International Marketing Communication PDF

INTERNATIONAL MARKETING COMMUNICATION WINTER SEMESTER 24/25 PROF. DR. ANNA GRIMM [email protected] INTERN...

INTERNATIONAL MARKETING COMMUNICATION WINTER SEMESTER 24/25 PROF. DR. ANNA GRIMM [email protected] INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm AGENDA FOR THIS COURSE 1. Let's get started: Definitions and Delimitations of Terms 2. The Marketing Communication Process 3. Culture and its importance for Marketing Communication 4. International Marketing Communication & Branding: Standardization vs. Differentiation? 5. The Marketing Communication Mix - reflected internationally 6. Relationships in the Communication Mix and Integrated Campaign Development 7. [Psychological Theories on the Impact of Communication] 8. Campaign Evaluation: How to measure Communication Success? 9. Connecting the Ps: Interweaving of Communication and other Marketing Aspects INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm  8. Definition of marketing effectiveness Campaign Evaluation: Communication research: measures of How to measure communication success Communication Value and process of campaign Success? evaluation INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm 3 REMINDER: DEFINING MARKETING COMMUNICATION EFFECTIVENESS AND ROI Return on Investment (ROI) = Accounting-based term referring to the percentage of profit achieved on the basis of a given amount of expenditure before taxes and other deductions Example: If a company invests 100.000€ in a campaign which results in extra sales worth 150.000€, the ROI would be 50% (150.000 € sales - 100.000 € investment = 50.000 € return; 50.000/100.000 = 50%) Marketing effectiveness, on the contrary, refers not only to the monetary component but to all communication objectives, thus also, for example: Increased brand perception Improved brand image Clearer understanding of brand values Successful repositioning of a brand Positive associations with a product etc.  It is virtually impossible to quantify the impact of individual components of an IMC strategy on these metrics outside of the market research lab. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm WHY EVALUATING IMC CAMPAIGNS? Ideal allocation of limited ressources in the furute by determining most effective tools The effects of communication campaigns interact with each other; continuous review is therefore important to ensure cost-effectiveness of brand and campaigns Thinking about KPIs and potential evaluation in advance helps to plan campaigns more strategically and efficiently Accountability to business decision makers: Marketing often has to fight for budgets; it is easier to fight with numbers (being more persuasive!) INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm MEASURING CAMPAIGN SUCCESS? ONLY IN RELATION TO PREVIOUSLY SET SMART OBJECTIVES! Communication Objective: Measurable criteria for success (examples!): Increase in prompted / unprompted brand awareness (measured via surveys) Brand awareness Media Coverage by third parties Brand search volume / name mentions (online) Share of voice/share of impressions (online) Explicit and implicit attitudes towards brand / product Brand attitude (measured via surveys) Content analysis of interactions with brand, e.g. on Social Media (online) or in News Media Need arousal Perceived importance of product (measured via surveys) Webshop visits / Analysis of memo lists or likes (online) Usage intention Purchase | Usage frequency Self-reported behavior / behavioral intention Sales numbers (offline and online)  ROI Communication INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm WHY SETTING SMART OBJECTIVES IS SO IMPORTANT: BENCHMARKING AND THE PROCESS OF EVALUATION IMC campaigns are often very complex and involve various measures. To align them strategically "smart" objectives are our most important tool: They are set before campaign design to determine what should be Setting SMART achieved. Objectives e.g.: Brand awareness should be increased by 10% Before the start of the campaign, we then think about how success is to be measured (see next slides) and establish a benchmark as a baseline from which changes are to be considered. e.g.: Survey on unprompted brand awareness with 1500 representative Measuring potential consumers Post-testing the During the campaign, ideally continuously monitor changes in this Benchmark measure and other relevant measures to be able to react quickly if necessary. e.g. smaller surveys on unprompted brand awareness Finally, a more detailed analysis is conducted to check whether the set Tracking / goal has been achieved and the process starts again. Monitoring e.g. detailed survey of the same / other 1500 representative potential effectiveness consumers INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm MICRO VS. MACRO-LEVEL: SHORT- VS. LONG-TERM OBJECTIVES The vast majority of IMC campaigns are not