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THE ROLE OF ADVERTISING LDCs and socialist/communist countries, emphasizing production and distribution efficiency, usually attack advertising as a wasteful practice whose primary purpose is to create unnecessary wants. Yet advertising serves a very useful purpose-consumers everywhere, irrespective of their countries political systems and level of economic development, need useful product information. Since the 1950s China has prohibited foreigners from advertising there because advertising was considered politically inappropriate. In the 1980s, however, China changed its policy in order that the Chinese population could be informed of products available, just as in a modern industrial society. Virtually all media are how available for advertising billboards, department stores display cases, telephone books, newspapers, magazines, and journals. Even radio and TV time is available and can be purchased. TV advertising is quite a bargain, since a sixty- sexily-second spot for the nationally broadcast China Central

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Page 1: assignment The Role of Advertising

THE ROLE OF ADVERTISING

LDCs and socialist/communist countries, emphasizing production and

distribution efficiency, usually attack advertising as a wasteful practice whose

primary purpose is to create unnecessary wants. Yet advertising serves a very

useful purpose-consumers everywhere, irrespective of their countries political

systems and level of economic development, need useful product information.

Since the 1950s China has prohibited foreigners from advertising there because

advertising was considered politically inappropriate. In the 1980s, however, China

changed its policy in order that the Chinese population could be informed of

products available, just as in a modern industrial society. Virtually all media are how

available for advertising billboards, department stores display cases, telephone

books, newspapers, magazines, and journals. Even radio and TV time is available

and can be purchased. TV advertising is quite a bargain, since a sixty-sexily-

second spot for the nationally broadcast China Central Television I network costs

only 55,000. Chinese viewers generally enjoy watching the commercials shown.

One study of our developing countries found that singaporeans, probably the

most economically advanced among the group, had more negative feelings than

those in other countries. They were least likely to see advertising as being

economically beneficial, and they were also most critical of the social impact of

advertising. Interesting, Russian consumers were found to exhibit more variable

attitudes toward advertising in general, whereas American respondents felt that

advertising resulted in greater negative social effects.2

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A correlation has been shown to exist between advertising expenditures and

a country's GNP and level of economic development. As a country becomes more

industrialized, the level of advertising expenditure tends to increase as well. the

United States is highest in per capita advertising at $499 per person. In the case of

japan, Canada, Germany, and France, the figures are $298, $196, and $154,

respectively.3 Regarding the Commonwealth of Independent States (CIS), foreign

companies are responsible for about half of the advertising done there. The

advertising expenditures in the CIS, at about $30 million, are quite tiny and

represent only the amount for a small advertising account in the United States.

Proctor and Gamble, the world's advertising leader, annually spends $2.3 billion

worldwide to promote its products.

Many of the largest advertisers in the United States also advertise heavily

overseas. Proctor and Gamble and General Motors, for example, are among the

largest advertising spenders in France and Canada. Local firms in markets outside

the United States often view this kind of expenditure as an unfair trade practice.

They fear that American firms could easily overwhelm local firms in terms of

advertising dollars.

PATTERNS OF ADVERTISING EXPENDITURES:

In one study, advertising-to-sales ratios varied across fifteen countries, with

ratios ranging from 0.95 for Yugoslavia to 7.62 for Australia. These ratios were not

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related to propulsion size, number of directly competing brands within the firm, or

number of directly competing brands outside the firm and provide information on

budgeting methods, media allocation, measures of advertising effectiveness, an d

compensation methods.

The relationship between advertising expenditure and sales generated has

been well documented. Certain variables determine the size of the advertising

budget as well as the size of the overall marketing budget. According to the well-

publicized ADVISOR models, the size of an advertising budget is a function of

Sales (+) number of users and other participants )+), customer concentration (-),

fraction of sales made to order (-). stage in life cycle (-), and product plans )+). The

size of a marketing budget is a function of prospect-customer attitude differences

(-), proportion of direct sales )+), and product complexity (-). It should be pointed out

that the importance of particular predictor variables is not uniform across countries.

It is important to note variations in the various kinds of marketing expenses

when expressed as a percentage of sales across countries and product categories.

The variations in the marketing expense ratios indicate the executives should be

careful when they approach advertising budget decisions in other cultures.

ADVERTISING AND REGULATIONS:

Advertising can be affected in several ways by local regulations. The

availability of media (or the lack of it) is one example. When and how much media

time and space are made available, if at all, is determined by local authorities.

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Belgium prohibits the use of electricity for advertising purposes between midnight

and 8:00 A.M. German was regulate TV advertising contents and limit advertising

on the national TV channels to twenty minutes a day, forcing advertisers to switch

from state-run TV to private channels. Greece and South Korea ban the erection of

new signs. Furthermore, nationalism may int rude in the form of a ban on the use of

foreign languages nd materials in advertising.

The advertising industry may have a local self-regulatory organization which

regulates the styles and contents of promotional activities. As in the case of

England, broadcast advertisements to be legal, decent, honest and truthful. For

instance, no medium can be used to advertise alcoholic drinks if more than 25

percent of the audience is under eighteen years. Children mu,st not be encouraged

to eat or drink at bedtime or to replace main meals with confectionery or snack

foods. Regarding motor vehicles, speed or acceleration should not be the

predominant message, and cars on public roads must not be shown to exceed

speed limits. Those selling treatment of minor addictions and bad habits must

acknowledge the vital role of willpower.

The legitimacy of comparative advertising has not been fully settled in many

countries. The Draft Directive of the EEC Commission on Misleading and Unfair

Advertising has proposed that comparative advertising shall be allowed, as long as

it compares material and verifiable details and is neither misleading nor unfair. In

effect, this directive would require Austria, Belgium, France, Itals, and Luxembourg

to remove present bans. Certain products are banned altogether from certain media

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or from advertising in certain countries.

