Chap016 - IMC

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I n t e r n a t i o n a l M a r k e t i n g

Integrated Marketing

Communications

and International

Advertising

Chapter 16

1 4 t h E d i t i o n P h i l i p R. C a t e o r a M a r y C. G i l l y J o h n L . G r a h a m

McGraw-Hill/Irwin

International Marketing

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Discussions

• List and explain all factors affect the choice of IMC tools (advertising, sales promotion, PR, events, personal selling…)

• _{List and explain the criteria to evaluate the IMC}

program

(3)

Factors influencing choice of IMC

• Product Life Cycle

• Brand Life Cycle

• Diffusion of Innovation

• Customer knowledge and perception

• Type of Customers (B2B vs. B2C; demographic)

• Type of Products (high involvement vs low

involvement, shopping, necessity…)

• The availability of tools

(4)

16-4

What Should You Learn?

• Local market characteristics that affect the advertising and promotion of products

• The strengths and weaknesses of sales promotion and public relations in global marketing

(5)

16-5

What Should You Learn?

• The effects of a single European market on advertising

• The effect of limited media, excessive media, paper and equipment shortages, and

government regulations on advertising and promotion budgets

(6)

16-6

Global Perspective

Barbie Versus Mulan

Global Perspective

Barbie Versus Mulan

• Integrated marketing communications (IMC)

– Advertising

– Sales promotions

– Trade shows

– Personal selling

– Direct selling

– Public relations

• Objective: successful sale of a product or service

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IMC STRATEGY

REQUIREMENTS

IMC STRATEGY

REQUIREMENTS

1. DETERMINE HOW WE WILL COMMUNICATE

WITH OUR CUSTOMER

2. DETERMINE HOW OUR CUSTOMER WANTS

TO COMMUNICATE WITH US

3. MEASURE COMMUNICATION AND

FEEDBACK AND MAKE CHANGES WHERE NECESSARY

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WHAT IS IMC?

1. IT PROVIDES TWO-WAY DIALOGUE BETWEEN SUPPLIER-CUSTOMER

2. IT PROVIDES FOR A UNIFORM MESSAGE DELIVERED THROUGH ALL COMPANY MEDIA

(ADVERTISING, SELLING EFFORT, DIRECT MAIL, TRADE SHOWS)

3. IT FOCUSES ON MEETING THE

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THE CONTINUOUS THE CONTINUOUS

IMC PLANNING PROCESS IMC PLANNING PROCESS

Set Goals

Determine

Communication Elements

Create Message

Place Messages in Media

Measure Results

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Action

Desire

Interest

Awareness

THE HIERARCHY OF EFFECTS MODEL

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COMMUNICATION TOOL KIT

1. ADVERTISING

2. SALES PROMOTION

3. DIRECT MARKETING

4. PUBLIC RELATIONS

5. INTERNET

6. TRADE SHOWS

7. TELEMARKETING

8. PERSONAL SELLING

9. MARKETING RESEARCH

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MEASURING IMC PERFORMANCE

THE MEASURE: DETERMINED BY:

RECALL SURVEYS/FOCUS GROUPS

INQUIRES CARD/COUPON RESPONSE, 800-NUMBER RESPONSE

POSITION PRE-AND POST-ADVERTISING ATTITUDE SURVEYS

REACH ESTIMATE YOUR READERS BASED ON TOTAL

CIRCULATION/ READERSHIP AUDITS

CPM (cost per 1000) DIVIDE COST OF AD BY

(13)

WHERE MARKETING COMMUNICATION

DOLLARS ARE SPENT

WHERE MARKETING COMMUNICATION

DOLLARS ARE SPENT

24.8% Direct Marketing Market Research Online Marketing Premiums & Incentives Public Relations 4.2% 5.8% 3.1% Sales Force Management Other Advertising Trade Shows Sales Promotion 18.0% 16.9% 4.4% 4.2%4.3% 5.8% 7.7% 24.8% 3.1% 10.8% 18.0% 16.9% 4.4% 4.2%4.3%

