Download Global advertising & culture - School of Business Administration

Global Marketing
Tom Gillpatrick, Ph.D.
Juan Young Professor of Marketing & Executive Director, FILC
Master International Management Program
School of Business Administration
Portland State University
3 December 2003
1
Selected Issues of Global
Marketing Strategies
IV. Global Communication Issues
- Global advertising & culture
- Global budgeting
- Creative strategy
- Global media
- Global regulations
- Agency selection & coordination
- Global IMC and other promotion
- Marketing and the internet
2
Week Seven Objectives
12-3-03

P1: Global Marketing Communications
Promotion Goals/Objectives
 Promotion Flows
 Promotion Mix



P2: Global Communications Issues
P3: Guest Speaker: Jim Thayer, President OSS
(Overseas Strategic Services)

Case Discussion: Motorola China Experience
3
Basic Promotional Goal
Shift the Demand function
Price
D2
D1
Quantity
4
Marketing Communications &
Managing Customer Response
Market Based: Promotion Strategies

Promotion Objectives




Build Awareness
Reinforcement or Change Attitudes or Behavior
Action
Increasing Customer response

Develop measures to evaluate effectiveness
5
The Dual Role of Marketing
Communications
Investing in the Enablers of Growth
Product
Price/ Cost
Place
Processes
People/ Climate
Positioning
Promotion
“Sales over night”
... Keeping the engine running
... Tactical
... Share of the market
“Brand over time”
... While changing the fan belt
... Putting the pitch before the
product (Strategic)
... Share of mind
... Making the latent blatant
6
Hierarchy of Effects Model
Awareness
Implications for promotion mix
Knowledge
Media
Advertising
Publicity
Liking
Sales Promotion
Preference
Conviction
Personal Selling
Purchase
7
Promotion Flows
Manufacturers Distributors
Retailers
Consumer response
8
Communication Tasks






Market- ID target market, PLC
Message- content, structure,format, source
Media/channels
Mix- promotion mix- IMC, push/pull
Money- budget
Measures
9
Customer Response Strategies
Pull
Push
Customer
Preference
Customer
Loyalty
Market
Coverage
Distributor
Push
• Attraction
• Search Eff.
• Stock-outs
• Mktg.-Effort
• Awareness
• Commitment
• Availability
• Merchandising
Communications Mix
Customer-Pull
Communications
Advertising
Sales Promotion
Catalogs
Direct Marketing
Telemarketing
Electronic Marketing
Public Relations
Customer-Push
Communications
10
Customer Response Index
Action
(10%)
Intentions
(32%)
Interested
(23%)
Comprehend
(54%)
Aware
(63%)
Not Interested
(77%)
Don’t Comprehend (46%)
Unaware (37%)
No Intentions
(68%)
CRI
.3%
No
Action
(90%)
2%
5%
26%
29%
37%
100%
11
Causes of Poor Customer Response
Poor Response
Marketing Problem
Underlying Cause
Low Awareness
Marketing
Communications
• Poor Media Selection
• Insufficient Frequency
• Poor Ad Copy
Poor Comprehension
Marketing
Communications
• Insufficient Frequency
• Poor Ad Copy
Low Interest
Product
Positioning
Low Intentions
Product
Positioning
Low Purchase Level
Distribution
and In-Store
• Insufficient Benefits
• High Price
• Poor Ad Copy
• Weak Value Proposition
• Need for Low-cost Trial
• Not Readily Available
• Not Available
• Hard to Find In-store
• Insufficient In-store
Services
12
13
The International
Communications Process
Cultural Context B
Cultural Context A
Message channel
Encoding
Message
translated into
appropriate
meaning
Noise
Competitive activities, other salespeople, confusion
and so on
Advertising
Media and or
personal sales
force
Decoding
Encoded
message
interpreted
into meaning
Feedback
Information
source
Marketer with
a product
Evaluation of
communications
process and
measure of action
by receiver
Receiver
Action by
consumer
responding to
decoded
message
14
A Model of the International Mass
Communications Process
Producer/
marketer/
advertiser
Sets
objectives and
advertising
budget
Advertising
agency
Mass
Media
Develops
message
(encoding)
and selects
media
Carries
the
message
Coordination
and
control
Sender’s cultural setting
Generate
feedback
on effects
Opinion
leaders,
individuals
Receive the
message and
interpret
(decoding)
Individuals
Think, feel
and act
(hierarchy
of effects)
Receiver’s cultural setting
15
The Four Components
of Global Advertising
The Four Components of Global Advertising
1. Message and Creative
2. Media
3. Strategy
4. Organization
16
Global Advertising is Most Powerful
When:
Global Advertising is Most Powerful
When:
• the image communicated can be
identical across countries
• the symbols used carry the same
meaning across countries
• the product features desired are the
same
• the usage conditions are similar
across markets
17
Advertising Intensity
in Selected Nations
Country
North America
Canada
United States
Latin America
Argentina
Mexico
Asia
India
Indonesia
Japan
Malaysia
South Korea
Australia
Europe
Belgium
France
Germany
Italy
Sweden
United Kingdom
Advertising as
percent of gross domestic product
1.17%
2.49
1.08
0.16
0.28
0.39
0.82
0.85
1.21
1.20
0.54
0.65
0.82 (1990)
0.57
0.63
1.35
18
Text Overview
1. Global Advertising and Culture
2. Setting the Global Advertising Budget
3. Creative Strategy
4. Global Media Decisions
5. Advertising Regulations
6. Choosing an Advertising Agency
7. Coordinating International Advertising
8. Other Forms of Communication
9. Globally Integrated Marketing Communications
(GIMC)
19
Introduction