According to the World Health Organization, nations with complete bans on

cigarette advertising are Norway. Finland, Italy, Iceland, Mozambique, Algeria,

Joudan, Sudan, Bulgaria, Czechoslovakia, Hungary, Poland, Romania, Russia,

Yugoslavia, Singapore, and French Polynesia. Those with partial bans include

Senegal,Bolivia, Cyhprus, Canada, Egypt, Belgium, Denmark, France, Germany,

Ireland, Sweden, Great Britain, Australia, New Zealand, and the United States.

Interpreting the law creatively, R./J. Reymnolds attempted to circumvent

Norway's ban on cigarette advertising by advertising "Camel boots" instead. The

advertisement used the same model, trademark, and the lettering in the Word

Camel as those used in Camel's cigarette advertisements. After a protest, the

advertisement swas eventcually withdrawn. Advertisements in France are limited to

a pricture of a cigarette package with no "Seductive imagery". To overcome this

restriction, cigarette makers create products such as Marboro cigasrette lighters

and Pall Mall matches that are purposefully made to resemble cigarette packages

becau,se there is no restriction on how such products can be advertised. In Sudan,

Philip Morris advertised by having the Marlboro cowboy hold a Marlboro ligher.

ADVERTISING MEDIA:

International advertising is the practice of advertising in foreign or

international media when the advertising campaign is planned, directly or indirectly,

by an advertiser from another country. To advertise overseas, a company must

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determine the availability (or unavailability) of advertising media. Media may not be

readily available in all countries or in certain areas within the countries.

Furthermore, the techniques used in media overseas can be vastly different from

the ones employed in the United States.

TELEVISION:

For Americans, television is taken for granted because it is available every

where and in color. Outsidde of the United States, even in other advanced nations,

it is a different story altogether. This difference may explain why U.S. advertisers

spend $ 20 billion each yeasr on TV commercials, four times the amount European

advertisers spend.

In most countries, television is not available on a nationwide basis because

of the lack of TV stations, relay stations, and cable. TV. Color television, for the

poor, is a rarity. Nevertheless, the viewing habits of people of lower income should

not be underestimated because of the "group viewing" factor. For example, a TV

set in a village hall can attrract a large number of viewers, resulting in a great deal

of interaction among the villagers in terms of conversation about the advertised

products.

In many countries, TV stations are state controlled and government operated

because of military requirements. As such, the stations are managed with the public

welfasre rasther than a commercial objective in mind. The programming and

advertising asre thus closely controlled. The programs shown may vary widely and

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are usually dubbed in the local languages. European governments particularly

abhor the U.S. Private-broadcast model with its degenerate mass programming.

More recently, however, European restrictions have been reduced on featuring

films with freaquent interruptions from advertisements. This reduction is due in part

to an attempt by European countries such as France to end t he government

monopoly on media and to privatize the broadcast business by making available

private broadcasting franchises.

Commercial TV time is usually extremely difficult to buy overseas. This is true

even in Europe and Japan, where television is widespread. The usual practice in

Tokyo is to use TV advertising to bombard the market, but the challenge for the

marketer is to get air time. There are several reasons why television advertising

time is severely limited. Most countries only have a few TV channels, which do not

schedule daytime television or late-night programs. With less broadcast time comes

less advertising time. Some countries do not allow program sponsorship other than

spot announcements. Belgium, Denmark, Norway, and Sweden ban advertising on

television altogether. Some governsment permit advertising only during certain hour

of operation. In Germany, advertising on television is permitted only between 6:15

and 8:00 P.M. (except Sundays and holidays) for a total advertising time available

of twenty minutes. Th at same number of commercial minutes also applies to

Switzerlnd. The problem of getting a frasction of the available television time was so

severe for Unilever that the firm had to make adjustments in media strategy by

relying more on other media. In most countries, the situation is such that an

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advertiser is fortunate to get air time at all.

There are at least two tactices an advertiser can employ to overcome the

problem of lack of broadcast time for advertising. One is to use shorter

commercials. In the United States, 61 percent of TV spots are thirty-second

commercials, and 35 percent are fifteen-second commercials. In Japan, 79 percent

of TV spots are fifteen-second commercials. Not surprisingly, clutter is worse in

Japan; there are sixteen commercials per hour in the United Stastes but thirty

commercials per hour in Japan.

Although disputed in the United States, fifteen-second spots have become

the norm in some countries. Spots shorter than thirty seconds are an overwhelming

majority in France (71 percent), JHapan (79 percent), and Spain (90 percent). As a

matter of fact, the Japanese even have eight-second spots that function almost like

billboards on TV nd yet are graphically compelling.

Another tactic is to purchase TV time well in advance. With a waiting list of

100 companies, TV advertising time in the Netherlands must be booked with a

year's notice. Those advertisers able to get air time still face other advertising

hurdles. For example, commercial interruptions can be long and frequent, creating

a severe problem of clutter.

Advertisers sometimes use television station in one country to reach

consumers in-another country. Canada is a prime example. More than 75 percent

of Canadians are clustered within 100 miles of the U.S. border, and 95 percent are

within 200 miles. Thus, nearly all canadians are within the broadcast range of U.S.

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Stations. U.S.advertisers often use U.S. TV stations to communicate with Canadian

consumers. In fasct, canadian advertisers themselves make it a prasctice of using

U.S. stations at the border (e.g. Detroit, Spokane, and Buffalo) cto air commercials

aimed primarily at the Canadian market. Reasons forx this practice are that

American TV stations have higher program ratings than Canadian stations, and that

the Canadian audience in total spends some twenty-six billion hours a week

viewing U.S. shows-the equivalent of 78 percent of the total hours spent watching

Canadian English-language TV programs.

New techn ology may allow advertisers to solve some of the problems

related to TV time and government regultion (e.g. a ban on the advertising of

certain products or to certain groups). Cable TV is now available in Western Europe

Commercial programs, for example, can be beamed from the United kingdom to

cable networks in Norway, Finland, and Switzerland. Retransmitting the signal,

however, is still illegal in Norway.

Satellite TV may present another solution and is gaining wider acceptance.