5.8% 7.7% _24.8%

3.1%

10.8%

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New Trends

• Search Engines: Google

• Social Medias: Facebook

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THE BUDGET BREAKDOWN METHOD (Allocates Total Available Budget)

TOTAL AVAILABLE BUDGET FUNDS

Trade Show

Mail

Radio

Magazines

Newspaper

Internet

Sales Force Allocated to:

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THE BUDGET BUILDUP

(Creates Total Budget)

Trade Shows

Mail

Radio

Magazines

Newspaper

Internet

Sales Force

How Much is Needed for Objective

Creates Total Budget

Exhibit 10-10

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In most Asian countries,

sex sells

sex sells,

especially for beer.

This picture - a convenience

store in Malaysia

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Alternative Advertising

Options

Alternative Advertising

Options

• PLACE ADVERTISING:

• Out-of-home advertising - different alternative advertising forms

• Billboards:

(19)

(20)

HSBC advertises on Kuala Lumpur’s monorail to show that the world’s local bank can bring people places—a tie-in to the

(21)

Alternative Advertising

Options

• _{Outdoor advertising popular in Asia}

WHY?

• Traffic jams - cities like Bangkok - massive captive audience

• Rural areas- TV & newspaper ad less available - billboards - mass audience

(22)

Options

Public Spaces:

• Put TV & print ads in public places - movies, airlines, restrooms, road etc

• Transit ads: reach working women

(23)

PRODUCT PLACEMENT:

• From movies to all types of TV shows

• Combined with special promotions to publicize entertainment tie-ins

• Placement - no cost – supply their products to movie company

• In China, some programs are produced & branded by advertisers

Options

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18- 24_{18- 24}

Product Placement:

– _{Marketers are finding other inventive ways to}

advertise during actual television broadcasts.

► _{Virtual logos networks add digitally to the playing field.}

► _{Ads also appear in best-selling paperback books and movie}

videotapes.

– _{Advertorials are print ads that offer editorial}

content that reflects favorably on the brand and is difficult to distinguish from newspaper or magazine content.

– _{Other firms are exploring branded}

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18- 25_{18- 25}

Point-of-Purchase

•

There are many ways to

communicate with consumers at

the point-of-purchase (POP)

– _{In-store advertising includes ads:} – _{On shopping carts}

– _{Cart straps}

– _{Aisles and shelves}

– _{In-store demonstrations} – _{Live sampling}

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18- 26_{18- 26}

• The appeal of point-of-purchasing

advertising lies in the fact that numerous studies show that in many product

categories consumers make the bulk of their final brand decisions in the store

• One study suggested that 70 percent of all buying decisions are made in the store

• In-store advertising is designed to increase the number of spontaneous buying

decisions

Point-of-Purchase

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16-27

The International

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16-28

Legal Constraints

• Comparative advertising

• _{Advertising of specific products}

• _{Control of advertising on television} • _{Accessibility to broadcast media}

• _{Limitations on length and number of commercials} • _{Internet services}

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16-29

Linguistic Limitations

• Language is one of the major barriers to

effective communication through advertising

• Translation challenges

• Low literacy in many countries

• Multiple languages within a country

• _{In-country testing with the target consumer}

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16-30

Cultural Diversity

• Knowledge of cultural diversity must encompass the total advertising project

• Existing perceptions based on tradition and heritages are often hard to overcome

• Subcultures

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16-31

Sales Promotions

in International Markets

Sales Promotions

in International Markets

• Sales promotions

– Marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation

– Short-term efforts directed to the consumer or retailer to achieve specific objectives

• In markets with media limitations the percentage of the promotional budget allocated to sales

promotions may have to be increased

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16-32

International Public Relations

• Public relations (PR) is creating good

relationships with the popular press and other media

– To help companies communicate messages to customers, the general public, and governmental regulators

