Transcript Global Promotion and Distribution

Global Promotion
• Promotion objectives
• Problems and
opportunities in
promotional
transplantation
• Legal issues
MKT 376
PROMOTION AND E-COMMERCE
Lars Perner, Instructor
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Promotion: Strategic and Tactical
Objectives
Emerging
Markets/
• Awareness
• Trial
• Attitude toward the
product
– Beliefs
– Preference
• Temporary sales
increases
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PROMOTION AND E-COMMERCE
New Products
Mature markets
/established
products
Lars Perner, Instructor
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Tools in Integrated Marketing
Communication
• Advertising
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Media
Direct mail
Billboards
Other
Sales promotion
Public relations
Distribution as promotion
Placements/endorsements
MKT 376
PROMOTION AND E-COMMERCE
Lars Perner, Instructor
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Advertising Prominence
• Higher income countries tend to spend
more on advertising. However:
– Some exceptions
– Lower media costs in developing
countries may understate extent of use
• U.S. has especially high advertising
spending.
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PROMOTION AND E-COMMERCE
Lars Perner, Instructor
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Ad Spending vs. Income
Spending
PC Income
Ratio
U.S.
$445.00
$35,610
1.25%
Canada
$157.00
$21,930
0.72%
Argentina
$76.00
$6,940
1.10%
Brazil
$32.00
$3,070
1.04%
Chile
$43.00
$4,590
0.94%
China
$0.30
$890
0.03%
$419.00
$25,330
1.65%
$1.20
$460
0.26%
Japan
$262.00
$35,610
0.74%
Australia
$246.00
$19,900
1.24%
France
$157.00
$22,730
0.69%
Germany
$230.00
$23,560
0.98%
Italy
$118.00
$19,390
0.61%
Sweden
$211.00
$25,400
0.83%
UK
$252.00
$25,120
1.00%
$0.02
$1,750
0.00%
Hong Kong
India
Russia
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Ad Spending vs. PC Income
2.00%
Pctg. Ad Spending
Country
1.50%
1.00%
0.50%
0.00%
-0.50%
$0
$10,000
$20,000
$30,000
$40,000
Per Capita Income
Note questionable
reliability of data and
possible accounting
issues.
PROMOTION AND E-COMMERCE
Lars Perner, Instructor
Average
=0.82%
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Country Economic Growth vs. Ad Spending: No
Clear Pattern
Economic Growth To PC Ad Spending Ratios
% Income Spent on
Advertising
2.0%
0.0%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
Economic Growth
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PROMOTION AND E-COMMERCE
Lars Perner, Instructor
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Regional Media Tendencies
• India: Outdoor
• Europe: Print media; radio advertising
avoided
• Television: U.S., China, Japan, Latin
America (e.g., novelas)
• Movie going countries: Cinema
advertising
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PROMOTION AND E-COMMERCE
Lars Perner, Instructor
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Global Advertising
• International TV channels: CNN,
SkyTel
• Magazines with regional editions:
Time, Newsweek, Playboy,
Cosmopolitan
• International newspapers: Financial
Times, Wall Street Journal
• Internet
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PROMOTION AND E-COMMERCE
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Advertising Budgeting Approaches
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Percentage of sales
Competitive parity
Affordability
Objective and task
COUNTRY
PRIORITY
COMPETITIVE
INTENSITY
GATEWAY
POTENTIAL
GROWTH
POTENTIAL
CURRENT
MARKET
COUNTRY
PRESTIGE
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Lars Perner, Instructor
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Advertising (Agency) Processes
OBJECTIVE
DETERMINATION
MESSAGE
CREATION
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BUDGETING
AGENCY OR
IN-HOUSE
SELECTION
MEDIA
SELECTION
CAMPAIGN
EVALUATION
PROMOTION AND E-COMMERCE
Lars Perner, Instructor
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Promotional Tools
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In-store promotions
Customers
Cross-marketing
Publicity and public relations
Cause marketing
Product placement
Trade fairs
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Lars Perner, Instructor
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Constraints on Global Communications
Strategies
• Language barriers
• Cultural barriers
• Local attitudes
toward advertising
• Production/cost
• Media availability
• Advertising
regulations
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Flops in the Transplantation of
Advertising
• Man and his dog
• “A can a week is all
we ask”
• “Follow the leader-he’s on a Honda!”
• Detergent ad
• “Get your teeth their
whitest!”
• Marlboro man in
Hong Kong
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Symbolism
• Green: Health in U.S.; in Latin
America, jungle (associated with
danger)
• Marlboro man: freedom in U.S.; dusty,
unappealing life in Hong Kong
• Perfume against raindrop: Cool,
refreshing feeling to Europeans;
symbol of fertility to some Asians
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Cultural Dimensions in Advertising
• Directness vs.
indirectness
• Comparative advertising
• Humor appeal
• Gender roles
• Explicitness
• Sophistication
• Popular vs. traditional
culture
• Information content vs.
fluff
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Promotion as a Means of Positioning
• How do people see advertising
and promotion efforts?
• Promotion as a means to
communicate
– benefits of product
– use of product
– product image
• Differences in desires by
culture
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Lars Perner, Instructor
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Advertising Standardization: Advantages
Essentially
parallel to
product/
positioning
standardization
MKT 376
• Economies of scale
• Consistent image
• Appeal to global consumer
segments
• Conservation/maximum
utilization of creative talent
• Cross-fertilization--moving
knowledge across markets
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Lars Perner, Instructor
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Disadvantages
• Cultural differences
• Advertising and
promotional regulations
• Market lifecycle stage
(maturity)
• Local commitment to
campaign (“Not-inventedhere)
Again, parallel to product/
positioning standardization
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Humor
• Humor appears to be a
universal phenomenon
• However, there are
great differences in
form across the World
• “A can a week is all we
ask” worked in U.S. but
was seen as silly in
Canada
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Lars Perner, Instructor
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Values
• Americans tend to
emphasize individuals; in
other cultures, standing
out from the group may not
be desirable
• Popular vs. traditional
culture
• Perception of comparative
advertising
• Eastern Europeans want
more facts in advertising
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Contrasting Advertising Perspectives (Aithison
2002)
• Western
• Asian
– “Atomistic”—broken
down to smallest
component parts
– “Unique selling
propositions”
– “How to”
– Positioning
– May be “dull and boring”
– “Copy focused”
– Holistic
– “Everything relates
to everything else”
– How things “fit
together” and
“relate”
– Visual and oral
Jim Aitchison, How Asia Advertises,
New York: Wiley, 2002.
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Advertising Content Comparisons
• American:
– Individual benefit and pleasure (e.g.,
“Make your way through the crowd)
• Korean
– Collective values (e.g., “We have a way of
bringing people together)
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Lars Perner, Instructor
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Legal Issues in Promotion
• Media allowed for
advertising
• Comparative
advertising
• Price promotions
– coupons
– premiums
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