Mc-Donald's and Mars have begun to funnel some advertising dollars to the Sky

Channel satellite network. McDonald's has used special commercials promoting

safety in order to placate those Eurxopean countries that restrict product advertising

aimed at children.

In can be seen that cable TV and satellite TV are often international media in

the sense that they reach multiple countries outside the country where the

broadcast originates. Tu,rner Broadcasting's Cable News Network has a global

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reach of more than sixty million households in more than 200 countries and

territories. MTV has access to some forty-six million cable-equipped and satellite-

equipped homes in Eurxope and can reach eighty-eight million more in the former

Soviet Union.

The problem with this new technology has been that, when an advertisement

is aired, consumers in all countries are exposed to an identical message. But

improved technology may in the future allow advertisers to beam particular

advertising versions to different countries.

RADIO:

Radio is no longer king of the media in the United States, but it retains its

status in many countries as they only truly national medium. In Mexico for example,

radio provides coverage for 83 percent of the country. It is popular for several

reasons. A radio set is inexpensive and affordable-even among poor people. It is

virtually a free medium for listeners; the programs are free and the costs of

operating and maintaining a radio set are almost negligible. Furthermore, illiteracy

poses no problem for this advertising medium. As a communicastion medium, radio

is entertaining, up-to-date, and portable. The medium penetrates from the highest

to the lowest socioeconomic levels, with FM stations being preferred by high-

income and better-educated listeners. Not surprxisingly, radio commands the

largest portion of advertising expenditures in a great number of makrets.

In order for radio stations in the United States to survive and counter the

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threat of television, they have adopted txhe "magazine" format by specializing in a

parrticular type of programming. Advertisers must not assume that stations have

adopted this same approach abroad. In many countries, radio stations have not

become specialized in a particular program format and see no need to be selective

in order to attract the listening audience. Radio stations commonly vary their

programming format throughout the day, sometimes as often as every half hour. An

audience shift should thus be expected, and a consequence of this practice ins that

it may not be easy to reach the target market effectively.

Unlike U.S. stations, which do their own programming and hire theirx own

announcers or disc jockeys, overseas stations are quite liberal in selling air time

outside operators. This is true in spite of the fact t hat for security reasons most

overseas stations are owned, controlled, nd operated by the government. Once the

air time h as been sold, the program format is determined by the sponsor or

independent discjokey. A certain disc jockey might even buy air time to broadcast

from a number of stations, promoting his or her identity by frequently mentioning his

or her name or titxle of show, by playing a particulasr theme song to begin and end

the program, and by soliciting calls and letters from the audience. Thus, listeners

loyalty is not so much to the station but to the dis jockey who may roam from one

station to another throughout the day.

Although air time for commercials is usually available, advertisers should still

expect certain problems. The availability of a radio network is generally limited, and

an advertiser must use many stations to blanket the entire market. Mexico's low

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program ratings also make it necessary for an advertiser to use many stations and

spots to achieve impact. Also, many stations terminate their broadcast at an early

hour each day. Because of these conditions, clutter is a tremendous problem.

Program breaks are frequent and commercial minutes are so numerous that

listeners have adopted the habit of constantly changing stations.

NEWSPAPERS:

In virtually all urban areas of the world, the population has access to daily

newspapers. In fact the problem for the advertiser is not one of having too few

newspapers but rather one of having too many of them. In the United States, large

cities can rarely support more than two dailies. In other countries, a city may have

numerous newspapers dividing the readership market. Lebanon, with a population

of 1.5 million, has some 200 daily and weekly newspapers, with the average

circulation per paper of only 3,500.

Newspapers in communist countries are controlled by the government and

are thus used for propaganda purposes. China's newspapers, for example, txend to

casrry news items thast the government deems to express some moral and social

value.

Believing that sensational news attracts readership, most non U.S.

new3spapers in the free world are set up in a sensational news format. It is a rule

rather than the exception for these newspapers to concentrate on murders,

robberies, scandals, and rapes. Even the United Kingdom, where the citizens are

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known for their reserved manner, is not exempt from this practice. World news and

nonscandalous political news often take a back seat to the more sensational news.

As a result, non U.S. news papers look more like such weekly U.S. tabloids as the

National Enquirer and Star. A newspaper that concentrate on news of substance

and qualaity (i.e. unsensational news) must pay for this in terms of low readership.

Many countries have English-language newspapers in addition to the local

language newspapers. The English-language newspapers are patterned more like

the traditional American paper, with an emphasis on world, government, and txhe

business news. This vehicle would be appropriate for an advertiser to reach

government and business leaders, educated readers, upper-class people and those

with affluence and influence. The aim of the Asiam Wall Streetx Journal is to supply

economic information in English to influential businesspersons, politicians, top

government officials and intellectuals. It was not designed to be a newspaper for

mass readers. Exhibit shows a number of English-language newspapers in Asia,

each carrying World Paper, an internastional news supplement.

Some countries have nationally distributed newspapers. But it is difficult to

find a true national newspaper because almost every newspaper tries to be

momewhat local in nature. Even in the United States, before USA Today, the

closest thing to a national newspaper was perhaps the New York TXimes, with the

Washington Post in second place. Clearly, it is even more difficult to have an

international newspaper. Those papers distributed internationally include The

International Herald Tribune and such financial news papers as The Wall Street

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Journal (with the Asian Wall Street Journal for Asian countries) and the United

Kingdom's Financial Times. As might be expected, these newspapers are not

available everywhere, and the circulation is low. Financial Times, a century-old daily

covering British business, sinternational business, and economic and political news,

has a worldwide circulation of about 230,000, with only 6,000 sold in the United

States and Canada. Still, the Financial TXimes offers U.S. advertisers access to

upscale readers in Europe and other parts of the world.

