© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 12 Marketing Communication Principles of International Marketing 9th Edition

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit The Marketing Communication Process Sender (Encodes Message) Message Feedback Message Channel Receiver (Decodes Message ) Noise Communication Outcome

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Communications Process Encoding - Converting the message into symbolic form that is properly understood by the receiver. Message channel - The path through which the message moves from the sender to the receiver. Decoding – Process of transforming message symbols back into thought.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Communications Process Noise - Extraneous and distracting stimuli that interfere with the intended accurate reception of a message. Outcome - Determined by how well objectives have been met in generating more awareness, a more positive attitude, or increased purchases. Feedback - Necessary to analyze the success of the communications effort.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International Negotiations The two biggest dangers faced in international negotiations: –Parochialism - The misleading perception that the world of business is becoming ever more American and that everyone will behave accordingly. –Stereotyping - Generalizations about any given group, both positive and negative.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International Negotiations The use of Internet in international negotiations allows the exporter to –Overcome distances. –Minimize social barriers. –Obtain instant feedback. –Negotiate from a home base. –Negotiate with a number of customers simultaneously.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International Negotiations The process of international business negotiations can be divided into five stages: –Offer Allows the parties to assess each others needs and commitment. The initiation of the process and its progress are determined by background factors of the parties and the overall atmosphere. –Informal meetings To discuss the terms and get acquainted. It may be necessary to utilize facilitators (such as consultants or agents) to establish the contact.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International Negotiations –Strategy formulation Review and assess factors to be negotiated. Prepare actual give and take of the negotiation. –Negotiations Depend on the cultural background and business traditions prevailing in different countries. Two approaches are used for negotiations: competitive and collaborative. –Implementation The choice of location for the negotiations and the negotiator characteristics play a role in the outcome.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International Negotiations A combination of attitudes, expectations, and habitual behavior influences negotiation style. Approaches used for adjusting to the style of the host-country negotiators: –Team assistance –Traditions and customs –Language capability –Determination of authority limits –Patience

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International Negotiations Approaches used for adjusting to the style of the host-country negotiators: –Negotiation ethics –Silence –Persistence –Holistic view –The meaning of agreements

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 12.2 – Steps in Formulating Marketing Communications Strategy

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Communications Strategy Promotional mix - Tools available to the international marketer for creating a total communications program for use in the targeted markets. The promotional mix consists of advertising, personal selling, publicity, sales promotion, and sponsorship. The choice of tools leads to either a push or a pull emphasis in marketing communications.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Promotional Mix Push strategies - Focuses on personal selling; considered useful for marketing industrial goods which have shorter channels of distribution. Pull strategies - Depend on mass communications to reach target audiences over long distribution channels. Integrated marketing communications - Coordinated use of a broad range of promotional tools to reach a target market.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Business and trade journals and directories –The two main concerns when selecting media are effectiveness in reaching the target audience and efficiency in cost minimization. –In deciding which publications to use, the exporter must apply the general principles of marketing communications strategy.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Direct marketing –Establishes relationship with a customer in order to initiate immediate and measurable responses. –Accomplished through direct-response advertising, telemarketing, and direct selling. –Direct mail can be a highly personalized tool of communication if the target audience can be identified and defined narrowly.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Direct marketing –Telemarketing (including sales, customer service, and help-desk-related support) is flourishing due to telecommunication systems and deregulation in the industry. –Database marketing allows the creation of an individual relationship with each customer or prospect.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools The Internet - Supports the exporter’s marketing communications in the following ways: –Allow the company to increase its presence in the marketplace. –Communicate information about its marketing mix. –Allow 24-hour access to customers and prospects. –Improve customer service. –Allow the exporter to gather information for subsequent marketing efforts. –Provide an opportunity to close sales and communicate with internal constituents, apart from customers.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools The Internet –The challenges in Internet-based communications are related to the newness of the medium and the degree to which adjustments need to be made for each market served. –Marketers using the Web as an advertising medium will have to be concerned about market-by-market differences in regulations.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Trade shows and missions –Trade show is an event where manufacturers, distributors, and other vendors display their products or describe their services to current and prospective customers, suppliers, other business associates, and the press. –Exporters may participate in general or specialized trade shows.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Reasons for participation in trade fairs –Opportunity to introduce, promote, and demonstrate new products. –Goodwill and contact cultivation. –Locate a trade intermediary. –Meet government officials and decision makers. –Opportunity for market research and collecting competitive intelligence. –Reach sizable sales prospects in a brief time period at a reasonable cost per contact.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Reasons for non participation in trade fairs –High cost. –Difficulty in choosing the appropriate trade fairs for participation. –Coordination. Other promotional events that the exporter can use are trade missions, seminar missions, solo exhibitions, video/catalog exhibitions, and virtual trade shows.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Personal selling –Involves high costs per contact. –Provides immediate feedback on customer reaction as well as information on markets.

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit Levels of Exporter Involvement in International Sales SOURCE: Framework adapted from Reijo Luostarinen and Lawrence Welch, International Operations of the Firm (Helsinki, Finland: Helsinki School of Economics, 1990), chapter 1

© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Communications Tools Four general guidelines to be satisfied for the marketer-intermediary interaction to work: –Know the sales scene. –Research the customer. –Work with the culture. –Learn from local representatives.