There are many cultural challenges that
advertisers face in global marketing.
Global advertising encompasses areas such as
advertising planning, budgeting, resource
allocation issues, message strategy, and media
decisions. Other areas include: local regulations,
advertising agency selection, coordination of
multi-country communication efforts and
regional and global campaigns.
20
1. Global Advertising and Culture


Language Barriers
 Language is one of the most formidable barriers in
global marketing.
 Three types of translation errors can occur in
international marketing:
 Simple carelessness
 Multiple-meaning words
 Idioms
Other Cultural Barriers
 Religion
21
1. Global Advertising and Culture
(contd.)

Cultural traps/cultural dimensions
 Geert Hofstede’s cultural grid can be used to
assess the appropriateness of comparative
advertising campaigns (see Exhibit 14-2). The five
cultural dimensions include:
 Power distance
 Uncertainty avoidance
 Individualism
 Masculinity
 Long-termism
22
2. Setting the Global Advertising
Budget

Companies rely on different kind of
advertising budgeting methods which include:
See Exhibit 14-3
 Percentage of Sales
 Competitive Parity
 Objective-and-Task Method
 Resource Allocation
23
Creative Challenges of
Global Advertising
Legal and Tax Considerations
Language Limitations
Cultural Diversity
Media Limitations
Production and Cost Limitations
24
Media Usage in Various Countries*
Nation
Print
Radio
Cinema
Transit
Argentina
148
155
43
16
47
Brazil
126
77
10
—
4
France
2,712
4,717
611
57
1,108
Germany
2,826
13,423
641
157
550
133,434
12,900
1,913
—
5,231
South Korea
1,083
1,755
188
—
708
Spain
2,386
4,569
873
62
384
143
1,560
—
13
82
4,621
9,071
287
84
530
45,410
67,536
14,022
—
1,672
Japan
Sweden
United
Kingdom
United States
* 1995
TV
25
3. Creative Strategy



The “Standardization” versus “Adaptation Debate”
Merits of Standardization:
 Scale Economies
 Consistent Image
 Global Consumer Segments
 Creative Talent
 Cross-Fertilization
Barriers to Standardization:
 Cultural Differences
26
3. Creative Strategy (contd.)
Advertising Regulations
 Market Maturity
 “Not-Invented-Here” (NIH) Syndrome
Approaches to Creating Advertising Copy:
 “Laissez Faire”
 Export Advertising
 Global Prototype Advertising
 Prototype Standardization


27
3. Creative Strategy (contd.)