There are several problems associated with advertising in foreign

newspapers. The purchase of space is a monumental problem. The general

unavailability of space is the result of overseas newspapers having a fixed and

small number of pages for each edition, including the sunday paper. This may

seem strange to American advertisers, who asre used to getting newspaper space

at anytime with just a few days notice. American advertisers are often puzzled

about why overseas publishers do not add more pages to accommodate

advertisements that would bring in revenue. The answer is that equipment is limited

and so is paper. Japanese newspapers, which experience these production

complicastions, are limited to only sixtxeen-to-twenty pages a day. Because

newspapers may have to ration and turn away advertisers, marketers may need

special arrangements to buy space on short notice.

American advertisers are accustomed to having separate editorial sections in

American newspapers and are often frustrated by foreign papers. A twenty-page

newspaper may still have sections for sports, entertainment, fashion, business, and

Page 15: assignment The Role of Advertising

science, but each section may be only one page. Thus, it becomes difficult for an

advertiser to match the product to the proper section or environment (e.g. tire and

automotive products in the sports section) in a local newspaper.

Furthermore, with so many newspapers dividing a small market, it is

expensive to reach the entire market. There are some 380 and 800 newspapers in

Turkey and Brazil, respectively. With advertisements in just one paper, the reach

would be quite inadequate. Advertising in several papers, on the other hand, is also

imprasctical. It is fortunate for advertisers that people often read or subscribe to two

or more dailies and often share newspapers. Despite a small circulation, readership

may still be high. Usually, txhe pass-along rate in foreign markets is much higher

than that in the United Stastes. But reliable estimates of circulation of overseas

newspapers asre difficult to obtain. The figure provided by the newspaper publisher

may be highly inflated, and there is no meaningful way, at least for advertisers, to

measure or audit the circulation figures.

MAGAZINES:

Nowshere else in the world are there so many and varied types of consumer

magazines as there are in the United States. Because U.S. magazines segment the

reading market in every conceivable manner, there are magazines for the masses

as well as for the few and select. This makes it possible for advertisers to direct

their campaigns to obtain reach (the total number of unduplicasted individuals

exposed to a particular media vehicle at least once during a specified time period)

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or frequency (the intensity or the number of times within a specified period that a

prospect is exposed to the message) orx both. Foreign magazines are generally not

highly developed in terms of a pasrticulr audience. They do not segment their

readers as narrowly as U.S. magazines do, and they do not have the same degree

of accurate information about reader characteristics. In Brazil, there are very few

magazines, and people read all three of four of them. This results in duplicastion

which can be a waste of promotional effort unless frequency is the objective.

Marketers of international products have the option of using international

magazines that have regional editions (e.g. Time, Business Week, Newsweek and

Life). In the case of Reader's Digest, local-language editions are distributed. Allen-

Edmonds, a shoe company, was able to increase its foreign sales by advertising its

shoes in the internastional editions of such magazines. For technical and industrial

products, magazines can be quite effective. Technical business publications tend to

be international in their coverage. These publications range from individual

industries (e.g. construction, beverages, textiles, etc) to world wide industrial

magazines coverxing many industries. A trade magazine about China, for example,

is a suitable vehicle for all types of industrial products of interest to the Chinese

goverxnment. In Europe, the number of business publications is seven times as

high as that in the United States. There are more than 1,000 technical and trade

journals in Scandinavia. Canada in contrast, usually has only one trade magazine

for each market segment, making it easier to cover the entire Canadian market.

Local (i.e. national) business magazines are a good vehicle to reach well-de-

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fined target audiences. Nikkei Business is one such magazine in Japan.

Unlike the U.S. market, which has an organization such as the ABC (Audit

Bureau of Circulations) to audit the circulastion figures for most magazines, the

circulation figures of overseas magazines are somewhat unreliable. Furthermore,

overseas masgazines tend to depend more on newsstand sales than on

subscription sales, making it difficult to calculate consistent volume or to predict the

size of readership in advance. Because many magazines are unaudited, either by

choice or by lack of an audit bureau, it is not sensible to exclude unaudited

publicastions from the media schedule. Even when publicastions are audited, the

information given may not be adequate. The English ABC provides minimum

information, whereas the German IVW audit is very thorough.

DIRECT MAIL:

Confusion usually arises when such terms as direct mail, direct advertising,

direct marketing, and mail order are discussed. It is important to understand that

direct marketing is a broad term that encompasses the other related terms.

According to the Direct Marketing Associastion (DMA), direct marketing is the total

of activities by which products and services are offered to market segments in one

or more media for informational purposes or to solicit a direct response from a

prxesent or prospective customer of contributor by mail, telephone, or personal

visit. This is a more than $1 billion businessx in the United States. As a system,

direct marketing has two distinct components:

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1. Promotion

2. Orddering/delivery

Direct marketers can promote their products through all advertising media.

They can solicit orders by making announcements on television or in magazines

(usually with coupons or order forms). Television home shopping is a form of direct

marketing. Some cable TV channels (e.g. the Home Shopping Network in the

United States and the Canadian Home Shopping Network) asre designed specially

for this purpose. In any case, local regulations must be followed. In France,

advertisers cannot show direct sales telephone numbers on screen. Viewers must

call the number on screen to obtain a second number for placing orders. In

Canada, until recently, home shopping services were restricted to using still images

on TV. Stasrting in 1995, the Canadian Radio-Television and Telecommunications

Commission h as made it possible for marketers to use full-motion video in

electronic retailing services. Also, infomercials now can be aired throughout the day

not just midnight to 6 A.M.

Frequently, marketers rely on direct advertising in media created for that

purpose. These media consist of direct mailings and all forms of print

advertisements distributed directly to prospects through a variety of methods (i.e.

advertising materials distributed door to door, on the street, or inside the store or

those placed inside shopping bags and on auto windshields). Direct mail is thus

only one kind of direct advertising medium, which is in turn a part of general-

advertising media or the promotional methods or direct marketing. Of course, the

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use of direct mail is not limited to just direct marketing. The Direct Marketing

Association annually publishes a break-down of direct-marketing expenditxures by

media in selected countries.

