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Global Marketing Management Global Communications Decisions & Global Promotions Decisions. MKTG 3215-090 Spring 2013 Mrs. Tamara L. Cohen. Class # 11. Global Communications Decisions. Preparation for this class: Read Course Reader #10. Homework #9 : Unconventional communications

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global marketing management global communications decisions global promotions decisions

Global Marketing ManagementGlobal Communications Decisions& Global Promotions Decisions

MKTG 3215-090

Spring 2013

Mrs. Tamara L. Cohen

Class # 11

global communications decisions1
Preparation for this class:

Read Course Reader #10

Homework #9:

Unconventional communications

Global media planners must think ‘outside the box’. Find out about an unusual media usage in the global marketplace. Write one paragraph.

Global Communications Decisions
slide4
KEY CONCEPTS
  • Sales Promotions
  • International Public Relations
  • International Advertising Strategy
  • Regional segmentation
  • Media planning
1 sales promotions in international markets
1. Sales Promotions in International Markets

Sales promotions

= marketing activities that stimulate consumer purchases & improve retailer / middleman effectiveness & cooperation e.g.cents off, in-store demo’s, samples, coupons, gifts, product tie-ins, contests, sponsorships, p.o.p.

    • short-term efforts directed to consumer or retailer, to achieve specific objectives e.g.consumer product trial / purchase, encouraging stores to stock product
  • In markets with media limitations, % of promotional budget allocated to sales promotions may have to
  • Product sampling - effective when product is new / small market share

P.O.P.

2 international public relations
2.International Public Relations

Public relations (PR)= creating good relation-ships with popular press & other media

- helps companies communicate messages to customers, general public, & governmental regulators

  • BP Gulf oil spill, 2010
  • global workplace standards (Nike)
  • building an international profile
  • corporate sponsorships
11 30 global marketers
# 11 - 30GLOBAL MARKETERS
  • Volkswagen
  • Honda Motor Co.
  • Mars Inc.
  • McDonald’s Corp.
  • Sony Corp.
  • GlaxoSmithKline
  • Deutsche Telekom
  • Kraft Foods
  • Nissan Motors Co.
  • Walt Disney
  • Danone Groupe
  • General Electric
  • Time Warner
  • PSA Peugeot Citroen
  • Pfizer
  • Yum Brands
  • PepsiCo
  • Maxingvest
  • Panasonic Corp.
  • Ferrero
how much should you spend on advertising or rather how do you spend most effectively
How much should you spend on Advertising?or rather,How do you spend most effectively?
  • What is typical advertising-to-sales ratio in your field?
  • Is your business built to leverage volume or to leverage margin?

Advertising % of sales:

Wal-Mart 0.4%

Target 2%

Best Buy (specialty retailer) 3+%

Macy’s (upscale dep’t store) 5%

Marketing % of sales:

  • Car industry 2.5 - 3.5%
  • Liquor 5.5 - 7.5 %
  • Packaged goods 4 -10%
  • Service businesses spend more because they are more margin-oriented, especially in growth phase.
3 international advertising strategy formulation
3. International Advertising Strategy Formulation

Of all elements of marketing mix, decisions involving advertising are most often affected by cultural differences.

  • Perform marketing research
  • Specify goals of communication
  • Develop most effective message(s) for market segments selected (most daunting)
  • Select effective media
  • Compose and secure a budget
  • Execute campaign
  • Evaluate campaign relative to goals specified
advertising strategy goals
Advertising Strategy & Goals
  • Marketing problems
    • require careful marketing research
    • thoughtful & creative advertising campaigns
      • in country, regional, and global markets
  • Increased need for more sophisticated advertising strategies
  • Standardization versus Customization (ad themes)
  • Consumer cultures e.g. convenience, America, youth, internationalism, humanitarianism, environmentalism
product attributes benefit of segmentation
Product Attributes & Benefit of Segmentation
  • Different cultures usually agree on benefit of primary function of product / service
  • Other features & psychological attributes of item can have significant differences
    • cameras
    • yogurt- Dannon / Danone
    • almonds- Blue Diamond
  • No 2 markets will react the same
    • each has its own set of differences
    • each will require different marketing approach & strategy
4 regional segmentation
Economies

