Integrated Marketing Communications and International Advertising

1. Chapter 16 Integrated Marketing Communications and International Advertising

2. Learning Objectives • Local market characteristics that affect the advertising and promotion of products • The strengths and weaknesses of sales promotion and public relations in global marketing • When global advertising is most effective; when modified advertising is necessary • The effect of limited media, excessive media, paper and equipment shortages, and government regulations on advertising and promotion budgets • The communication process and advertising misfires

3. Global PerspectiveBarbie Versus Mulan • Integrated marketing communications (IMC) • Advertising • Sales promotions • Trade shows • Personal selling • Direct selling • Public relations • Objective: successful sale of a product or service • Availability of appropriate communication channels can determine entry decisions

4. Sales Promotions in International Markets • Sales promotions • Marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation • Short-term efforts directed to the consumer or retailer to achieve specific objectives • In markets with media limitations the percentage of the promotional budget allocated to sales promotions may have to be increased • Product sampling, cent-offs, in-store demonstrations, coupons, gifts, product tie-ins, contests, sponsorship of special events. Designed to supplement advertising and personal selling in the promotional mix.

5. International Public Relations • Public relations (PR)is creating good relationships with the popular press and other media • To help companies communicate messages to customers, the general public, and governmental regulators • Bridgestone/Firestone Tires (death of over 100 people) • Honda safety recall (Honda Accord)– (1.5 million in the US and 760,000 in China) – transmission shaft - may be broken during certain driving styles – causing engine problem. • Global workplace standards and product safety recall • Building an international profile – companies need PR consultation to build an international profile • Corporate sponsorships –as an aspect of PR, sports events and charity events (Pizza Hut and KFC)

6. Top 20 Global Advertisers ($ millions) Exhibit 16.1

7. Top 100 Advertisers’ Global Spending ($ millions) Exhibit 16.2

8. Top Ten Advertisers (Russia and China – $ millions) Exhibit 16.3 (B) China (A) Russia

9. International Advertising • Perform marketing research • Specify the goals of the communication • Develop the most effective message(s) for the market segments selected • Select effective media • Compose and secure a budget • Execute the campaign (executional styles) • Evaluate the campaign relative to the goals specified

10. Advertising Strategy and Goals • Marketing problems • Require careful marketing research • Thoughtful and creative advertising campaigns • In country, regional, and global markets • Increased need for more sophisticated advertising strategies • Balance between standardization of advertising themes and customization • Consumer cultures (global youth)

11. Product Attributes and Benefit Segmentation • Different cultures usually agree on the benefit of the primary function of a product or service • Other features and psychological attributes of the item can have significant differences • Cars • Breakfast cereal • Blue Diamond (Assumes that no two markets will react the same) • Each has its own set of differences • Each will require a different marketing approach and strategy

12. Regional Segmentation • Pan-European communications media highlights need for more standardized promotional efforts • Costs savings with a common theme in uniform promotional packaging and design • Legal restrictions slowly being eliminated

13. Global Advertising and the Communications Process • If not properly considered, different cultural contexts can increase the probability of misunderstandings • Effective communication • Demands the existence of a “psychological overlap” between the sender and the receiver to avoid transmission of message that results in unattended meaning. • It can never be assumed that “if it sells well in one country, it will sell in another” (Disney)

14. The International Communications Process Exhibit 16.4

15. Legal Constraints • Comparative advertising • Advertising of specific products • Control of advertising on television • Accessibility to broadcast media • Limitations on length and number of commercials • Internet services • Special taxes that apply to advertising

16. Linguistic Limitations • Language is one of the major barriers to effective communication through advertising • Translation challenges • Low literacy in many countries • Multiple languages within a country • In-country testing with the target consumer group avoids problems caused by linguistic differences

17. Cultural Diversity • Knowledge of cultural diversity must encompass the total advertising project • Existing perceptions based on tradition and heritages are often hard to overcome • Subcultures (different patterns of breakfast eating) • Changing traditions

18. Media Limitations and Production and Cost Limitations • Media limitations may diminish the role of advertising in the promotional program • Examples of production limitations: • Poor-quality printing • Lack of high-grade paper • In Egypt, static-filled television and poor-quality billboards have led companies such as Coca-Cola and Nestlé to place their advertisements on the sails of boats that sail along the Nile. • Low-cost reproduction in small markets poses a problem in many countries. • For example, hand-painted billboards must be used instead of printed sheets because the limited number of billboards does not warrant the production of printed sheets

19. Media Planning and Analysis – Tactical Considerations • Availability (too few vs. too many) • Cost (cost per contact varies widely) • Coverage (difficulty of reaching certain sector) • Lack of market data

20. Media Planning and Analysis – Tactical Considerations • Newspapers • Magazines • Radio and television • Satellite and cable TV

21. Media Planning and Analysis – Tactical Considerations • Direct mail • The Internet • The New Social Media (WOM, Blogs, Video sharing) • Other media

22. Media Penetration in Selected Countries(per 1,000 persons) Exhibit 16.5

23. Top Ten Websites in Three Countries(visitors per month) Exhibit 16.6

24. Social Networking Goes Mobile(Percent of Respondents) Exhibit 16.7

25. Campaign Execution and Advertising Agencies • Managed by advertising agencies • Local domestic agency • Company-owned agency • Multinational agency with local branches • Compensation for advertising agencies: • Commonly 15 percent throughout the world • Some companies moving to reward-by-results (sales rise, the agency will be rewarded accordingly)

26. World’s Top Ten Advertising Agency Organizations Exhibit 16.8

27. International Control of Advertising – Broader Issues • Consumer criticism (skepticism) • Deceptive advertising • Decency and blatant use of sex • Self-regulation and restrictive laws • Government regulations

28. Summary • An integrated marketing communications (IMC) program includes coordination among advertising, sales management, public relations, sales promotions, and direct marketing • Currently companies are basing their advertising strategies on national, subcultural, demographic, or other market segments • The major problem facing international advertisers is designing the best messages for each market served

29. Summary • The availability and quality of advertising media vary substantially around the world • Advances in communication technologies are causing dramatic changes in the structure of the international advertising and communications industries