With regard to ordsering, buyers can place orders by telephone (often with a

toll free number), through a personal visit, or by mail. An order that is sent in by mail

and fulfilled by mail delivery is called a mail order. Thus, mail order is not a medium;

rather it is just one of several means that can be used to place and handle orders.

An orderxing method consists of one of the two components of the direct marketing

system.

For this discussion, direct mail and direct marketing are considered together.

There are several rxesons for doing so. Direct mail generally accounts for a major

portion of direct marketing advertising expenditures. Also, many reports on direct

marketing campaigns do not provide a detailed breakdown of the advertising dollar

accounted for by media other than direct mail.

Directc mail is lasrgely undeveloped in many countries. This is especially true

where labor is cheap and abundant and where it is just as easy to use a

salesperson to make sales calls. Furthermore, for countries with high illiteracy, this

medium is not suitable for promoting consumer products.

Without doubt, the United States in the most developed masrket for the

advertising medium of direct mail. Foreign masrketers as wsell as American

marketers have a wide slection of buyer lists that permit them to contact the

intended tasrget audience with minimum waste.

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European masrketers are far behind the United States in exploiting the

medium of direct mail. Also there are more restrictions on collection of personal

data. In Germany, mail cannot be sent to those who hasve requested that their

names be rxemoved from mailing lists. If an addressee has a label on one's

mailbox rxefusing direct mail, delivery cannot be made. Furthermore, although

personal data may include year of birth, date of birth is not allowed.

U.S. practices in using direct mail require some modificastion when taken

abroad. There is difficulty in making a directc transposure of a U.S. mailing piece

whithout change into a European mailing kit because of various weight rules and

other unique regulations. Population direct-mail lists are another serious problem

since foreign list owners do not trust renters and brxokers. List generation and

management is still primitive abroad. American list owners enhance their lists with

such information as buyers frequency, recency, and dollar valaue, but direct

marketers used to those prasctices can become frustrated with list brokers in

Europe (except in Germany) because basic selection criteria are not even provided.

Also, privacy laws are more restrictive abroad than in the United States. For

example, Germany allows only two unique selection criteria per order when renting

a list.

In Asia, just like in Europe, the use of direct mail is on the rise. With the

emergence of local list brokers in Asia, a marketer can now purchase reasonable

lists for the Asian masrket. It is common to mail materials from Singapore because

of competitive printing servicves, availability of professional letter mailing firms, and

Page 21: assignment The Role of Advertising

discounts on airmail postate rates.

U.S. companies using direct mail to contact customers abroad may find

remailing useful and economical. There are three basic ways to move a marketer's

promotional materials from the United States. First, the ISAL (International Surface

Air-lift) system was designed by the U.S. Postal Service to use a combination of air

and surfasce transportastion. This is the least expensive way of moving materials

for bulk mailers and publishers. After being received at ISAL's acceptance points,

the material is airlifted to selected distribution points around the world where it

merges with other surface-mail pieces. Second, mailers who do not want to bother

with ISAL's requirements can pay a surcharge to ISAL consolidators, which asre

private companies that will sort, bag, and transport the material to an ISAL gateway

city. Finally, remailers asre private distribution services that provide a turnkey

system and negotiate privaste rates with airline cargo divisions.

OUTDOOR:

Outdoor advertising includes posters, billboards, painted bulletins, roadside

and store signs, and electric spectaculars (large illuminted, electric signs with

special lighting and animated effects). Given the great impact and impressiveness

of size and color, outdoor advertising serves well as reminder prxomotion for well-

known products.

Outdoor advertising is frequently used overseas because of the low cost of

medium, because an advertiser can simply place its posters on any available wall

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bus-stop, shelter, tree, or fence without paying for it. The prasctice also encourages

one advertiser to replace other advertisers posters with one of its own.

Unlike most media, outdoor advertising is one medium in which the United

States seems to lag behind other countries in terms of per-capita advertising

expenditures and sophistication. This is an advanced and dominant medium in

Eurxope and Canada. Outdoor advertising is also very important in countries

without commercial TV (e.g.Belgium). In Saudi ASrabia outdoor and transit posters

account for more than a quarter of all media sepnding, roughly ten tximes the U.S.

percentage.

Outdoor advertising does not have to be uniteresting. One advertiser

changes its outdoor illustration and message frequently-with the model removing an

item of clothing each time the poster board is changed. Another advertiser made it

appear that the billboard was gradually being eaten away by termites.

New technologies have added such design options as backlighting,

projection, Day-Glo paints, three-dimensionals, extensions, reflective disks, bows,

and cutouts. Fiber optics may eventually replace neon because fiber optics are

much more energy efficient and weightx less than neon glass tubing. Some

advertisers have turned to video billboards that can show a twenty-second

commercial repeatedly.

When using outdoor advertising, certain rules should be followed. Illustrations

should be larege, and words should be kept to a minimum. A rule of thumb is to say

"What must be said" and not "Whgat can be said". Simple, contrasting colors

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should be used; white on black or red seems to work well. The right typeface is

critical; certain typefaces are difficult to read. Having all letters in capitals can be

equally as difficult and should be avoided.

SCREEN (CINEMA):

In virtually all countries, the cinema is a favorite activity for social gathering.

People are avid moviegoers because of the limitied television broadcasting and

because of people's natural desire to go out to a place of social gathering. Cinemas

(or theaters, as they are called in many parts of the world) asre classified as first-

class or second-class and sometimes even third-class, depending on how soon

new films are shown there. Theaters usually open at noon during the weekdays and

earlier on weekends, and the usually operate on a reserved-seat basis, with

advance reserve bookings being highly encouraged. In Japan, the lack of theaters

allows theater operators to pick and choose films and to book only those that will be

heavily promoted months before the actual showing, preferably with repeated

announcements in prime time on TV.

Much like outdoor advertising, the cinema is a very popular advertising

medium outside of the United States. Cinemas sell commercial time to agencies of

advertisers. The usual practice is for a theater to begin its program with a showing

of slides of advertised products, and this slide show is followed by commercials.