limited to one measurable objective, but have several objectives Level 1: Long-term contribution to shareholder We have already seen that for some objectives it is important to first achieve other sub-objectives (e.g. to increase purchases I may first need to improve my value (e.g. brand equity) customers' attitude towards the product)  Micro-objectives, which pay off on a larger Macro-objective Level 2: Asessment of Relationships between these objectives can be examined more closely in the achievement of critical market research lab; e.g. we can check whether a more positive attitude towards success factors (e.g. technical the product is actually statistically related to a higher purchase intention (for expertise) relationships between such variables there are already many studies that we can rely on here). Also: some goals, depending on the means used, are achievable in the short term, Level 3: Micro-evaluation of e.g. sales of products can be boosted quickly by discount promotions. Other goals, individual promotional on the other hand, e.g. achieving a good brand reputation, can only be achieved campaigns and elements in the long term through continuous work and are much more difficult to (e.g. short-term sales) attribute to individual campaigns  Time horizon must be taken into account in evaluation! Source: Adapted from McDonald, M. (2005). Let Us Drop. Once and for All, the Nonsense about Marketing Return on Investiment. Journal of Medical Marketing, 5 (3), 256-260 INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm MEASURING CAMPAIGN SUCCESS: BRAND/PRODUCT AWARENESS "Brand awareness" as a goal of an IMC campaign can be quantified in very different ways - also depending on the promotional tools used. We will get to know some of them below: „Please name all brands that Unprompted brand awareness: target audience will name your brand when come to your mind when you prompted to think about a product or service you offer. think about cars?“ „Please select all car brands Prompted brand awareness: when the person being surveyed says they are that are familiar to you“ aware of your brand when presented with a list of brands. Media Coverage by third parties: How many earned media posts are there about your brand/product? (online and offline; especially relevant for PR campaigns) Brand search volume / name mentions: How many people actively search for your brand, e.g. via search engines (see Google Trends) or mention it in their own social media posts (number of hashtags; see for example brand24.com) Share of voice: percentage of coverage and conversations about your brand, relative to your competitors. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Source: https://www.askattest.com/blog/articles/how-to-measure-brand-awareness MEASURING CAMPAIGN SUCCESS: BRAND/PRODUCT ATTITUDE Explicit and implicit attitudes toward brand / product: Customer attitudes are a composite of a person's beliefs, feelings, and behavioral intentions towards a brand. They can be explicit, i.e., conscious to the consumer and communicable by him or her - then they can be expressed via surveys ("How much do you like this brand? How likely is it that you would recommend this brand?"). But we also have implicit (= we are not aware of, underlying) attitudes towards brands, which are more difficult to measure, but also determine behavior (measurable e.g. via implicit association tests). Associations with a brand: Brand associations are a set of remembered brand qualities. Especially interesting to check if desired brand personality / image has been created. Measurable via surveys, e.g. brandtags.com or implicit tests. Content analysis of news / interactions with brand, e.g. on Social Media or in News Media: Not only frequency, but also quality (positive / negative) of reporting and interaction is recorded  Very complex, can be partially automated. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Image Source: https://www.askattest.com/blog/articles/how-to-measure-brand-awareness MEASURING CAMPAIGN SUCCESS: NEED AROUSAL / DESIRE Measuring whether consumers feel a need for the specific product or for a product in the corresponding category is perhaps the most difficult discipline - but not impossible, depending on the context. Perceived importance of product: Surveys can be used to measure, in absolute terms or in comparison to reference products, whether consumers feel a desire to own the product (e.g., "Do you think a handbag from company XX would be good for your social view?" "Would you be happy if your mother gave you XY for Christmas?"). Webshop visits / Analysis of memo lists or likes: In the online shopping context, real customer behavior can also be measured: e.g. clicks on the corresponding product, Likes for content featuring the product, how often it ends up in shopping carts or how often the web store is visited… Other behavioral data: e.g. Eye-Tracking