Transcript E-COMMERCE

Chapter
17
Global Promotion, E-Commerce,
and Personal Selling
McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Outline
 Global Sales Promotion
 Other Promotional Tools
 Direct Marketing
 E-commerce
 Global Personal Selling
 Takeaways.
Global Sales Promotion Tools

1. IN-STORE (P-O-P) AND TRADE PROMOTIONS

- - WATCH REGULATORY PROBLEMS (IKEA IN GERMANY)

2. EVENTS AND SPONSORSHIPS

- - GLOBAL COMMUNICATIONS WITH GLOBAL BRAND
(FUJI’S OLYMPIC COUP, WINDOWS 95)

3. CROSS-MARKETING

-- MERCHANDISE THAT EXTENDS AND BUILDS THE
BRAND
Global Sales Promotion Tools
 4. PUBLICITY
 - - (BILL GATES AND MICROSOFT, PHIL
KNIGHT AND NIKE)
 5. PUBLIC RELATIONS
 - - (NESTLE’S BABY FORMULA, NIKE’S
SWEATSHOPS )
 6. INTERNATIONAL TRADE FAIRS
 -- (MICROLOG EXAMPLE IN CH.4)
In-Store and Trade Promotion
IN-STORE: promotional activities inside the store
TRADE: promotional activities targeted at channel
intermediaries
• In-store promotions are more localized than advertising
• In-store promotions need to be supported by trade promotions
• Different countries/cultures have different attitudes towards
coupons
• Different countries have different distribution infrastructures that
limit transferability of certain in-store/trade promotions
• Sales promotion needs to be localized because of country-unique
restrictions/regulations
Country Regulations of Promotions
Country
Australia
Austria
Canada
Denmark
Category
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
No restrictions
or
minor ones
Authorized
with major
restrictions
General
ban with
important
exceptions
Almost
total
prohibition
x
x
x
x
x
x
x
x
x
x
x
x
Country Regulations of Promotions
Country
Category
France
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Germany
Hong Kong
Japan
No restrictions
or
minor ones
Authorized
with major
restrictions
General
ban with
important
exceptions
Almost
total
prohibition
x
x
x
x
x
x
x
x
x
x
x
x
Country Regulations of Promotions
Country
Category
Korea
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
Premiums
Gifts
Competitions
United
Kingdom
United States
Venezuela
No restrictions
or
minor ones
Authorized
with major
restrictions
x
x
x
x
x
x
x
x
x
x
x
x
General
ban with
important
exceptions
Almost
total
prohibition
Sponsorships and Cross-Marketing
SPONSORSHIPS increase with the advent of global media
and global events (e.g. World Cup, Olympics).
Products associate themselves with globally recognized
sports figures (e.g. Tiger Woods & Nike)
CROSS-MARKETING of related products leverage a strong
brand name into product line extensions (e.g. Burberry’s baby
products)
The New Promotional In-words
• Event marketing
• Cross-marketing
• Product placement
• Cause marketing
• E-commerce
• Pop-up ads
• Banner ads
• Experiential marketing
Event Marketing: The Introduction of
Swatch
Date
Country
Event
March 1984
Germany
13-ton giant Swatch on Commerzbank building,
Frankfurt
April 1984
France
“Urban Sax” saxophonist group at the “Eldorado”
theater in Paris to celebrate launch, first Swatch
Magazine
August 1984
USA
Ivan Lendl U.S. Tennis Open
September 1984
USA
World Breakdancing Championship:
“The Roxy” New York
September 1984
France
First street art painting show with the French artists
“Les Fréres Ripoulin,” “Espace Cardin” theater, Paris
November 1984
USA
The Fat Boys music sponsorship, “Private Eyes,”
New York, to introduce “Granita di Frutta” to the
trade
Event Marketing: The Introduction of
Swatch
Date
Country
Event
Summer 1985
September 1985
Sweden
France
September 1985
September 1985
October 1985
Fall 1985
November 1985
France
England
Belgium
USA
Spain
Oestersjö Rallyt (Segel-Rallye)
Cinema festival, Pompidou Center, Paris with
Kurosawa's film, Ran; Mini City Magazine
“Le Défilé”: Jean-Paul Gautier & Régine Chopinot
Andrew Logan's Alternative Miss World, London
“Mode et Anti-Mode” fashion show, Brussels
Thompson Twins concert tour sponsorship
Swatch launch party, the “Cirque,” Barcelona
Global Publicity
PUBLICITY is the publishing of news about the company and its
products. Very prominent in hi-tech industries.
GOOD NEWS – wherein positive press coverage enhances consumer
interest in the company and its products
BAD NEWS – even negative publicity helps keep the brand name in
the public eye (e.g. Benetton), although some may of course damage
brand equity
PRODUCT PLACEMENT – using branded products in film/TV (e.g.
BMW Z3 in James Bond’s Goldeneye)
Global Public Relations
GLOBAL P.R. – focuses on creating goodwill toward the corporation
as a whole. Ha become increasingly important because of antiglobalization sentiments.
Global PR targets various groups of stakeholders such as:
Stockholders
• Employees
• Customers
• Distributors
• Suppliers
• Financial community
• Media
• Activist groups
• General public
• Government
International Trade Fairs
Participation in International Trade fairs is a way of identifying
potential distributors in a new local market.
At trade fairs, local marketers can introduce a company’s latest
products, discover industry trends, & spot new competitive
developments.
Participation involves preparation of product and sales
materials, opening a booth, sending a team – plus paying a
sometimes steep fee. Fairs cost money.
Direct Marketing
DIRECT MARKETING: an interactive marketing system
that uses one or more advertising media to effect a
measurable response and/or transaction at any location.
• MAIL ORDER – catalogs, sales offers through “snail” mail
• TELEMARKETING – phone calls from companies to households
• DIRECT RESPONSE TV (DRTV) – TV commercials with phone
numbers to let viewers call for purchases.