The theater may then proceed to show newsreels and documentaries that may

contain paid news items such as a store opening. Then, just before the showing of

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the main fature, there are short promotional films or teaser trailers of coming

attractions. An intermission can present another opportunity for advertising.

Cinema advertising has several advantages. It has the impact of oudoor

advertising without the drawback of being stationary. It has sight and sound like

television but with better quality. Furthermore, cinema advertising has a true captive

audience. A disadvantage is tht some moviegoers may resent having to watch

commercials. But such resentment is likely a minor problem, since moviegoers are

usually in positive and receptive mood. The more serious problem is that patrons,

knowing thast there will be some commercials shown first, take their time in

showing up and may be wandering into and about the theater until the main feature

begins.

DIRECTORIES:

Directories are books that provide listings of people, professions, and

institutions. They yellow-page telephone directories, with a listing of various types of

companies are a prime example. Directories may be sold or given away free of

charge. Because the telephone is not widely available in many areas and the

information is not accurate, this medium has been underutilized outside of the

United States. In some countries, governments and private entities publish trade

directories of local exporters and their advertisements.

RURAL MEDIA:

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In marketing to LDCs, marketers must understand the use of rural media.

Mobile units, for example, can be sent to areas lacking access to mass media.

Such vehicles can play recorded music and advertising messages over amplifiers

or loudspeakers attached to the vehicles rooftops. A marketer can also attract an

audience by arranging for some type of festival advertising held at a temple or

school. A free out door movie can be shown during the festival while advertising is

broadcast through loudspeakers to the captive audience. In a way, such rural

media are not much different than the traveling "medicine" shows of the American

past.

STADIUM:

Stadium advertising is also appropriaste, especially in soccer stadiums,

because soccer (i.e. "football") is the most popular and passionate sport in the

world. Signs can be displayed on stadium walls, and the advertising rules for

outdoor advertising should be applied. The objective of this advertising is not so

much to communicate with those in a basketball or football stadium but rather to

communicate with TV viewers. For nonstop games like soccer and hockey, a

broadcaster can show the entire game while including logos or brief advertising

messages on the edges of the screen-at the top, bottom, side, or all around, with

the game being shown in the middle part of the screen.

Cigarette marketers are major sponsors of sports and cultural events (e.g.

billiards, horse racing, rugby, and symphony orchestras) in England because these

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events receive extensive TV dcoverage. In effect, the prominent display of names

and logos allows companies to associate their brands with glamor, health, vitality

and success.

OTHER MEDIA:

There are several other advertising media that are traditional and common in

LDCs and elsewhere. Some of these media are advertising specialies, a variety of

inexpensive items (e.g. pens, calendars letter openers) carrying the advertiser's

name addrxess, and a short sales message. In spite of the cost, such items are

relatively durable. Because of their attractive appeasrance and low production cost.

Ajinomoto's calendasr-type products are an effective display in Japan and other

Asian countries. A charming, attractive young girl (Miss Ajinomoto) serves as an

"eye-catcher" to help advertise products. Ajinomoto provides three-ounce bottles to

restaurants as tooth-pick holders or seasoning containers. In addition to using the

traveling cinema, a popular form of entertainment. Ajinomoto also uses the traveling

cooking school, which combines the expertise of a cook and a nutritionist, to

provide instruction and educastion to many institutions such as schools. Moreover,

the company uses "exhibitions", or public-service advertising, to promote total

company image and technical expertise, such as with the anticancer medicine

Lentinan and the sugarless sweetener Aspartame.

One recent medium that has gained world wide attention is the Internet.

Unlike other media, the Internet is global in nature, creating both worldwide

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opportunities and problems. It is unknown whether the law governing an Internet

promotion should be the law of the upload site or that of the download site.

Although all the other media allow marketers to a cvertain extent to restrict delivery

of their messages, the Internet is an all-or-nothing proposition. thus, it is so easy to

violate many domestic laws. Also given its international nature, the Internet requires

global planning and the cultural dimension must be considered. A successful Web

site is the one that his been carefully planned, taking into account the various

languages and cultures.

MEDIA MIX:

There is no one single advertising medium that is suitable for all countries

and products. The media mix has to vary from one target market to another. One

study focused on the changing media consumption of four groups of people. Hong

Kong residents, long-time Hong Kong immigrants to Canada, new Hong Kong

immigrants to Canada, and English-speaking Caucasian Canadians. While the

immigrant groups did not increase their total media consumption, their consumption

across different media refl;ected both ethnic affirmation and assimilation processes.

In other words, immigrants acculturation process was influenced by their original

media consumption behaviour and language ability.

The basic principles of media selection apply in all markets. In general, an

advertising medium should be selective and cost-effective in reaching a large

number of the intended audience. It should deliver the kind of reach, frequency, and

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impact desired, assuming that there are no pasrticular legal restrictions.

Tokyo Toyopet provide a good illustration of how advertising media are

selected to promote cars-in this case, Toyota casrs. Newspapers and magazines,

due to their national circulation in Japan, asre unsuitable because this division of

Toyota only concentrates on the Tokyo market. TV time is not readily available and

much too expensive. As a result, radio advertising in the clear-cut choice.

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STANDARDIZED INTERNATIONAL ADVERTISING:

Standardized international advertising is the practice of advertising the same

product in the same way everywhere in the world. The controversy of the

standardization of global advertising centers on the appropriateness of the variation

(or the lack of it) within advertising content from country to country. The technique

has generated a beated and lively debaste for more than thirty years and has been

both praised and condemned-passionately.

