20

International Advertising and Promotion

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Reasons for the importance of international
markets

¾ Domestic markets for many products and

services are stagnant
¾ Many companies rely on foreign markets to
survive, particularly those with small domestic
markets
¾ International markets offer growth
opportunities for many companies
¾ Competition has become global and marketers
must be able to compete globally
Markets such as China offer strong growth
opportunities for many companies
International Advertising

¾ The U.S. accounts for over half of the world’s

advertising expenditures
¾ Advertising expenditures outside the U.S. are
growing more rapidly than inside
¾ Every country in the world has advertising of
one form or another
¾ The more affluent the country, the more
monies spent on advertising
 The International Environment

Economic
Environment

International
Political/Legal Marketing Demographic
And
Environment Environment
Promotional
Decisions

Cultural
Environment
Economic Environment

¾ Stage of economic development

¾ Economic infrastructure
¾ Standard of living
¾ Per capita income
¾ Distribution of wealth
¾ Currency stability
¾ Exchange rates
Demographic Environment

¾ Size of population
¾ Number of households
¾ Household size
¾ Age distribution
¾ Occupation distribution
¾ Education levels
¾ Employment rates
¾ Income levels
Cultural Environment

¾ Language
¾ Lifestyles
¾ Values
¾ Norms and customs
¾ Ethics and moral standards
¾ Taboos
Political/Legal Environment

¾ Government policies
¾ Laws and regulations
¾ Political stability
¾ Nationalism
¾ Attitudes toward multinationals
The Big Question . . .

Should the global marketer offer the

same product, marketing, and
advertising throughout the world?

OR…
Should the global marketer adapt the
product, marketing, and advertising to
individual markets throughout the
world?
Saab used a global campaign since its
customers are similar around the world

Source: Courtesy Lowe & Partners Worldwide

(The Martin Agency, Lowe Brindfars for SAAB
Automobile AB).
 Global Marketing and Advertising
Advantages

¾ Economies of scale in production, distribution

¾ Lower costs with less in planning and control
¾ Lower advertising and production costs
¾ Ability to exploit good ideas worldwide
¾ Ability to introduce products quickly, worldwide
¾ Consistent international brand, company identity
¾ Simplification of coordination and control
When is Globalization Appropriate?

¾Brands can be adopted for a visual appeal,

avoiding the problems of trying to translate
words into different languages

¾Brands that are promoted with image

campaigns that play to universal appeals such
as sex or wealth

¾High-tech products and new products coming to

the world for the first time, not steeped in
cultural heritage of the country

¾Products with with a nationalistic flavor if the

country has a reputation in the field

¾Products that appeal to a market segment with

universally similar tastes, interests, needs, and
values
Young people are a global market segment
for many products
Global Products, Local Messages

¾ An in-between approach:
ƒ Standardizing products
ƒ Localizing advertising messages
ƒ “Think globally, act locally”

¾ Adapt messages to respond to

differences in language, cultural,
and market conditions.
ƒ Pattern advertising
Continental Airlines used pattern advertising
to promote its BusinessFirst class
Decision areas in international advertising

¾Organization
¾Agency Selection
¾Advertising and market research
¾Creative Decisions
¾Media Selection
¾Coordination of other IMC tools
International Ad Agencies

¾ Many large, American general agencies

operate internationally
¾ Foreign billings account for over a third
of total billings by the top 10 American
agencies
¾ Large multinational companies often deal
with large, international agencies
¾ Overseas offices are usually staffed with
multilingual, multinational personnel
Foreign Local Agencies

¾ Staffed with local talent who

understand local attitudes, culture,
media, and conditions
¾ Especially effective for launching
consumer products in a single,
new geographic area
¾ Poses some problems if a product
is to be launched in multiple, local,
foreign markets
 Criteria for Selecting an Agency
for International Advertising

¾ Ability of agency to cover relevant markets

¾ Quality of agency work
¾ Market research, PR, and other services offered
¾ Roles of company advertising department and agency
¾ Level of communication and control desired
¾ Ability of agency to coordinate internationally
¾ Size of company’s international business
¾ Company’s desire for local vs. international image
¾ Company organizational structure
¾ Centralized vs. decentralized
¾ Company level of involvement with international operations
Advertising and market research areas

¾Information on demographic characteristics of

markets
¾Information on cultural differences such as
norms, lifestyles and values
¾Information on consumers’ product usage,
brand attitudes, and media preferences
¾Information on media usage and audience size
¾Copy testing to determine reactions to different
types of advertising appeals and executions
¾Research on the effectiveness of advertising
and promotional programs in foreign markets
Creative Decisions

Creative decisions involve determining the

appropriate advertising message for each market
and are similar in process and procedure to
those for domestic advertising

¾ Creative decisions should be based on

advertising and communication objectives
¾ Copy platforms must be developed that
include major selling ideas
¾ Specific appeals and execution styles
must be selected
¾ Appeals may have to be adapted for local
market conditions
Media Selection Decisions

¾ Media differ in various countries with

respect to factors such as:
– availability
– cost
– usage
– quality
– restrictions
¾ Media options include use of local,
national or international media
 Commercials Shown Per Hour in various
countries

Turkey 57

Philippines 40

China 38

France 36

Mexico 34

Thailand 33

Australia 30

United Kingdom 16

0 10 20 30 40 50 60
Factor to consider in developing sales
promotion programs for foreign markets

¾ Economic development

¾ Market maturity

¾ Consumer perceptions

¾ Trade structure

¾ Regulations
WD-40 used samples to introduce its product
to Russia
 Who Allows What Promotions
Promotion U.K. Spain Germany France Italy

In-pack premiums Yes Yes No Maybe Yes

Multi-purchase offers Yes Yes Maybe Yes Yes
Extra product Yes Yes Maybe Yes Yes
Free product Yes Yes Yes Yes Yes
Mail-in offers Yes Yes No Yes Yes
Purchase-with-purchase Yes Yes No Yes Yes
Cross-promotions Yes Yes No Yes Yes
Contests Yes Yes Maybe Yes Yes
Self-liquidating premiums Yes Yes No Yes Yes
Sweepstakes Maybe Maybe No Maybe Maybe
Money-off coupons Yes Yes No Yes Maybe
Next-purchase coupons Yes Yes No Yes Maybe
Cash rebates Yes Yes Maybe Yes No
In-store demos Yes Yes Yes Yes Yes
 Central vs. Local Roles in International Sales
Promotion

Minimum Maximum
•Design

Headquarters Influences
•Execution
Subsidiary Influences

Adoption + Adaptation
•Strategy Strategy
•Design
•Cross-fertilization
•Execution
•Information
transfer
•Strategy
Cross-Fertilization
•Design
• Information transfer
•Execution
Information
Transfer
Maximum Minimum
Local Regional Global

Low International brand uniformity High

 Role of public relations in global marketing

¾ Deal with local governments, media, trade

associations and the general public
¾ Present the company as a good corporate
citizen
¾ Serve as part of the IMC program and help
market the product or service
¾ Deal with specific issues and problems the
company may face in foreign markets
Gillette products have web sites for many
different countries such as Italy