Studies, Observations of customers at the point of sale INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Image Source: https://www.eye-square.com/de/eye-tracking-in-mobile-ux-research/ MEASURING CAMPAIGN SUCCESS: ACTION / USAGE INTENTION Self-reported behavior: consumers can be asked how often they have bought or used the product in the last few weeks / months  however, is often not very reliable and tends towards socially desirable answers Behavioral intention: questioning whether customers would buy / recommend / use the product  Same criticisms as above Real behavioral data: This includes sales numbers of offline and online sales (from which the ROI can be calculated), as well as more complex market research studies such as observations of buying behavior at the Image Source: https://corporate.zalando.com/en/our- point of sale or usage diaries / tracking for online impact/sustainability/sustainability-reports/attitude-behavior-gap-report#consumer- attitudes-seven-key-themes products. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm MEASURING CAMPAIGN SUCCESS: EXCURSUS ON CUSTOMER SATISFACTION Although customer satisfaction can only be influenced in the broadest sense by communication measures, its collection is nevertheless often attributed to marketing and it is a decisive KPI for corporate success. Therefore, we take a look at some measures for this as well: Net Promoter Score: Way of monitoring how likely consumers are to recommend your offering to a friend or co-worker. It’s a way of measuring customer satisfaction and loyalty as well as overall satisfaction Customer Retention Rate: Companys ability to retain paying buyers. To calculate it, we need the number of new customers and the number of returning consumers (e.g. by surveys, registrations to platforms, adresses etc.) Customer Satisfaction Score: Masurement of how satisfied customers are with offerings and service. It’s a tool to measure how a customer feels at the moment. The customer satisfaction score is the most common method used to gauge consumer sentiment. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Source: https://www.smartsurvey.co.uk/blog/6-ways-to-measure-customer-satisfaction IMPORTANT: EACH TOOL IN THE PROMOTIONAL MIX OFFERS DIFFERENT POSSIBILITIES FOR CAPTURING THE RESPECTIVE COMMUNICATION OBJECTIVES ADVERTISING PUBLIC RELATIONS Email Marketing Content Metrics Social Media Metrics & SPONSORING Click-rate Conversion rate Shares Example: We want to increase product Conversion Rate Bounce rate Comments awareness and use all different Bounce Rate Time spent on page Follows promotional tools – how could we Scroll depth Click-rate measure for each channel if we have been successful? PPC Marketing Print Advertising PR Campaigns Conversion Rate Purchases / website Media Clipping Cost per conversion accesses neraby (QR) Qualitative Media Click-rate Observational study analysis SALES PERSONAL PROMOTION SELLING INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm CASE: HOW COULD WE MEASURE MARKETING EFFECTIVENESS? Please read through the campaign description below and discuss in your group: 1. How can we re-formulate the communication objectives in a SMART way? 2. How might we measure whether the campaign goals have been met? 3. How high is the ROI? 4. What criticisms would you make / what could the company do better? "Frischemanufaktur" is a start-up that offers mineral water with real fruit in it for naturally flavored and healthy drinking experience. They would like to become better known especially among female students (age 20-30) and increase the brand awareness in this target group by 10% through the campaign. They also want their brand to be perceived as "healthier" and "more refreshing" than their main competition, Vitamin Well water. Last, they want to increase their sales by 3%. For an integrated marketing communication campaign, they spend 25,000€ and use the money for social media ads on Instagram and billboard ads in university cities. Within the campaign period, they generate sales worth 50,000€ instead of the usual 20,000€ in the comparable period. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm  9. Connecting the Ps: Communicating prices Interweaving of Using communication for product Communication and development other Marketing In the right place at the right time? Aspects INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm 16 MARKETING COMMUNICATION IS INEXTRICABLY AND VARIOUSLY INTERWOVEN WITH THE OTHER ASPECTS OF MARKETING PRICE PRODUCT PROMOTION PLACE INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm PRICE COMMUNICATION Price communication includes all measures concerning the presentation and communication of prices to customers and potential buyers such as price-related advertising or the use of price lists. Some companies, e.g. food discounters, use low prices as a central unique selling point and focus their advertising