Global Marketing Management Global Communications Decisions & Global Promotions Decisions

1. Global Marketing ManagementGlobal Communications Decisions& Global Promotions Decisions MKTG 3215-090 Spring 2013 Mrs. Tamara L. Cohen Class # 11

2. Global Communications Decisions

3. Preparation for this class: Read Course Reader #10 Homework #9: Unconventional communications Global media planners must think ‘outside the box’. Find out about an unusual media usage in the global marketplace. Write one paragraph. Global Communications Decisions

4. KEY CONCEPTS • Sales Promotions • International Public Relations • International Advertising Strategy • Regional segmentation • Media planning

5. 1. Sales Promotions in International Markets Sales promotions = marketing activities that stimulate consumer purchases & improve retailer / middleman effectiveness & cooperation e.g.cents off, in-store demo’s, samples, coupons, gifts, product tie-ins, contests, sponsorships, p.o.p. • short-term efforts directed to consumer or retailer, to achieve specific objectives e.g.consumer product trial / purchase, encouraging stores to stock product • In markets with media limitations, % of promotional budget allocated to sales promotions may have to • Product sampling - effective when product is new / small market share P.O.P.

6. Product samplingLe RelaisBébésNestlé’s effective campaign to penetrate French baby market

7. 2.International Public Relations Public relations (PR)= creating good relation-ships with popular press & other media - helps companies communicate messages to customers, general public, & governmental regulators • BP Gulf oil spill, 2010 • global workplace standards (Nike) • building an international profile • corporate sponsorships

8. TOP 10GLOBAL MARKETERS

9. # 11 - 30GLOBAL MARKETERS • Volkswagen • Honda Motor Co. • Mars Inc. • McDonald’s Corp. • Sony Corp. • GlaxoSmithKline • Deutsche Telekom • Kraft Foods • Nissan Motors Co. • Walt Disney • Danone Groupe • General Electric • Time Warner • PSA Peugeot Citroen • Pfizer • Yum Brands • PepsiCo • Maxingvest • Panasonic Corp. • Ferrero

11. How much should you spend on Advertising?or rather,How do you spend most effectively? • What is typical advertising-to-sales ratio in your field? • Is your business built to leverage volume or to leverage margin? Advertising % of sales: Wal-Mart 0.4% Target 2% Best Buy (specialty retailer) 3+% Macy’s (upscale dep’t store) 5% Marketing % of sales: • Car industry 2.5 - 3.5% • Liquor 5.5 - 7.5 % • Packaged goods 4 -10% • Service businesses spend more because they are more margin-oriented, especially in growth phase.

12. 3. International Advertising Strategy Formulation Of all elements of marketing mix, decisions involving advertising are most often affected by cultural differences. • Perform marketing research • Specify goals of communication • Develop most effective message(s) for market segments selected (most daunting) • Select effective media • Compose and secure a budget • Execute campaign • Evaluate campaign relative to goals specified

13. Advertising Strategy & Goals • Marketing problems • require careful marketing research • thoughtful & creative advertising campaigns • in country, regional, and global markets • Increased need for more sophisticated advertising strategies • Standardization versus Customization (ad themes) • Consumer cultures e.g. convenience, America, youth, internationalism, humanitarianism, environmentalism

14. Product Attributes & Benefit of Segmentation • Different cultures usually agree on benefit of primary function of product / service • Other features & psychological attributes of item can have significant differences • cameras • yogurt- Dannon / Danone • almonds- Blue Diamond • No 2 markets will react the same • each has its own set of differences • each will require different marketing approach & strategy

15. Economies of Scale 4. Regional Segmentation • Pan-European communications media highlights need for more standardized promotional efforts • Costs savings with common theme in uniform promotional packaging & design • Legal restrictions slowly being eliminated • Latin America also becoming attractive regional segment e.g.

