Module 7

International Advertising

International Advertising
‡ It entails dissemination of a commercial message to target audiences in more than one country ‡ Target audience differ from country to country
± In terms of how they perceive or interpret symbols ± Respond to humor or emotional appeal ± Literacy levels and spoken languages

‡ In some cases MNC centralize advertising decisions and budgets and use the same or a limited number of agencies world wide ‡ In some cases budgets are decentralized and placed in the hands of the subsidiaries

International marketing environment
‡ Economic environment
± Reflects the potential buying behavior of that country ± Country with sound economic condition is more potential and attractive for the marketers ± Purchasing power and life time value of developed nation like US, Japan is high compared to other nation ± Income of the customers of developing economies like India, China, Brazil is also rising giving rise to marketing and advertising opportunities ± Another segment is less developed economies which are not attractive and do not provide opportunities to marketing and advertising

International marketing environment
‡ Demographic environment
± Like age, education, income, distribution of population, household size, employment, and literacy rate etc affect the marketing environment ± Latin America, Indonesia and India has more younger generation population is gaining lot of attraction from the world ± Educated population of India attract 60% of outsourcing business ± World s largest consumer market, China with 1.2 Billion population provides opportunities for marketing and advertising

International marketing environment
‡ Cultural environment
± Like language, customs, attitudes, lifestyles, taste and preferences plays a major role ± E.g. menu change by McDonald s to match the taste and preferences of each country ± Some culture emphasis on competition while others give importance to relationship ± However companies must be willing to adapt when necessary understanding the culture of the company is the only sound basis for planning for any company entering the international market ± It helps to create good communication and advertising issues

International Marketing environment
‡ Political/ Legal environment
± It influences business at various levels ± Stability of government policies depends upon political parties ± Unfortunately, government are not always stable and friendly to business communities as ideology of each party is different, having special interest on some issues ± This leads to changes in policies affecting business community

International Marketing environment
‡ Legal environment differs from country to country in terms of the following:
± Type of product to be advertised e.g. Canada, France, Italy, Sweden, limit tobacco advertising to the point of purchase ± Use of women in ads-Islamic nation may not accept ± Use of foreign language ± Use of air time ± Government/general holiday: targeted by the companies to advertise more ± Content-sensor board does not allow all types of content to be shown

Role of International Advertising
‡ International advertising as a communication process
± It is more complex as communication takes place across multiple context, which differ in terms of language, literacy, and other cultural factors ± People may misinterpret ± Failure to reach the intended audience ± Steps in the process of communication in International market are:
‡ Advertisers determine appropriate message for the target audience ‡ Message encoded ‡ Message sent through media audience who then decodes the message and reacts to the message

Role of International Advertising
‡ International advertising as a Business Practice
± Through this the firm attempts to inform audience in multiple countries ± Inform the firms corporate message then uniform global campaign is used ± If the objective is to launch a new product then local campaigns tailored to local markets are made ± Use of same image in different countries build familiarity and substantial cost saving

Role of International Advertising
‡ International advertising as an industry
± There are large numbers of small and medium sized advertising agencies with operations in various countries ± Some companies like IBM and Citibank make annual expenditure of $500 million worldwide ± Mostly headquarter in US ± World wide over $400 Million is spent on advertising ± Media plan has to be made ± There is a trend towards consolidation of media in order to achieve greater economies of scale

Role of International Advertising
‡ International advertising as a social force
± Primary objective of advertising is to sell products or services ± Advertising exerts a formative influence both persuasive and pervasive ± To promote and introduce new products from one society to another ± It creates expectation about good life ± Nike McDonalds have become desire of the teens ± It acts like an integrating force across national boundaries

Advantages
‡ Economies of scale in production and distribution of advertisements ‡ Lower production costs due to reduction in planning and control ‡ Exploring good ideas throughout the world ‡ Enables company to get an international image ‡ Enables the company to increase sales

Disadvantages
‡ Difference in culture, market and economic development, media availability legal restrictions make it difficult for a company to operate in International markets ‡ Difference in consumer perception, usages pattern of product affect the companies activities ‡ One global campaign may not be suitable for all countries, leading to increase in cost of production of ads ‡ Government on many countries are unstable

