International Marketing Communication and Advertising Decisions PDF

International Marketing @University of Tübingen Marketing decisions: International communication and advertising Prof. Dr. Kristina Klein Communication – a definition Definition “The passing of information, exchange of ideas, or process of establishing share...

International Marketing @University of Tübingen Marketing decisions: International communication and advertising Prof. Dr. Kristina Klein Communication – a definition Definition “The passing of information, exchange of ideas, or process of establishing shared meaning between a sender and a receiver“ The paradigm of communication  Who  sender  communicates what  message  to whom  receiver  under which circumstances  external influences  using which channels  media channel  in which region  catchment area  to what expenses  costs  with which impact?  feedback Belch, G.E./Belch, M.A. (2004), Advertising and Promotion, p. GL3; Bruhn, M. (2003), Integrierte Unternehmens- und Markenkommunikation, p. 32 2 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Communication takes place only when the intended meaning transfers from the source to the receiver Cultural Context A 3. Message channel Advertising media and/or personal sales 2. Encoding force Message translated into appropriate meaning 7. Noise Competitive activities, other salespeople, 4. Decoding confusion, etc. Encoded message interpreted into meaning 6. Feedback Evaluation of communication processes and measure of action by receiver 1. Information source 5. Receiver Marketer with a Action by consumer product responding to decoded message Cultural Context B Keegan, W.J./Schlegelmilch, B. (2001), Global Marketing Management, p. 456 3 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Determinants of coordination decisions Cost advantages with standardization of communication  Savings with costs of conceptualization  However: costs of conceptualization < 10 % of all communication costs Effects  Increase of effects by standardization of communication  Cross-national usage of creative activities (economies of scope)  Bundling of financial resource (e.g., stars in international campaigns)  Usage of international media (e.g., CNN)  Spillover effects (e.g., Champions League)  Decrease of effects by standardization of communication  Unspecific addressing  Different associations of the creative elements Backhaus, K./ Büschken, J./Voeth, M. (2003), p. 268 ff. 4 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Optimal degree of differentiation in international advertising Determination of the profit-optimal degree of differentiation Trade-off between cost savings vs. decrease in effects of standardization But: Determination of effects problematic: Measurement of degree of standardization of communication activities Determination of effects on revenues (advertising effectiveness) E.g., experimental studies Determination of advertising elasticities depending on differentiation Backhaus, K./ Büschken, J./Voeth, M. (2003), p. 268 ff. 5 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Strategic alternatives of international communication and product planning  Extension (standardization): offering product virtually unchanged in markets outside the home country  Adaptation: changing elements of design, function, and packaging according to needs of different country markets  Creation: developing new products for the world market Product Create new Extent product Adapt product product Extent Product Dual extension communications adaptation Product Communications Adapt Communications invention Dual adaptation communications adaptation Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 347; Kotler, P./Keller, K.L. (2009), Marketing Management, p. 651 6 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Dual extension Product Dual Extension = extent product + extent communication Dual Product Communications extension adaptation “...sell the same product with virtually no adaptation, using the same advertising and promotional Product in- appeals used domestically, in two or more country markets or segments.” Communic Dual vention ations adaptation adaptation  Under the right conditions this can be the most profitable strategy  It is important to send a message which must be understood across different cultures  This strategy are utilized more frequently with B2B products, because most of the consumer goods have to adapt to local tastes Example: Solarworld offers the same products in different countries (e.g. USA, Italy, Germany, Singapore) and has a communication campaign with Larry Hagman in different countries (e.g. France, Spain, Greece). Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 350; www.solarworld.com 7 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Product adaptation Product Product Adaptation = adapt product + extent communication Product “…adapt the product to local use or preference conditions while Dual extension adaptation Communications extending, with minimal change, the basic home market communications Productin- vention strategy or brand name.” Communicatio ns adaptation Dual adaptation Example: Nespresso has different tastes in different countries, but in every country nearly the same communication. Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 350 8 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Communications adaptation Product Communication Adaptation = extent product + adapt communication Dual Product Communications extension adaptation Product “extending the product while adapting the marketing communication Communic Dual in- vention ations program…” adaptation adaptation  The same products can fulfill different needs, appeal to different segments or serve different functions in particular countries or regions  Adapt the marketing communication can be the key to market success  Communication adaptation has relatively low costs of implementation compared with a dual adaptation Example: Specific communication for Specific communication for porteños, because they Chinese with a Chinese woman pronounce Pepsi „Pecsi“. and the Pepsi Logo on flowers. Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 350-352; http://nancyfriedman.typepad.com/away_with_words/2009/07/index.html 9 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Dual adaptation Product Dual Adaptation = adapt product + adapt communication Dual Product Communications extension adaptation Product in- “…both the product and one or more promotional elements Communic ations Dual adaptation vention are adapted for a particular country or region.” adaptation Environmental conditions or consumer preferences can differ from country to country, so can the function a product serves or consumer receptivity to advertising appeals. Example: Coca-Cola adapts formula Unilever’s Rexona deodorant and tastes for different once had 30 different countries as well as the package designs and 48 communication, e.g., in different formulations. Brazil the World Advertising and branding Championship is promoted were also executed on a in comparison to Poland local basis, which shows the example of an ad in New Zealand. 