16. Global Advertising & the Communications Process(developing an effective message) • Different cultural contexts can increase probability of misunderstandings • Effective communication • demands existence of “psychological overlap” between sender & receiver • NEVER assume that “if it sells well in one country, it will sell in another”

17. Creative Challenges • Language “lost in translation” • Color e.g. green = cool in Europe, but green = danger/disease in tropics • Timing e.g. seasons & clothing fashions • Values e.g. bicycle = recreation in USA, but bicycle = transport in Asia; French’s mustard boycotted in US in 2003 when France didn’t go along with US attack on Iraq • Beliefs e.g. rain = refreshing in Europe, but rain = fertility in Africa • Humor • Tastes • Appropriate endorser e.g. who is most recognizable athlete in world? • Literacy e.g. using print ads when small % of target market can read • Media availability e.g. using Internet when small % of target has access • Feedback step of communications (ad testing; noise)

19. World’s Highest Paid Athletes in 2012 Floyd Mayweather Manny Pacquiao Tiger Woods LeBron James Roger Federer Kobe Bryant Phil Mickelson David Beckham CristianoRonaldo Peyton Manning $85 m BOXING $62 m BOXING $59 m GOLF $53 m BASKETBALL $53 m TENNIS $52 m BASKETBALL $48 m GOLF $46 m SOCCER $43 m SOCCER $42 m FOOTBALL

20. Legal Constraints • Comparative advertising - not allowed in Germany, Belgium, Luxembourg; okay in UK, Spain, Portugal; restricted in India, Philippines • Advertising of specific products - restrictions on advertising pharmaceuticals, toys, tobacco, liquor • Control of advertising on TV • Limitations on length & number of commercials • Internet services - EU addressing regulation; should TV rules apply? • Special taxes that apply to advertising

21. Liquorice Allsorts language controversy 1980s: Government forbade mixing languages in advertising, so banned “LEKKERISH LIQUORICE”

22. CulturalDiversity Problems associated with communicating to people in diverse cultures present one of the great creative challenges in advertising. • Knowledge of cultural diversity must cover total advertising project • Existing perceptions based on tradition & heritages often hard to overcome • Subcultures • Changing traditions

23. 5. Media planning • Availability - huge variations among countries • Cost - agents & negotiation • Coverage - difficult to reach some sectors; lack of info re coverage • Lack of market data - accurate data uncertain • Newspapers - too many in some countries, too few in others • Magazines - few with large circulation; best for technical products • Radio & TV - major communications media in most countries • Satellite & cable TV - increasing importance

24. Media • Direct mail - especially important when other media not available; beware Chile • Internet - evolving; B2B; catalogs; many consumer goods companies have e-stores; direct internet marketing • New Social Media - Word-of-Mouth / BUZZ marketing & peer recommendations always key; Internet has advanced pace & reach of Word-of-Mouth; e.g. Papa John’s Pizza blog • Other media e.g. cinema; billboards (high illiteracy)

25. Giant 3-D murals for flip flop launch bus stop Red Bull car Supermarket trolley Chocolate billboard

26. El Torobillboards originally advertising Osborne Brandy in Spain

27. The original London Black Taxicab Now they come in all colors, though the iconic shape is still the same.

29. Guerilla Marketing • specifically for small business & entrepreneur • always use combination of marketing methods • based on human psychology not experience, etc • marketing investments: time, energy, imagination (not $) • measure PROFIT not sales • create std of excellence with acute focus rather than diversity • instead of trying to get new customers, aim for more referrals, more transactions with existing customers, larger transactions • forget competition; focus on coop. with other businesses • use current technology as tool to empower business • VIRAL marketing - through social networks • GRASS ROOTS & ASTROTURF (imitate grass roots) gorilla

30. “Need a new BBQ?” Mr. Clean Elevator ad

31. International Advertising Ad firms have become international, like every other business. Advertiser should employ local ad agency or multinational agency with local representation. • local modifications • cross-cultural communication can be difficult • decency standards differ - sex, modesty, Western excess • tobacco • Myanmar has stringent individual censorship boards

32. Keys to success in Global Communication Decisions • Integrated marketing communications program includes coordinated advertising, sales management, public relations, sales promotions, & direct marketing. • Unique legal, media, production limitations in every market • Wide variety of media choices, old & new • Communication technology (especially Internet) will continue to cause dramatic changes in international advertising & communications industries.

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34. Global Promotions Decisions

35. Promotionsin the Marketing Mix Promotion = business of COMMUNICATING with customers Product benefits must be communicated to customers to generate sales and profits. Promotional Mix blends • advertising • public relations • sales promotion • selling GLOBAL context

36. Sellingoverseas … … the expatriate experience

37. KEY CONCEPTS • Relationship marketing • Expatriate • Virtual Expatriate • Repatriation • Third-Country Nationals • Local Nationals • Separation allowance

38. Americans Abroad Number of Americans living abroad has steadily grown over past decade, as more people have become interested in living abroad, exploring another language and culture, or finding an overseas job. According to recent estimates by the U.S. State Department, there are 3 - 6 million Americans living overseas.