Direct Marketing depends on…
• 1. CATALOG OF PRODUCTS (“STORE”)
• 2. NAMES, ADDRESSES, TELEPHONES, FAXES,
EMAILS
• 3. TOLL-FREE NUMBERS (1-800, 1-888)
• 4. CREDIT CARDS
• 5. STANDARDIZED, RELIABLE BRANDS
(GLOBAL BRANDS)
Direct Marketing is often outsourced…
1. “DO IT YOURSELF” – the firm develops the market and the
necessary contacts on its own, very labor-intensive & costly
2. MARKETING INTERMEDIARY – the firm turns the product over to
a direct marketing company specializing in international
marketing through a contractual relationship; the intermediary
then sets-up the infrastructure & local contacts
3. STRATEGIC ALLIANCE – the firm develops an alliance with a
direct marketing company in the local market; this leverages the
local company’s existing infrastructure and contacts
E-Commerce Pros
E-COMMERCE: buying & selling of goods/services online, a.k.a.
online marketing; the online marketplace is naturally global
PROS
• Easy
and convenient for the customer
• Creates a natural on-to-one relationship between buyer and
seller
• Fosters customer loyalty and increases customer retention
rates
• Helps the company focus on providing customer value
• Lowers costs for buyers and sellers from the pre-purchase
stage to the post-purchase stage
• Facilitates price comparisons
E-Commerce Cons
CONS
• Can reach only a certain segment, those with desktops and
Internet access
• Cannot provide the full tactile experience with the product or the
personal interaction in services
• E-commerce needs good electronic communication links
• Customers are put off by computers and technology
• Perceived risks involved can be great
• Without credit cards, e-commerce would be unthinkable
Successful E-Commerce Cases
SERVICES
PRODUCTS
• Airline tickets
• Personal computers (e.g. Dell)
• Tourist packages
• Books (e.g. Amazon)
• Banking services
• Computer software
• Brokerage services
• Cameras
• Rental cars
• Leisure apparel (e.g. Eddie Bauer)
• Hotel reservations
• Sports equipment
• Compact discs
Successful E-Commerce: B2B
 E-commerce has been particularly successful in business-to-
business transactions. Reasons:
 Many products use standardized components where price is
the only concern.
 The Internet makes it easy to compare prices – and entry
barriers are low for new entrants.
 Technology is diffused rapidly so new entrants can access
state-of-the-art technology.
 Cost pressures inside the corporations force the use of lowcost suppliers.
Global Personal Selling
Culture affects the “people skills” of the global marketer.
Good salesmanship varies across countries.
Personal selling is usually the least global of all marketing
activities.
Global Personal Selling
How transferable are selling strategies & techniques? The following are
factors that affect transferability:
• DIFFERING HUMAN RELATIONS
(e.g. the role of a salesperson is looked down on by hierarchical
cultures)
• DEGREE OF MARKET DEVELOPMENT
(e.g. level of customer sophistication)
• DIFFERING REGULATORY ENVIRONMENTS
(e.g. salesperson costs escalate in countries where fringe benefits are
high)
• GEOGRAPHIC & PHYSICAL DIMENSIONS
(e.g. climate, transportation conditions, population density)
Global Personal Selling
Presentations made during a sales visit usually consist of five
distinct stages:
1. ATTENTION – get the customer to listen to you
2. INTEREST – get the customer interested in what you have to say
3. DESIRE – get the customer to desire what you are selling
4. CONVICTION – get the buyer convinced that the offer is a good
deal
5. ACTION – get the customer’s signature on the contract
In foreign markets, these stages are still valid but the
salesperson needs to adapt these stages to the local culture.
Culture and Salesmanship
LOW CONTEXT CULTURES
HIGH CONTEXT CULTURES
 PREPARATION
 PREPARATION
 GREAT PRODUCT
 GREAT PRODUCT
 APPEARANCE
 THE “PERSON”
 ENTHUSIASM
 CULTURAL AWARENESS
 SELF-CONFIDENCE
 RELATIONSHIP ORIENTED
 GREAT CLOSER OF
TRANSACTION
IMC- Integrated Marketing
Communications
IMC – combining various communication disciplines (e.g. media
advertising, direct marketing, sales promotion, internet advertising, &
public relations) to ensure clarity, consistency, & maximum
communications impact.
IMC examples:
• Intel in China – distribution of bicycle reflectors
• Citibank in Thailand – credit card agents at malls
• Yonex in Indonesia – badminton team sponsorship
Takeaways
In addition to media advertising there are now a number of
alternative promotional tools for creating global presence &
visibility.
Global marketing communications need to be integrated so
a unified image & message is communicated.
Takeaways
The global promoter should be aware that local regulations can
make the implementation of a global sales promotional
campaign difficult in any one country. Use local representatives
to find out exactly what the limits are.
Takeaways
With advances in the Internet, telecommunications, express
mail, address list development, & credit card availability,
direct mail is transformed from a simple promotional tool to
a low-risk direct marketing option.
It is a new mode of entering a market, a new way for small
businesses to promote and sell its products abroad.
Takeaways
E-commerce is a new medium which combines one-to-one
communication & sales transactions. It is growing fast
especially in services & in B2B.
Takeaways
Personal selling may be the last frontier for globalization,
with local people necessary for customer contact.
With the globalization of industries & markets, local
salespeople will also be part of the front-line service
providers for global customers.