• Bridgestone/Firestone Tires safety recall

• Global workplace standards

(33)

16-33

Top 20 Global Advertisers

($ millions)

Top 20 Global Advertisers

($ millions)

(34)

16-34

Top 100 Advertisers’ Global Spending

($ millions)

Top 100 Advertisers’ Global Spending

($ millions)

(35)

16-35

Top Ten Advertisers

(Russia and China – $ millions)

Top Ten Advertisers

(Russia and China – $ millions)

(36)

16-36

International Advertising

1. Perform marketing research

2. Specify the goals of the communication

3. Develop the most effective message(s) for the

market segments selected

4. Select effective media

5. Compose and secure a budget

6. Execute the campaign

7. Evaluate the campaign relative to the goals

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16-37

Advertising Strategy and Goals

• Marketing problems

– Require careful marketing research

– Thoughtful and creative advertising campaigns

► _{In country, regional, and global markets}

• Increased need for more sophisticated advertising strategies

• Balance between standardization of advertising themes and customization

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16-38

Product Attributes

and Benefit Segmentation

Product Attributes

and Benefit Segmentation

• Different cultures usually agree on the benefit of the primary function of a product or service

• Other features and psychological attributes of the item can have significant differences

– Cameras

– Yogurt

– Almonds

• Blue Diamond

– Assumes that no two markets will react the same

► _{Each has its own set of differences}

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16-39

Regional Segmentation

• Pan-European communications media highlights need for more standardized promotional efforts

• Costs savings with a common theme in uniform promotional packaging and design

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16-40

Global Advertising

and the Communications Process

Global Advertising

and the Communications Process

• If not properly considered, different cultural contexts can increase the probability of

misunderstandings

• _{Effective communication}

– Demands the existence of a “psychological overlap” between the sender and the receiver

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16-41

Media Limitations

and Production and Cost Limitations

Media Limitations

and Production and Cost Limitations

• Media limitations may diminish the role of advertising in the promotional program

• Examples of production limitations:

– Poor-quality printing

– Lack of high-grade paper

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16-42

Media Planning and Analysis –

Tactical Considerations

Media Planning and Analysis –

•

Availability

•

Cost

•

Coverage

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16-43

•

Newspapers

•

Magazines

•

Radio and television

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16-44

Tactical Considerations

•

Direct mail

•

The Internet

•

The New Social Media

(45)

16-45

Media Penetration

in Selected Countries

(per 1,000 persons)

Media Penetration

in Selected Countries

(per 1,000 persons)

(46)

16-46

Top Ten Websites

in Three Countries

(visitors per month)

Top Ten Websites

in Three Countries

(visitors per month)

(47)

16-47

Social Networking Goes Mobile

(Percent of Respondents)

Social Networking Goes Mobile

(Percent of Respondents)

(48)

16-48

Campaign Execution

and Advertising Agencies

Campaign Execution

and Advertising Agencies

• Managed by advertising agencies

– Local domestic agency

– Company-owned agency

– Multinational agency with local branches

• Compensation

– Commonly 15 percent throughout the world

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16-49

World’s Top Ten

Advertising Agency Organizations

World’s Top Ten

Advertising Agency Organizations

(50)

16-50

International Control

of Advertising – Broader Issues

International Control

of Advertising – Broader Issues

• Consumer criticism

• Deceptive advertising

• Decency and blatant use of sex

• Self-regulation

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16-51

Summary

• An integrated marketing communications (IMC) program includes coordination among

advertising, sales management, public relations, sales promotions, and direct marketing

• Currently companies are basing their advertising strategies on national, subcultural, demographic, or other market segments

• The major problem facing international

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16-52

Summary

• The availability and quality of advertising media vary substantially around the world

• Advances in communication technologies are

causing dramatic changes in the structure of the international advertising and communications