10 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Product invention Product Invention = create new product Product Adapt Create new Extent product “…develop an entirely new product designed to address the market opportunity product product at a price point that is within the reach of the potential customer.” Extent Dual extension Product Commun- communications adaptation Product ications Adapt Communications Dual invention communications adaptation adaptation Important for reaching mass markets in less industrialized nations and certain segments in industrialized countries Example: Dove and Nivea have invented an underarm whitening deodorants for fairer underarms. Though present around the world, the brand communication is localized showcasing Indian celebrities and highlighting the purpose of the Olay with whitening skin- product: one can get fairer mask in China (white skin is underarms irrespective of frequent a symbol for beauty in Asia). shaving or waxing (frequent waxing is prevalent in India). Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 353-354; globeone 2012; http://www.youtube.com/watch?v=q6COW4NNnJg 11 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de How to choose a strategy? Product Adapt Create new Extent product product product Extent Product Commun- Dual extension ications communications adaptation Product Adapt Communications Dual invention communications adaptation adaptation Two main errors that management makes in choosing a strategy: NIH (not invented here) syndrome means managers ignore the advancements of subsidiaries overseas Managers impose policies upon subsidiaries because they assume what is right for customers in one market is right in every market Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 354 12 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Standardization vs. adaptation in advertising: Some examples Extension of Standardized communication Creation of theme but Global pool of country-specific communication adaptation of copy to ads ads each local market  No adaptation at all  Adapt colors  From which each  Restrictions  e.g., Nespresso spot  Adapt TV spots to country selects the regarding (nearly standardized) avoid taboos most appropriate one advertisement of  e.g., Coca Cola, cigarettes and  e.g., Nivea, Apple Goodyear alcohol  Restrictions regarding rebates and guarantees 13 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Ad executions “American creative people always want to photograph European men kissing women’s hands. But they seldom know that the nose must never touch the hand or that this rite is reserved solely for married women. And how do you know that the woman in the photograph is married? By the ring on the left hand, of course. Well, in Spain, Denmark, Holland, and Germany, Catholic women wear the wedding ring on the right hand. When photographing a couple entering a restaurant or theater, you show the woman preceding the man, correct? No. Not in Germany and France. And this would be laughable in Japan. Having someone in a commercial hold up his hand with the back of it to you, the viewer, and the fingers moving toward him should communicate ‘come here’. In Italy it means good-bye.” Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 435 14 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Difficulties in standardization vs. adaptation in communication Must the specific advertising message and media strategy be changed from region to region or country to country? Difficulties that negatively affect an organization‘s communication efforts The message may…  Not get through to the intended recipient  Reach the target audience but may not be understood or may even be misunderstood  Reach the target audience and may be understood but still may not induce the recipient to take action desired by the sender  The effectiveness of the message can be impaired by noise “Eighteen-year olds in Paris have “If we could find one message on a more in common with 18-year-olds in global basis it could be effective, but New York than with their own parents. so far there are different needs in They buy the same products, go to different countries. We have been in the same movies, listen to the same Sweden for 60 years and in China music, sip the same colas. Global for only 4 or 5 so our feeling is that advertising merely works on that retailing is local. It is important to premise.” (William Roedy, Director of take advantage of local humor, and MTV Europe) the things on people’s minds.” (Nils Larsson, IKEA) Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 433-434 15 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de When to use which approach? Depends on the product involved and a company’s objectives in a particular market Standardized print campaigns can be used for industrial products or technology-oriented consumer products (e.g., Apple iPhone) Standardized print campaigns with a strong visual appeal often travel well TV commercials that use voice-overs instead of actors or celebrity endorsers speaking dialogue can use standardized visuals with a translated copy for the voice-overs (e.g., Gillette) Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 435 16 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Potential problematic areas Communication style (explicit vs. implicit) Humor in advertising Use of sexually explicit or provocative imagery (partial nudity, same-sex couples) Man-woman relationships (e.g., intimate scenes) Food as product category with cultural sensitivity Use of colors Keegan, W.J./Green, M.C. (2011), Global Marketing, p. 445; Kotabe, M.M./Helsen, K. (2014), Global marketing management, pp. 444 ff. 17 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultural considerations in global media decisions: ad executions in Arab countries Arab countries  Use of comparative advertising claims is prohibited  Non-censored films cannot be advertised  Women may only appear in those commercials that relate to family affairs, and their appearance must be in a decent manner that ensure feminine dignity  Women must wear a long suitable dress which fully covers her body except face and palms Example: H&M‘s campaign featuring Gisele Bündchen has been censored in Dubai and other Gulf regions, by digitally inserting a T-shirt under the clothes. Keegan, W.J./Green, M.C. (2011), Global Marketing, pp. 444-4447; http://www.zeit.de/2011/14/Mode-Gisele-Buendchen 18 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Universität Bremen Prof. Dr. Kristina Klein Max-von-Laue-Straße 1 Gebäude WiWi 2 F3210 [email protected] 0421 218-66970