Global Promotion, E-Commerce, and Personal Selling Chapter 17 © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

Global Promotion, E-Commerce, and Personal

Selling

Chap

ter

17

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Outline

Global Sales PromotionOther Promotional ToolsDirect MarketingE-commerceGlobal Personal SellingTakeaways.

1. IN-STORE (P-O-P) AND TRADE PROMOTIONS

- - WATCH REGULATORY PROBLEMS (IKEA IN GERMANY)

2. EVENTS AND SPONSORSHIPS

- - GLOBAL COMMUNICATIONS WITH GLOBAL BRAND (FUJI’S OLYMPIC COUP, WINDOWS 95)

3. CROSS-MARKETING

-- MERCHANDISE THAT EXTENDS AND BUILDS THE BRAND

Global Sales Promotion Tools

4. PUBLICITY

- - (BILL GATES AND MICROSOFT, PHIL KNIGHT AND NIKE)

5. PUBLIC RELATIONS

- - (NESTLE’S BABY FORMULA, NIKE’S SWEATSHOPS )

6. INTERNATIONAL TRADE FAIRS

-- (MICROLOG EXAMPLE IN CH.4)

Global Sales Promotion Tools

IN-STORE: promotional activities inside the store

TRADE: promotional activities targeted at channel intermediaries

• In-store promotions are more localized than advertising

• In-store promotions need to be supported by trade promotions

• Different countries/cultures have different attitudes towards coupons

• Different countries have different distribution infrastructures that limit transferability of certain in-store/trade promotions

• Sales promotion needs to be localized because of country-unique restrictions/regulations

In-Store and Trade Promotion

Country

Category

No restrictions or

minor ones

Authorized with major restrictions

General ban with important

exceptions

Almost total

prohibition

Australia Premiums Gifts Competitions

x x

x

Austria Premiums Gifts Competitions

x x

x

Canada Premiums Gifts Competitions

x x

x

Denmark Premiums Gifts Competitions

x

x x

Country Regulations of Promotions

Country

Category

No restrictions or

minor ones

Authorized with major restrictions

General ban with important

exceptions

Almost total

prohibition

France Premiums Gifts

Competitions

x x x

Germany Premiums Gifts

Competitions

x x

x

Hong Kong Premiums Gifts

Competitions

x x x

Japan Premiums Gifts

Competitions

x x x

Country Regulations of Promotions

Country

Category

No restrictions or

minor ones

Authorized with major restrictions

General ban with important

exceptions

Almost total

prohibition

Korea Premiums Gifts

Competitions

x x x

United Kingdom

Premiums Gifts

Competitions

x x

x

United States Premiums Gifts

Competitions

x x x

Venezuela Premiums Gifts

Competitions

x x x

Country Regulations of Promotions

SPONSORSHIPS increase with the advent of global media and global events (e.g. World Cup, Olympics).

Products associate themselves with globally recognized sports figures (e.g. Tiger Woods & Nike)

CROSS-MARKETING of related products leverage a strong brand name into product line extensions (e.g. Burberry’s baby

products)

Sponsorships and Cross-Marketing

• Event marketing

• Cross-marketing

• Product placement

• Cause marketing

• E-commerce

• Pop-up ads

• Banner ads

• Experiential marketing

The New Promotional In-words

Event Marketing: The Introduction of Swatch

Date Country Event

March 1984 Germany 13-ton giant Swatch on Commerzbank building,Frankfurt

April 1984 France “Urban Sax” saxophonist group at the “Eldorado”theater in Paris to celebrate launch, first SwatchMagazine

August 1984 USA Ivan Lendl U.S. Tennis Open

September 1984 USA World Breakdancing Championship:“The Roxy” New York

September 1984 France First street art painting show with the French artists“Les Fréres Ripoulin,” “Espace Cardin” theater, Paris

November 1984 USA The Fat Boys music sponsorship, “Private Eyes,”New York, to introduce “Granita di Frutta” to thetrade

Date Country Event

Summer 1985 Sweden Oestersjö Rallyt (Segel-Rallye)

September 1985 France Cinema festival, Pompidou Center, Paris with Kurosawa's film, Ran; Mini City Magazine

September 1985 France “Le Défilé”: Jean-Paul Gautier & Régine Chopinot

September 1985 England Andrew Logan's Alternative Miss World, London

October 1985 Belgium “Mode et Anti-Mode” fashion show, Brussels

Fall 1985 USA Thompson Twins concert tour sponsorship

November 1985 Spain Swatch launch party, the “Cirque,” Barcelona

Event Marketing: The Introduction of Swatch

PUBLICITY is the publishing of news about the company and its products. Very prominent in hi-tech industries.

GOOD NEWS – wherein positive press coverage enhances consumer interest in the company and its products

BAD NEWS – even negative publicity helps keep the brand name in the public eye (e.g. Benetton), although some may of course damage

brand equity

PRODUCT PLACEMENT – using branded products in film/TV (e.g. BMW Z3 in James Bond’s Goldeneye)

Global Publicity

GLOBAL P.R. – focuses on creating goodwill toward the corporation as a whole. Ha become increasingly important because of anti-

globalization sentiments.

Global PR targets various groups of stakeholders such as:

Stockholders• Employees• Customers• Distributors• Suppliers

• Financial community• Media

• Activist groups• General public• Government

Global Public Relations

Participation in International Trade fairs is a way of identifying potential distributors in a new local market.

At trade fairs, local marketers can introduce a company’s latest products, discover industry trends, & spot new competitive

developments.

Participation involves preparation of product and sales materials, opening a booth, sending a team – plus paying a

sometimes steep fee. Fairs cost money.

