Chapter 14 Global Promotion Strategies

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 2 International Marketing Dilemma Promotion Standardization Promotion Adaptation versus

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 3 Promotion Standardization Advantages Economies of scope; production cost savings Able to spend more time, attention and $ on campaign itself Strong branding image, avoid confusion –Travelers –Viewers of global media –Internet –International organizational buyers

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 4 PRESSURES FOR PROMOTION ADAPTATION Written and spoken language differences Differences in symbolic meaning Differences in humor Product use and preference differences Lack of cross-cultural icons Value and norm differences Collectivism versus individualism Government regulation

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 5 Push versus Pull Strategies Pull strategy –Focuses on the end-user or the buyer –Dependence on sales promotions and advertising –Advisable when product is widely used by consumers, channel is long, product is not complex, and when self-service is predominant shopping behavior Push strategy –Focuses on the distributors of a product –Incentives offered to wholesalers or retailers to carry and promote a product –May resort to push when channel is short, there is a lack of advertising media or difficulty using firm’s pull strategy in foreign markets

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 6 Personal Selling International selling –Company sales force travels across countries and meets directly with clients abroad Local selling –Company organizes and staffs a local sales force made up of local nationals to do selling in that country When a customer is met in person by a representative of the marketing company

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 7 Buying criteria –How products/vendors are selected may vary market to market Language –Importance of knowing the local language Business etiquette –How and when appointments and introductions are made, if gifts are presented, attending social/business events International Selling (cont’d)

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 8 International Sales Negotiations Negotiation style –Japanese – least aggressive –French and Brazilians – most aggressive –Russia – zero-sum game Time orientation –Longer in China versus U.S. and Europe Attitude toward final contract –U.S., Germany, Scandinavia: “get it in writing” culture –China, Arab Countries: Relationship and personal trust drive business practices; “loose” contracts

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 9 Recruitment & Compensation of Local Sales Force Recruitment –Scarcity of skilled personnel –Differences in prestige of sales positions in different cultures Compensation –Salespeople from different cultures may respond to motivation programs differently Rewarding volume, consistency, straight salary, etc.

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 10 What Makes a Great Salesperson? LOW CONTEXT Preparation Great product Appearance Enthusiasm Self-confidence Great closer LOW CONTEXT Preparation Great product Appearance Enthusiasm Self-confidence Great closer HIGH CONTEXT Preparation Great product The “person” Cultural awareness Relationship oriented HIGH CONTEXT Preparation Great product The “person” Cultural awareness Relationship oriented

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 11 Global Account Team Global account team – Services a customer in every country in which the customer operates –Response to centralized purchasing within global firms –Most companies would rather do this, especially if they themselves are centrally operated

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 12 International Trade Fairs Ideal for exposing new customers and potential distributors to a company’s product range Very important for B2B sales in markets with underdeveloped media channels 600 trade shows in 70 countries each year –Cologne Trade Fair –Hanover Fair

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 13 Sales Promotion Stimulate immediate consumer purchasing and/or channel cooperation –Coupons, sweepstakes, gifts, reduced- price labels, free goods, double-pack promotions, in-store displays, slotting allowances

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 14 Sales Promotion (cont’d) Country-to-country differences –Cultural norms Taiwanese consumers prefer coupons to sweepstakes; Malaysians and Thais prefer sweepstakes to coupons –Government restrictions and regulations Japan’s limitation on value of promotional gifts attached to products is 10% of the product’s price

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 15 Sports Promotions and Sponsorships Sports events increasingly covered by global media –Olympics, World Cup Sign space –Must have logo or brand worth exposing to global audience –Take into consideration popularity of certain sports and the segments they attract

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 16 Olympics Versus the World Cup Soccer is favorite TV sport in 24 out of 34 countries surveyed by Ipsos-Reid –250 million registered soccer players and 1 billion spectators worldwide World Cup sponsors get good deal! –Pay $20 million - $50 million –Get rights to World Cup sponsorship marks, behind-the-scenes access, 2 on-field ad boards in 20 stadiums –Year-long run-up to event

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 17 Telemarketing Can be used to solicit sales and to offer enhanced customer service to current and potential consumers –Big in Latin America (Brazil) –Telephone numbers must be easy to obtain phone lists often don’t exist in every developing (or even developed!) countries –Government restrictions and regulations EU has its own “Do Not Call” list

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 18 Managing Word-of-Mouth Cultural differences in product recommendation references –Individualistic cultures versus collectivist cultures