INTERNATIONAL MARKETING MANAGEMENT

MBA.2: IB.A

2009

HARDIK PATELID NO: 0121KMKM0209

LONDON SCHOOL OF COMMERCE

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PART (A)

THEODORE LEVITT’S SEMINAL ARTICLE ‘THE GLOBALISATION

OF MARKET’ (Harvard Business review 1983) CAUSED MANY

COMPANIES TO EXAMINE THEIR INTERNATIONAL ADVERTISING

STRATEGIES AND TO ADOPT A GLOBAL STRATEGY. WHAT

PROBLEMS DO YOU SEE IN SUCH AN APPROACH?

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INRODUCTION:

International advertising entails dissemination of a commercial message to target audiences in

more than one country. Target audiences differ from country to country in terms of how they

perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in

levels of literacy and languages spoken. How the advertising function is organized also varies. In

some cases, multinational firms centralize advertising decisions and budgets and use the same or

a limited number of agencies worldwide. In other cases, budgets are decentralized and placed in

the hands of local subsidiaries, resulting in greater use of local advertising agencies

(International Business Review, 2008)

International advertising used to be the concern of a limited number of companies using the

specialist sections of an even smaller number of advertising agencies. All limited even further by

a lack of international media markets. Today, the growing number of materialistic richer

consumers, developing international businesses and the increasing globalization of brands means

that thinking and acting internationally have become a necessity. Today, international advertising

is now a normal item in many companies and advertising agencies around the world. Country

borders were once seen as the main determinant of differences in consumption patterns, with

subsequent differences in promotion, product and even manufacturing approaches. (David J.

Hanger, 2005)

An advertising strategy is an operation developed to communicate ideas about products and

services to potential consumers in the hopes of convincing them to buy those products and

services. This strategy, when built in a rational and intelligent manner, will reflect other business

considerations and objectives as well. According to Alexander Hiam and Charles D. Schewe

“A business's advertising strategy "determines the character of the company's public face." Even

though a small business has limited capital and is unable to allocate as much money to

advertising as a large corporation, it can still develop a highly effective advertising campaign..

Today, most advertising strategies focus on achieving three general goals, as the Small Business

management indicated that Advertising Your Business as : 1) promote awareness of a business

and its product or services; 2) stimulate sales directly and "attract competitors' customers"; and

3) establish or modify a business' image. In other words, advertising seeks to inform, persuade,

and remind the consumer. With these aims in mind, most businesses follow a general process

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which ties advertising into the other promotional efforts and overall marketing objectives of the

business. (Adams, Bob, 1996)

Strategy is an international context is a plan for the organization to position itself vis-à-vis its

competitors, and resolve how it wants to configure its value chain activities on a global scale. Its

purpose is to help managers create an international vision, allocate resources, participate in major

international markets, be competitive, and perhaps reconfigure its value chain activities given the

new international opportunities. Global strategy involves: competing everywhere, appreciating

that success demands a presence in almost every part of the world in order to compete

effectively, making the product same for each market, centralized control, taking advantage of

customer needs and wants across international borders, locating their value adding activities

where they can achieve the greatest competitive advantage, integrating and coordinating

activities across borders. There four main advantages of global strategy such as economic of

scale, lower costs, coordination of activities and faster product development (Philip Kotler,

1993) Globalized advertising is generally associated with the use of the same brand name across

the world. However, a company may want to use different brand names partly for historic

purposes. Many global firms have made acquisitions in other countries resulting in a number of

local brands. These local brands have their own characteristic market and a company may find it

counterproductive to change those names. Global advertising themes are most advisable when a

firm may market to customers seeking similar benefits across the world. Once the purchasing

reason has been determined as similar, a common theme may be created to address it . With

global strategy, the headquarters seeks substantial control over its country operations in an effort

to minimize redundancy, and achieve maximum efficiency, learning, and integration worldwide.

(Theodore Levitt, 1975)

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PROBLEMS:

The main problems see in international advertising strategies are language barrier, cultural

diversity and media limitation as well as customers preferences. The given problems describe as

below:

A) Language barrier: language is one of the major barriers to effective communication through

advertising. The problem involves different languages of different countries, different languages

or dialects within one country. For example: The Bacardi Company wanted to sell the drink

“Pavane” in Germany, but “pavane” is perilously close to “pavian” which means “Babbon”.