International Trade Fairs

• MAIL ORDER – catalogs, sales offers through “snail” mail

• TELEMARKETING – phone calls from companies to households

• DIRECT RESPONSE TV (DRTV) – TV commercials with phone numbers to let viewers call for purchases.

DIRECT MARKETING: an interactive marketing system that uses one or more advertising media to effect a

measurable response and/or transaction at any location.

Direct Marketing

• 1. CATALOG OF PRODUCTS (“STORE”)

• 2. NAMES, ADDRESSES, TELEPHONES, FAXES, EMAILS

• 3. TOLL-FREE NUMBERS (1-800, 1-888)

• 4. CREDIT CARDS

• 5. STANDARDIZED, RELIABLE BRANDS (GLOBAL BRANDS)

Direct Marketing depends on…

1. “DO IT YOURSELF” – the firm develops the market and the necessary contacts on its own, very labor-intensive & costly

2. MARKETING INTERMEDIARY – the firm turns the product over to a direct marketing company specializing in international marketing through a contractual relationship; the intermediary then sets-up the infrastructure & local contacts

3. STRATEGIC ALLIANCE – the firm develops an alliance with a direct marketing company in the local market; this leverages the local company’s existing infrastructure and contacts

Direct Marketing is often outsourced…

E-COMMERCE: buying & selling of goods/services online, a.k.a. online marketing; the online marketplace is naturally global

• Easy and convenient for the customer• Creates a natural on-to-one relationship between buyer and seller• Fosters customer loyalty and increases customer retention rates• Helps the company focus on providing customer value• Lowers costs for buyers and sellers from the pre-purchase stage to the post-purchase stage• Facilitates price comparisons

PROS

E-Commerce Pros

• Can reach only a certain segment, those with desktops and Internet access

• Cannot provide the full tactile experience with the product or the personal interaction in services

• E-commerce needs good electronic communication links

• Customers are put off by computers and technology

• Perceived risks involved can be great

• Without credit cards, e-commerce would be unthinkable

CONS

E-Commerce Cons

• Personal computers (e.g. Dell)

• Books (e.g. Amazon)

• Computer software

• Cameras

• Leisure apparel (e.g. Eddie Bauer)

• Sports equipment

• Compact discs

• Airline tickets

• Tourist packages

• Banking services

• Brokerage services

• Rental cars

• Hotel reservations

SERVICES PRODUCTS

Successful E-Commerce Cases

Successful E-Commerce: B2B

E-commerce has been particularly successful in business-to-business transactions. Reasons:

Many products use standardized components where price is the only concern.

The Internet makes it easy to compare prices – and entry barriers are low for new entrants.

Technology is diffused rapidly so new entrants can access state-of-the-art technology.

Cost pressures inside the corporations force the use of low-cost suppliers.

Culture affects the “people skills” of the global marketer.

Good salesmanship varies across countries.

Personal selling is usually the least global of all marketing activities.

Global Personal Selling

How transferable are selling strategies & techniques? The following are factors that affect transferability:

• DIFFERING HUMAN RELATIONS

(e.g. the role of a salesperson is looked down on by hierarchical cultures)

• DEGREE OF MARKET DEVELOPMENT

(e.g. level of customer sophistication)

• DIFFERING REGULATORY ENVIRONMENTS

(e.g. salesperson costs escalate in countries where fringe benefits are high)

• GEOGRAPHIC & PHYSICAL DIMENSIONS

(e.g. climate, transportation conditions, population density)

Global Personal Selling

Presentations made during a sales visit usually consist of five distinct stages:

1. ATTENTION – get the customer to listen to you

2. INTEREST – get the customer interested in what you have to say

3. DESIRE – get the customer to desire what you are selling

4. CONVICTION – get the buyer convinced that the offer is a good deal

5. ACTION – get the customer’s signature on the contract

In foreign markets, these stages are still valid but the salesperson needs to adapt these stages to the local culture.

Global Personal Selling

PREPARATION GREAT PRODUCT APPEARANCE ENTHUSIASM SELF-CONFIDENCE GREAT CLOSER OF

TRANSACTION

PREPARATION GREAT PRODUCT THE “PERSON” CULTURAL AWARENESS RELATIONSHIP ORIENTED

LOW CONTEXT CULTURES HIGH CONTEXT CULTURES

Culture and Salesmanship

IMC – combining various communication disciplines (e.g. media advertising, direct marketing, sales promotion, internet advertising, &

public relations) to ensure clarity, consistency, & maximum communications impact.

IMC examples:

• Intel in China – distribution of bicycle reflectors

• Citibank in Thailand – credit card agents at malls

• Yonex in Indonesia – badminton team sponsorship

IMC- Integrated Marketing Communications

In addition to media advertising there are now a number of alternative promotional tools for creating global presence &

visibility.

Global marketing communications need to be integrated so a unified image & message is communicated.

Takeaways

The global promoter should be aware that local regulations can make the implementation of a global sales promotional

campaign difficult in any one country. Use local representatives to find out exactly what the limits are.

Takeaways

With advances in the Internet, telecommunications, express mail, address list development, & credit card availability, direct mail is transformed from a simple

promotional tool to a low-risk direct marketing option.

It is a new mode of entering a market, a new way for small businesses to promote and sell its products abroad.

Takeaways

E-commerce is a new medium which combines one-to-one communication & sales transactions. It is growing fast

especially in services & in B2B.

Takeaways

Personal selling may be the last frontier for globalization, with local people necessary for customer contact.

With the globalization of industries & markets, local salespeople will also be part of the front-line service

providers for global customers.

Takeaways