Top 10 Advertising Agencies
1. Dentsu 2. McCann-Erickson 3. BBDO Worldwide 4. J. Walter Thompson 5. Euro RSCG 6. Grey 7. DDB Needham 8. Ogilvy and Mather 9. Leo Burnett 10.Publicis Worldwide

Internet Advertising

Meaning
‡ Internet refers to a set of rules in which two computer network can exchange information with one another ‡ It is hybrid media as it can work similar to a newspaper, magazines, T.V ‡ Act as interactive communication media ‡ Two way communication is possible on account of which the companies can interact with consumers, suppliers, channel members etc

Components
1. World wide web 2. Electronic mail- email which enables people to transmit messages 3. Internet relay chat- enables people to chat electronically 4. Usenet-provides platform to share knowledge 5. Gopher- is a document retrieval system 6. Server- enables the people to use keywords and retrieve the detailed information

Advantages of net advertising
‡ Measuring effectiveness
± Internet is far superior compared to other media to know about their viewers

‡ Access
± Advertisers are able to access the impact of their ads quite early ± It provide flexibility to launch the campaign in way it can be changed before money is spent

‡ Creativity
± Creative ads leads to large traffic through repeat visits

‡ Budget
± With small budget international exposure is possible

Advantages of net advertising
‡ Targeting the audience
± Wastage is minimal ± Only interested people visit the site

‡ Message tailoring
± Message can be designed to appeal the specific needs and wants of the target audience

‡ Interactive capabilities
± People interested in the company will visit and interact more

‡ Sales potential
± Because it is direct response media, the ability to generate sales is enhanced

Disadvantages of internet
‡ Web snarl
± When large number of users, downloading time will increase. For whom speed is a major criteria it proves to be a disadvantage

‡ Clutter
± So many ads get unnoticed

‡ Privacy
± Internet marketer should not intrude the privacy

‡ Measurement problem
± Difficult to know the effectiveness of this media

Disadvantages of internet
‡ Audience characteristics
± Web not for everyone ± Only 10 to 15% people uses web for purchasing

‡ Potential for deception
± Sometimes, the advertisers attempt to target children with subtle advertising messages ± This may have ill effect and mislead them

‡ Cost
± Low priced item web is costlier affair ± High ticket item, web may be good

‡ Quality
± Web do not reflect high quality of TV broadcasting

Types of internet advertising
1. 2. 3. 4. 5. Banner ads Pop-ups Corporate home page Sponsorship E-mails

Banner ads
It is a small graphic links placed on the web page User can click on the ad and go to the website Can instantly identify the website visitor 2 persons can view same page at the same time Site such as Yahoo will have banner advertisement ‡ Ads will be placed on site that attract specific market ‡ E.g. ad for abs-reducer should be placed in a site which provide information on health ‡ ‡ ‡ ‡ ‡

Types of internet advertising
‡ Pop-up ads
± When a user access internet, a small window appears called pop-ups ± When a surfer wants to go to a site he/she has to go through the ad page first ± It's the thing of the past now. With a variety of popup blockers available freely, it makes no sense in investing in this form of advertising as it irritates the viewer.

Types of internet advertising
‡ Corporate home page
± Present the basic information of the company with corporate brochure ± Present papers, publications which the company like to present to the public

‡ Sponsorship ‡ E-mail
± Customizing the message is possible ± Inexpensive ± Customer permission is must ± Opt in and opt out email

Others- types of internet advertising
‡ Floating Ads ‡ These ads appear when you first go to a webpage, and they "float" over the page for five to 30 seconds. While they are on the screen, they obscure your view of the page you are trying to read, and they often block mouse input as well. These ads appear each time that page is refreshed. ‡ Floating ads are popular for several reasons:
± ± ± ± They grab the viewer's attention and cannot be ignored They are animated They have audio/video content like TV ads They can take up the entire screen, therefore from a branding standpoint, they are much more powerful than a banner ad or a sidebar ad ± They have a high click-through rate of about 3 percent

‡ However, many users get highly irritated because of these ads.