Regional Approach
Pattern Standardization
 Modular Approach
28
4. Global Media Decisions



Media Infrastructure

Media infrastructure differs from country to country
Media Limitations

The major limitation in many markets is media
availability.
Recent Developments in the Global Media Landscape:

Growing commercialization and deregulation of
mass media
29
4. Global Media Decisions (contd.)






Shift from radio and print to TV advertising
Rise of global and regional media
Growing spread of interactive marketing
Growing popularity of text messaging
Improved monitoring
Improved TV-viewership measurement
31
Global Marketing Communications




In the U.K., all advertising is allowed if
not specifically forbidden.
In Germany, everything is forbidden if
not specifically allowed.
In Italy, everything is allowed, even if
forbidden, and
In Belgium, nobody knows what’s
forbidden.
Angela Mills
33
5. Advertising Regulations

The major types of advertising regulations
include:
 Advertising of “Vice Products” and
Pharmaceuticals
 Comparative Advertising
 Content of Advertising Messages
 Advertising Targeting Children
 Other Advertising Regulations: Issues of local
languages, tax issues, and advertising rates.
34
5.Advertising Regulations (contd.)

Strategies to deal with advertising regulations:
 Keep track of regulations and pending
legislation
 Screen the campaign early on
 Lobbying activities
 Challenge regulations in court
 Adapt marketing mix strategy
35
Regulations Regarding Premiums, Gifts
and Competitions in Selected Countries
Country
Category
Australia
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Austria
Canada
Denmark
No
restrictions
or
minor ones
Authorized
with major
restrictions
General
ban with
Almost
important
total
exceptions prohibition
x
x
x
x
x
x
x
x
x
x
x
x
36
Regulations Regarding Premiums, Gifts
and Competitions in Selected Countries
Country
Category
France
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Germany
Hong Kong
Japan
No
restrictions
or
minor ones
Authorized
with major
restrictions
General
ban with
Almost
important
total
exceptions prohibition
x
x
x
x
x
x
x
x
x
x
x
x
37
Regulations Regarding Premiums, Gifts and
Competitions in Selected Countries
Country
Category
Premiums
Gifts
Competitions
United
Premiums
Kingdom
Gifts
Competitions
United States Premiums
Gifts
Competitions
Venezuela
Premiums
Gifts
Competitions
No
restrictions
or
minor ones
Korea
13-9
x
x
x
x
x
Authorized
with major
restrictions
General
ban with
Almost
important
total
exceptions prohibition
x
x
x
x
x
x
x
Source:
Source: Jean
Jean J.
J. Boddewyn,
Boddewyn, Premiums,
Premiums, Gifts,
Gifts, and
and Competitions,
Competitions, New
New York:
York: (International
(International Advertising
Advertising Association,
Association, 1988.
1988.
©
38 ©
1988
1988 International
International Advertising
Advertising Association
Association
6. Choosing an Advertising Agency

In selecting an ad agency, the international marketer has
several options:
1. Work with the agency that handles the advertising
in the firm’s home market.
2. Pick a purely local agency in the foreign market.
3. Choose the local office of a large international
agency.
4. Select an international network of ad agencies that
spans the globe.
39
6. Choosing an Advertising Agency
(contd.)

When screening ad agencies, the following set
of criteria can be used:
 Market coverage
 Quality of coverage
 Expertise with developing a central
international campaign
 Creative reputation
 Scope and quality of support services
40
6. Choosing an Advertising Agency
(contd.)



