International Advertising and Promotion 20 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Reasons for International Importance Economic necessity Growth and profit opportunities Company survival, particularly those with small domestic markets Stagnation of domestic markets

Focusing on China for Growth

Tourism Australia Uses Global Campaign

International Advertising & Promotion RankAdvertiserOutside U.S.Inside U.S. 1Proctor & Gamble$4,995$3,527 2Unilever3, General Motors1,1452,208 4L’Oreal2, Toyota Motor Corp.1,8951,203 6Ford Motor Co.1,1681,701 7Time Warner2981,838 8Nestlé1, Johnson & Johnson6741,351 10Daimler/Chrysler5781,425 Ad spending in millions of U.S. dollars

The International Environment Economic Environment Economic Environment Demographic Environment Demographic Environment Cultural Environment Cultural Environment International Marketing & Promotional Decisions International Marketing & Promotional Decisions Political/Legal Environment Political/Legal Environment

International Economic Environment Economic environment Stage of economic development Economic infrastructure Standard of living Per capita income Distribution of wealth Currency stability Exchange rates Economic environment Stage of economic development Economic infrastructure Standard of living Per capita income Distribution of wealth Currency stability Exchange rates International Marketing And Promotional Decisions International Marketing And Promotional Decisions

ICI Dulux Targets Young Households in China *Click outside of the video screen to advance to the next slide

International Demographic Environment Demographic environment Size of population Number of households Household size Age distribution Occupation distribution Education levels Employment rate Income levels Demographic environment Size of population Number of households Household size Age distribution Occupation distribution Education levels Employment rate Income levels International Marketing And Promotional Decisions International Marketing And Promotional Decisions

International Cultural Environment Cultural environment Language Lifestyles Values Norms and customs Ethics and moral standards Taboos Cultural environment Language Lifestyles Values Norms and customs Ethics and moral standards Taboos International Marketing And Promotional Decisions International Marketing And Promotional Decisions

Heineken Translation Issues

Lay’s Targets China Youth Market *Click outside of the video screen to advance to the next slide

International Political/Legal Environment Political/legal environment Government policies Laws and regulations Political stability Nationalism Attitudes toward multinational companies Political/legal environment Government policies Laws and regulations Political stability Nationalism Attitudes toward multinational companies International Marketing And Promotional Decisions International Marketing And Promotional Decisions

Test Your Knowledge Since the European Union banned the use of food dyes in seafood, the salmon market has suffered. People mistakenly believe that salmon is naturally pink. Unfortunately, salmon is an unappetizing gray color. This is an example of how _____ factors can inadvertently hurt small businesses. A)economic B)demographic C)political/legal D)cultural E)infrastructure

Advertising Subject to Regulation Products that may be advertised Content or creative approach used Media advertisers are permitted to use The amount of advertising one may do Use of foreign languages in ads Use of materials from outside the country Use of local vs. international ad agencies Specific taxes levied on advertising

Global Marketer’s Dilemma Offer the same product, marketing, and advertising everywhere ? Adapt the product, marketing, and advertising to each society?

Global Marketing & Advertising Advantages Lower costs with less in planning and control Economies of scale in production, distribution Lower advertising production costs Ability to exploit good ideas worldwide Ability to introduce products quickly, worldwide Consistent international brand, company image Simplification of coordination and control

Gillette Launches Mach3 Globally

Problems With Global Advertising Legal restrictions may make it difficult to develop an effective universal appeal Media availability or usage may vary by country or region Consumer needs and usage patterns often vary by country or region Differences in culture, market and economic development make it difficult to use global advertising

When is globalization appropriate? Brands can be adopted for visual appeal, avoiding translation problems Brands promoted with image campaigns playing to universal needs, values, emotions High-tech products, new to the world, not steeped in the cultural heritage of the country of origin Products with a nationalistic flavor, if the country has a favorable reputation in the field Products appealing to a market segment with universally similar tastes, interests, needs, values Globalization Often Works Best For:

TAG Heuer’s Global CampaignCampaign

British Airways Uses Global Advertising *Click outside of the video screen to advance to the next slide

Global Products, Local Messages Standardizing Products “Think Globally, Act Locally” Localizing Ad Messages An In-between Approach Differences in Language Differences in Market Conditions Differences in Cultural Adapt Messages to Respond To Use of Pattern Advertising

TaylorMade Used Pattern Advertising

Decision Areas in International Advertising Organization Style Creative Strategy & Execution Agency Selection Advertising Research Coordination of Other IMC Tools Media Strategy and Selection Decision Areas

Centralization of International Advertising Budgeting Research Agency Selection Agency Selection Creative Strategy Creative Strategy Media Strategy Media Strategy Campaign Development Campaign Development Central Authority

Decentralized International Advertising Central Authority Central Authority Budgets Media Campaigns Creative Research Budgets Media Campaigns Creative Research Budgets Media Campaigns Creative Research Region One Region One Region Two Region Two Region Three Region Three

Criteria for Selecting an Agency 1.Ability of agency to cover relevant markets. 2.Quality of agency work. 3.Market research, public relations, and other services offered by the agency. 4.Relative roles of company advertising department and strategy. 5.Level of communication and control desired by company.

Criteria for Selecting an Agency 6.Ability of agency to coordinate international campaign. 7.Size of company’s international business. 8.Company’s desire for local versus international image. 9.Company organizational structure for international business and marketing (centralized versus decentralized). 10.Company’s level of involvement with international operations.

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

Creative Decisions Appeals may have to be adapted for local market conditions Specific appeals and execution styles must be selected Copy platforms must be developed that include major selling ideas Creative decisions should be based on advertising and communication objectives

Coca-Cola Adapts to Local Markets

International Media Selection Issues Widely Differing Characteristics Cost Coverage Restrictions Availability Quality Media Information Problems Cost Reliability Circulation Audience Availability

Specialized Target Audiences

Broad Coverage of International Media © 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

International Sale Promotion Market Maturity Trade Structure Economic Development Consumer Perceptions Regulations Major Creation Considerations

WD-40 Used Product Samples in Russia

Central vs. Local Roles

Public Relations in Global Marketing Deal with specific issues and problems the company may face in foreign markets Serve as part of the IMC program and help market the product or service Present the company as a good corporate citizen Deal with local governments, media, trade associations, and the general public

Worldwide Growth of the Internet