Another example, a company marketing tomato paste in the Middle East found that in Arabic the

phrase tomato paste translates as tomato glue. Language translation encounters innumerable

barriers that impact effective. Communication is impeded by the great diversity of cultural

heritage and education which exists within countries and which causes varying interpretations of

even single sentences and simple concept. Some companies have tried to solve the translation

problem by hiring foreign translators.

B) Cultural Diversity: Communication is more difficult because cultural factors largely

determine the way various phenomena are perceived. If the perceptual framework is different,

perception of the message it differs. Knowledge of cultural diversity must encompass the total

advertising project.

C) Media Limitation: Media may diminish the role of advertising in the promotional program

and may force the marketers to emphasis the other elements of promotional mix. A marketer’s

creativity is certainly challenged when a television commercial is limited to 10 showing a year

with no two exposures closer than 10 days. In some African countries advertisers run boats up

and down the rivers playing popular music and broadcasting commercial into the bush as they

travel. (Bovee, Courtland L., and William F. Arens, 1989)

The main problem see while adopting a global strategy is:

1) It is challenging for management, particularly in highly centralized organization, to closely

coordinate the activities of a large number of widely- dispersed international operations.

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2) The firm must maintain ongoing communication between headquarters and the subsidiaries, as

well as among the subsidiaries.

3) When carried to an extreme, global strategy results in a loss of responsiveness and flexibility

in local markets.

4) Local managers who are stripped of autonomy over their country operations may become

demoralized, and lose their entrepreneurial spirit. (Hills, Gerald E, 1997)

EXAMPLE:

Sony have successfully created an incredible brand name previously, however, its legend

seem to be falling apart recently. In fact, Sony’s net profit for the July-September quarter for

2006 falling 94% to 1.7 billion Yen, compared to 28.5 billion Yen for the same period last year

(Benson, 8th Nov 2006). The major reasons for the declining profit are affected by the critical

strategic issues faced by Sony which became a main drawback for them. Sony must learn from

their mistake and implement more effective and efficient strategies if they want to get out from

this current unfavorable situation. Besides than their current strategies, alternatives strategies

suggested above should become another major concern for Sony to ensure that they can

effectively rebuilt their poor reputation and regain more market share in the future.

(www.sony.net)

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CONCLUSION:

Thus we see advertising has multiple layers to it. A lot more than what actually meets the

consumer’s eye goes into creating a successful advertisement or an advertisement campaign. In

today’s era of consumerism the need for advertisements to break the clutter and stand out

becomes absolutely imperative. Advertising has multiple media at its disposal with each having

its respective strengths and limitations. Digital media advertising (internet, mobile and digital

signage) is expected to emerge as the medium of choice for advertisers. Of the available media, it

was the fastest growing segment in 2008. (Shea, Barbara S., 1995). Its better return on

investment and the comparative ease with which its efficacy can be measured will ensure that the

trend continues. International advertising is a creative and cultural challenge. Before conveying

any message one must have a fair idea about the sensitivities that are specific to every culture.

For instance, different cultures have different flavours of humour. An Indian advertisement

cannot humour the elders as it would offend the cultural beliefs that the country represents. An

advertisement campaign is a big challenge. The critical part of making an advertising campaign

is determining a campaign theme, as it sets the tone for the individual advertisements and other

forms of marketing communications that will be used. Advertisement is therefore, has elements

of both an art as well as science.

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REFERENCE:

1) Adams, Bob. Adams Streetwise Small Business Start-up. Holbrook, MA: Adams Media

Corporation, 1996.

2) International Business Review Volume 17, Issue 3, June 2008, Pages 235-249)

3) David J. Hanger Practice of Advertising (Fifth Edition) 2005, Pages 297-310

4) Theodore Levitt, Harvard Business Review, Marketing Myopia-September-October 1975

5) Philip Kotler, Ronald E. Turner, Marketing Management- seventh edition, 1993

6) Bovee, Courtland L., and William F. Arens. Contemporary Advertising. 3d ed. Homewood,

IL: Irwin, 1989.

