chapter 14 global promotion strategies

Chapter 14

Global Promotion Strategies

Copyright © Houghton Mifflin Company. All rights reserved. Chapter 14 | Slide 2

The Marketing Mix

A Well-PositionedMarketing

Mix

Targeted PLACE

Targeted PRODUCT

Targeted PROMOTION

Targeted PRICE


International Marketing Dilemma

Promotion

Standardization

Promotion

Adaptation

versus


IntegratedInternationalPromotion

Events&

SponsorshipsAdvertising

Trade Fairs

PublicityPersonalSelling

In-Store Promotions

Public Relations

Direct Marketing


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


PRESSURES FOR PROMOTION ADAPTATIONWritten and spoken language differences

Differences in symbolic meaningDifferences in humor

Product use and preference differencesLack of cross-cultural icons Value and norm differences

Collectivism versus individualismGovernment regulation


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


Hindu Festival Attracts U.S. Marketers

• Kumbh Mela – festival draws 30 million participants, many from small towns

• Western brands promote products– Samples, billboard and poster advertising,

and other sales promotions• Encourage product trial• Incites word-of-mouth

• Commercialization of ancient tradition?• Economic imperialism?


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


International Selling

Purchasing behavior can vary country to country

DecisionMaker

InitiatorInitiator UserUser

GatekeeperGatekeeperInfluencerInfluencer

BuyerBuyer Who is the buying unit?What role does each play in the decision-making process?


• 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

International Selling (cont’d)


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. “get it in writing” culture


Local Selling

• Role of local sales force– Missionary sales force – Visiting clients

together with local distributor’s sales force– Company-owned sales force – Company sales

force ensures personnel have right training and qualifications and uniform price negotiations

• Foreign sales practices– Nature of the interaction between salespeople

and local customer can be different market to market• Bausch & Lomb in Japan


Local Selling (cont’d)

• Recruitment– Scarcity of skilled personnel– Differences in prestige of sales positions in

different cultures

• Compensation– Salespeople from different cultures may respond

to motivation programs in the same way• Rewarding volume, consistency, straight salary, etc.


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


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


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


Selling to Business and Government


1. Search phase – Purchaser utilizes media and business contacts to search for vendors

2. Prequalifying phase – Purchaser requests documentation from potential bidders

3. Formal bids – Bidders provide written statement of how they will solve purchaser’s problem and their price

4. Selection – Purchaser makes choice– Performance bond – A guarantee that the company

will pay certain specified damages if job not completed in accordance with specifications

Bidding Process


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


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


Sales Promotion (cont’d)

• Country-to-country differences exist– 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 of the 10% product’s price


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


Olympics Versus the World Cup

• Soccer is favorite TV sport in 24 out of 34 countries surveyed by Ipsos-Reid Corporation– 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 marks, behind-the-

scenes access, 2 on-field ad boards in 20 stadiums

– Year-long run-up to event


Telemarketing

• Can be used to solicit sales and to offer enhanced customer service to current and potential consumers– Efficient telephone system required– Telephone numbers must be easy to

obtain phone books don’t exist in every country!

– Government restrictions and regulations


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


Public Relations

• Marketing activities that enhance brand equity by promoting goodwill toward the organization– May be necessary to defend brand

against bad publicity– PR campaigns can go wrong if not

managed correctly• Philip Morris in Czech Republic• Nestlé’s baby formula in developing countries


Growing Importance of Promotions in Developing Countries

• Shift from mass to target marketing– “No one’s ever spoken to them personally

before.”

• Role of collectivism– Local partners– Message

• Appropriate adaptation– “Talk to someone about a trip to Tahiti and you

may lose them. But talk about supermarket coupons for groceries and a TV or stereo, then you’ve got more attention.”


Dunkin’ Donuts “Love” Campaign in Thailand

• Mother’s Day campaign– Good cultural fit with Thai importance on family,

Queen Mother, etc.

• Integrated promotion campaign– In-store promotions– Sales promotion and packaging– Public relations– Publicity

• Very successful!


Axe & Durex Co-Branded Campaign in Thailand

• Axe is positioned as a sexy brand; co-brands with condom manufacturer

• Integrated promotion campaign– Premium– Packaging inserts– Flyers– Advertisements

chapter 14 global promotion strategies

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