International Advertising and Promotion

Dr. George BelchSan Diego State University

International Advertising and Promotion

Dr. George BelchSan Diego State University

Competition has become global and marketers must be able to compete globally

Competition has become global and marketers must be able to compete globally

International markets offer growth opportunities for many companies

International markets offer growth opportunities for many companies

Many companies rely on foreign markets to survive, particularly those with small domestic markets

Many companies rely on foreign markets to survive, particularly those with small domestic markets

Domestic markets for many products and services are stagnant

Domestic markets for many products and services are stagnant

International markets offer growth opportunities for many companies

International markets offer growth opportunities for many companies

Many companies rely on foreign markets to survive, particularly those with small domestic markets

Many companies rely on foreign markets to survive, particularly those with small domestic markets

Domestic markets for many products and services are stagnant

Domestic markets for many products and services are stagnant

Reasons for the Importance of International Markets

Many Multinational Companies are Focusing on China for Growth

Tourism Australia Uses a Global Campaign to Attract Visitors

International Advertising & PromotionRank Advertiser Outside U.S. Inside U.S.

1 Proctor & Gamble $6,364 $3,367

2 Unilever 4,965 752

3 L’Oreal 3,242 798

4 General Motors 1,442 2,232

5 Toyota Motor Corp. 2,181 1,022

6 Coca-Cola Co. 2,231 442

7 Johnson & Johnson 1,181 1,402

8 Ford Motor Co. 1,436 1,012

9 Reckitt Benckiser 1,842 544

10 Nestlé 1,696 618

Ad Spending in Millions of U.S. dollars

Top 10 Global Advertisers

EconomicEnvironmentEconomic

Environment

DemographicEnvironment

DemographicEnvironment

CulturalEnvironment

CulturalEnvironment

CulturalEnvironment

CulturalEnvironment

EconomicEnvironmentEconomic

Environment

DemographicEnvironment

DemographicEnvironment

The International Environment

InternationalMarketing

And

PromotionalDecisions

InternationalMarketing

And

PromotionalDecisions

Political/LegalEnvironment

Political/LegalEnvironment

International Economic Environment

Economic environment

• Stage of economic development• Economic infrastructure• Standard of living• Per capita income• Distribution of wealth• Currency stability• Exchange rates

Economic environment

• Stage of economic development• Economic infrastructure• Standard of living• Per capita income• Distribution of wealth• Currency stability• Exchange rates

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

International Demographic Environment

Economic environment

• Size of population• Number of households• Household size• Age distribution• Occupation distribution• Education level• Employment rate• Income level

Economic environment

• Size of population• Number of households• Household size• Age distribution• Occupation distribution• Education level• Employment rate• Income level

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

International Cultural Environment

Cultural environment

• Language• Lifestyles• Values• Norms and customs• Ethics and moral standards• Taboos

Cultural environment

• Language• Lifestyles• Values• Norms and customs• Ethics and moral standards• Taboos

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

Marketers Must Adapt to Customer Behavior in Various Countries

NESCAFE President Ad From Japan

International Political/Legal Environment

Political/legal environment

• Government policies• Laws and regulations• Political stability• Nationalism• Attitudes toward multinational

companies

Political/legal environment

• Government policies• Laws and regulations• Political stability• Nationalism• Attitudes toward multinational

companies

International MarketingAnd Promotional Decisions

International MarketingAnd Promotional Decisions

Type of products that may be advertisedType of products that may be advertised

The content or creative approach usedThe content or creative approach used

The media advertisers are permitted to useThe media advertisers are permitted to use

The amount of advertising one can useThe amount of advertising one can use

The use of foreign languages in adsThe use of foreign languages in ads

Use of ad materials from outside the countryUse of ad materials from outside the country

Use of local versus international ad agenciesUse of local versus international ad agencies

The specific taxes levied on advertisingThe specific taxes levied on advertising

Use of local versus international ad agenciesUse of local versus international ad agencies

Use of ad materials from outside the countryUse of ad materials from outside the country

The use of foreign languages in adsThe use of foreign languages in ads

The amount of advertising one can useThe amount of advertising one can use

The media advertisers are permitted to useThe media advertisers are permitted to use

The content or creative approach usedThe content or creative approach used

Type of products that may be advertisedType of products that may be advertised

Advertising Aspects Subject to Regulation

Global Marketer’s Dilemma

Should we offer the same product,

marketing, and advertising

throughout the world?

Should we adapt the product,

marketing, and advertising to each of several societies

throughout the world?

