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mk314 - international advertising 1 INTERNATIONAL ADVERTISING SEMINAR MATERIAL SEMINAR 1: i) BACKGROUND: THE ENVIRONMENT AND CHANGE ii) BRANDING AND MARKETING MANAGEMENT DEVELOPMENTS IN WORLD REGIONS: ASIA/PACIFIC RIM VIDEO: "A force to be reckoned with" This BBC programme is about the economy of Taiwan and business developments there in the past 50 years. Please consult the list of discussion points while watching. Taiwan is part of APEC that includes the ASEAN countries as well as Australia and a growing number of others. Taiwan is moving to a hi-tech, high wage economy, which is more to do with niche exploitation than copycat and using existing technologies in an innovative way. This strategy avoids head-to-head contests for techno supremacy. They target niches with worldclass products. They specialise in computer peripherals, microcomputers, and application specific chips. This is no one way street though. Motorola, Intel, Glaxo, Apple, Boeing, Lockhead have weighed up the `tigers' and recognised their high potential and have teamed up with local companies for manufacturing, applied research and applied design. Task: Given the events of the last few years this becomes a great illustration of how things can change. Using a source like one of the broadsheets (say the FT), catch up on the status quo regarding the Pacific Rim and the knock on effects for the rest of the world. Compare the pessimism recently to the optimism of the BBC video and notes (please see me for both). brands and marketing management 1 mk314 - international advertising 2 BACKGROUND: THE ENVIRONMENT AND CHANGE Washes Whiter This series of 5 one hour programmes made by the BBC plots the history of (mostly British) advertising from the 1950's until the end of the 1980's. It is essentially an attempt to read advertising "socially" in the context of the times. These and other video materials can be made available to you. There are two basic propositions when dealing with the question `what is advertising?': 1. That advertising merely reflects society in order that the marketer can communicate how products (and companies) fit in with consumers/customers expectations and ways of seeing. This is particularly true when discussing brands since brands are said to have personalities that match that of the person who buys particular brands. 2. That advertising shapes society, or at least used to! Technology has always had this accusation levelled at it but no more so than right now, which takes the heat off advertising somewhat. Most advertisers would subscribe to the first view. As Marshall Mcluhan said: "The ads of our time are the richest and most faithful daily reflections any society ever made of Its whole range of activities." One view then is that if you want to see how a country sees itself then look at the ads. This is the view of one-time ad man and film director David Puttman. Number five in the 'Washes Whiter' series is entitled `The getaway people' and looks at the Puttman-type view and explores themes such as nostalgia and community life in the 1950s and the celebration of today and the metropolis in the 1960s. The extract you have been shown/are about to see looks at the 1970s and 1980s. It’s all to do with CHANGE but in particular look out for the following: * The dream of skyscrapers begins to crumble and the notion of "Modernism" begins to fade. There is a move away from the notion of what is "British" to a simpler, GLOBAL message in the form of Coca Cola's "I'd like to teach the world to sing" (Hilltop 1971). Here Coca Cola are said to have discovered the `counter culture' of being global, anti-capitalist, spiritual yearnings, communal. Note also Kellogg, Martini and Esso. * The 1973 oil crisis and austerity where there is no place for the `getaway people' of the previous decade. The British reaction to the crisis and its use by Parker (Over a barrel 1979). * The recession following the crisis and the country apparently going in on itself. In times of trouble where's the safest place to be? A rose-coloured, nostalgic, imagined past where things were cosy and so were the brands - like Hovis, Galaxy, Mateus Rose, Horlicks. * The attack on the British market place by "foreign" products like Danish bacon, the Italian Fiat Strada (Figaro 1979). * The so-called seachange in the early 1980s with a renewed sense of national purpose with the Metro (Counter attack - a British car to beat the world 1981) and Esso (Credo 2 1980). brands and marketing management 2 mk314 - international advertising 3 * The 1980s obsession with money and icons of success where the monologue was an attempt to create a dialogue with the INDIVIDUAL. Halifax (Money 1987), Renault (Way of life 1985), British Airways (Boardroom 1988). * This has been called both ideology (Thatcherism) and not i.e. merely a realistic approach toward materialism and the desire to display wealth etc. as in Gold Blend 1988. This is said to reflect the ME generation. It had already begun in the late 1980s - Hamlet (Crash of 87). * The question for now is ‘is the mood changing?'...to an US orientation where people need to belong as individuals and are asking `what can I do with my life?'