communication completely on this  Particularly useful for low-risk / low-involvement products with high competition. But: general trend in western countries towards high quality products; often combination in marketing communication ("top quality for low price"); INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm PRICE VS. COSTS Even if you follow a cost-based princing approach, often something else has to be communicated! Consumers are only interested in the perceived value of the product - this can be strongly influenced by communication Example: VS. Sakura edition, Fillico Jewelry Water Source: https://www.lifestyleasia.com/ind/food-drink/drinks/luxury- water-trend-india/ INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm CONSISTENT PRICE COMMUNICATION VS. PRICE ADAPTION A differentiated pricing approach can help to reach as many different consumers as possible – with higher and lower willingness to pay – and to capture the optimal margin. On the other hand, a consistent price communication is important for a company's reputation and consumer trust. A lack of consistency with pricing can undermine the value proposition that a company has created. 129,99€ 29,99€ VS. Therefore: If Adapted Prizing is used, it must be ensured that every consumer is always communicated the same price – although prices may differ between consumers  difficult in the online age, therefore sub-brands for the same products are often used INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm CLEAR PRICE COMMUNICATION IS KING Make sure consumers know exactly what is included in the price and what is not, so they recognize value for money but are not disappointed (e.g., Are batteries included? Is shipping for free?). But: It is also very impactful how we state the price. An example: Regardless of the actual price, the payment method plays a crucial role in consumer communication and psychology. You might offer an annual subscription for £250 a year. Do people see that as expensive? £20.83 a month seem better? Or £4.80 a week? Another example: The Decoy Effect  The psychology of price perception would offer enough material Source: for a lecture of its own ;) https://www.abaxsoft.com/blog/how-to- make-more-profit- with-decoy-effect/ INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm USING COMMUNICATION TO CO-DESIGN PRODUCTS Not only communication, but also the design of products or services requires a lot of knowledge about the target group: What do they want? What will be well received? Benefits of Customer Co-Creation Here, too, analyses such as we have learned (sociodemographics, psychodemographics, development of buyer personas, etc.) can of course help 1. “Free” new and unexpected ideas But: communication can also be used to involve (potential) customers 2. Better products based on customer directly in the design process: Customer Co-Creation = inviting desires  Creating customer value stakeholders (usually customers or employees) to participate in a design 3. Better financial performance or problem-solving process to produce a mutually valued outcome 4. Higher customer engagement and Depending on the business model, this can happen in very different involvement with a brand  ways: From the inclusion of small groups in the development of mass strengthens brand authenticity, products to the complete individualization of the service or product trust, and transparency offering INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Examples of Customer Co-Creation The „Hive“ Food Innovation Lab by Unilever (https://hive.unilever.com) INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Examples of Customer Co-Creation IKEA co-creation projects: www.about.ikea.com/en/life-at-home/co-creation INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Examples of Customer Co-Creation IKEA co-creation projects – the IKEA proposer: https://survey.alchemer.eu/s3/90411926/new-proposals INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm Examples of Customer Co-Creation LEGO ideas community (https://ideas.lego.com/#all) More than 1 Million People interacting with platform In return for contributing a winning idea, the creator can give final approval for the end product, be recognized on all packaging and marketing, and even earn a percentage of product sales. