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Svend Hollensen GLOBAL MARKETING 4 th Edition Communication decisions Lecture by Ewa Baranowska-Prokop, Ph.D.

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Presentation on theme: "Svend Hollensen GLOBAL MARKETING 4 th Edition Communication decisions Lecture by Ewa Baranowska-Prokop, Ph.D."— Presentation transcript:

1 Svend Hollensen GLOBAL MARKETING 4 th Edition Communication decisions Lecture by Ewa Baranowska-Prokop, Ph.D.

2 Hollensen, Global Marketing 4e, © Pearson Education 2008 De Beers: forward integration  What could be De Beers motives for making forward integration into the retail & consumer market?  Is it a wise decision?  How should De Beers develop its Internet strategy following this forward integration strategy?  Would it be possible for De Beers, with its branded diamonts, to standardize the international marketing strategy across borders? 17-2

3 Hollensen, Global Marketing 4e, © Pearson Education BMW Motorcycles: A case study (1)  Should BMW use standardization or adaptation in promoting the motorcycles outside the US and Germany? Requires web access

4 Hollensen, Global Marketing 4e, © Pearson Education BMW Motorcycles: A case study (2)  Why is BMW using its website as a virtual showroom rather than also selling online directly to consumers?  Should BMW develop and promote a new motorcycle brand to differentiate its motorcycles from competing motorcycle brands as well as differentiating them from BMW cars?

5 Hollensen, Global Marketing 4e, © Pearson Education Learning objectives  Define and classify the different types of communication tools  Describe and explain the major steps in advertising decisions  Describe the techniques available and appropriate for setting the advertising budget in foreign markets

6 Hollensen, Global Marketing 4e, © Pearson Education Learning objectives (2)  Discuss the possibilities of marketing via the Internet  Explain how important personal selling and sales force management are in the international marketplace  Define and explain the concept of ‘viral marketing’  Discuss how standardized international advertising has both benefits and drawbacks

7 Hollensen, Global Marketing 4e, © Pearson Education Figure 17.1 The shift from seller initiative to buyer initiative

8 Hollensen, Global Marketing 4e, © Pearson Education Figure 17.2 Elements of the international communication process

9 Hollensen, Global Marketing 4e, © Pearson Education Figure 17.3 The major international advertising decisions Objectives setting Budget decisions Message decisionsMedia decisions Agency selection Advertising evaluation

10 Hollensen, Global Marketing 4e, © Pearson Education What is this? Which form of budgeting means that the firm simply allocates a fixed proportion of sales to the advertising budget? Percentage of sales method

11 Hollensen, Global Marketing 4e, © Pearson Education Percentage of sales method Advantages  Guarantees equality among markets  Easy to justify  Guarantees only what is affordable is spent Disadvantages  Based on historical performance  Ignores necessity of increased spending during declining sales  Does not consider goals  Fails to address relationship between advertising and sales

12 Hollensen, Global Marketing 4e, © Pearson Education What is this? Which form of budgeting simply duplicates the amounts spent on advertising by major rivals? Competitive parity

13 Hollensen, Global Marketing 4e, © Pearson Education What is this? Which form of budgeting starts with determining the advertising objectives and then ascertaining the tasks needed to attain the objectives? Objective and task approach

14 Hollensen, Global Marketing 4e, © Pearson Education What is this? What term refers to the total portion of the target market exposed to at least one ad in a given time period? Reach

15 Hollensen, Global Marketing 4e, © Pearson Education What is this? What term refers to the average number of times within a given timeframe that each potential customer is exposed to the same ad? Frequency

16 Hollensen, Global Marketing 4e, © Pearson Education European agency selection factors National  Supports national subsidiary  Investment in existing brand best handled nationally  Closer to marketplace  Personalized service and greater creativity  Diversity of ideas Pan-European  Reflects new European reality  Economies of scale in new product development and branding  Uniformity of treatment across Europe  Resources and skills of major agency  Easier to manage one agency group Source: adapted from Lynch, 1994, Table 11-4.

17 Hollensen, Global Marketing 4e, © Pearson Education Aspects of advertising evaluation  Communication impact  Pretesting of print and broadcast ads  Testing finished ad  Sales impact

18 Hollensen, Global Marketing 4e, © Pearson Education Public relations Possible PR methods  Event sponsorship  Prizes at events  Press releases  Announcements  Lobbying Possible PR targets  Employees  Shareholders  Suppliers  Customers  General public  Governments  Financial markets

19 Hollensen, Global Marketing 4e, © Pearson Education What is this? What term refers to a short-term effort directed primarily to the consumer and/or retailer to achieve specific objectives such as product trial? Sales promotion

20 Hollensen, Global Marketing 4e, © Pearson Education Factors leading to expansion of sales promotion activities  Greater retail competition  Higher levels of brand awareness  Improved retail technology  Greater integration of promotional mix in media campaigns

21 Hollensen, Global Marketing 4e, © Pearson Education Factors leading to expansion of international direct marketing activities  Developments in mailing technology  Escalating costs of other forms of promotion  Increasing availability of quality lists  Developments in information technology  Increasing availability throughout developed world of interactive television facilities

22 Hollensen, Global Marketing 4e, © Pearson Education Questions to ask when assessing sales force effectiveness Is the selling effort structured for effective market coverage? Is the sales force staffed with the right people? Is strong guidance provided? Is adequate sales support in place? Does the sales compensation plan provide the proper motivation?