. Midland (Grandson) and a new sense of community. Coca Cola (General assembly 1989). One last thought. Advertising tells a story but any cultural historian will tell you the best truth is fiction. Good fiction is more real than fact. Task: The problem with advertisements is that they become perfect copies of originals that never existed!! Read in particular the two basic propositions at the front of this piece and be prepared to debate the ideas behind them. brands and marketing management 3 mk314 - international advertising 4 BACKGROUND: THE ENVIRONMENT AND CHANGE ADVERTISING IN CHINA Part One. The History of Advertising in China In the 1970s, people living in China knew nothing about advertising. The national economy was planned and enterprises didn’t need to advertise. Advertisements were still seldom broadcast in the early 1980s. At that time, people believed the content of advertisements because they believed deeply that broadcasts, TV programs, newspapers and magazines normally report facts. The companies that adopted a persuasive form of advertising got much benefit from this. Some enterprises kept large stock levels and consequently had cash-flow problems. By advertising, products were sold more rapidly. Along with the increase of advertising activities, many more people felt cheated by some untruthful advertisements. Some people even become doubtful that any advertising could be truthful. Example: Stud martens available, 1500 Yuan for one pair, 6-10 young martens bred p.a., buy back grown up martens at 600 Yuan for each. Long-term contract of buying & selling necessary. This advertisement seems to offer a good opportunity to earn money. 1500 Yuan invested, 36006000 Yuan can be achieved. Actually, this advertisement is only a tactic of a company to sell stud martens at a high price. The contracts of buying back grown up martens are normally very strict. For example, the weight of grown up martens must be in the range from 2.5kg to 2.75kg. More or less than that does not qualify. Also, some other parameters, such as “high quality fur” are important. The wording may suggest a fail-safe proposition but it is not by any means definite that the buying back" will take place. There is no binding contract. Disputes related to advertising cannot normally be resolved because there is nowhere to complain. If customers are not satisfied with a product's quality, they can complain to consumers association. This association is basically a mediation organisation, but it doesn’t deal with the complaints of untruthful advertisements due to very limited power. It is not surprising, then, that some phrases appear frequently such as “this product is your best choice”, “the total efficiency of this drug is 99.6%”. Some arguments are non-scientific and even some data are fabricated. In the early 1990s, problems existing in advertisement activities emerged gradually. A law that regulates advertising was needed and such advertising law was passed in 1991. This is looked at in part two below. Part Two. Advertising Law Advertising law came into force on 1 February 1991. This is a comprehensive law that regulates the activities of advertisers, advertising agents and others involved in the industry. It deals with general products and some special merchandise such as medicines and tobacco. Tobacco Advertising The law prohibits releasing tobacco advertising by broadcasts, films, TV channels, newspapers and periodicals. It’s not permitted to install tobacco advertising in any kind of waiting room, cinema or theatre, conference hall, sport stadia or other public arena. All tobacco advertisements must carry a “smoking is harmful to health” warning. Medicines Advertising brands and marketing management 4 mk314 - international advertising 5 a) Advertisements of drugs and medical equipment are not permitted to include the following content: -unconfirmed scientific information -unsubstantiated cure rates -comparison of functions or security with other drugs or medical equipment; -the honour or name of medical research institutions, academic organisations, medical units or specialists, doctors and patients; -other content prohibited by laws or administrative regulations. b) The contents of drug advertisements must be consistent with the booklet of directions that is ratified by the hygiene administrative departments of the state council or the province. Advertisements of prescription drugs i.e. drugs that should be used according to a doctor's advice must contain the phrase “buying and using under prescription”. c) Certain drugs including anaesthesia drugs, psychosis drugs, poison drugs, radiation drugs and other special drugs cannot be advertised. Prohibited Items in Advertising Activities Chinese advertising law says that the basic principles of advertising are to improve the quality of merchandise and services, to protect consumers’ legal rights, to make people abide by social morality and ethic, to safeguard the state dignity and interests. For these reasons, the situations described below are not permitted to occur in advertisements. a) using the national flag, national emblem or national anthem; b) the name of government department or of government staff; c) using the phrases of “state level”, “highest level” or “best”; d) impairing social stability and the safety of human life or property, or damaging social public interests; e) impairing public order or violating prevailing customs in