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Integrated Marketing Communications and

International Advertising

McGraw-Hill/IrwinInternational Marketing, 13/e

© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter

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Chapter Learning Objectives

• Local market characteristics that affect the advertising and promotion of products

• The strengths and weaknesses of sales promotion and public relations in global marketing

• When global advertising is most effective; when modified advertising is necessary

• The effects of a single European market on advertising• The effect of limited media, excessive media, paper and equipment

shortages, and government regulations on advertising and promotion budgets

• The communication process and advertising misfires

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Global PerspectiveBarbie Versus Mulan

• The original Barbie between Japan, Hong Kong and Hollywood• Major toy makers increasingly are designing 1 version globally

- Cable & satellite TV and internet- International retail giants – Wal- Mart, Toys “R” us, Carrefour

• Rapunzel Barbie launched in 59 countries at the same time. TV ad campaign in 35 languages around the world broadcasted at the same time+ web site+ games+ videos+ movies

• Action figures toys make up just 1% of the toy market in Germany, 5% in US AND 6% in UK

• Disney’s Jasmine in the Islamic world• Despite of Mattel IMC plan Barbie sales declined sharply in front

of the more ethnically diverse competitors’ products

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Las Vegas Loosing Its Exclusivity

• The gaming heritage• Resort industry• Dinning& Shopping• Competition from other

cities• Lack of a unifying idea

that could break through the clutter

• People love to come to Las Vegas to cut loose, have fun and do things they wouldn’t do back home

• R&R Partners “Only in Vegas” ads

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Using IMC To Market Las Vegas

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Creating a Unique Brand Identity for Las Vegas

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Leveraging the popular commercials into IMC

• Marketing guerilla efforts around the Oscar and Grammy awards

• Sponsorships, PR& feature stories in CNN& National Public Radio, US Today, NY Times, WS journal and cover story in Time magazine

• Grand Marketer Award 2004• 37.4 million visitors• 89% occupancy rate

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Taking The “Only Vegas” Campaign in a New Direction

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Creating a Unique Brand Identity for Las Vegas

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Point ofpurchase

Publicity

Publicrelations

Directmarketing

Interactivemarketing

Specialevents

Packaging

Salespromotion

Directresponse

Traditional Approach to Marketing Communications

MediaAdver-tising

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Contemporary IMC Approach

Point ofpurchase

Publicity

Interactivemarketing

Publicrelations

Directmarketing

Specialevents

PackagingSales

promotionDirect

response

MediaAdver-tising

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Defining IMC

IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. Don Schultz

IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. Don Schultz

The goal of IMC is to generate short-term financial returns and build long-term brand value.

The goal of IMC is to generate short-term financial returns and build long-term brand value.

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Demand for accountabilityDemand for accountabilityDemand for accountability and Measurement of Outcomes

Demand for accountability and Measurement of Outcomes

Recognized as a business processRecognized as a business process

Importance of relevant audienceImportance of relevant audience

Ongoing strategic business processOngoing strategic business process

Multiple relevant audiencesMultiple relevant audiences

A Contemporary Perspective of IMC

IMCNot just another

management fashion

IMCNot just another

management fashion

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Traditional compensationTraditional compensation Performance-based compensation Performance-based compensation Traditional compensationTraditional compensation Performance-based compensation Performance-based compensation

Media advertisingMedia advertising Multiple forms of communicationMultiple forms of communication

Mass mediaMass media Specialized mediaSpecialized media

Manufacturer dominanceManufacturer dominance Retailer dominanceRetailer dominance

General focusGeneral focus Data-based marketingData-based marketing

Low agency accountabilityLow agency accountability Greater agency accountabilityGreater agency accountability

Limited Internet availabilityLimited Internet availability Widespread Internet availabilityWidespread Internet availability

Media advertisingMedia advertising Multiple forms of communicationMultiple forms of communication

Mass mediaMass media Specialized mediaSpecialized media

Manufacturer dominanceManufacturer dominance Retailer dominanceRetailer dominance

General focusGeneral focus Data-based marketingData-based marketing

Low agency accountabilityLow agency accountability Greater agency accountabilityGreater agency accountability

Reasons for the Growing Importance of IMC

From Toward

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IMC and Branding

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.

