Chapter 16

1. Chapter 16 Integrated Marketing Communications and International Advertising

2. Chapter Learning Objectives • Local market characteristics that affect the advertising and promotion of products • The impact of emerging global segments on communications decisions • 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 • How the communication process and advertising can misfire

3. Global Perspective: Battle for Market Supremacy—Coke versus Pepsi in India • Integrated marketing communications (IMC) • Advertising • Sales promotions • Trade shows • Personal selling • Direct selling • Public relations • IMC example: Coca-Cola’s promotional campaign to gain market supremacy in the Indian soft drink market-Valentine’s Day Campaign • Objective: to combine the disciplines to provide clarity, consistency and maximum impact through a seamless integration of discrete messages. • Problem: the availability of appropriate communication channels to customers can hinder the implementation of an IMC.

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: • Consumer-product trial or purchase • Consumer introduction to the store • Obtain retail point-of-purchase displays • Encourage stores to stock the product • Support and augment advertising and personal selling • For example, Disneyland in Hong Kong runs promotions throughout the year. One key promotion they have been running is ‘Stay and Play for Two Days’. • Product sampling effective with new products or those with small market share. • ‘Bottom of the pyramid’ provides a viable market but may require non-conventional market approaches such as sales promotions.

5. International Public Relations • Arnott’s Biscuits extortion threat and product recall • Toyota’s mechanical defect PR crisis • Domino’s Pizza (You Tube)-the power of new media in PR • Areas of focus: • Global workplace standards • Building an international profile • Corporate sponsorships The role of public relations (PR) is creating good relationships with the popular press and other media to help companies communicate messages to their customers, the general public, and governmental regulators.

6. International Public Relations (cont.) Here are a few takeaways from the Toyota crisis: • Accept that it can happen to you. If companies such as Toyota and Johnson & Johnson can get hit with major crises, so can your organisation. Have a crisis plan • Plan ahead. When a crisis hits, executives no longer have the luxury of deliberating and responding with a news release for tomorrow’s newspaper. In today’s social media, 24/7 TV news and websites, response times are measured in minutes. • Know where to find the experts. If a major crisis hits, you’ll need help. Take time now to identify the most experienced crisis management consultants in your industry and know how to reach them at a moment’s notice. • Get active on social media now. Twitter, Facebook, YouTube and blogs are indispensable channels for communication during a crisis. Domino’s learned the hard way. It had no presence on social media until the crisis hit. • If a crisis hits, assume responsibility and act. Taking responsibility isn’t the same as accepting blame. Customers want to see that you understand the gravity of the situation and will go out of your way to satisfy their needs.

7. International Advertising • Growth in global advertising expenditures has slowed along with the economy. • Decisions involving advertising are those most often affected by cultural differences among country markets. • Basic framework of international advertising: • Global ad expenditure to reach the 2008 peak in 2011 and exceed it in 2013. • Developing markets will continue to grow much faster than developed markets: developing markets will account for 35.9 per cent of ad expenditure in 2013, up from 31.5 per cent in 2010. • Ad expenditure in newspapers and magazines to fall by 2 per cent between 2010 and 2013. Technology to help television, cinema and outdoor grow ahead of the market, while internet advertising grows three times faster than the market as a whole. • Display advertising now the fastest-growing internet category, driven by online video and social media.

8. International Advertising (cont.) • 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. • Evaluate the campaign relative to the goals specified. • Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets. Consumers respond in terms of their culture, its style, feelings, value systems, attitudes, beliefs and perceptions.

9. Advertising Strategy and Goals • Marketing problems require careful marketing research and thoughtful and creative advertising campaigns in country, regional and global markets. • Increased need for more sophisticated advertising strategies. • For example Gillette with more than 800 products in 200 countries. • Balance between standardisation of advertising themes and customisation. • ‘Gillette, the best a man can get’, common global image • Consumer cultures • Focus on newer global market segments defined by ‘consumer cultures’ related to shared sets of consumption-related symbols: • Convenience • Youth • Internationalism • Humanitarianism.

10. Universal versus Regional Segmentation • Most well-established global companies use standardised marketing campaigns with some local adaptation. • Regional segmentation is based on the similarities in customer needs and preferences that exist at the regional level rather than the global level. • BEM’s • Country of origin effects impact strategy. • For example Coca-Cola developed a regional brand of juice called Qoo (pronounced ‘coo’) that capitalises on the attraction for Japanese pop culture in many parts of Asia (such as Singapore). The brand hinges on an animated character named Qoo.

11. Product Attributes and Benefit Segmentation • Different cultures usually agree on the benefit of the primary function of a product. • Other features and psychological attributes of the item can have significant differences • Cameras • Almonds. • Blue Diamond – assumes that no two markets will react the same, that each has its own set of differences, and that each will require a different marketing approach and strategy.

12. Global Advertising and the Communications Process • If not properly considered, the different cultural contexts can increase the probability of misunderstandings. • Effective communication demands the existence of a ‘psychological overlap’ between the sender and the receiver. • Most promotional mistakes are attributable to one of key areas of communication process not properly reflecting cultural influences or to a general lack of knowledge about the target market. • It can never be assumed that ‘if it sells well in one country, it will sell in another’. • Nestlé Confectionary’s Kit Kat brand became a ‘lucky charm’ for Japanese students sitting university entrance exams. Kit Kat is pronounced ‘Kitto Katsu’ in Japanese, which translates as ‘surely succeed’. …sparking the rumour that Kit Kat was a charm for success.

13. The International Communications Process

14. Legal Constraints • Laws that control comparative advertising vary from country to country in Europe • 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.

15. Linguistic Limitations • Language is one of the major barriers to effective communication through advertising. • Translation challenges • Low literacy in many countries • Tourism Australia’s ad with the slogan ‘So where the bloody hell are you?’ • Multiple languages within a country

16. 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 • Changing traditions

17. Media Limitations and Production and Cost Limitations • Media limitations may diminish the role of advertising in the promotional program and put focus on other elements of promotional mix. • Examples of production limitations: • Poor-quality printing • Lack of high-grade paper. • Low-cost reproduction in small markets poses a problem in many countries.

18. Media Planning and Analysis – Tactical Considerations • Availability • Cost • Coverage • Lack of market data • Newspapers • Magazines.

19. Media Planning and Analysis – Tactical Considerations (cont.) • Radio and television • Satellite and cable TV • Direct mail • The internet • Other media.

20. Media Penetration in Selected Countries (per 1000 persons)

21. Mobile and social media communications • Mobile marketing • Mobility • High response rates • Option for other media interactions • Targeted and personal • MMS • In game mobile marketing • Social media • Other media.

22. International Control of Advertising: Broader Issues • Consumer criticism • Deceptive advertising • Decency and blatant use of sex • Self-regulation • Government regulations.

23. 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. • 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.