Desirable image (“global” versus “local”)
Size of the agency
Conflicting accounts
41
7. Coordinating International
Advertising

Global or pan-regional advertising approaches
require a great deal of coordination. The
following mechanisms can help:
 Monetary Incentives (cooperative
advertising)
 Advertising Manuals (brand book)
 Lead-Country Concept
 Global or Pan-Regional Meetings: Six
guidelines to implement a global or panregional advertising approach include:
42
7. Coordinating International
Advertising (contd.)
 (1).
Top management must be dedicated to
going global.
 (2). Use a third party (e.g., the ad agency)
to help sell key managers the benefits of a
global advertising approach.
 (3). A global brief based on cross-border
consumer research can help persuade
managers to think in terms of global
consumers.
43
7. Coordinating International
Advertising (contd.)
 (4).
Find product champions and give them
a charter for the success of the global
marketing program.
 (5). Convince local staff that they have an
opportunity in developing a global
campaign.
 (6). Get local managers on the global
marketing team -- have them do the job
themselves.
44
8. Other Forms of Communication

Sales Promotions: Sales promotion refers to a
collection of short-term incentive tools that lead
to quicker and/or larger sales of a particular
product by consumers or the trade.
 Rationales explaining the local character of
promotions:
 Economic development
 Market maturity
 Cultural perceptions
 Trade structure (pull vs. push promotions)
45
8. Other Forms of Communication
(contd.)
 Government



regulations
Direct Marketing
Event Sponsorships
Trade Shows: When attending an
international trade show, the following
guidelines might prove useful:
 Decide on what trade shows to attend at
least a year in advance.
 Prepare translation of product materials,
price lists, selling aids.
46
8. Other Forms of Communication
(contd.)





Bring plenty of literature. Bring someone who knows
the language or have a translator.
Send out, ahead of time, direct-mail pieces to
potential attendees.
Find out the best possible space, for instance, in
terms of traffic.
Plan the best way to display your products and to tell
your story.
Do your homework on potential buyers from other
countries.
47
8. Other Forms of Communication
(contd.)

Assess the impact of trade show participation
on the company’s bottom line. Performance
benchmarks may need to be adjusted when
evaluating trade show effectiveness in
different countries since attendees might
behave differently.
48
Market Facilitators
The Company
The Competition
Government Institutions
Securities Analysts
Interest Groups
Advertising Agencies
Market Research Firms
Business Journalists
PR Firms
Trade Journalists
Distributors
suppliers of Complementary
Products & Services
Consultants
Trade Associations
OEM’s
VAR’s
The Customer
49
Brand Management Wheel
Word of
Mouth
Advertising
HR, Employee Morale,
Brand Culture
Scholarships and
Endorsements
Service Standards
and Behavior
Product
Performance
and
Development
BRAND
Promotions
STRATEGY
Packaging
Channel management,
CRM, Internet
Physical Premises
Public
Relations
Corporate
Events
Adapted from P. Temporal “Advanced Brand Management: from Vision to Valuation”
50
9. Globally Integrated Marketing
Communications (GIMC)


Integrated Marketing Communications (IMC):
 IMC coordinates different communication vehicles –
mass advertising, sponsorships, sales promotion,
packaging, point-of-purchase displays, so forth.
Globally Integrated Marketing Communications (GIMC):
 GIMC is a system of active promotional management
that strategically coordinates global communications
in all of its component
51
9. Globally Integrated Marketing
Communications (GIMC)

parts.
Both horizontally (country-level) and vertically
(promotion tools) are used in GIMC.
52
Strategic Matrix Interpretation
Areas/Priorities
for image
correction
Areas w/ no clear
image position
Reasons for current
franchise – must be
maintained
Relative Performance
STRONG
Threats
(Remedy)
Competitive
(Enhance)
Core Strengths
(Maintain)
MEDIUM
Weaknesses
(Enhance)
Lower
Priority
Opportunities
(Increase
salience)
Low
Priority
Potential
Opportunities
(Increase
salience)
LOW
AVERAGE
HIGH
Relative Importance
WEAK
Lower
Priority
Increased
salience of
such existing
strengths can
significantly
enhance
positioning
Source: Asia Market Intelligence
53
AMI’s Pinpoint™ Analysis
Beverage Market Example
PERFORMANCE
WEAK
AVERAGE
HIGH
Attractive Packaging
Growing Brand
Easy in Pubs
STRONG
MEDIUM
IMPORTANCE
Always Fresh
Buy Best
High Quality
Good Tasting
Modern
Promoted in Bars
Easy to drink
International standards
Trendy
Good Advertising
Easy shop
LOW
Good value
Locally made
Younger
Hear a lot about brand
Expensive
Special Occasion
Strong
Source: Asia Market Intelligence
54
Emotional Brand Relationship Process
Togetherness/partnership
Loyalty
Trust
Friendship
Respect
Information
Awareness
Adapted from P. Temporal “Advanced Brand Management: from Vision to Valuation”
55
56
57
58
Marketing to the New Asia