2005 Brand Value(Billions of Dollars)

1. Coca-Cola

$67.52

2. Microsoft

$59.94

3. IBM$53.38

4. GE $46.99

5. Intel $35.59

6. Nokia

$26.45

7. Disney

$26.44

8. McDonald’s

$26.01

9. Marlboro

$24.84

10. Mercedes

$21.19

IMC plays a major role in the process of developing and sustaining brand identity & equity by increasing the number of encounters between the consumers and the brand

IMC plays a major role in the process of developing and sustaining brand identity & equity by increasing the number of encounters between the consumers and the brand

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Intel’s Advertising Helps Build Brand Equity The Bunny People

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© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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AdvertisingAdvertising

Direct MarketingDirect Marketing

Interactive/Internet Marketing

Interactive/Internet Marketing

Sales PromotionSales Promotion

Publicity/PublicRelations

Publicity/PublicRelations

Personal SellingPersonal Selling

AdvertisingAdvertising

Direct MarketingDirect Marketing

Interactive/Internet Marketing

Interactive/Internet Marketing

Sales PromotionSales Promotion

Publicity/PublicRelations

Publicity/PublicRelations

Basic Elements of the Promotional Mix

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Sales Promotions in International Markets

• Sales promotions- Marketing activities that stimulate consumer purchases and improve

retailer or middlemen effectiveness and cooperation- Short-term efforts directed to the consumer or retailer to achieve

specific objectives’

• P&G “Arial Road Show” to the rural areas in Egypt • In markets with media limitations the percentage of the

promotional budget allocated to sales promotions may have to be increased

• Pepsi an Coke carnival truck in Latin America• Product sampling – Nestle rest- stop in France

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• Consumer-oriented• [For end-users]

• Trade-oriented• [For resellers]

Sales Promotion Tools

EventsEvents

Loyalty ProgramsBonus Packs Bonus Packs

efunds/Rebates Refunds/Rebates Contests/SweepstakesContests/Sweepstakes

PremiumsPremiumsSamplesSamplesCouponsCoupons

CoopAdvertising

CoopAdvertising

TradeShows

TradeShows

TrainingProgramsTrainingPrograms

POP Displays

TradeAllowances

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Introduce new products

Introduce new products

Get existing customers to buy

more

Get existing customers to buy

more

Attract new customers

Attract new customers

Maintain sales in off season

Maintain sales in off season

Increase retail inventories

Increase retail inventories

Tie in advertising & personal selling

Tie in advertising & personal selling

Enhance personal selling

Enhance personal selling

Combat competitionCombat competition

Introduce new products

Introduce new products

Get existing customers to buy

more

Get existing customers to buy

more

Attract new customers

Attract new customers

Maintain sales in off season

Maintain sales in off season

Increase retail inventories

Increase retail inventories

Tie in advertising & personal selling

Tie in advertising & personal selling

Enhance personal selling

Enhance personal selling

Various Uses of Sales Promotion

SalesPromotion

SalesPromotion

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Advertising Versus Publicity

AdvertisingAdvertising PublicityPublicity

TentativeTentative

LowLow

Low/Unspecified Low/Unspecified Uncontrollable Uncontrollable

GreatGreat

LowerLower

Measurable Measurable

SchedulableSchedulable

High/Specific High/Specific

HighHigh

SpecifiableSpecifiable

UndeterminedUndetermined

HigherHigher

LittleLittle

FactorFactor

ControlControl

CredibilityCredibility

ReachReach

FrequencyFrequency

CostCost

FlexibilityFlexibility

TimingTiming

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InterviewsInterviewsInterviews Interviews

FeatureArticlesFeatureArticles

SpecialEvents

SpecialEvents

PressConferences

PressConferences

NewsReleasesNews

Releases

FeatureArticlesFeatureArticles

SpecialEvents

SpecialEvents

NewsReleasesNews

Releases

Publicity Vehicles

PublicityVehicles

PublicityVehicles

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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Public Relations

•When an organization systematically plans and distributes information in an attempt to control and manage its image and the nature of the publicity it receives, it is really engaging in PR.

•“The management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance”

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Corporate AdvertisingCorporate

Advertising Cause-related

MarketingCause-related

Marketing

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

Special EventSponsorship

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

Public Relations Tools

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International Public Relations

• Bridgestone/Firestone Tires safety recall & Throwing the blame • Global workplace standards• Building an international profile for new companies• Corporate sponsorships despite of their connections to advertising

- Tobacco companies using sports event sponsorships.- Coca Cola & soccer, Macdonald’s & Sidney Olympics 2000

The role of public relations (PR) is creating good relationships with the popular press and other media to help companies communicate messages to customers, the general public, and governmental regulators.

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The Growth of Advertising and Promotion

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Expenditure in Billions of Dollars

$0 $50 $100 $150 $200 $250 $300 $350

U.S. Advertising

U.S. SalesPromotion

AdvertisingOutside U.S.