of

Scale

4. Regional Segmentation
  • Pan-European communications media highlights need for more standardized promotional efforts
  • Costs savings with common theme in uniform promotional packaging & design
  • Legal restrictions slowly being eliminated
  • Latin America also becoming attractive regional segment e.g.
global advertising the communications process developing an effective message
Global Advertising & the Communications Process(developing an effective message)
  • Different cultural contexts can increase probability of misunderstandings
  • Effective communication
    • demands existence of “psychological overlap” between sender & receiver
  • NEVER assume that “if it sells well in one country, it will sell in another”
creative challenges
Creative Challenges
  • Language “lost in translation”
  • Color e.g. green = cool in Europe, but green = danger/disease in tropics
  • Timing e.g. seasons & clothing fashions
  • Values e.g. bicycle = recreation in USA, but bicycle = transport in Asia; French’s mustard boycotted in US in 2003 when France didn’t go along with US attack on Iraq
  • Beliefs e.g. rain = refreshing in Europe, but rain = fertility in Africa
  • Humor
  • Tastes
  • Appropriate endorser e.g. who is most recognizable athlete in world?
  • Literacy e.g. using print ads when small % of target market can read
  • Media availability e.g. using Internet when small % of target has access
  • Feedback step of communications (ad testing; noise)
slide19
World’s Highest Paid Athletes in 2012

Floyd Mayweather

Manny Pacquiao

Tiger Woods

LeBron James

Roger Federer

Kobe Bryant

Phil Mickelson

David Beckham

CristianoRonaldo

Peyton Manning

$85 m BOXING

$62 m BOXING

$59 m GOLF

$53 m BASKETBALL

$53 m TENNIS

$52 m BASKETBALL

$48 m GOLF

$46 m SOCCER

$43 m SOCCER

$42 m FOOTBALL

legal constraints
Legal Constraints
  • Comparative advertising - not allowed in Germany, Belgium, Luxembourg; okay in UK, Spain, Portugal; restricted in India, Philippines
  • Advertising of specific products - restrictions on advertising pharmaceuticals, toys, tobacco, liquor
  • Control of advertising on TV
  • Limitations on length & number of commercials
  • Internet services - EU addressing regulation; should TV rules apply?
  • Special taxes that apply to advertising
liquorice allsorts language controversy
Liquorice Allsorts language controversy

1980s: Government forbade mixing languages in advertising, so banned

“LEKKERISH LIQUORICE”

cultural d i v e r s i t y
CulturalDiversity

Problems associated with communicating to people in diverse cultures present one of the great creative challenges in advertising.

  • Knowledge of cultural diversity must cover total advertising project
  • Existing perceptions based on tradition & heritages often hard to overcome
  • Subcultures
  • Changing traditions
5 media planning
5. Media planning
  • Availability - huge variations among countries
  • Cost - agents & negotiation
  • Coverage - difficult to reach some sectors; lack of info re coverage
  • Lack of market data - accurate data uncertain
  • Newspapers - too many in some countries, too few in others
  • Magazines - few with large circulation; best for technical products
  • Radio & TV - major communications media in most countries
  • Satellite & cable TV - increasing importance
media
Media
  • Direct mail - especially important when other media not available; beware Chile
  • Internet - evolving; B2B; catalogs; many consumer goods companies have e-stores; direct internet marketing
  • New Social Media - Word-of-Mouth / BUZZ marketing & peer recommendations always key; Internet has advanced pace & reach of Word-of-Mouth; e.g. Papa John’s Pizza blog
  • Other media e.g. cinema; billboards (high illiteracy)
giant 3 d murals for flip flop launch bus stop
Giant 3-D murals for flip flop launch bus stop

Red Bull car

Supermarket trolley

Chocolate billboard

the original london black taxicab
The original London Black Taxicab

Now they come in all colors, though the iconic shape is still the same.

guerilla marketing
Guerilla Marketing
  • specifically for small business & entrepreneur
  • always use combination of marketing methods
  • based on human psychology not experience, etc
  • marketing investments: time, energy, imagination (not $)
  • measure PROFIT not sales
  • create std of excellence with acute focus rather than diversity
  • instead of trying to get new customers, aim for more referrals, more transactions with existing customers, larger transactions
  • forget competition; focus on coop. with other businesses
  • use current technology as tool to empower business
  • VIRAL marketing - through social networks
  • GRASS ROOTS & ASTROTURF (imitate grass roots)

gorilla

slide30
“Need a new BBQ?”

Mr. Clean

Elevator ad

international advertising
International Advertising

Ad firms have become international, like every other business. Advertiser should employ local ad agency or multinational agency with local representation.

  • local modifications
  • cross-cultural communication can be difficult
  • decency standards differ - sex, modesty, Western excess
  • tobacco
  • Myanmar has stringent individual censorship boards
keys to success in global communication decisions
Keys to success in Global Communication Decisions
  • Integrated marketing communications program includes coordinated advertising, sales management, public relations, sales promotions, & direct marketing.
  • Unique legal, media, production limitations in every market
  • Wide variety of media choices, old & new
  • Communication technology (especially Internet) will continue to cause dramatic changes in international advertising & communications industries.
promotions in the marketing mix
Promotionsin the Marketing Mix

Promotion = business of COMMUNICATING with customers

Product benefits must be communicated to customers to generate sales and profits.