society; f) containing obscenity, superstition, terror and violence; g) including discrimination of nationality, race, religion and gender; h) hampering protection of environment and natural resources; i) other situations prohibited by laws and administrative regulations. Advertising law also stipulates that advertising should not impair mental and physical health of under-age people and disabled people; it should not defame the merchandise or services of other producers or sellers. Advertising Activities Clients, media and agents should make a contract on the basis of the advertising law in every advertising activity to make rights and duties clear for each party. Clients designing, producing or releasing advertisements by themselves or by other people should have truth, legal and valid certification documents as below: a) business license and other documents to certify eligibility of production and sale; b) certification document about product quality issued by a quality examination organisation; c) other certification documents to confirm the truthfulness of the advertisement. Agents and media should check related certification documents according to laws and administrative regulations, and verify the advertising content. Agents should not supply services of designing, producing or acting as a deputy to advertisements which are not true or without brands and marketing management 5 mk314 - international advertising 6 sufficient certification documents. The media should only publicise the kind of advertisements that conform to this. Legal Punishment Advertising supervisory bodies must order clients to stop releasing advertisements that propagate their products or services improperly. Clients should have the correct kind of publicity regarding the advertising. If not they could be fined 1-5 times the cost of the advertisement. Irresponsible agents and media could see their work confiscated and be fined 1-5 times the sum of the income. If there is a serious problem, their advertising business could be closed by law i.e. if they are criminals, they should be punished for their crime. Advertising supervisory bodies should fine the clients who supply false certification documents between 10,000 and 100,000 Yuan (£1=12 Yuan); Advertising supervisory bodies should confiscate the illegal income due to fabricating, altering or transferring advertising audit figures and fine in the range of 10,000-100,000 Yuan. Criminal responsibilities should be investigated if there are any. If clients, agents or media violate this law and take one of the actions below, they should undertake civil responsibility. a) impairing mental or physique health of under-age or disabled people; b) imitating a patent that belongs to other people; c) depreciating merchandise or services of other producers or sellers; d) using names or figures without permission; e) other behaviours invading legal civil rights of anyone else. Business administration departments of county governments or superior governments are the advertising supervision bodies. If litigants refuse to accept administrative punishment they can apply for reconsideration to the superior body of the previous one within 15 days after getting acknowledgement; they can also go to court during that period. Part Three. The Media and cost of advertising China is a big country. There are 30 provinces, direct municipalities or autonomy regions (province, direct municipality and autonomy region are in the same administrative level, so each of them can be called province) in mainland China. There are more than 10 municipalities under each province. There are at least 1 broadcast station, 1 TV channel, and 2 newspapers in every municipality. There are 2 or 3 broadcast stations, 2 or 3 TV channels on provincial level in each province. There are 3 mandarin broadcast stations and 6 TV channels in central China. In the whole country, there are about 600 broadcast stations and 400 TV channels in total. Generally speaking, a person can choose a program from 10 TV channels. If cable is used, the number of choice can be up to 20. The amount of newspaper and magazine varieties is in the thousands. Cost of advertising has changed a lot according to the popularity of the program quantities of newspaper and magazine sales. a) The average advertising charges in Liaoning Education TV channel Liaoning is a province that lies in the northeast part of China. Provincial level TV channels in the province are Liaoning TV1, Liaoning TV2, Liaoning Education TV, Liaoning cable TV. The last one doesn’t run advertising. Liaoning Education TV is not as popular as Liaoning TV1 and Liaoning TV2. Table 1. Advertisement Charge Details of Liaoning Education TV Yuan (£1=12 Yuan) brands and marketing management 6 7 mk314 - international advertising DURATION 10s 15s 20s 30s 45s 60s before or after education before or after cartoon/news before or after film interposing during film special topic in economy 150 200 250 300 450 600 200 300 400 500 750 1000 300 400 500 700 1050 1400 450 600 750 1050 1575 1820 5m 4000/ 2000 10m 5000/ 3500 concentration showing production/ 3000/ releasing 1500 3m 50m×2 15000 notes: 1. on Saturday or Sunday, plus 30%; in festival and 1 day before, plus 50%. 2. for joint-venture plus 50%; single foreign investment enterprise plus 100%. 