Lower costs with less in planning and control Lower costs with less in planning and control

Global Marketing and Advertising Advantages

Economies of scale in production, distribution Economies of scale in production, distribution

Lower advertising and production costs Lower advertising and production costs

Ability to exploit good ideas worldwide Ability to exploit good ideas worldwide

Ability to introduce products quickly, worldwide Ability to introduce products quickly, worldwide

Consistent international brand, company identity Consistent international brand, company identity

Simplification of coordination and control Simplification of coordination and control

Lower costs with less in planning and control Lower costs with less in planning and control

Economies of scale in production, distribution Economies of scale in production, distribution

Lower advertising and production costs Lower advertising and production costs

Ability to exploit good ideas worldwide Ability to exploit good ideas worldwide

Ability to introduce products quickly, worldwide Ability to introduce products quickly, worldwide

Consistent international brand, company identity Consistent international brand, company identity

Legal restrictions may make it difficult to develop an effective universal appeal

Legal restrictions may make it difficult to develop an effective universal appeal

Media availability or usage may vary by country or region

Media availability or usage may vary by country or region

Consumers needs and usage patterns often vary by country or region

Consumers needs and usage patterns often vary by country or region

Differences in culture, market and economic conditions make it difficult to use global advertising

Differences in culture, market and economic conditions make it difficult to use global advertising

Media availability or usage may vary by country or region

Media availability or usage may vary by country or region

Consumers’ needs and usage patterns often vary by country or region

Consumers’ needs and usage patterns often vary by country or region

Differences in culture, market and economic conditions make it difficult to use global advertising

Differences in culture, market and economic conditions make it difficult to use global advertising

Problems With Global Advertising

Brands can be adopted for visual appeal, avoiding problems of translating words into many languages

Brands can be adopted for visual appeal, avoiding problems of translating words into many languages

Brands promoted with image campaigns playing to universal appeals such as sex or wealth

Brands promoted with image campaigns playing to universal appeals such as sex or wealth

High-tech products, new to the world, not steeped in the cultural heritage of the country of origin

High-tech products, new to the world, not steeped in the cultural heritage of the country of origin

Products with with a nationalistic flavor if the country has a favorable reputation in the field

Products with with a nationalistic flavor if the country has a favorable reputation in the field

Products appealing to a market segment with universally similar tastes, interests, needs, and values

Products appealing to a market segment with universally similar tastes, interests, needs, and values

Brands can be adopted for visual appeal, avoiding problems of translating words into many languages

Brands can be adopted for visual appeal, avoiding problems of translating words into many languages

Brands promoted with image campaigns playing to universal appeals such as sex or wealth

Brands promoted with image campaigns playing to universal appeals such as sex or wealth

High-tech products, new to the world, not steeped in the cultural heritage of the country of origin

High-tech products, new to the world, not steeped in the cultural heritage of the country of origin

Products with with a nationalistic flavor if the country has a favorable reputation in the field

Products with with a nationalistic flavor if the country has a favorable reputation in the field

When is Globalization Appropriate

©

Globalization Often Works

Best For:

Globalization Often Works

Best For:

Gillette Uses Global Advertising for the Sensor

TAG Heuer’s Global Campaign

Standardizing Products

Standardizing Products

“Think Globally, Act Locally”

“Think Globally, Act Locally”

Localizing Ad Messages

Localizing Ad Messages

Differences in Language

Differences in Language

Differences in Language

Differences in Language

Differences in Market Conditions

Differences in Market Conditions

Differences in Cultural

Differences in Cultural

Differences in Market Conditions

Differences in Market Conditions

Differences in Cultural

Differences in Cultural

“Think Globally, Act Locally”

“Think Globally, Act Locally”