7) Hills, Gerald E. "Market Opportunities and Marketing." The Portable MBA in

Entrepreneurship. Edited by William D. By grave. 2d Ed. New York: John Wiley & Sons, 1997.

8) Cohen, William. The Entrepreneur and Small Business Problem Solver. 2d Ed. New York:

John.

9) Shea, Barbara S., with Jennifer Haupt. Small Business Legal Guide. New York: John Wiley

& Sons, 1995.

10) David Gartner, Ph.D., International Marketing Management (IMM) Course Slides and Notes,

Thunderbird, The American Graduate School of International Management- Summer 2001

11) http://www.sony.net/SonyInfo/CorporateInfo/index.html

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PART (B)

Suggest some of the particular cautions that an individual from a high context

culture should bear in mind when dealing with someone from a low context

culture. Do the same for a low to high context culture situation.

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INTRODUCTION:

Edward T. Hall, a Foreign Service veteran, identified the concepts of high-context and low-

context in the 1960’s to categorize differences in communication styles. In his Beyond Culture,

published in 1976 by Anchor Press/Doubleday, in New York, Hall states: “High context

transactions feature pre-programmed information that is in the receiver and in the setting, with

only minimal information in the transmitted message. Low context transactions are the reverse.

Most of the information must be in the transmitted message in order to make up for what is

missing in the context.”(Edward T. Hall, 1976)

The general terms "high context" and "low context" (popularized by Edward Hall) are used to

explain broad-brush cultural differences between societies. High context refers to societies or

groups where people have close relations over a long period of time. Many aspects of cultural

behavior are not made open because most members know what to do and what to think from

years of relations with each other. Your family is most likely an example of a high context

environment. Low context refers to societies where people tend to have many relations but of

shorter duration or for some specific reason. In these societies, cultural behavior and attitude may

need to be spelled out clearly so that those coming into the cultural environment know how to

behave. (Adler, N., 1997)

A culture is not identified as high or low in an absolute sense, but rather, each message can be

presented on a continuum from high to low. Likewise, a culture (French Canadian) may be of a

higher context than one (English Canadian) but lower context than another (Spanish or French).

Likewise, a stereotypical individual from Texas (a higher context culture) may communicate

more with a few words or use of a prolonged silence, than a stereotypical New Yorker who is

being very explicit, despite both being part of a culture which is overall of lower-context. While

the milieu of individuals in a culture can be diverse, and not all individuals can be described by

strict stereotypes, understanding the broad tendencies of predominant cultures of this world can

help us inform and educate ourselves on how to better facilitate communication between

individuals of differing cultures. (Chatman, J.A. & Barsade, S.G., 1995)

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Humor:

“A high-context joke from a high context culture will not translate well to someone of a different

culture, even another high-context culture. Humor is very much about context, as a joke may not

be considered very funny if it seems like it is over-explained using only low-context messages”.

(Cox, T., 1993)

An individual from high context culture should bear the below cautions in mind when

dealing with someone from a low context culture:

An individual from a higher context culture may need to caution when dealing to a lower context

culture. A lower context culture demands more independence, and expects many relationships,

but fewer intimate ones. A high context individual is more likely to ask questions rather than

attempt to work out a solution independently, and the questions are likely to be asked from the

same few the same few people. The high context person may be frustrated by people appearing

to not want to develop a relation or continue help them on an ongoing basis. The term ‘Hand-

holding’ might be used in an unintentional derogatory sense.

High Context culture’s cautions:

Less verbally explicit communication, less written/formal information

More internalized understandings of what is communicated

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Multiple cross-cutting ties and intersections with others

Long term relationships

Strong boundaries- who is accepted as belonging vs. who is considered an "outsider"

Knowledge is situational, relational.

Decisions and activities focus around personal face-to-face relationships, often around a

central person who has authority.

Examples:

  Small spiritual congregation, a party with friends, family gatherings, expensive connoisseur

restaurants and neighborhood restaurants with a regular clientele, undergraduate on-campus

friendships, regular pick-up games, hosting a friend in your home overnight. (Gannon, M.

1998).

