Week 9 - International marketing

communication

Prepared by Alistair Hodgson & Robin Roberts

Key Themes

After attending this week’s lecture and studying chapter 11 you should be able to:• Explain the influence of culture on marketing

communication• Describe the methods used to set an international

advertising budget• Discuss the main drivers of creative strategy• Explain how international media decisions are made

Key Themes

• Assess differences in marketing communication regulations around the globe

• Explain core factors in choosing a suitable advertising agency

• Understand that the benefits of diverse elements of the marketing communication mix differ around the globe

Scene Setter: HSBC

• Global operations > global consumers with varied cultural backgrounds– Logical to expect customisation?– In reality, advertising has been standardised, but

focused on cultural differences• Combination of both video/televised advertising and

print-based > strategy is consistent across both, however.

Scene Setter: HSBC

Scene Setter: HSBC

International advertising and culture

• Culture provides a big hurdle in international marketing communication

• Language barriers– things don’t always translate the way they should• “Body by Fisher” becomes “Corpse by Fisher”• “When I used this shirt, I felt good.” becomes “Until I

used this shirt, I felt good.”

• Other cultural barriers– the culture itself can throw up challenges to a marketing

communication strategy (conceptual translation)

Language barriers

• The challenge of idioms– how to translate the Australian saying

‘Wrap your laughing gear around this’• translates roughly to ‘eat this’

• Translations don’t always translate– in the United States the Pepsi slogan,

‘Come alive with the Pepsi Generation’• in Taiwan it becomes, ‘Pepsi will bring your ancestors

back from the dead’

Other cultural barriers

• Involve local advertising agencies– they have a greater sensitivity to the local language– Can translate conceptually, as well as literally

• Don’t translate– ‘Sheer Driving Pleasure’ for BMW worldwide– ‘Don’t crack under pressure’ for TAG Heuer

Other cultural barriers

• Political sensitivities– referring to Hong Kong and Taiwan as ‘countries’ when in

China

• Poor taste– what is poor taste in one country is not necessarily poor taste

in another

• Value systems are different– is it reasonable to use comparative advertising in all cultures?

Other cultural barriers

Sunsilk shampoo: Saudi Arabia

Foster’s (UK): “Don’t lose your head”

• Viewed as insensitive in the UK, despite apparent cultural similarities between the UK and Australia:• Humour often doesn’t translate exactly

• Australian humour generally more irreverent than in the UK

Other cultural barriers:Comparative Advertising

Figure 11.1

Other cultural barriers:Comparative Advertising

Q: Why is comparative advertising not acceptable in collectivist countries?

Subtle vs. Direct Comparative Advertising

Setting the international advertising budget

• Many of the approaches used in domestic communications are also used in international communications:

– Percentage of sales

– Competitive parity

– Objective and task

– Resource allocation

Setting the international advertising budget

• Percentage of sales– using a percentage of past sales or future sales or a

combination of both to determine the budget– still one of the most common methods– Key benefit: Keeps advertising budgets in check (sales

determine the budget)– Key cost: Promotion follows the number of sales;

contrast with the usual process (advertise > higher sales)

Setting the international advertising budget

• Competitive parity– determining budget based on activities of one or more

competitors– allows the organisation to maintain its ‘share of voice’– Key benefit: spending follows a pre-existing, optimised

amount for the local market– Key cost: new entrants should really spend more than

pre-existing competitors• Current spending levels within an industry could be questionable

Setting the international advertising budget

• Objective and task– relating the advertising budget to the sales objectives– one of the most appealing methods amongst

marketing communicators– Key benefit: communications meet the company’s

primary objectives (or at least aim to)• Also encourages well-developed understanding of the local

market

– Key cost: the advertising budget can spiral

Setting the international advertising budget

• Resource allocation– involves the allocation of resources across different

countries• subsidiaries determining their own budgets (bottom-up

budgeting)• headquarters determines budgets (top-down budgeting)

Creative strategy

• To standardise or adapt

– similar argument to that of product adaptation vs standardisation

– can still be considered standardised if a global campaign is used and only minor changes to comply with local regulations are undertaken (i.e. language)• substantial changes would be considered an ‘adapted

creative strategy’

Creative strategy:Advantages of Global Advertising

Table 11.1

Merits of standardisation

• Economies of scale

• Consistent image

– Nike ‘swoosh’

• Global consumer segments

– ‘business-class traveler’; ‘emerging middle-class’

