19 McGraw-Hill/Irwin

International Advertising and Promotion

Copyright © 2012 McGraw-Hill Companies, Inc., All right reversed

Importance of International Markets Stagnation of domestic markets Company survival Growth and profit opportunities Trade Balance 19-2

Tourism Australia Uses Global Advertising 19-3

International Advertising & Promotion

Rank Advertiser

1 2 3 Proctor & Gamble Unilever L’Oreal 4 5 6 General Motors Toyota Motor Corp.

Coca-Cola Co.

7 8 9 10 Johnson & Johnson Ford Motor Co.

Reckitt Benckiser Nestlé

Outside U.S.

$6,364 4,965 3,242 1,442 2,181 2,231 1,181 1,436 1,842 1,696

Ad Spending in Millions of U.S. dollars Inside U.S.

$3,367 752 798 2,232 1,022 442 1,402 1,012 544 618 19-4

International Economic Environment

Economic Environment Cultural Environment International Marketing & Promotional Decisions Demographic Environment Political/Legal Environment

19-5

International Economic Environment

Economic Environment

• • • • • • • Stage of economic development Economic infrastructure Standard of living Per capita income Distribution of wealth Currency stability Exchange rates

International Marketing And Promotional Decisions

19-6

Liu Xiang Endorses Nike in China 19-7

International Demographic Environment

International Marketing And Promotional Decisions Demographic Environment

• • • • • • • • Size of population Number of households Household size Age distribution Occupation distribution Education levels Employment rate Income levels 19-8

International Cultural Environment

Cultural Environment

• • • • • • Language Lifestyles Values Norms and customs Ethics and moral standards Taboos

International Marketing And Promotional Decisions

19-9

TaylorMade Translation Issues Tagline Translation Issues 19-10

New Balance Markets in France 19-11

International Political/Legal Environment

International Marketing And Promotional Decisions Political/legal Environment

• • • • • Government policies Laws and regulations Political stability Nationalism Attitudes toward multinational companies 19-12

Advertising Areas Subject to Regulation Products that may be advertised Content or creative approach used Media advertisers are allowed to use The amount of advertising allowed Use of foreign languages in ads Materials from outside the country Local vs. international ad agencies Specific taxes levied on advertising 19-13

Global Marketer’s Dilemma Offer the same product, marketing, & advertising everywhere?

Adapt the product, marketing, & advertising to each society?

19-14

Global Marketing & Advertising Advantages Economies of scale in production, distribution Lower costs due to less planning and control Lower advertising production costs Ability to exploit good ideas worldwide Consistent international brand, company image Simplification of ad coordination and control 19-15

Gillette Launches Fusion Globally 19-16

Problems With Global Advertising Differences in culture, market & economic development Consumer needs & usage patterns Media availability or usage Legal restrictions 19-17

Consumer Usage Patterns & Perceptions Nescafé Instant Coffee United States Continental Europe Tea-drinking Countries Latin America Scandinavia Great market penetration, but minor share Major market share, but idea of instant coffee was new Conversion not only to coffee, but to instant coffee Preferred coffee couldn’t be duplicated with instant version Ingrained habit of keeping coffee on stove all day long 19-18

NESCAFE President Ad From Japan 19-19

Adapting to Different Countries 19-20

When is globalization appropriate?

Globalization works best for…

Brands that can be adapted for visual appeal Brands promoted with image campaigns playing to universal needs, values, emotions High-tech products, new to the world Products with a nationalistic flavor Products appealing to universally similar tastes, interests, needs, values 19-21

TAG Heuer’s Global Campaign 19-22

TAG Heuer’s Global Campaign 19-23

Global Products, Local Messages Standard Products

In-between Approach

Standard Marketing Strategies Localizing Ad Messages

Adapt messages to…

Culture Language Market Conditions 19-24

TaylorMade Pattern Advertising 19-25

Decision Areas in International Advertising Organization Style Coordination of Other IMC Tools

Decision Areas

Media Strategy and Selection Creative Strategy & Execution Agency Selection Advertising Research 19-26

Centralization of International Advertising Budgeting Media Strategy Agency Selection

Central Authority

Campaign Development Creative Strategy Research 19-27

Decentralized International Advertising

Central Authority

Region One Region Two Region Three Campaigns Creative Media Research Budgets Campaigns Creative Media Research Budgets Campaigns Creative Media Research Budgets 19-28

Combination Structure

Home Office

Policy Guidelines Operations International Manager Local Managers Sets Objectives Approves Budgets Approves Creatives Approves Media 19-29

Criteria for Selecting an Agency 1. Ability of agency to cover relevant markets.

2. Quality of agency work.

3. Market research, public relations, and other services offered by the agency.

4. Relative roles of company advertising department and strategy.

5. Level of communication and control desired by company.

19-30

Criteria for Selecting an Agency 6. Ability of agency to coordinate international campaign.

7. Size of company’s international business.

8. Company’s desire for local versus international image.

9. Company organizational structure for international business and marketing (centralized versus decentralized).

10. Company’s level of involvement with international operations.

19-31

Advertising Research Demographic characteristics of markets Cultural differences such as norms, lifestyles, and values Consumers’ product usage, brand attitudes and media preferences Media usage and audience size Copy testing Effectiveness in foreign markets 19-32

Creative Decisions Creative decisions should be based on advertising and communication objectives Copy platforms must be developed that include major selling ideas Specific appeals and execution styles must be selected Appeals may have to be adapted for local market conditions 19-33

Adapting to Local Markets 19-34

International Media Selection Issues Types of media available How much time is spent watching TV Amount of commercial time available Clutter Tolerance for advertising Coverage, cost, quality, restrictions Political climate Limited and unreliable media information 19-35

Jelly is a Popular Fashion Magazine in Japan 19-36

International Media • U.S. media with international editions • Time • Newsweek • Reader’s Digest • National Geographic • USA Today • Good Housekeeping • Seventeen • Popular Mechanics • BusinessWeek 19-37

Direct Broadcast by Satellite (DBS) 19-38

International Sales Promotion

Major Creation Considerations

Economic Development Market Maturity Consumer Perceptions Trade Structure Regulations 19-39

WD-40 Used Product Samples in Russia 19-40

Public Relations in Global Marketing Deal with local governments, media, trade associations, and the general public Present the company as a good corporate citizen Serve as part of the IMC program and help market the product or service Deal with specific issues and problems the company may face in foreign markets 19-41

Worldwide Growth of the Internet 19-42