Integrated Marketing Communications and International Advertising

1. Chapter 16 Integrated Marketing Communications and International Advertising McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

2. Integrated marketing communications …the whole is greater than the sum of the parts

3. Integrated Marketing Communications (IMC) • IMC consists of: • Advertising • Sales Promotions • Trade Shows • Personal Selling • Usually short term efforts that are meant to stimulate immediate purchases • Direct Selling • Public Relations • Can be good or bad press • Bridgestone/Firestone Tires

4. Some communication tools Different tools serve different purposes... …but boundaries blurred Advertising Sales promotion Direct marketing Personal selling Publicity and PR Sponsorship

5. Communication tools: the promotional mix non-personal communication by an identified sponsor, transmitted to target audience via (mass) media Advertising creating, developing direct relationships with individual customers short-term incentives to encourage sales Sales promotion Direct marketing etc.. Personal selling Publicity and PR Sponsorship Making“news”; building goodwill, understanding between organisations & publics Informing, persuading potential customers through personal communication supporting event, person, etc, to enhance sponsor’s awareness, image, etc.

6. Sales Promotions in International Markets • Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation • Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer-product trial or immediate purchase • Cents-off • In-Store Demonstrations • Samples • Coupons • Gifts Examples of sales promotion include: 6. Product Tie-Ins 7. Contests 8. Sweepstakes 9. Sponsorship of Special Events, 10. Point-Of-Purchase Displays

9. International Public Relations • Creating good relationships with the popular press and other media to help companies communicate messages to their publics—customers, the general public, and governmental regulators—is the role of public relations (PR) • The job consists of not only encouraging the press to cover positive stories about companies, but also of managing unfavorable rumors, stories, and events

10. Advertising • Advertising has been used for centuries. • U.S. advertisers spend more than $237 billion each year; worldwide spending approaches $470 billion. • Advertising is used by: • Business firms • Nonprofit organizations • Professionals • Social agencies • Government

14. Advertising Advertising plays a pivotal role in world commerce and in the way we experience and live our lives. It is part of our language and our culture…It is both a complex communication process and a dynamic business process. O’Guinn et al (2003) Advertising and Integrated Brand Promotion, Ohio: South-Western, p8

17. Advertising • Global Advertising • 7 Steps in International Advertising • 1. Perform marketing research • 2. Specify the goals of the communication • 3. Develop the most effective message • 4. Select effective media • 5. Compose and secure a budget • 6. Execute the campaign • 7. Evaluate the campaign relative to the goals specified

18. Advertising • Advertising Strategies and Goals • Standardization with local customization • Where standardization can occur, companies gain in economies of scale, but must alter the advertising appeal to each unique culture • Product Attribute and Benefit Segmentation • Different cultures may seek the same benefit from the primary function of the product (a car’s primary function is to drive from one point to another); but differences occur when some features are valued over others across cultures (types of car stereos, safety equipment, after sale services, etc) . • Regional Segmentation • Where it is possible, advertising will continue to be segmented and standardized by region (European countries, or Latin American countries).

21. Selecting Advertising Media • Reach • Percentage of people exposed to ad • Frequency • Number of times a person is exposed to ad • Media Impact • The qualitative value of a message exposure through a given medium

22. Advertising • The International Communication Process (7 steps): • 1. An information source • 2. Encoding • The message from the source converted into effective symbolism for transmission to a receiver. • 3. A message channel • The sales force and/or advertising media • 4. Decoding • The interpretation by the receiver of the symbolism transmitted from the information source.

23. Advertising • The 7 Steps in Creating Message (the international communication process) • 5. Receiver • Consumer action taken by receivers • 6. Feedback • Effectiveness of message • 7. Noise • Uncontrollable and unpredictable influences

24. A model of communication field of experience field of experience Message Source encodes decodes Receiver feedback noise Source: adapted from W. Schramm (1971) “How communication works”, in Schramm & Roberts (eds), The process and elements of mass communication

26. Constraints on Advertising • 1. Legal Constraints • Varies from one country to another where limits can be on: • Types of products/services that can or can not be advertised (cigarettes, alcohol..) • Amount of time given to advertise products/services on TV, radio etc. • Who the advertising can be targeted to (children, etc)

27. Constraints on Advertising • 2. Linguistic Limitations • 3. Cultural Diversity • 4. Media Limitations • 5. Production and Cost Limitations • Examples • Crossing Borders 16.3 pg. 489; 16.4 pg 491

28. Constraints to Advertising Campaigns • There are many problems in communicating a firm’s product offerings to its various target markets around the world. Some of these include: • Cultural Diversity: Ad campaigns and product brand names being communicated may mean different things to different cultures • Media Limitations: in some underdeveloped countries, there is a shortage of advertising media such as radio stations, print media (newspapers, magazines), and television stations, cable TV, and satellite TV • Production and Cost Limitations: In some markets costs are prohibitive to advertise on conventional advertising media; other countries may have low quality paper to print advertising

29. Constraints to Advertising Campaigns • Coverage: In large, less developed countries advertising media such as television may not be geographically dispersed • Lack of Market Data: This makes it difficult to reach specific target markets • Direct Mail: Even if direct mail is available, it may not work due to high illiteracy rates in some countries 7. The Internet: Though advertising via the internet is fast increasing, the WWW is not widely available in many countries where computers are considered expensive

33. Media Planning and Analysis • When advertising internationally, the company must consider the following: • 1. Availability • What media is available • 2. Cost • 3. Coverage • 4. Lack of market data • Reliable statistical information or research on target audiences…

34. Media Planning and Analysis • Different types of medias used: • Newspapers • Magazines • Radio and television • Satellite and cable • Direct Mail • The internet • Other (billboards, cinemas, trucks, ships, etc)

35. Advertising Agencies • Important questions • Should global, local or combination of both types of advertising agencies be used? • Exhibit 16.5 pg. 507 “World’s Top Advertising Agency Organizations” • How much (legal) control should be placed on advertisers?