12. Communicating Strategies with the World Consumer

Chapter Overview 1. Global Advertising and Culture 2. Setting the Global Advertising Budget 3. Creative Strategy 4. Global Media Decisions 5. Advertising Regulations 6. Choosing an Advertising Agency 7. Other Communication Platforms 8. Globally Integrated Marketing Communications (GIMC) 2

Introduction There are many cultural challenges that advertisers face in global marketing. Global advertising encompasses areas such as advertising planning, budgeting, resource allocation issues, message strategy, and media decisions. Other areas include: local regulations, advertising agency selection, coordination of multi-country communication efforts and regional and global campaigns. 3

1. Global Advertising and Culture Language Barriers – Language is one of the most formidable barriers in global marketing. – Three types of translation errors can occur in international marketing: Simple carelessness Multiple-meaning words Idioms (See Exhibit 12-1.) 4

Exhibit 12-1: Five Different Ways of Saying Tires in Spanish

1. Global Advertising and Culture Other Cultural Barriers – Religion – Cultural traps/cultural dimensions Geert Hofstede’s cultural grid can be used to assess the appropriateness of comparative advertising campaigns. The five cultural dimensions include: – Power distance – Uncertainty avoidance – Individualism – Masculinity – Long-termism 6

2. Setting the Global Advertising Budget Companies rely on different kind of advertising budgeting methods: – Percentage of Sales – Competitive Parity – Objective-and-Task Method – Resource Allocation The U.S. has the largest ad expenditures, followed by Europe 7

Exhibit 12-2: Top 20 Global Advertisers–Measured Media Only (2013) 8 Top 20 Largest Global Advertisers 2013 worldwide measured-media ad spending. Dollars in millions. Rank Advertiser % CHG 1 P&G$11,468$10, Unilever7,9067, L'Oreal5,9345, Toyota3,4443, GM3,3523, Volkswagen3,2272, Nestle3,1202, Coca-Cola2,8992, Mars Inc.2,8582, Pepsi Co2,7352, Sony2,7213, Mc Donald's2,7182, RB (Reckitt Benckiser)2,5412, Ford2,4112, Nissan2,1871, Samsung Electronics2,1592, Johnson & Johnson2,0651, Microsoft1,9831, Yum! Brands1,9161, Comcast Corporation1,8631,

Exhibit 12-3: Measured Advertising Spending by Region (2011) 9

Exhibit 12-4: Top Ten Advertisers in BRIC Countries 10

Exhibit 12-5: 2007 Ad Spending Allocation by 3 Biggest Advertisers in Key Markets 11

3. Creative Strategy The “Standardization” versus “Adaptation” Debate Merits of Standardization: – Scale Economies – Consistent Image – Global Consumer Segments – Creative Talent – Cross-Fertilization 12

3. Creative Strategy Successful universal appeals include: 1) superior quality 2)new product/service 3) country of origin 4) heroes and celebrities 5) lifestyle 6) global presence 7) market leadership 8) corporate image 13

3. Creative Strategy Barriers to Standardization: – Cultural Differences – Advertising Regulations – Market Maturity – “Not-Invented-Here” (NIH) Syndrome 14

Exhibit 12-6: Examples of Universal Appeals 15

3. Creative Strategy Approaches to Creating Advertising Copy: – “Laissez Faire” – Export Advertising – Global Prototype Advertising – Prototype Standardization – Regional Approach – Concept Cooperation Modular Approach 16

4. Global Media Decisions Media Infrastructure – Media infrastructure differs from country to country Media Limitations – The major limitation in many markets is media availability. 17

Exhibit 12-7: Average Cost of a Prime-Time 30 Second TV Spot (2007) 18

4. Global Media Decisions Recent Developments in Global Media – Growing commercialization and deregulation of mass media – Shift from radio and print to TV advertising – Rise of global and regional media – Growing spread of interactive marketing – Growing popularity of text messaging – Improved monitoring – Improved TV-viewership measurement 19

5. Advertising Regulations Major advertising regulations: – Advertising of “Vice Products” & Pharmaceuticals – Comparative Advertising – Content of Advertising Messages – Advertising Targeting Children – Issues of local languages – Tax issues – Advertising rates 20

5. Advertising Regulations Strategies to deal with advertising regulations: – Keep track of regulations and pending legislation – Screen the campaign early on – Lobbying activities – Challenge regulations in court – Adapt marketing mix strategy 21

Exhibit 12-8: China’s 1995 Advertising Law 22

6. Choosing an Advertising Agency Options for choosing an ad agency: 1. Work with the agency that handles the advertising in the firm’s home market. 2. Pick a purely local agency in the foreign market. 3. Choose the local office of a large international agency. 4. Select an international network of ad agencies that spans the globe. 23

Exhibit 12-9: Advertising Agency Selection Criteria 24

6. Choosing an Advertising Agency When screening ad agencies, consider: – Market coverage – Quality of coverage – Expertise with developing a central international campaign – Creative reputation – Scope and quality of support services – Desirable image (“global” versus “local”) – Size of the agency – Conflicting accounts 25

7. Other Communication Platforms Sales Promotions Sales promotion refers to a collection of short-term incentive tools that lead to quicker and/or larger sales of a particular product by consumers or the trade. – Rationales explaining the local character of promotions: Economic development Market maturity Cultural perceptions Trade structure (pull vs. push promotions) Government regulations (See Exhibit ) 26

Exhibit 12-10: Which Techniques Are Allowed in Europe 27

7. Other Communication Platforms Direct Marketing Event Sponsorships Mobile Marketing Product Placement Viral Marketing Global Public Relations & Publicity Trade Shows 28

7. Other Communication Platforms Trade Shows Decide on what trade shows to attend at least a year in advance. Prepare translation of product materials, price lists, selling aids. Bring plenty of literature. Bring someone who knows the language or have a translator. Send out, ahead of time, direct-mail pieces to potential attendees. Find out the best possible space, for instance, in terms of traffic. Plan the best way to display your products and to tell your story. 29

7. Other Communication Platforms Trade Shows Do your homework on potential buyers from other countries. Assess the impact of trade show participation on the company’s bottom line. Performance benchmarks may need to be adjusted when evaluating trade show effectiveness in different countries since attendees might behave differently. On-line information on trade show events is plentiful (e.g., A recent phenomenon is the emergence of “virtual trade shows” (e.g., 30

Exhibit 12-11: Global Sponsorships by Region 31

8. Globally Integrated Marketing Communications (GIMC) Integrated Marketing Communications (IMC): – IMC coordinates different communication vehicles – mass advertising, sponsorships, sales promotion, packaging, point-of-purchase displays, so forth. 32

8. Globally Integrated Marketing Communications (GIMC) Globally Integrated Marketing Communications (GIMC): – GIMC is a system of active promotional management that strategically coordinates global communications in all of its component parts. – Both horizontal (country-level) and vertical (promotion tools) approaches are used in GIMC. 33