Global Promotion Strategies 14 Global Promotion Strategies

Learning Objectives List the major factors that determine a firm’s ability to use a push or a pull promotion strategy in different national markets. Contrast the benefits to the international marketer of using an international sales force with those of using local sales forces. Describe the impact that different purchasing behaviors, buying criteria, languages, and negotiation styles can have on international selling. Explain the importance of global account management. Describe how global marketers can successfully utilize international trade fairs and consortia as well as manage the international bidding process. Cite examples of how sales promotions vary across cultures, and suggest reasons for these differences. Note recent international trends in sales promotions, sports sponsorships, telemarketing, product placement, and managing word-of-mouth. Give examples of international public relations disasters and suggest ways by which global marketers can promote the goodwill of their firms.

Chapter Outline Global promotion strategies Personal selling Global account management Selling to businesses and governments Other forms of promotion Public relations 3

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 there is a lack of advertising media or difficulty transferring firm’s pull strategy in foreign markets 4

International Selling (cont.) 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 sales banquets and other social/business occasions 5

Personal Selling When a customer is met in person by a representative of the marketing company 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 6 6

Global Account Team Global account team – Services a customer in every country in which the customer operates Siemen’s teams for Volkswagen & Ford Response to centralized purchasing within global firms Information technology makes it possible Price pressures 7

Bidding Process Search phase – Purchaser utilizes media and business contacts to search for vendors Prequalifying phase – Purchaser requests documentation from potential bidders Formal bids – Bidders provide written statement of how they will solve purchaser’s problem and their price Selection – Purchaser makes choice Performance bond – A guarantee that the company will pay certain specified damages if job not completed in accordance with specifications 8

Consortium Selling Consortium – Group of firms that share a certain contract or project on a pre-agreed basis but act as one company toward the customer Share the risk Enhance competitiveness of turnkey projects 9

Sales Promotion Add value to products in order to stimulate consumer purchasing and/or channel cooperation Coupons, sweepstakes, gifts, reduced-price labels, free goods, double-pack promotions, in-store displays, slotting allowance 10

Telemarketing Can be used to solicit sales and to offer enhanced customer service to current and potential consumers 11

Managing Word-of-Mouth Cultural differences in product recommendation references Individualistic cultures versus collectivist cultures Buzz marketing – Marketing activities undertaken to stimulate consumer discussion of the product Good buzz and bad buzz 12

Public Relations Marketing activities that enhance brand equity by promoting goodwill toward the organization 13