Localizing Ad Messages

Localizing Ad Messages

Standardizing Products

Standardizing Products

Global Products, Local Messages

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

An In-between ApproachAn In-between Approach

Adapt Messages to Respond ToAdapt Messages to Respond To

Use of Pattern Advertising

Use of Pattern Advertising

OrganizationOrganization

Creative DecisionsCreative Decisions

Agency SelectionAgency

Selection

Advertising and Market

Research

Advertising and Market

Research

Coordination of Other

IMC Tools

Coordination of Other

IMC Tools

Media SelectionMedia SelectionMedia SelectionMedia Selection

Creative DecisionsCreative Decisions

Advertising and Market

Research

Advertising and Market

Research

Agency SelectionAgency

Selection

OrganizationOrganization

Decision Areas in International Advertising

Decision AreasDecision Areas

BudgetingBudgeting

ResearchResearch

AgencySelectionAgency

Selection

CreativeStrategyCreativeStrategy

MediaStrategyMedia

Strategy

CampaignDevelopment

CampaignDevelopment

CampaignDevelopment

CampaignDevelopment

ResearchResearch

CreativeStrategyCreativeStrategy

AgencySelectionAgency

Selection

BudgetingBudgeting

Centralization of International Advertising

Central AuthorityCentral

Authority

Decentralization of International Advertising

CentralAuthorityCentral

Authority

Budgets

Media

Campaigns

Creative

Research

Budgets

Media

Campaigns

Creative

Research

Budgets

Media

Campaigns

Creative

Research

RegionOne

RegionOne

RegionTwo

RegionTwo

RegionThree

RegionThree

Budgets

Media

Campaigns

Creative

Research

RegionOne

RegionOne

Budgets

Media

Campaigns

Creative

Research

RegionTwo

RegionTwo

Criteria for Selecting an Agency to Handle International Advertising

1. Ability of agency to cover relevant markets.

2. Quality of agency work.

3. Market research, public relations, and other services offered by the agency.

4. Relative roles of company advertising department and strategy.

5. Level of communication and control desired by company.

Criteria for Selecting an Agency to Handle International Advertising

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

6. Ability of agency to coordinate international campaign.

7. Size of company’s international business.

8. Company’s desire for local versus international image.

9. Company organizational structure for international business and marketing (centralized versus decentralized).

10. Company’s level of involvement with international operations.

Information on demographic characteristics of marketsInformation on demographic characteristics of markets

Information on cultural differences such as norms, lifestyles, and valuesInformation on cultural differences such as norms, lifestyles, and valuesInformation on cultural differences such as norms, lifestyles, and valuesInformation on cultural differences such as norms, lifestyles, and values

Advertising Research

Information on demographic characteristics of marketsInformation on demographic characteristics of markets

Information on consumers’ product usage, brand attitudes and media preferenceInformation on consumers’ product usage, brand attitudes and media preferenceInformation on consumers’ product usage, brand attitudes and media preferenceInformation on consumers’ product usage, brand attitudes and media preference

Information on media usage and audience sizeInformation on media usage and audience sizeInformation on media usage and audience sizeInformation on media usage and audience size

Copy testing to determine reactions to different types of advertising appeals and executionsCopy testing to determine reactions to different types of advertising appeals and executionsCopy testing to determine reactions to different types of advertising appeals and executionsCopy testing to determine reactions to different types of advertising appeals and executions

Research on the effectiveness of advertising and promotional programs in foreign marketsResearch on the effectiveness of advertising and promotional programs in foreign markets

Appeals may have to be adapted for local market conditions

Appeals may have to be adapted for local market conditions

Specific appeals and execution styles must be selected

Specific appeals and execution styles must be selected

Copy platforms must be developed that include major selling ideas

Copy platforms must be developed that include major selling ideas

Creative decisions should be based on advertising and communication objectives

Creative decisions should be based on advertising and communication objectives

Specific appeals and execution styles must be selected

Specific appeals and execution styles must be selected

Copy platforms must be developed that include major selling ideas

Copy platforms must be developed that include major selling ideas

Creative decisions should be based on advertising and communication objectives

Creative decisions should be based on advertising and communication objectives

Creative Decisions

Coca-Cola Now Adapts its Advertisingfor Local Markets

Local Media Reach Specialized Target Audiences

International Media Selection Issues

Widely Differing Characteristics

Widely Differing Characteristics

CostCost

CoverageCoverage

RestrictionsRestrictions

AvailabilityAvailability

QualityQuality

Media Information Problems

Media Information Problems

CostCost

ReliabilityReliability

CirculationCirculation

AudienceAudience

AvailabilityAvailabilityCostCost

CoverageCoverage

RestrictionsRestrictions

AvailabilityAvailability

QualityQuality

International Media Provide Broad Coverage

Market MaturityMarket Maturity

Trade StructureTrade Structure

Economic DevelopmentEconomic Development

Consumer PerceptionsConsumer Perceptions

RegulationsRegulations

Trade StructureTrade Structure

Consumer PerceptionsConsumer Perceptions

Market MaturityMarket Maturity

Economic DevelopmentEconomic Development

Foreign Market Sales Promotion Programs

Major Creation ConsiderationsMajor Creation Considerations

WD-40 Used Samples to Introduce Its Product to Russia

Deal with specific issues and problems the company may face in foreign markets

Deal with specific issues and problems the company may face in foreign markets

Serve as part of the IMC program and help market the product or service

Serve as part of the IMC program and help market the product or service

Present the company as a good corporate citizenPresent the company as a good corporate citizen

Deal with local governments, media, trade associations and the general public

Deal with local governments, media, trade associations and the general public

Serve as part of the IMC program and help market the product or service

Serve as part of the IMC program and help market the product or service

Present the company as a good corporate citizenPresent the company as a good corporate citizen

Deal with local governments, media, trade associations and the general public

Deal with local governments, media, trade associations and the general public

Role of Public Relations in Global Marketing

Web Sites Are Adapted to Various Countries