1. Communication decisions
Lecture by Ewa Baranowska-Prokop, Ph.D.
Communication decisions

2. 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?

3. 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. 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. 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. 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. Figure 17.1 The shift from seller initiative to buyer initiative

8. Figure 17.2 Elements of the international communication process

9. Figure 17.3 The major international advertising decisions
Objectives setting
Budget decisions
Message decisions
Media decisions
Agency selection
Advertising evaluation

10. What is this? Percentage of sales method
Which form of budgeting means that the firm simply allocates a fixed proportion of sales to the advertising budget?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Percentage of sales method

11. 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. What is this? Competitive parity
Which form of budgeting simply duplicates the amounts spent on advertising by major rivals?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Competitive parity

13. What is this? Objective and task approach
Which form of budgeting starts with determining the advertising objectives and then ascertaining the tasks needed to attain the objectives?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Objective and task approach

14. 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?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Reach

15. 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?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Frequency

16. 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. Aspects of advertising evaluation
Communication impact
Pretesting of print and broadcast ads
Testing finished ad
Sales impact

18. 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. What is this? Sales promotion
What term refers to a short-term effort directed primarily to the consumer and/or retailer to achieve specific objectives such as product trial?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Sales promotion

20. 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. 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. 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. 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. 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. 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. What is this? Viral marketing
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?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Viral marketing

27. 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. 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. Courvoisier cognac used a localization strategy

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

32. What is this?
The best alternative to a negotiated agreement is known as ______.
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
BATNA

33. Hofstede’s cultural dimensions
Masculinity/femininity
Uncertainty avoidance
Power distance
Individualism/collectivism

34. Figure 18.2 Gap analysis in a cross-cultural negotiation

35. Disney had to adapt to European cultures

36. 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. 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. 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. What is this? Expatriates
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?
There follows an explanation of some key terms:
Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralization, delegation, standardization and local responsiveness.
Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.
Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Expatriates

40. 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. Risk of culture shock is lower when expatriate exhibits
Open-mindedness
Empathy
Cultural sensitivity
Resilience
Low ego identity

42. 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. Figure 18.3 ‘Bottom-up’ learning in global marketing

44. 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. 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. 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