Integrated Marketing Communications and International Advertising

Integrated Marketing Communications and International Advertising

Chapter 16

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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

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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

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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.

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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)

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Top 20 Global Advertisers ($ millions)

Exhibit 16.1

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Top 100 Advertisers’ Global Spending ($ millions)

Exhibit 16.2

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Top Ten Advertisers (Russia and China – $ millions)

Exhibit 16.3(A) Russia (B) China

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International Advertising1. Perform marketing research2. Specify the goals of the

communication3. Develop the most effective

message(s) for the market segments selected

4. Select effective media5. Compose and secure a budget6. Execute the campaign (executional

styles)7. Evaluate the campaign relative to

the goals specified

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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)

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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

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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

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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)

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The International Communications Process

Exhibit 16.4

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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

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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

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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

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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

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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

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Media Planning and Analysis – Tactical Considerations

Newspapers Magazines Radio and television Satellite and cable TV

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Media Planning and Analysis – Tactical Considerations

Direct mail The Internet The New Social Media (WOM, Blogs,

Video sharing) Other media

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Media Penetration in Selected Countries (per 1,000 persons)

Exhibit 16.5

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Top Ten Websites in Three Countries (visitors per month)

Exhibit 16.6

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Social Networking Goes Mobile(Percent of Respondents)

Exhibit 16.7

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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)

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World’s Top Ten Advertising Agency Organizations

Exhibit 16.8

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International Control of Advertising – Broader Issues

Consumer criticism (skepticism) Deceptive advertising Decency and blatant use of sex Self-regulation and restrictive laws Government regulations

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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

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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