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm  CUSTOMER CO-CREATION AS A BUSINESS MODELL: THE CASE OF SPREATSHIRT The Leipzig-based company Spreadshirt AG 153 is Europe's largest producer of customized t- shirts and apparel. As one of the first large-scale mass customization companies in Europe, Spreadshirt has risen steadily from its modest beginnings in 2002 to currently around 450 employees working at production sites in Germany, Poland and the United States. The most crucial part in the customer co-design process is the online configuration toolkit which is internally called confomat. As one of the interview partners explained, there are two main pathways via which customers purchase custom apparel from spreadshirt. About 50% of customers buy their products from so-called spreadshirt-shops, i.e. t-shirt shops. These partner shops typically embed the spreadshirt online services into their own web presence and offer pre-selected products, which are arranged, i.e. designed and customized, by the respective partner. […] The other half of the customers use the online toolkit to co-design their individual custom products. This online process typically exhibits three elements. (1) The customer chooses the basic product category, i.e. t-shirt or bag. (2) Customers may select an illustration or upload an image to be placed on the product by adapting its dimensions and position, i.e. front or back.. (3) Customers proceed to the check-out process, i.e. purchase and payment. Source: Thallmaier, S. (2014) Customer Co-Design. A Study in the Mass Customization Industry. (p. 59f) INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm INTERNATIONAL ASPECTS: GLOCALIZATION VS. OF PRODUCTS – AN OTHER CASE As discussed earlier, despite uniform branding, companies often customize their products according to the tastes of consumers in different regions of the world. […] Both Pizza Hut and Domino’s are meticulous in keeping vegetables and non-vegetables separate in their kitchens to a point where they invite customers to inspect them. A further concession to the host culture is adapting meals to meet the needs of the country’s 5.2 million Jains, whose religion forbids them from eating onions and garlic. Finally, stores that are located in areas where there is a large Muslim population do not use pepperoni. […] McDonald’s has had more difficulty in penetrating the Indian market and has just 105 outlets in India, despite studying Indian consumers’ tastes for six years before entering the market. McDonald’s introduced a radically different menu due to protests that it was introducing a foreign fast-food culture in India. All beef products were eliminated and vegetarian foods and a mutton burger were introduced. The rejection of beef products by consumers is due to their incompatibility with India’s predominantly Hindu culture that worships the cow. Furthermore, there is a large section of the population that is vegetarian, and even Hindus who eat non-beef meat products have days of the week when they do not consume meat. In this environment McDonald’s had to drastically change its global model. Some vegetarian options have been adapted to include more spices to meet the need for tastier food. In these respects the Indian consumer can be viewed as ‘Indianizing’ McDonald’s as apposed to the chain ‘Americanizing’ India. Indeed the McVeggie burger developed for the Indian market is now available in many other markets including the USA, Canada, and the United Kingdom. Source: Burton, D. (2009) Cross Cultural Marketing: Theory, Practive and Relevance. London: Routledge (p. 66f) INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm PLACEMENT: COMMUNICATION AT THE POINT OF SALE When designing an integrated marketing strategy, communication must be aligned with the point of the customer journey - the further away the consumer is from the actual point of purchase, the less action-focused a message must be, for example. Communication can create product value in the form of experience at various touchpoints, which are often also important points in the distribution network Or communication can simply encourage the consumer to spontaneously purchase a product at the point of sale. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm PLACEMENT: COTROLL OVER POINT OF SALE COMMUNICATION Accordingly, the communication strategy must also be aligned with the distribution strategy! Especially when distribution is not in the hands of the company, it is often difficult to create a uniform product experience  The VS. customer experience is then highly dependent on distributors. Solution approaches: Close, good relationships with distributors Provide a lot of communicative help (e.g. branding content guidelines); communication to distributors (training etc.) as important as to customers! Consider to obtain full control over distribution Cross-cultural aspect: Distribution channels and control over them are heavily culture-dependent. This also applies to the brand experience of consumers in individual countries. A standardization approach is hardly possible if there is no in-house distribution. INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm 30 PACKAGING AS A COMMUNICATION MEDIUM Unique, high-quality packaging can underline and signal the product value, especially for luxury products Packaging can serve as a carrier for product information at the POS (e.g. USPs) or attract attention  valuable communication tool! INTERNATIONAL MARKETING COMMUNICATION Lecturer: Dr. Anna Grimm