“Typical” Japanese:




What is the extent of staff understanding?
Does it affect decision-making?
Are the insights still valid?
More sophisticated marketing research:


How to understand markets better?
Does research account for:



Reticent focus groups?
Middle-of-the-road responses to surveys?
Should marketing research resources be increased given:


Growing heterogeneity of the Japanese market?
Competition for segments?
59
Distribution of Consumer Advertising and Sales
Promotion Expenditures in Asia (by percentage)
Media
Total Advertising and
Promotion
Advertising in the Four Mass
Media
Newspapers
Magazines
Radio
TV
Sales Promotions
Expenditures
DM
Inserts
Outdoors
Transportation
POP
Telephone Directory
Exhibitions, visuals, etc.
New Media Advertising
Expenditures
1986
1987
1988
1989
1990
1991
1992
100.0
100.0
100.0
100.0
100.0
100.0
100.0
66.0
25.1
6.5
4.5
29.9
33.9
3.9
6.2
6.5
4.4
3.2
2.1
7.6
0.1
65.7
25.0
6.5
4.4
29.8
34.1
3.9
6.1
7.0
4.3
3.0
2.1
7.7
0.2
66.3
25.5
6.7
4.3
29.8
33.5
3.8
5.8
7.0
4.3
2.7
2.1
7.8
0.2
64.6
25.1
6.6
4.1
28.8
35.2
3.6
5.9
6.9
4.4
2.8
2.0
9.6
0.2
64.2
24.4
6.7
4.2
28.9
35.6
3.5
5.9
6.9
4.5
2.7
2.2
9.9
0.2
63.8
23.8
6.8
4.2
29.3
36.0
3.5
5.9
6.9
4.6
2.8
2.5
9.7
0.2
63.6
22.3
6.7
4.3
30.3
36.2
4.1
5.9
6.9
4.9
2.7
2.9
8.8
0.2
60
New Rules of Communications

Current advertising:
What is the extent of Mood over Message?
 Importance of cognitive messages – does balance
need to be shifted?


Advertising by a non-Japanese firm:
How can Mood be utilized?
 Other distinctively Japanese features to address?


Who are best advertising partners?
Given changes in industry
 Given new marketing challenges

61
Shifting Realities of
Marketing Strategies
Old Model
New Model
Relationship with Passive Consumer
Customers
Customer Needs Articulated
Co-producer
Segmentation
Mass Market
Customized segments
of one
Product and
Service Offerings
Line extensions and Customer-driven:
modifications; R&D Customization of
drives new products products and services
Unarticulated
Marketing
interactions
drive new product
development
62
Shifting Realities of Marketing Strategies
Old Model
New Model
Pricing
Fixed prices and
discounting
Communication
Advertising and PR
Value-based pricing –
models and
emergence of
consumer-determined
pricing
Integrated, interactive
customized marketing
communication,
education and
entertainment
63
Shifting Realities of Marketing Strategies
Old Model
Distribution
Strategic Intent
Supply chain
New Model
Traditional retailing Direct (electronic)
and direct marketing distribution and rise
to segments
of third-party logistics
services
Market Participation Leadership and
innovation in target
segment
Inventory
Integrated global
supply chain including
global delivery; justin-time
64
Shifting Realities of Marketing Strategies
Old Model
New Model
Geographic scope Domestic and
international
Global
Competitive
advantage
Marketing finesse
Marketing power
65