An individual from low context culture should bear the below cautions in mind when

dealing with someone from a high context culture:

An individual from a low context culture may need to cautions when dealing to a higher context

culture. Higher context culture expects small close groups, and reliance on that group. Groups

can actually be relied upon to support each other, and it may be difficult to get support outside of

your group. Professional and person lives often intertwine. A lower context individual may be

more likely to try to work things out on their own and feel there is a lack of self-service support,

rather than ask questions and take time to develop the relationships needed to accomplish the

things that need to be done.

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Low Context culture’s cautions:

Rule oriented, people play by external rules

More knowledge is codified, public, external, and accessible.

Sequencing, separation--of time, of space, of activities, of relationships

More interpersonal connections of shorter duration

Knowledge is more often transferable

Task-centered. Decisions and activities focus around what needs to be done, division of

responsibilities.

Examples:

  Large US airports, a chain supermarket, a cafeteria, a convenience store, sports where rules are

clearly laid out, a motel. (Gannon, M., 1998).

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Entering High and Low Context Situations

High contexts can be complicated to enter if you are a foreigner (because you don't carry the

context information within, and because you can't directly create close relationships). Low

contexts are comparatively easy to enter if you are a foreigner (because the environment contains

much of the information you need to contribute, and because can you form relationships rather

soon, and because the important thing is accomplishing a task rather than feeling your way into a

relationship). Remember that every culture and every situation has its high and low aspects.

Often one situation will contain an internal high context core and an outer low context hoop for

those who are less involved. For instance, a PTA is usually a low context situation: any parent

can join, the dates of the meetings, who is president, what will be discussed, etc. are all explicitly

available information and it is usually fairly clear how to take part in the meetings. However, if

this is a small town, maybe the people who run the PTA all know each other very well and have

many overlapping interests. They may "agree" on what should be discussed or what should

happen without ever really talking about it, they have insensible, constrained values that

influence their decisions. Other parents from outside may not understand how decisions are

actually being made. So the PTA is still low context, but it has a high context subgroup that is in

turn part of a high context small town society. (Hall, E., 1990)

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Conclusion : Culture is the main point behind inter cultural communication, understanding that culture is the

most important key in inter cultural communication. There are some important main aspects in

communication such as power, social framework, non-verbal communication, and time. Study

the history and language of the other culture. Begin to develop a warm personal relationship with

the other side's negotiator even before negotiations start. Do not assume the other side interprets

things in the same way that you do. Be alert and sensitive to nonverbal or indirect

communication, and be aware of your own nonverbal cues. Be aware of and respect the

importance of maintaining face. Well your negotiating strategy to the opponent's cultural needs,

haggling when suitable or starting from general principles. Compromising in the face of an

opponent's inflexibility may simply confuse the situation, since their inflexibility is often

calculated to make you reveal your bottom line. Low context negotiators must cultivate patience.

Finally, agreements must be presented in a form which preserves face all around.

Communication itself is an exchange of information between senders and receivers, and thus,

people easily refer it as a simple matter. However, communication is very complex and high-

technological context to understand and to use. This complex context becomes more difficult

when culture is involved. Different cultures have different ways to communicate, and by

understanding how these cultures communicate, effective inter-cultural communication can be

achieved.

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Reference: 1) Edward T. Hall, a Foreign Service veteran, identified the concepts of high-context and low-

context in his book: “Beyond Culture”, published by Anchor Press/Doubleday, New York, 1976

2) Adler, N. (1997). International Dimensions of Organizational Behavior, 2nd Ed. Boston:

South-Western College Publishing.

3) Chatman, J.A. & Barsade, S.G. (1995). Personality, organizational culture, and cooperation:

Evidence from a business simulation. Administrative Science Quarterly, 40, 423-443.

4) Cox, T. (1993). Cultural Diversity in Organizations. San Francisco: Berrett-Koehler..

5) Gannon, M. (1998). Integrating context, cross-cultural dimensions, and cultural metaphors in

management education and training. Paper presented at the Biennial International Conference of

the Western Academy of Management, Istanbul, Turkey, June 28-July 2, 1998.

6) Hall, E. (1990). Understanding Cultural Differences. Yarmouth, ME: Intercultural Press.