International Advertising and

Promotion

International Advertising and

Promotion

20

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Reasons for International Importance

Economic necessityEconomic necessity

Growth and profit opportunitiesGrowth and profit opportunities

Company survival, particularly those with small domestic markets

Company survival, particularly those with small domestic markets

Stagnation of domestic marketsStagnation of domestic markets

Focusing on China for Growth

Tourism Australia Uses Global Campaign

International Advertising & Promotion

Rank Advertiser Outside U.S. Inside U.S.

1 Proctor & Gamble $4,995 $3,527

2 Unilever 3,689 848

3 General Motors 1,145 2,208

4 L’Oreal 2,336 753

5 Toyota Motor Corp. 1,895 1,203

6 Ford Motor Co. 1,168 1,701

7 Time Warner 298 1,838

8 Nestlé 1,509 605

9 Johnson & Johnson 674 1,351

10 Daimler/Chrysler 578 1,425

Ad spending in millions of U.S. dollars

The International Environment

EconomicEnvironmentEconomic

Environment

DemographicEnvironment

DemographicEnvironment

CulturalEnvironment

CulturalEnvironment

InternationalMarketing

&

PromotionalDecisions

InternationalMarketing

&

PromotionalDecisions

Political/LegalEnvironment

Political/LegalEnvironment

International Economic Environment

Economic environment

• Stage of economic development• Economic infrastructure• Standard of living• Per capita income• Distribution of wealth• Currency stability• Exchange rates

Economic environment

• Stage of economic development• Economic infrastructure• Standard of living• Per capita income• Distribution of wealth• Currency stability• Exchange rates

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

ICI Dulux Targets Young Households in China

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International Demographic Environment

Demographic environment

• Size of population• Number of households• Household size• Age distribution• Occupation distribution• Education levels• Employment rate• Income levels

Demographic environment

• Size of population• Number of households• Household size• Age distribution• Occupation distribution• Education levels• Employment rate• Income levels

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

International Cultural Environment

Cultural environment

• Language• Lifestyles• Values• Norms and customs• Ethics and moral standards• Taboos

Cultural environment

• Language• Lifestyles• Values• Norms and customs• Ethics and moral standards• Taboos

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

Heineken Translation Issues

Lay’s Targets China Youth Market

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International Political/Legal Environment

Political/legal environment

• Government policies• Laws and regulations• Political stability• Nationalism• Attitudes toward multinational

companies

Political/legal environment

• Government policies• Laws and regulations• Political stability• Nationalism• Attitudes toward multinational

companies

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

Test Your Knowledge

Since the European Union banned the use of food dyes in seafood, the salmon market has suffered. People mistakenly believe that salmon is naturally pink. Unfortunately, salmon is an unappetizing gray color. This is an example of how _____ factors can inadvertently hurt small businesses.

A) economic

B) demographic

C) political/legal

D) cultural

E) infrastructure

Advertising Subject to Regulation

Products that may be advertised

Content or creative approach used

Media advertisers are permitted to use

The amount of advertising one may do

Use of foreign languages in ads

Use of materials from outside the country

Use of local vs. international ad agencies

Specific taxes levied on advertising

Global Marketer’s Dilemma

Offer the same

product, marketing,

and advertising everywhere

?

Adapt the product,

marketing, and

advertising to each society?

Global Marketing & Advertising Advantages

Lower costs with less in planning and control

Economies of scale in production, distribution

Lower advertising production costs

Ability to exploit good ideas worldwide

Ability to introduce products quickly, worldwide

Consistent international brand, company image

Simplification of coordination and control

Gillette Launches Mach3 Globally

Problems With Global Advertising

Legal restrictions may make it difficult to develop an effective universal appeal

Legal restrictions may make it difficult to develop an effective universal appeal

Media availability or usage may vary by country or region

Media availability or usage may vary by country or region

Consumer needs and usage patterns often vary by country or region

Consumer needs and usage patterns often vary by country or region

Differences in culture, market and economic development make it difficult to use global advertising

Differences in culture, market and economic development make it difficult to use global advertising

When is globalization appropriate?