39. Global PerspectiveAre International Assignments Glamorous? • Job security • Adjustment to other cultures – family considerations • Readjustment when return home – reentry culture shock • Will an international assignment really help your career? • International sales force may be the ultimate way to: “Think global. Act local.”

40. Designing the Sales Force • Relationship marketing • Decisions about sales personnel: • numbers • characteristics • assignments • Different markets affect direct sales & customer approaches • Territory allocationdetails after personnel • Customer call plans decisions fixed

41. Recruiting marketing & sales personnel Largest personnel requirement abroad for most companies is sales force. • Expatriates • Virtual expatriates • Local nationals • Third-country nationals

42. Tokyo Luanda Osaka Moscow Geneva Zurich 6. Singapore N’djamena Hong Kong Nagoya Sydney São Paulo Rio de Janeiro Bern Melbourne Shanghai Beijing Oslo Perth Libreville 2012: The 30 Most Expensive Citiesto Live in the WorldasEXPATS Copenhagen Seoul Canberra Brisbane London Khartoum Adelaide St. Petersburg Caracas Shenzhen ASIA EUROPE AFRICA MIDDLE EAST AUSTRALIA AMERICAS

43. Best Countries to be an Expat • Thailand • Saudi Arabia • Singapore • Egypt • Switzerland Important factors to expats: • health care • education • quality of life • social life • income

44. SelectingSales & Marketing Personnel • Management must define expectations • Most important requirements • maturity • emotional stability • breadth of knowledge (language skills) • positive outlook • flexibility • cultural empathy • energetic & enjoy travel (stamina) • Selection mistakes can be costly • Manager’s culture affects personnel decisions

45. Training forInternational Marketing • nature of training program depends on: • home culture of sales person • culture of business system & foreign market • continual training important in foreign markets • companies should provide home-office personnel with cross-cultural training • Internet makes sales training more efficient

46. Personal Selling Tips BELGUIM be able to identify decision makers. Flanders (Dutch) group decisions common; Wallonia (French) high level exec’s have final say CHINA expect to continue negotiations after deal is signed. Signing contract is just beginning of business relationship. Both sides expected to continue working together afterwards. COLOMBIA business counterparts want personal relationship, strong friendship. Be sure to keep same sales representatives throughout negotiation or risk losing deal. GERMANY be prepared with data to support sales proposition. German businessmen unimpressed with flashy presentation, so keep materials serious & detailed, no exaggeration. INDIA maintain flexible schedule to accommodate casual punctuality. Rigid hierarchy dictates decisions made only by highest level boss.

47. morePersonal Selling Tips MEXICO when planning meetings, breakfast / lunch preferred. Take time to cultivate relationships with business contacts - relationships more important than professional experience. PERU relate to individuals not corporate entities. Establish personal rapport. Maintain same sales rep’s throughout negotiations. RUSSIA 1st meeting is formality. Russian counterparts use this time to judge credibility. Be warm & friendly. SCOTLAND people soft-spoken & private. Takes time to build relationships. SOUTH KOREA status important. Make sure business card indicates title. Don’t send representative to meet Korean exec of higher status – could be viewed as disrespectful. THAILAND emphasizes non-conflict. Don’t make assertive demands in sales pitch.

48. Motivatingsales personnel • National differences must always be considered when motivating marketing force • Individual incentives? • Communications important in maintaining high levels of motivation (NOT “out of sight, out of mind”) • Company needs to clarify opportunities for growth within firm • Fear of being forgotten

49. Designing Compensation Systems for Expatriates • Fringe benefits – can be 35-60% salary in Europe; tax structure important; e.g. expense accounts in high-tax countries • Compensations comparisons between home office & abroad – important what would have received at home office • Short-term assignment compensation = separation allowances • Using compensation program to recruit, develop, motivate, or retain personnel

50. Evaluating & Controlling Sales Representatives • US emphasis on individual performance • easily be measured by sales revenues generated • In many countries evaluation more complex • where teamwork favored over individual effort • US primary control tool used by sales managers is incentive system • In other countries corporate control & frequent interactions with peers & supervisors are means of motivation & control