
Buyer’s cultural
background
7 Negotiation outcome
Source: Adapted from Simintiras, A.C. and Thomas, A.H. (1998)
and Simintiras, A.C. and Reynolds, N. (2001).
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What is this?
The best alternative to a negotiated
agreement is known as ______.
BATNA
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Hofstede’s
cultural dimensions
Masculinity/femininity
Uncertainty avoidance
Power distance
Individualism/collectivism
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Figure 18.2 Gap analysis
in a cross-cultural negotiation
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Disney had to adapt to
European cultures
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Approach to general
intercultural preparation (1)
Build awareness about how cultural
differences impact upon them in the sales
organization
Motivate salespeople and managers to
‘rethink’ behaviour and attitude towards
customers
Allow salespeople to examine their own
biases in a psychologically safe
environment
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Approach to general
intercultural preparation (2)
Examine how stereotypes develop and
how they can create misunderstandings
between buyers and sellers
Identify diversity issues that need to be
addressed in the international sales
organization
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Steps for improving crosscultural negotiation competences
Assess communication competences of
salespersons
Assess communication competences of
negotiators in the buying firm
Match communication and negotiation
competences of buying and selling firm
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What is this?
What term refers to employees who are
sent out from the headquarters to work
for the company in the foreign markets,
often in its subsidiaries?
Expatriates
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Attributes to consider
when selecting expatriates
Foreign-language skills
General relational abilities
Emotional stability
Educational background
Past cultural experience
Ability to deal with stress
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Risk of culture shock is
lower when expatriate exhibits
Open-mindedness
Empathy
Cultural sensitivity
Resilience
Low ego identity
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Expatriate training methods
Area/country
descriptions
Cultural assimilation
training
Role playing
Handling critical
incidents
Case studies
Stress reduction
training
Field experience
Extensive language
training
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Figure 18.3 ‘Bottom-up’
learning in global marketing
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For discussion (1)
 Identify and discuss problems associated with
assessing advertising effectiveness in foreign
markets
 Compare domestic communication with
international communication. Explain why ‘noise’
is more likely to occur in the case of international
communication processes
 Explain how personal selling may differ overseas
from how it is used in the home market
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For discussion (2)
Why do more companies not standardize
advertising messages worldwide? Identify
the environmental constraints that act as
barriers to the development and
implementation of standardized global
advertising campaigns
What is meant by saying that advertising
regulations vary around the world?
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For discussion (3)
 Evaluate the ‘percentage of sales’ approach to
setting advertising budgets in foreign markets
 Explain how the multinational firm may have an
advantage over local firms in training the sales
force and evaluating its performance
 Identify and discuss problems associated with
allocating the company’s promotion budget
across several foreign markets
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