Brands can be adopted for visual appeal, avoiding translation problems

Brands promoted with image campaigns playing to universal needs, values, emotions

High-tech products, new to the world, not steeped in the cultural heritage of the country of origin

Products with a nationalistic flavor, if the country has a favorable reputation in the field

Products appealing to a market segment with universally similar tastes, interests, needs, values

Globalization Often Works

Best For:

TAG Heuer’s Global Campaign

British Airways Uses Global Advertising

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Global Products, Local Messages

Standardizing Products

“Think Globally, Act Locally”

Localizing Ad Messages

An In-between Approach

Differences in Language

Differences in Market Conditions

Differences in Cultural

Adapt Messages to Respond To

Use of Pattern Advertising

TaylorMade Used Pattern Advertising

Decision Areas in International Advertising

Organization Style

Organization Style

Creative Strategy & Execution

Creative Strategy & Execution

Agency SelectionAgency

Selection

Advertising Research

Advertising Research

Coordination of Other

IMC Tools

Coordination of Other

IMC Tools

Media Strategy and Selection

Media Strategy and Selection

Decision AreasDecision Areas

Centralization of International Advertising

BudgetingBudgeting

ResearchResearch

AgencySelectionAgency

Selection

CreativeStrategyCreativeStrategy

MediaStrategyMedia

Strategy

CampaignDevelopment

CampaignDevelopment

Central AuthorityCentral

Authority

Decentralized International Advertising

CentralAuthorityCentral

Authority

Budgets

Media

Campaigns

Creative

Research

Budgets

Media

Campaigns

Creative

Research

Budgets

Media

Campaigns

Creative

Research

RegionOne

RegionOne

RegionTwo

RegionTwo

RegionThree

RegionThree

Criteria for Selecting an Agency

1. Ability of agency to cover relevant markets.

2. Quality of agency work.

3. Market research, public relations, and other services offered by the agency.

4. Relative roles of company advertising department and strategy.

5. Level of communication and control desired by company.

Criteria for Selecting an Agency

6. Ability of agency to coordinate international campaign.

7. Size of company’s international business.

8. Company’s desire for local versus international image.

9. Company organizational structure for international business and marketing (centralized versus decentralized).

10. Company’s level of involvement with international operations.

Advertising Research

Information on demographic characteristics of marketsInformation on demographic characteristics of markets

Information on cultural differences such as norms, lifestyles, and valuesInformation on cultural differences such as norms, lifestyles, and values

Information on consumers’ product usage, brand attitudes and media preferencesInformation on consumers’ product usage, brand attitudes and media preferences

Information on media usage and audience sizeInformation on media usage and audience size

Copy testing to determine reactions to different types of advertising appeals and executionsCopy testing to determine reactions to different types of advertising appeals and executions

Research on the effectiveness of advertising and promotional programs in foreign marketsResearch on the effectiveness of advertising and promotional programs in foreign markets

Creative Decisions

Appeals may have to be adapted for local market conditions

Appeals may have to be adapted for local market conditions

Specific appeals and execution styles must be selected

Specific appeals and execution styles must be selected

Copy platforms must be developed that include major selling ideas

Copy platforms must be developed that include major selling ideas

Creative decisions should be based on advertising and communication objectives

Creative decisions should be based on advertising and communication objectives

Coca-Cola Adapts to Local Markets

International Media Selection Issues

Widely Differing Characteristics

Widely Differing Characteristics

CostCost

CoverageCoverage

RestrictionsRestrictions

AvailabilityAvailability

QualityQuality

Media Information Problems

Media Information Problems

CostCost

ReliabilityReliability

CirculationCirculation

AudienceAudience

AvailabilityAvailability

Specialized Target Audiences

Broad Coverage of International Media

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

International Sale Promotion

Market MaturityMarket Maturity

Trade StructureTrade Structure

Economic DevelopmentEconomic Development

Consumer PerceptionsConsumer Perceptions

RegulationsRegulations

Major Creation ConsiderationsMajor Creation Considerations

WD-40 Used Product Samples in Russia

Central vs. Local Roles

Public Relations in Global Marketing

Deal with specific issues and problems the company may face in foreign markets

Deal with specific issues and problems the company may face in foreign markets

Serve as part of the IMC program and help market the product or service

Serve as part of the IMC program and help market the product or service

Present the company as a good corporate citizenPresent the company as a good corporate citizen

Deal with local governments, media, trade associations, and the general public

Deal with local governments, media, trade associations, and the general public

Worldwide Growth of the Internet