Promotional Mix blends

  • advertising
  • public relations
  • sales promotion
  • selling GLOBAL context
selling overseas
Sellingoverseas …

… the expatriate experience

slide37
KEY CONCEPTS
  • Relationship marketing
  • Expatriate
  • Virtual Expatriate
  • Repatriation
  • Third-Country Nationals
  • Local Nationals
  • Separation allowance
americans abroad
Americans Abroad

Number of Americans living abroad has steadily grown over past decade, as more people have become interested in living abroad, exploring another language and culture, or finding an overseas job.

According to recent estimates by the U.S. State Department, there are 3 - 6 million Americans living overseas.

global perspective are international assignments glamorous
Global PerspectiveAre International Assignments Glamorous?
  • Job security
  • Adjustment to other cultures – family considerations
  • Readjustment when return home – reentry culture shock
  • Will an international assignment really help your career?
  • International sales force may be the ultimate way to: “Think global. Act local.”
designing the sales force
Designing the Sales Force
  • Relationship marketing
  • Decisions about sales personnel:
    • numbers
    • characteristics
    • assignments
  • Different markets affect direct sales & customer approaches
  • Territory allocationdetails after personnel
  • Customer call plans decisions fixed
recruiting marketing sales personnel
Recruiting marketing & sales personnel

Largest personnel requirement abroad for most companies is sales force.

  • Expatriates
  • Virtual expatriates
  • Local nationals
  • Third-country nationals
2012 the 30 most expensive cities to li ve in the worl d as exp ats
Tokyo

Luanda

Osaka

Moscow

Geneva

Zurich

6. Singapore

N’djamena

Hong Kong

Nagoya

Sydney

São Paulo

Rio de Janeiro

Bern

Melbourne

Shanghai

Beijing

Oslo

Perth

Libreville

2012: The 30 Most Expensive Citiesto Live in the WorldasEXPATS

Copenhagen

Seoul

Canberra

Brisbane

London

Khartoum

Adelaide

St. Petersburg

Caracas

Shenzhen

ASIA

EUROPE

AFRICA

MIDDLE EAST

AUSTRALIA

AMERICAS

slide43
Best Countries to be an Expat
  • Thailand
  • Saudi Arabia
  • Singapore
  • Egypt
  • Switzerland

Important factors to expats:

  • health care
  • education
  • quality of life
  • social life
  • income
selecting sales marketing personnel
SelectingSales & Marketing Personnel
  • Management must define expectations
  • Most important requirements
    • maturity
    • emotional stability
    • breadth of knowledge (language skills)
    • positive outlook
    • flexibility
    • cultural empathy
    • energetic & enjoy travel (stamina)
  • Selection mistakes can be costly
  • Manager’s culture affects personnel decisions
training for international marketing
Training forInternational Marketing
  • nature of training program depends on:
    • home culture of sales person
    • culture of business system & foreign market
  • continual training important in foreign markets
  • companies should provide home-office personnel with cross-cultural training
  • Internet makes sales training more efficient
personal selling tips
Personal Selling Tips

BELGUIM be able to identify decision makers. Flanders (Dutch) group decisions common; Wallonia (French) high level exec’s have final say

CHINA expect to continue negotiations after deal is signed. Signing contract is just beginning of business relationship. Both sides expected to continue working together afterwards.

COLOMBIA business counterparts want personal relationship, strong friendship. Be sure to keep same sales representatives throughout negotiation or risk losing deal.

GERMANY be prepared with data to support sales proposition. German businessmen unimpressed with flashy presentation, so keep materials serious & detailed, no exaggeration.

INDIA maintain flexible schedule to accommodate casual punctuality. Rigid hierarchy dictates decisions made only by highest level boss.

more personal selling tips
morePersonal Selling Tips

MEXICO when planning meetings, breakfast / lunch preferred. Take time to cultivate relationships with business contacts - relationships more important than professional experience.

PERU relate to individuals not corporate entities. Establish personal rapport. Maintain same sales rep’s throughout negotiations.

RUSSIA 1st meeting is formality. Russian counterparts use this time to judge credibility. Be warm & friendly.

SCOTLAND people soft-spoken & private. Takes time to build relationships.

SOUTH KOREA status important. Make sure business card indicates title. Don’t send representative to meet Korean exec of higher status – could be viewed as disrespectful.