3. sequential 30 times 10% off; sequential 100 times 15% off; more than 200 times 20% off. b) The average advertising charges in Liaoning 21st Century Advertising Company. This is an advertisement production company that has a co-operative relationship with Liaoning TV1, Liaoning TV2 and Liaoning Education TV. Its charges are: Table 2. Dealing Charge Details of Liaoning 21st Century Advertising Company yuan DURATION 15s 20s 30s 45s 60s characters 500 650 800 products 2000 2500 3000 4500 5500 business information 1500 2000 2500 3500 4500 imaginative 10000 12000 15000 20000 25000 artistic 25000 30000 40000 50000 60000 specially invited negotiable actor/actress cartoon 3000/s joint-venture plus 50%; single foreign investment enterprise plus 100% c) Price of advertising on Shenyang Daily Shenyang, the 4th biggest city in China, is the capital of Liaoning Province. Shenyang Daily is a principal newspaper in the city. Table 3. Price of Advertisement on Shenyang Daily yuan whole half 1/4 35cm× 35cm× 35cm× 14cm× 7cm× 7cm× page page page 20cm 15cm 10cm 10cm 10cm 5cm 88000 44000 22000 40000 30000 20000 8000 4000 2000 colour page plus 50%; joint-venture plus 30%; single foreign investment enterprise plus 100%. Task: Update this case taking into account the changes that have taken place in the last few years. brands and marketing management 7 mk314 - international advertising 8 THEME 1: BRANDS AND MARKETING MANAGEMENT MINICASE HISTORY: AFTER EIGHT Et ne dites pas, "ils sont fous ces Anglais", pas avant d'avoir goute des After Eight This was the final text in the first commercial that introduced After Eight to the French market place in 1971. Prejudices were overcome and new habits introduced. The After Eight concept was seen as sacrilege by the French and as nothing at all by the Germans who knew nothing of after dinner gatherings/habits of the English or the Italians who were not accustomed to mint and chocolate mixed and used to buying big boxes of chocolates let alone English-style dinner parties. THE NAME This came from inspiration rather than anything else. A Rowntree executive heard of a shirt in America called 'After Six' and thought 'Why not After Eight'? PACKAGING This was designed to be upmarket to reflect special occasions which would communicate both verbally and pictorially via a trademark i.e. a Louis XIV ormolu clock (moulded, embossed, gilded bronze) showing the time as a few minutes after eight against a distinctive green background. The product itself was individually wrapped in brown glassine envelopes also bearing the trademark. POSITION Perceived as uniquely presented to be enjoyed after dinner or on comparable occasions. Associated with elegance, sophistication, social status of the hostess and guests i.e. reflects good taste of the giver, flatters receiver but is affordable. All of this is meant to evoke the dinner party - the candelabra, the crystal brandy glasses, black ties and cigars, the old English country house, butlers, chauffeurs and Rollers etc. in other words this is highly ASPIRATIONAL. ADVERTISING The tone of voice, choice of cast, and the selected scenarios had to reflect the above evocations. Tested in 1962 in Scotland then "Dinner Table" was put on air in 1964 on Yorkshire TV - resulting in 64% sales increase compared with 18% in other parts of the country. Thus the brand acquired its one and only personality. INTERNATIONAL The key and obvious question was 'would the brand's added value apply in other markets. JWT had handled the UK account but Lintas were given the account for Germany, Holland, Italy, France. The UK commercials were not simply dubbed to save money. The decision was made to keep the ENGLISHNESS of the brand but to create quality advertising in each of the chosen markets to make sure no brand image damage occurred. The English dinner party was a problem so adaptations had to be made: brands and marketing management 8 mk314 - international advertising 9 GERMANY - a high society soiree was invented where the entire concept was highlighted using a butler but emphasising they were made in Germany. Launched via glossy magazines in 1966 After Eight was a major brand by 1969. HOLLAND/ITALY - Launched in 1969 basically as in Germany with minor adaptations. FRANCE - In France confectionery products were not associated with social activity, English food not taken seriously and peppermint in chocolate unheard of. Through qualitative research RM made the decision to keep the concept, including the Englishness that was dealt with purely through advertising: Voice over..."The English have always had a certain way of life - a sense of refinement if you like...Here is a new fashion from London for after dinner - After Eight. Fine leaves of chocolate filled with melting mint. Yes, you heard - mint and chocolate. And don't say, 'they are mad, these English', before having tasted After Eight." Task: There is some speculation as to what, these days, constitutes a special occasion and some suspicion of 'crusty lords and bejewelled hostesses'. Does the modern woman have a different set of values in a different lifestyle? Does After Eight need concept need revamping without repositioning? Do you think that the company, even though part of Nestle, will stick to the RM principles and guidelines as laid down in 1985 in terms of product, position and advertising? Main Source: Rijkens, R