Doing research is difficult in this area because of the ambiguous definition of

standardization itself. Strictly speaking, a standardized advertisement is an

advertisement that is used internationally with virtually no change in its theme,

copy, or illustration (other than translation). More recently, a new breed of

advocates of standardization has claimed that an advertisement with changes in its

copy or illustration (e.g. a foreign model used in an overseas version) is still a

standardized advertisement as long as the same theme is maintained. This new

and broadened definition can cloud the issue even more with the added element of

subjectivity. Because standardization is a matter of degree rather than an all-or-

nothing phenomenon, a more precise definitioon of standardized advertising,

conceptually and operationally, would go a long way toward solving the confusion

created by contradictory claims.

Dewar's advertising is a good example of how difficult it is to state with

certainty whether a certain advertisement is a standardized advertisement or not.

After twenty lored to markets around the world. The format is the same in every

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country, it provides biographical information, hobbies, and philosophies to portray

the successful lifestyle of an entrepreneurial "life-achiever" who also happens to be

a txypical and famous Dewar's drinker. Previously, Dewasr's overseas advertising

used translations of American advertisements, but research revealed that the use of

local personalities would communicate a stronger message. The localized profile

advertisements used in Spain featured profiles of a Spanish author and a twenty-

nine-year-old Spanish flight instructor and former hang-gliding champion. The

Australian campaign gave Dewar's profiles of a thirty-three-year-old Melbourne

entrepreneur, a jewelry designer, and a photojournalist. In Thailand, the

advertisement featured a Bangkok architect. These campaigns were handled by the

local Leo Burnett offices.

The issue of advertising standardization, without doubt, has far reaching

implications. If it is a valid strategy, international business managers should

definitely take advantage of the accompanying benefits of decision simplification,

cost reduction, and efficiency. On the other hand, if the premise of this approach is

false, the indiscriminate application of standardized advertising in the marketplace

will cause more harm than good since it can result in consumers misinterpreting the

intended message. Consequently, the important function of advertising to facilitate

a consumer's search process can be seriously impaired.

THREE SCHOOLS OF THOUGHT:

There are three schools of thought on the issue of standardized advertising:

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1. Standardization

2. Individualization

3. Compromise

The standardization school, also known as the universal, internationalized,

common, or uniform approach, questions the traditional belief in the heterogeneity

of the market and the importance of the localized approach. This school of thought

assumes that better and faster communication has forged a convergence of art,

literature, media availability, tastes, thoughts, religious beliefs, culture, living

conditions, language, and therefore, adevertising. Even when people are different,

their basic physiological and psychological needs are still presumed to remain the

same. Therefore, success in advertising depends on motivation pastterns rather

than on geography. this belief is held by Elinder, Roostal, Fatt Strouse, and Levitt,

among others. British Airways's image advertisements, which were designed by

Saatchi and Saatchi to trumpet the newly sleek British Airways, have been cited as

an example of a successful standardized campaign.

The opposite view of the standardization school is the individualization

school, also known as the nonstandardization, specificity, localization or

customization approach. This conventional school of though holds that advertisers

must particularly make note of the differences among countries (e.g. culture, taste,

media, discretxionary income). These differences make it necessary to develop

specific advertising programs to achieve impact in the local masrkets. Authorities

sharing this view include Nielsen, Lenormand, Lipson and Lamont.

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A good illustration of the importance of individualization is the Shiseido case.

That company, the world's third largest cosmewtic company, did poorly in its first

attempt to penetrate the U.S. market because its advertisements featured only

Japanese models.

Between these two extreme schools is the compromise school of thought.

While recognizing local differences and cautioning against a wholesale or automatic

use of standardization, this middle-of-the-road school holds that it may be possible,

and in certain cases even desirable to use U.S. marketing techniques under some

conditions. Those with this moderate view include Dunn, Keegan, Peebles, Ryans,

and Vernon.

Jain has proposed a frame work for determining marketing program

standardization. Standardization is more practical and effective under these

conditions:

1. Markets are economically alike.

2. Worldwide customers, not countries, are the basis for identifying the

segments to serve.

3. Countries have similar customer behaviour and lifestyle.

4. The product has cultural compatibility across countries.

5. There is a great degree of similarity in the firm's competitive position in

different markets.

6. The firm competes against the same adversaries with similar share

positions in different markets.

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7. Product is industrial or high-tech (versus consumer product).

8. Home-market-positioning strategy is meaningful in the host market.

9. Countries have similar physical, political and legal environments.

10. There are similar marketing infrastructures in the home and host

countries.

11. Firms possess key managers who share a common world view.

12. Strategic consensus exists among parent-subsidiasry managers.

13. Authority for seting policies and allocating resources is centralized.

Keegnan provides a set of guidelines that can help in determining when it is

appropriate to use standardized advertising. According to Keegan txhere are five

international product and promotion strategies. The choice of strategy depends on

such factors as cost, need, and use conditions. A particular product can be

extended i.e. unchanged, if use conditions are uniform across masrkets. Likewise, a

promotional campaign can be standardized or extended if consumer need for this

pasrticular product is universal. As a company moves from the first strategy toward

the last, there is a corresponding increase in cost.

The first of the five strategies is one product, one message, worldwide. This

strategy is feasible if both the need and use conditions are uniform across

countries. Not many products satisfy these conditions, though Cokeand Pepsi are

often cited as examples. Other examples include diamonds. Chivas Regalk scotch,

and BMW automobiles. Mentioned in jest by some authorities are products that

may even be more truly global, such as Israeli Uzi submachine guns, French

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Exocet missiles, Russian Kalashnikov rifles, and nuclear weapons.

The second of the five strategies is product extension communicastions

adaptastion. A product may be extxended to other countries because of uniform

use conditions, but the promotional message very likely must be changed because

needs vary. Toothpaste is used in the same manner every where but often for

different reasons. People in the north of England and in the French-speaking areas

of Canada use tooth-paste primarily for breath control, making the appeal of fluoride

toothpastes rather limited. Anheuser-Bursch and its partners market the same beer

in many countries but customize their advertisements (based on American themes)

for each national market.