THAILAND emphasizes non-conflict. Don’t make assertive demands in sales pitch.

motivating sales personnel
Motivatingsales personnel
  • National differences must always be considered when motivating marketing force
  • Individual incentives?
  • Communications important in maintaining high levels of motivation (NOT “out of sight, out of mind”)
  • Company needs to clarify opportunities for growth within firm
  • Fear of being forgotten
designing compensation systems for expatriates
Designing Compensation Systems for Expatriates
  • Fringe benefits – can be 35-60% salary in Europe; tax structure important; e.g. expense accounts in high-tax countries
  • Compensations comparisons between home office & abroad – important what would have received at home office
  • Short-term assignment compensation = separation allowances
  • Using compensation program to recruit, develop, motivate, or retain personnel
evaluating controlling sales representatives
Evaluating & Controlling Sales Representatives
  • US emphasis on individual performance
    • easily be measured by sales revenues generated
  • In many countries evaluation more complex
    • where teamwork favored over individual effort
  • US primary control tool used by sales managers is incentive system
  • In other countries corporate control & frequent interactions with peers & supervisors are means of motivation & control
designing compensation systems for a global sales force do
Designing Compensation Systems for a Global Sales ForceDO:
  • involve representatives from key countries
  • allow local managers to decide mix between base & incentive pay
  • use consistent performance measures
  • allow local countries flexibility in implementations
  • use consistent communication & training themes worldwide
designing compensation systems for a global sales force don t
Designing Compensation Systems for a Global Sales Force DON’T:
  • design plan centrally & dictate to local offices
  • create a similar framework for jobs with different responsibilities
  • require consistency on every performance measure within incentive plan
  • assume cultural differences can be managed through incentive plan
  • proceed without support of senior sales executives worldwide
preparing u s personnel for foreign assignments
Preparing U.S. Personnel for Foreign Assignments
  • Cost of foreign assignments
    • typically 150-400% of annual base salary
    • cost increases if expatriate returns home before completing scheduled assignment (2-4 years)
  • Planning process
    • begin prior to selection of those going abroad
    • include career development after returning home
overcoming reluctance to accept a foreign assignment
Overcoming Reluctance to Accept a Foreign Assignment
  • Concerns for career
    • absence may adversely affect opportunities for advancement
  • Concerns for family
    • children’s education
    • isolation from family & friends
    • proper health care
    • potential for violence
  • Special compensations packages
reducing rate of early returns
Evaluation of employee’s family

75% of families sent abroad experience adjustment problems with children or marital discord

Cross-cultural training for families as well as employee

Local ombudsman

- someone experienced in country

- anticipate challenges & be ready with solutions

Reducing Rate of Early Returns
5 steps to successful expatriate repatriation
5 steps to Successful Expatriate Repatriation
  • Commit to reassigning expatriates to meaningful positions
  • Create mentor program – typically senior exec’s – monitor co. activities, keep up communication, liaise between expat & HQ dept’s
  • Offer written job guarantee stating what company is obligated to do for returning expatriate
  • Keep expatriate in touch with HQ through periodic briefings & HQ visits
  • Prepare expatriate & family for repatriation once return date is set
developing cultural awareness
Developing Cultural Awareness
  • Expatriate failures
    • caused by lack of understanding of cultural differences & effect on management skills
  • Cultural skills
    • can be learned & developed
    • provide individual with ability to relate to different culture even when individual is unfamiliar with details of that particular culture
do you have cultural skills
Do YOU have cultural skills?
  • Do you communicate respect verbally & non-verbally, conveying sincere interest in people & their cultures?
  • Do you tolerate ambiguity & absorb frustrations with cultural differences?
  • Do you display empathy by understanding others’ needs & differences from their points of view?
  • Do you remain non-judgmental about others’ behavior?
  • Do you recognize others’ culture & values as influences on their perceptions, evaluations, & judgments?
  • Can you laugh things off?
changing profile of global manager
Fewer companies today limit their search for senior-level executive talent to home countriese.g. Indira Nooyi = head of PepsiCo; Richard Gnodde = co-CEO Goldman Sachs Int’l

Some companies believe in international experience

early in person’s career

integral part of entry-level development programs

Many companies committed to making foreign experience an integrated part of a successful corporate career

Changing Profile of Global Manager
foreign language skills
Foreign-Language Skills
  • Many global companies believe:
    • learning language improves cultural understanding & business relationships
    • to be taken seriously in business community, expatriate must be at least conversational in host language
  • Many companies making stronger efforts to recruit people who are bilingual or multilingual
keys to success in global promotions decisions
Keys to success in Global Promotions Decisions
  • Company’s sales force is front line of marketing organization
  • Recent emphasis on using local personnel operating in own lands highlights importance of adapting managerial techniques to local needs
  • Development of effective marketing organization requires careful recruiting, selecting, training, motivating, & compensating of expatriate personnel & families
  • Most practical method of maintaining efficient international sales & marketing force is careful planning at all stages of career development
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