• Crossfertilisation

– Mazda’s ‘Zoom-Zoom’ tagline. Introduced in Japan > becomes a huge success in the US > introduced to Australia and Europe

Barriers to standardisation

• Cultural differences– advertising cosmetics in the Middle East– Japanese advertising creates new icons, music, and stories

• Advertising regulations– foreign-made advertisements featuring Caucasians not allowed in

Malaysia

• Market maturity– Body Shop is not the dominant ‘eco-friendly’ provider in some

mature markets (Lush as a key rival)

• Not invented here (NIH) syndrome– Local subsidiary reluctance to use standardised creative approach

International media decisions

• Media buying is a critical element– variations exist across different countries• published readership levels of magazines are accurate

in Australia but less so in China• Creative approach is often less-important than gaining

media presence

• Media infrastructure– issues of access and affordability• television media in the Philippines is relatively cheap• internet bandwidth is large in China

– fibre optic point-to-point across China

International media decisions

• Media limitations– cost– availability of certain types in some markets/sub-

markets• Traffic/Road-based media better in markets with severe

congestion

– overall quality of media in some countries is questionable- issues with media contracts

International media decisions

• Developments– growing spread of interactive marketing• Most obvious examples are online (Facebook etc.)

– growing popularity of mobile marketing• Again, previous video has relevance here too

– media fragmentation• Digital ad agencies becoming more prominent; companies

must adapt to media fragmentation and use new channels for promotion

International media decisions

• Developments– rise of global and regional media companies• Local media often difficult to access > global & regional

media offers a way into particular markets• Increasing similarity amongst consumers a factor too

– growing commercialisation and deregulation of mass media• Privatisation of state-owned media entities• Digital television and additional channels

– improved television viewership measurement

Advertising regulation

• Advertising of some products comes under greater scrutiny– for example, alcohol and pharmaceuticals

• Heineken Cup (Rugby tournament) now referred to as the ‘H’ cup in France

• Advertising clutter– lobby groups and government regulate to reduce clutter

• Comparative advertising– common in Australia,

but constrained or prohibited in many Asian countries

Advertising regulation

• Content of advertising messages– can be subject to certain rules or guidelines• Due to health & safety regulation• Misleading messages

• Targeting children– some advertisements are excluded from children’s

viewing• Greece bans television advertisements of toys between

7am-10pm.• Fast food advertising restrictions

Choosing an advertising agency

• What is their market coverage?• Can they develop/be part of a global campaign?• Creative reputation• Scope and quality of services• Local know-how (often contradicts previous

consideration)• Size of agency– big isn’t always best– small agencies could be more creative/innovative

Coordinating international advertising

• Monetary incentives to local distributors– ‘co-operative advertising’• providing incentives at a local level to reward those who

are consistent in their delivery of the global message

• Advertising manuals– brand books, DVD, CD, online etc. to provide some

structure• International or global meetings

Other elements of the marketing communication mix

• Advertising is a critical element of the marketing mix but not the only element

• An integrated approach is needed– Integrated Marketing Communication (IMC)– other elements which need to be considered• sales promotion• direct marketing• event sponsorship• trade shows• personal selling

Sales promotion

• Usually a local effort

• Many of the same promotions as domestic sales promotion

– point of sale

– coupons

– discounts

Sales promotion

• Why so local?– level of economic development• developing countries like sampling

• Market maturity– products in an early stage of their introduction may

warrant promotions that allow the consumer to trial the product

• Government regulations– coupons are used heavily in the US and less so in

Australia, New Zealand, and Europe

Direct marketing

• Telemarketing• Direct mail• Online– internet – social media– mobile

Event sponsorship

• Globally one of the fastest growing promotional tools• Heavily skewed towards sports– other events gaining ground• concerts

• There is the risk of ‘ambush marketing’– non-sponsors giving the impression to consumers

they are in fact sponsors– Nike in 2014 World Cup

• Sponsor of individual players& teams but not the tournament

Trade shows

• Over 15,000 trade shows a year• Good opportunity for business-to-business• Can provide immediate access to customers in foreign

markets

Personal selling

• Used more extensively by industrial companies• Need to be aware of cultural differences between

countries– ‘down to business’ Western approach– subtle approach in Asia

Summary

You should now have an understanding of:• The influence of culture on marketing

communication• The methods used to set an international advertising

budget• The main drivers of creative strategy• How international media decisions are made

Summary

• Differences in marketing communication regulations around the globe

• Core factors when choosing a suitable advertising agency

• The benefits of diverse elements of the marketing communication mix differ around the globe