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Chapter 1

The Paradoxes in Global Marketing and Advertising

American University of Sharjah College of Arts and Sciences

Department of Mass CommunicationDr. Ibahrine

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Define and understand the value of the Paradoxes

Explain the dilemma in global marketing

Explore the impact of global advertising on

Arab society.

Explain the convergence and divergence of consumer behavior

Discuss the standardization-adaptation decision

Chapter 1 Objectives

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What Is Paradox?

statement that seems contradictory but is actually true

Economic globalization is accompanied by increased focus on local identity

Local segmentation versus global Standardization in marketing

Convergence of technology goes with divergence of usage of technology

Global media versus local music preferences

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Global Advertising

Advertising is any sponsored, paid message that is communicated in a nonpersonal way Single country Regional Global

Global advertising is the use of the same advertising appeals, messages, art, copy, photographs, stories, and video segments in multiple country markets

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The Magnitude of Advertising

United States: United States: $294 billion$294 billion($1,000 per ($1,000 per

person)person) Global:Global:$360 billion$360 billion

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Factors Driving Globalization

Development of international media

Spread of market-based economies in countries and regions like China, South America, India, and Eastern Europe

Expansion of English as an global language (Global English)

Web-enabled ability for even small companies to market globally

1-7Globalization & the myths in international marketing

• Globalization of markets’ Levitt (1983) :• The world’s needs and desires have homogenized• (Internet) technology brings a world culture• Global business and global media have brought global

communities• youth, business people more similar to each other across

countries than to other people within countries• similarities in media exposure bring consumer together

• Increased wealth makes people travel• Increased travel brings universal values

1-8Marketing Communications in a Global Context

• It terms of demand, it predicates a convergence of tastes and preferences

• In terms of supply, product and services are seen as becoming more standardized

• Competition takes place on a global scale as multinational corporations seek to protect and grow business

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Paradoxes Paradox: statement that seems contradictory but is

actually true Belonging important where individual achievement is a

core value Economic globalization is accompanied by increased

focus on local identity Global media versus local music preferences Local segmentation versus global standardization in

marketing Convergence of technology goes with divergence of

usage of technology

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The Technology Paradox

People use new technology to do the things they used to do better, nicer, more efficient

They are extensions of human beings (McLuhan)

People’s behavior is very stable, is based in history New technology is used to reinforce existing behavior

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Convergence-divergence

IA slides

No evidence of convergence.

Persistent variation of consumption

Consumer behavior across countries.

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Increased wealth divergence

Wealth brings choice

The wealthier countries become the more manifest values and value differences

European Union good example: economic convergence but stable value differences expressed in consumption, motives and communications

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The Global vs. Local Debate

Should companies act as if there is one global market, motivated by the same wants and desires?

Or should they account for cultural differences when developing products and marketing for the cultures they serve?

Must the specific advertising message and media strategy be changed from region to region or country to country?

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The standardization – Adaptation debate

Discussion ongoing since 1960s

Mostly academic

Three schools of thought Standardization Adaptation Combination

Type of studies Conceptual papers Surveys among managers Complex studies including performance measures Content analysis of advertising

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The standardization – Adaptation

• Three schools of thought

1. Standardization

2. Adaptation

3. Combination

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The Global vs. Local Debate

Three schools of thought on international advertising:

Standardization—differences are a matter of degree, so focus on customer similarities and brand development.

Localization—consider differences in culture, economy, media, legal environment, etc.

Combination—use a standardized strategy but adapt advertising execution to the local culture.

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Standarization versus Adaptation

Globalization (standardization) Developing standardized products marketed worldwide

with a standardized marketing mix Essence of mass marketing

Global localization (adaptation) Mixing standardization and customization in a way that

minimizes costs while maximizing satisfaction Essence of segmentation Think globally, act locally

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The Global-Local Dilemma

Standardize or modify

Arguments standardization Global communities with similar habits and values Global youth, business persons

There is not one global, Asian or European teenage culture

Jeans don’t make a Chinese youth into an American youth.

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The Standardization-adaptation

• Company, organizational culture Universalism of western companies causes preference for

standardization Degree of export dependence: standardize when little export

• Business environment Infrastructure, laws, media

• Consumer Income Culture

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Central Control vs. Local Adaptation

Some advertisers develop tightly controlled global campaigns while others develop local campaigns in every major market; most combine standardization and localization.

Global campaigns have two starting points: Success in one country A centrally conceived strategy

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Central Control vs. Local Adaptation

Global marketers strive for a consistent brand strategy that allows them to honor cultural differences when those differences are relevant to the brand’s marketing strategy

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Standardization versus Adaptation

Eighteen-year olds in Paris have more in common with 18-year-olds in New York than with their own parents. They buy the same products, go to the same movies, listen to the same music, sip the same colas. Global advertising merely works on that premise.

—William Roedy, Director, MTV Europe

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Effect on performance

• Increasingly studies find effect on performance• Adaptation leads to better results• Adapt brands to a position that is relevant to

minds of consumers• Understand factors that lead to superior

performance: Handling product adaptation, marketing planning Control marketing activities Insight in how to differentiate products Effective pricing, advertising and distribution

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Standarization

versus AdaptationArabic

read right to

left

Chinese

“delicious/

happiness”

The faces of Coca-Cola around the

world

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For discussion (1)

Because English is the world language of business is it necessary for UK managers to learn a foreign language?

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For discussion (2)

Identify some constraints in marketing to a traditional Muslim society. Use examples from your own experience

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For discussion (3)

The focus of this article has been the influence of culture on marketing. What is the influence of marketing on culture?

How do the roles of women in different cultures affect women’s behaviour as consumers?

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For discussion (4)

“Proponents of the Levitt theory spoke of developing powerful advertising that crosses international boundaries, cutting across all lines of culture, nationality, race, mores, values and customs” (de Mooij, 2009: 11)

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How would you expect to come into contact with global marketing

activities?

How is global marketing as a field related to your future career?