European Advertising Strategies brands and marketing management 9 mk314 - international advertising 10 THEME 1: BRANDS AND MARKETING MANAGEMENT MINICASE HISTORY: GORDON'S GIN United Distiller’s sells Gordon’s worldwide. It's a primary gin brand within the growing white spirits market but gin as a category has been in decline and this has affected Gordon's - but it is still the world leader selling primarily in the UK, USA, Spain and South Africa where it is produced in each and collectively these represent 90% of world volume. In the USA it is no.2 to Seagram's and in Spain it faces stiff competition from Larios (a Gordon's "me too" originally). In South Africa it is strong but does have a rival in Mainstay. In Germany, France, Italy it is brand leader but these are small markets. Duty free is increasing with UK, Germany and USA sales accounting for almost half. THE NAME AND POSITION Gordon's has a global reputation. It has heritage and credibility with consumers and the trade but its market position varies from culture to culture and the stage in the life cycle and of course competition. In the USA and Spain Gordon's has a low image linked with a low price and therefore is price-sensitive in these markets. In contrast Gordon's is viewed as rather up-market in the UK, a mature market where the brand has a premium price. RESEARCH AND IMAGE In 1988 Gordon's commissioned motivational research in 6 markets - USA, UK, Spain, France, Germany and Italy in order to develop a global strategy. The research suggested two market types: mature markets of UK, USA, Spain; and up-and-coming markets of the type of the other three. USA - Gordon's were up against "social" brands such as Absolut that were highly prestigious. The main findings were: 1. Young adults seek prestige brands 2. A trend toward easy to take spirits 3. Greater health consciousness 4. Greater fashionability of vodka, tequila and white rum 5. Greater use of wine/champagne in drink situations 6. Slow decline of Martini Where neat, Martini was perceived as having quality, strength and mellowness. These seem important variables for brand acceptance. Gordon's was not seen as a Martini base but medium priced spirits like Gordon’s were seen as the base for a mixer. Gordon's seen as mass-market, blue collar/ordinary white collar - adequate, acceptable, and everyday. Not to be mixed with Martini, Gordon's was seen as inferior to Beefeaters, Tanqueray, and Bombay. It was seen as functional and American "bottom shelf" - not at all English. SPAIN - The research indicated: 1. Gin has high status, is fashionable, youthful and fun when used as a mixer but is seen as masculine, older, quiet, contemplative and relaxed when neat. 2. There has been a decline in non-mixable spirits 3. High alcohol proof spirits are associated with status 4. Brand images express self-image 5. English imported is associated with high status brands and marketing management 10 mk314 - international advertising 11 For many then the image is high quality - if worst of the premium brands, not as good as Beefeater and Tanqueray but in competition with Larios GERMANY - Gin not an established spirit. However the research indicated that where gin was known it had a positive image, described variously as: 1. it is yuppie 2. it is luxury 3. it is stylish man 4. it is modern and associated with the British elite, masculine, independently minded people as well as being fun, sociable, friendly, sexy and frivolous. Apparently men in Germany usually approve the drinking of spirits, which is very much, a social activity. The image therefore one of high class, high status - the best gin available. ITALY - Gin in Italy has high status value where known because of its "imported" nature. It was seen as a versatile mixer associated with festivity and liveliness yet with relaxation and contemplation and mature distinguished men such as English lords. There was evidence that it was seen as best taken neat and regarded as a friendly drink. FRANCE - In France gin is a mixer in a wider sense than that in the UK and associated with warm weather, fun, frivolity, sexuality and sophistication. The physical aspects were important too i.e.: 1. appetite appeal/refreshingness 2. clarity of the liquid 3. freshness 4. coolness 5. bubbliness (with tonic) Englishness was regarded as a reinforcing element. Seen as being the best gin available. Authentic London gin added to status yet yuppie and aspirational associated with successful lifestyles. THE UK - Gin is almost universally associated with tonic i.e. G&T, classic, establishment yet aspirational and yuppie and maturity - a passage to adulthood. Here frivolity and excitement were much less likely to be associations. Task: 1. Gordon's are looking for distinct target groups out of this. What would you advise? 2. Communication strategy options are required. What would you suggest? Main Source: Hankinson and Cowking, Branding in Action THEME 1: BRANDS AND MARKETING MANAGEMENT Find the article by Laverick, S. and Johnston, K. (1997)‘The marketing of a consumer icon: Mini Cooper into Japan – coals to Newcastle’, Marketing Intelligence and planning, 15, 4, pp.179-184. Task: Read this article with a view to explaining brand bonding and exploring spatial variations across country markets and target markets. brands and marketing management 11