Global Marketing Management Global Communications Decisions

1. Global Marketing ManagementGlobal Communications Decisions MKTG 3231 Fall 2015 Mrs. Tamara L. Cohen Class # 24

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

4. 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.

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

6. 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

7. TOP 10GLOBAL MARKETERS

8. # 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

10. 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.

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

12. 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

13. 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

14. 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.

15. 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”

16. 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)

18. World’s Highest Paid Athletes in 2015 Floyd Mayweather Manny Pacquiao Cristiano Ronaldo Lionel Messi Roger Federer LeBron James Kevin Durant Phil Mickelson Tiger Woods Kobe Bryant $300 m BOXING $160 m BOXING $80 m SOCCER $74 m SOCCER $67 m TENNIS $65 m BASKETBALL $54 m BASKETBALL $51 m GOLF $51 m GOLF $50 m BASKETBALL

19. 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

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

21. 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

22. 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 • Social media - growing fast; there is a cost

23. 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)

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

25. El Torobillboards originally advertising Osborne Brandy in Spain

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

28. 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

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

30. 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

31. Keys to Success in Global Communications 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.

32. Next class: Case # 3: AIDS, Condoms & Carnival Preparation: Read case study via text book + independent reading Prepare for class discussion & (optional) hand in