23 Hollensen, Global Marketing 4e, © Pearson Education Using expatriates Advantages  Product knowledge  Training for promotion  Greater home control Disadvantages  Highest costs  High turnover  High training costs Source: Reprinted from Industrial Marketing Management, Vol. 24, Honeycutt, E.D. and Ford, J.B. (1995) ‘Guidelines for managing an international sales force’, p. 138, Copyright 1995, with permission from Elsevier.

24 Hollensen, Global Marketing 4e, © Pearson Education Staffing the sales force from the host country Advantages  Economical  High market knowledge  Language skills  Best cultural knowledge  Faster implementation Disadvantages  Needs product training  May be held in low esteem  Importance of language skills declining  Difficult to ensure loyalty

25 Hollensen, Global Marketing 4e, © Pearson Education Staffing the sales force from a third country Advantages  Cultural sensitivity  Language skills  Economical  Allows regional sales coverage  May allow sales in a country in conflict with home country Disadvantages  Face identity problems  Blocked promotions  Income gaps  Needs product/company training  Loyalty assurances

26 Hollensen, Global Marketing 4e, © Pearson Education What is this? What term refers to a marketing technique that seeks to exploit existing social networks to produce exponential increases in brand awareness through online word-of-mouth communication? Viral marketing

27 Hollensen, Global Marketing 4e, © Pearson Education Viral marketing Advantages  Inexpensive  Active and participatory  Effectively targeted through peer-to-peer networks Disadvantages  Requires technologically compatible programs  Filtering programs may prevent receipt  Must be easy

28 Hollensen, Global Marketing 4e, © Pearson Education Developing a viral marketing campaign Step 1: Create compelling content Step 2: Target the right audience Step 3: Seed the message Step 4: Control/ measure results

29 Hollensen, Global Marketing 4e, © Pearson Education Courvoisier cognac used a localization strategy

30 Hollensen, Global Marketing 4e, © Pearson Education Negotiation  A negotiation process can be defined as a process in which two or more entities come together to discuss common and conflicting interests in order to reach an agreement of mutual benefit

31 Hollensen, Global Marketing 4e, © Pearson Education Figure 18.1 The cross-cultural negotiation process 1 Status distinction 2 Impression formation accuracy 3 Interpersonal attraction Non-task related interaction 4 Exchange of information 6 Concession making and agreement 5 Persuasion and bargaining strategy 7 Negotiation outcome Task related interaction Seller’s cultural background Buyer’s cultural background Cultural distance between seller and buyer Source: Adapted from Simintiras, A.C. and Thomas, A.H. (1998) and Simintiras, A.C. and Reynolds, N. (2001).

32 Hollensen, Global Marketing 4e, © Pearson Education What is this? The best alternative to a negotiated agreement is known as ______. BATNA

33 Hollensen, Global Marketing 4e, © Pearson Education Hofstede’s cultural dimensions Masculinity/femininity Uncertainty avoidance Power distance Individualism/collectivism

34 Hollensen, Global Marketing 4e, © Pearson Education Figure 18.2 Gap analysis in a cross-cultural negotiation

35 Hollensen, Global Marketing 4e, © Pearson Education Disney had to adapt to European cultures

36 Hollensen, Global Marketing 4e, © Pearson Education Approach to general intercultural preparation (1)  Build awareness about how cultural differences impact upon them in the sales organization  Motivate salespeople and managers to ‘rethink’ behaviour and attitude towards customers  Allow salespeople to examine their own biases in a psychologically safe environment

37 Hollensen, Global Marketing 4e, © Pearson Education Approach to general intercultural preparation (2)  Examine how stereotypes develop and how they can create misunderstandings between buyers and sellers  Identify diversity issues that need to be addressed in the international sales organization

38 Hollensen, Global Marketing 4e, © Pearson Education Steps for improving cross- cultural negotiation competences  Assess communication competences of salespersons  Assess communication competences of negotiators in the buying firm  Match communication and negotiation competences of buying and selling firm

39 Hollensen, Global Marketing 4e, © Pearson Education What is this? What term refers to employees who are sent out from the headquarters to work for the company in the foreign markets, often in its subsidiaries? Expatriates

40 Hollensen, Global Marketing 4e, © Pearson Education Attributes to consider when selecting expatriates Foreign-language skills General relational abilities Emotional stability Educational background Past cultural experience Ability to deal with stress

41 Hollensen, Global Marketing 4e, © Pearson Education Risk of culture shock is lower when expatriate exhibits Open-mindedness Empathy Cultural sensitivity Resilience Low ego identity

42 Hollensen, Global Marketing 4e, © Pearson Education Expatriate training methods  Area/country descriptions  Cultural assimilation training  Role playing  Handling critical incidents  Case studies  Stress reduction training  Field experience  Extensive language training

43 Hollensen, Global Marketing 4e, © Pearson Education Figure 18.3 ‘Bottom-up’ learning in global marketing

44 Hollensen, Global Marketing 4e, © Pearson Education For discussion (1)  Identify and discuss problems associated with assessing advertising effectiveness in foreign markets  Compare domestic communication with international communication. Explain why ‘noise’ is more likely to occur in the case of international communication processes  Explain how personal selling may differ overseas from how it is used in the home market

45 Hollensen, Global Marketing 4e, © Pearson Education For discussion (2)  Why do more companies not standardize advertising messages worldwide? Identify the environmental constraints that act as barriers to the development and implementation of standardized global advertising campaigns  What is meant by saying that advertising regulations vary around the world?

46 Hollensen, Global Marketing 4e, © Pearson Education For discussion (3)  Evaluate the ‘percentage of sales’ approach to setting advertising budgets in foreign markets  Explain how the multinational firm may have an advantage over local firms in training the sales force and evaluating its performance  Identify and discuss problems associated with allocating the company’s promotion budget across several foreign markets


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