Welcome to International Advertising

1. Welcome to International Advertising

2. Housekeeping • Web site is ready • www.jou.ufl.edu/faculty/jvillegas/iad/ • Monday • Read article on Web site

3. Why companies go abroad? • ALREADY, the ______ buy more cellphones than consumers anywhere else. They buy more film than the Japanese. They now buy as many vehicles as the Germans (New York Times 01/05).

4. Here’s how it starts. Step 1: Terms • Explain various forms of marketing strategies and company structures. • Understand the concept of globalization. • Answer the question – why companies go abroad? • Introduce models of thinking about the world.

5. Definitions in Int’l Business & Advertising • Globalization – What is it? • In 1983 an article appeared in the Harvard Business Review that generated controversy.

6. Theodore Levitt (1983) • Defined globalization. • “The crystallization of the entire world as a single place”. • Ignored regional and national differences. • Companies must operate as if the world was only one market. • Companies should sell the same product the same way everywhere.

7. Rationale for the “One Market” World • Consumers around the world are motivated by the same desires: • Modernity • Quality • Value • New technology and standardized methods of production make global marketing programs feasible. • Levitt argues for STANDARDIZATION

8. Potential Pitfalls • Challenges of different languages: • Translations • Colloquialisms • Challenges of concept development: • Different definitions and meanings

9. Why Companies Go Abroad? • Saturated domestic markets. • Higher profit margins in foreign markets. • Increased foreign competition at home. • Trade deficits. • Emergence of new markets.

10. Types of Marketing Strategies • International Marketing • The extension of the home country strategy and plan to the world. • Multinational Marketing • Development of a strategy for each country.

11. Types of Marketing continued • Global Marketing • Integrates both the international and multinational approach. • Objective is to create the greatest value for customers and the greatest competitive advantage for the company.

12. Types of Marketing continued • Transnational Marketing • Centralizes some resources at home and others abroad. • Also distributes some resources to local operations in different countries. • This forms extends, adapts and creates a marketing mix.

13. Domestic or national Companies • Focuses on serving consumers in the home country. • Term often associated with home or domestic market – Ethnocentric. • Ethnocentric means home-country oriented. Tendency to look inward – highly nationalistic.

14. International Companies • A company that does some business in another country. • It must adapt marketing mix to accommodate new markets.

15. Multinational Companies • When a company decides to respond to market differences. • Creates a multinational strategy. • A unique strategy for each country. • Recognizes differences in countries. • POLYCENTRIC – host-country oriented. • An outward versus an inward perspective

16. Global Companies • Focus on building cost advantages through centralized global-scale operations. • Strategic assets, resources, responsibilities and decisions are centralized. • Mentality is to treat operations in other countries or regions as a delivery pipeline.

17. Transnational Companies • Uses global resources to serve global customers. • Efficiency = global competitiveness. • Some functions centralized, others local. • Gives customer the illusion of being local.

18. Newer Forms of Transnationals • Virtual or modular corporation • Temporary network of independent companies • Modular corporations – trend of the 90’s • Modulars focus on core competency and outsource the rest.

19. FRAMEWORK FOR THINKING ABOUT THE WORLD FOUR MODELS OF WORLD ECONOMY AND WORLD ORDER

20. 1st, 2nd and 3rd World Order • 1st – US • 2nd – Russian • 3rd – everyone else • Product of the Cold War. • Two superpowers tried to dominate the globe. • What’s wrong with this picture?

21. The North-South Divide • Divides world into two parts. • Developed world – mainly the North. • Developing world – mainly the South. • What wrong with this picture?

22. 21st Century Model • One macro-structure • One market – one world • Underscores the Levitt’s concept • Globalization of media • Spread of capitalism • Western imperialism • Global insecurity

23. Core Perspective of the World • Immanuel Wallerstein (1974) describes the history of the capitalist world economy from Middle Ages to present. • He differentiates the world economy into 3 zones: • 1) Core (states) – high income areas • 2) Semi-periphery - middle/low income • 3) Periphery – low income areas

24. Core Perspective continued • A FLUID MODEL THAT CAPTURES HISTORY. • Core states tend to be replaced over time with other countries. • Technological advances play the most important role in changing status.

25. International Resources at UF

26. International Resources • Centers: • International Center • http://www.ufic.ufl.edu/ • Center for Latin American Studies • http://www.latam.ufl.edu/

27. International Resources • NOTE: Access to UF’s online resources require direct access or the use of a proxy server • http://www.uflib.ufl.edu/access.html

28. e-International Resources • A great first step is the Business Reference site • http://web.uflib.ufl.edu/cm/business/subjects/internat.htm • Databases (Numerical info) • Country profiles • CIA Factbook http://www.odci.gov/cia/publications/factbook/ • Economist Intelligence Unit (BR) • Lexis-Nexis (BR)

29. e-International Resources • Market data • Euromonitor (BR) • TableBase • Strategis - Market Research Reports • Company data • Dow Jones • Thomson Analytics

30. e-International Resources • Articles (In depth info about countries, products and companies) • The key is in the keywords • Lexis-Nexis • Factiva • ABI-Inform

31. International Resources • Books, publications • International business/advertising books • IB journals • Magazines, TV, etc.