Others
‡ Interstitial Ads
± Interstitial pages are a form of advertisement on the web that appears between web pages that the user requests. Because interstitials load in the background, they are a preferred way of delivering ads that contain large graphics, streaming media, or applets.

‡ Unicast Ads
± A unicast ad is basically a TV commercial that runs in the browser window. It has enriched audio/video content. The ads can last anywhere from 10 to 30 seconds. These ads have similar branding power as a TV commercial. However, a unicast ad offers something that TV ads cannot -- the ability to click on the ad for more information. These ads are getting very effective, as the average clickthrough rate is 5%.

‡ Takeover Ads
± Viewers visiting the website will see a large ad when they first come, and then the continuity is maintained by reiterating the same message throughout the site in the form of banners, side bars or buttons. The approach works very well for branding because the brand is visible to viewers throughout the visit to the site. Click-through rates are also high

Types of internet advertising
‡ Contextual Ads
± Contextual advertising is a type of online advertising commonly used for content-based websites. With contextual advertising, targeted ads appear based on the page's actual content. First, a contextual advertising system scans the text of a webpage for keyword phrases. Then, the system returns specific, targeted ads based on the content people are viewing. This is becoming very popular as the ads can be targeted based on the users' interests.

‡ There are many other ways in which you can advertise like embedding your ad/brand in online games, chat rooms, etc. Rich media interactive ads can also be creatively used in a lot of different ways. Once you get started - you'll be able to explore great opportunities in this area. ‡ Do Right Marketing offers freelance content writing services. These include writing for the web, intranet, marketing and sales collateral such as case studies, newsletters, whitepapers, articles, blog posts, website navigation, editing, and proofreading, etc

Internet and IMC
‡ Personal selling through net
± Lower cost and better reach

‡ Public relation through net
± Company can provide information about its contribution to society, social work, annual reports, future plans etc

‡ Direct marketing through net
± Can be used to target specific group e.g. books, health care equipment, sale of property

‡ Sales promotion through net
± May provide different types of incentive to promote the product like, contests, discounts, rebate, coupons etc

Industrial Advertising

Industrial advertising
‡ It deals with information about business goods and service ‡ Like machinery, material, technology and process to industrial producers ‡ Industrial product market is specialized and concentrated ‡ The number of industrial buyers are limited

Objective of industrial advertising
1. Helps to improve the image among current and potential customers 2. It conveys technical information and specification of the product 3. Helps the customer to know the product, supporting personal selling 4. Selling cost is reduced

Features of industrial buying
1. Industrial purchases made are straight forward 2. Prices are to be negotiated 3. Competitive bidding is encouraged 4. Specification varies from one manufacturer to another 5. Differing requirement of several departments is to be met

Business to business communication
‡ A communication focus on potential customers who purchase in bulk for reproducing product/services

Objective of Business to business communication
1. Create awareness about products and services to the target group 2. The company must establish a favorable image 3. Must generate interest among the target group and motivate them to try the product 4. Proper communication regarding features, benefits to be passed to buyer 5. Sometimes product may have to be provided for trial and live-wire demonstration needs to be conducted

Business to business promotion
1. Advertising-appearing in technical journals 2. Direct marketing- direct mailing and telemarketing are the methods adopted 3. Internet-helps industrial buyers to find their potential seller saving enormous cost 4. Sales promotion- cash or trade discounts are given 5. Public relation-need for the company to create positive image as industrial buying is rational buying 6. Interactive media-email, teleconferencing, customer care centers are some of the interactive media

Goals of industrial advertising
1. To increase awareness and knowledge of the product and create a favorable attitude and image 2. To make the sales executives job easier 3. Lower cost of selling

Special issues in industrial selling
‡ Market related
± ± ± ±

Size and concentration of market Each customer is larger Derived demand Weak secondary data sources

‡ Product/price and channel related
± Product specification ± Negotiation price ± Shorter and direct channel

‡ Buyer related- engineer, Purchase manager, mgt ‡ Promotion related

Questions
1. What is international advertising? 2. What are the advantages and disadvantages of international advertising? 3. What are the components of internet advertising? 4. Discuss various types of internet advertising. 5. What is difference between B2B communication and consumer focus communication?

Thank you

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