Product adaptation-communications extension is the third strategy. When

use conditions differ but need remains constant across markets, modification of

product but not promotion is necessary. Black and Decker, although wanting to

globalize is power tools, must make several product adjustments of fit certain

markets. The tools everywhere look the same on the outside. But inside it is

another matter, especially for masrkets in which the variastions in electrical outlets

and voltages require different circuits and cords.

Dual adaptation is the fourth strategy. Both the product nd promotion have to

be changed for a foreign market owing to vasriations in need as well as use

conditions in various countries. Refrigerators made for the United States, for

example, must be modified to accommodasted 220-volt and 50 HZ electricity

overseas. The large refrigerator and its large freezer compartment do not appeal to

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people in countries where shopping for fresh food is done daily and where a

refrigerator is used mainly for short term storasge. Additionally, with the high cost of

electricity in virtually all markets outside the United States, the advertising appeal

must be based on low electricity consumption, durability, reliability and

compachness.

Product invention is the last strategy. This strategy may have to be used if

the existing product is too expensive for foreign consumers. A brand new product

with different freatures may have to be designed in order to make it affordable. For

generations, Indians have called dhobis to collect dirty laundry from middle-class

neighborhoods and wash it upon the rocks at the river. Seeing this as an

opportunity for product invention. Whirlpool crop has appealed to young

professional Indian couples who want Western-style automatic washing machines

by offering wh at it calls the World Washer. Whirpool's compact washers have

specially designed agitators that do not tangle saris, the flowing outfits wom by a

large number of Indian women. Variations of the World Washer are also

manufactured and sold in Brazil and Mexico, and there are plans to export them to

other Asian and Latin American countries. Except for minor variations in the

controls, the three versions asre nearly identical and sell for $270 to $ 650. The

World Washer is a simple, affordable, basre-bones washer that does only eleven

pounds of wash, or about one-half the capacity of the typical U.S. model.

Keegan's guidelines, although useful, are quite general. Thus, one must

consider other relevant factors and treat them explicity.

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FEASIBILITY AND DESIRABILITY:

For an international advertising manager, the decision is affected by his or

her perception of whether it is "feasible" and "desirable" to implement

standardization. In some cases, it may be feasible but not desirabale to use a

stqandardized advertisement; in other cases, it may be desirable but not feasible to

do so. The applicability of advertising standardization is a function of these two

conditions.

The feasibility issue has to do with whether environmental restrictions or

difficulties may prohibit the use of a standardized campaign. Three common

problems are literacy (for print advertisements), local regulations, and media and

agency availability.

Because illiteracy adversely affects the comprehension of advertising copy,

the text portion of an advertisement must frequently be minimized or replaced with

pictures. Nevertheless, although pictures may appear to be an effective means of

communicating with nonliterate market segments, there are problems in pictorial

perception, and certain types of pictures asre likely to fail to communicate with

nonliterate markets in developing countries. Therefore, international marketers

should research their markets before attemping to communicate with them through

pictures.

Many countries have laws that place restrictions on the nature, content, and

style of advertising messages. The Barboro cowboy was banned in England on the

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grounds that cowboy worship among children might induce them to take up

smoking. So the company had to use noncowboys driving around Masrlboro

country in a Jeep.

Gerxmany's emphasis on fasir competition results in the prohibition of

slander against competitors. As a result, the advertiser must be wary of using

compasratives (e.g. better, superior)and superlatives (e.g. best, most durable). In

China, Duracell battery commercials were taken off the air because the drumming

bunny's endurance claim violated the rules that prohibit superlative claims and

comparative advertising. Likew3ise, Budweiser's "King of Beerts" slogan was found

to be unacceptable.

A multinational advertiser wishing to use a standardized advertising

campaign needs to rely on an advertising agency with a worldwide network to

coordinate the campaign across nations. Unfortunately, almost no agencies,

regardless of swize, are in a postion to control local agencies overseas. In spite of

this difficulty, a few multinasionals (e.g. Bayer, Colgaste-Palmolive) hasve decided

to consolidate their global advertising at one agency. Ogilvy and Mather World

wide, overseeing 272 offices, creat white on white TV commercial to sell laundry

detergent in France and was later used to replace twenty different local campaigns

in thirty countries. Similarly, IBM's Personal Systems Group awarded its entire

sales-promotion business to Einson Freeman Promotional Campaigns, making it

the first glob al br and to use a single agency.

In must be noted that the use of a single agency to handle worldwide

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advertising, while resembling the standardization approach, does not necessarily

mean that the approach is purely standardization. While Colgate-Palmolive believes

that there is no need to reinvent a winning formula, the directive of IBM's Personal

System Group is "do it once, replicate, and localize".

According to one study, advertising agency executives believe that client

presure will result in greater use of standardization. However, they also feel that

client pressure and "saving money" asre among the least important reasons for

standardization because it makes no sense to use a bad or unproven campaign just

to save money. Local agencies tend to think that they can produce better

advertisements for their local markets and that creative impact should be the most

important reason as to whether an advertisement should be standardized or

localized.

Degree of feasibility varies from country to country, facilitating the

implementation of standardization in some countries while creating problems in

others. Furthermore, an environment may change, permitting either more or less

opportunity for standardization in the future. Therefore, feasibility is dependent on

the situation and does not offer solid support for either of two extreme schools of

thought.

Two major criteria exist to judge the degree of desirability of a standardized

advertisement. One of these is the amount of cost savings that might be achieved.

Thus, standardization is desirable only when the derived saving in production cost

of this type of advertisement is significant.

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Another criterion of desirability is consumer homogeneity, a major

assumption of the uniform approach. If consumers were indeed homogeneous

across countries, the debate would be resolved, since consumers could then be

motivated in exactly the same way. Are consumers homogenous? The proponents

of each school of thought have offered real-life examples that are subjective and

highly judgemental. Consumers would be better served if the collection of empirical

data were based on research designs that eliminate the effect of confounding

factors. The results of the literature review of management responses, consumer

characteristics, and consumer responses indicate that there is no theoretical or

empirical evidence to support the standardization perspective in its present form.