2004

1980

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Top 20 Global Advertisers ($ millions)

• Insert Exhibit 16.1

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International Advertising

1. Perform marketing research.

2. Specify the goals of the communication.

3. Develop the most effective message(s) for the market segments selected.

4. Select effective media.

5. Compose and secure a budget.

6. Execute the campaign.

7. Evaluate the campaign relative to the goals specified.

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Advertising Strategy and Goals

• Marketing problems require careful marketing research and thoughtful and creative advertising campaigns in country, regional, and global markets, respectively.

• Increased need for more sophisticated advertising strategies.- Increased costs, coordination of adv. programs, global image

• Balance between standardization of advertising themes and customization.

- Foreign or domestic agencies- Centralization or decentralization

• Gillete, the best a Man can get – umbrella statement but different brand names

• Consumer cultures as a base for segmentation

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Product Attributes and Benefit Segmentation

• Different cultures usually agree on the benefit of the primary function of a product

• Other features and psychological attributes of the item can have significant differences

- Cameras in US, Japan and Africa - excellent pictures is the primary function

- Dannon’s yogurt - health in US and Pleasure in France

• Blue Diamond’s Almonds – assumes that no two markets will react the same, that each has its own set of differences, and that each will require a different marketing approach and strategy

- In US “a can a week is all what we ask”, Canada considered it too silly . In Japan almond tofu and miso soup

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Regional Segmentation

• Pan-European communications media highlighting need for more standardized promotional efforts and harmony in brand names

• IBM pan-European promotional strategy- CIM• Costs savings with a common theme in uniform promotional

packaging and design• Eveready in Latin America 1 message campaign to 16 countries• Legal restrictions slowly being eliminated

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The International Communications Process

• Insert Exhibit 16.4

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Global Advertising and the Communications Process

• If not properly considered, the different cultural contexts can increase the probability of misunderstandings

• Effective communication demands the existence of a “psychological overlap” between the sender and the receiver

• It can never be assumed that “if it sells well in one country, it will sell in another”

• Tooth paste for cavity reducing in US& breath control in Europe• Encoding Problems even with the right message – Is the perfume

effective against infertility in Africa?!!• Decoding problems – Pepsi “come alive”, Chevrolet NOVA

“doesn’t go” in Spain

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Legal Constraints

• Laws that control comparative advertising vary from country to country in Europe.

• Comparative advertising- Germany, Belgium and Luxembourg• Advertising of specific products - Pharmaceuticals• Control of advertising on television- Time and content• Accessibility to broadcast media• Limitations on length and number of commercials – In Germany

20 min between commercials and not more than 12 min/hour• Internet services• Special taxes that apply to advertising

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Linguistic Limitations

• Language is one of the major barriers to effective communication through advertising

• Translation challenges• Low literacy in many countries• Multiple languages within a country

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Cultural Diversity

• Knowledge of cultural diversity must encompass the total advertising project

• General Mills instant cake in UK and Japan• Toyota Prado “rule by force” not a nice memory in China• Existing perceptions based on tradition and heritages are often

hard to overcome• P&G and the story of the bird delivering Pampers in Japan• Subcultures• Changing traditions and Coffee in Japan

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Media Limitations and Production and Cost Limitations

• Media limitations may diminish the role of advertising in the promotional program

• 10 showings /year with no 2 exposures closer than 10 days in Italy• Examples of production limitations:

- Poor-quality printing : Kodak in China- Lack of high-grade paper : Colgate - Palmolive in Eastern Europe

• Low-cost reproduction in small markets poses a problem in many countries – Coca Cola and Nestle using Feluccas Sails in Egypt

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Media Planning and Analysis – Tactical Considerations

• 10-50 commercial string sandwiches in Brazil• National coverage = 40-50 different media• Annual TV scheduling by August 30 in Germany• In Vietnam Newspapers ads limited to 10% of space and

5% of time on radio and TV

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Media Planning and Analysis – Tactical Considerations

• Availability• Cost• Coverage• Lack of market data - circulation& segmentation• Newspapers

- Number, paper shortage, ad space, editorials and advertorials

• Magazines

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Media Planning and Analysis – Tactical Considerations (continued)

• Radio and television• Satellite and cable TV• Direct mail• The Internet• Other media Cinema , Billboards etc.

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Campaign Execution and Advertising Agencies

• Managed by advertising agencies- Local domestic agency- Company-owned agency- Multinational agency with local branches

• Compensation- Commonly 15 percent throughout the world- Some companies moving to reward-by-results

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International Control of Advertising: Broader Issues

• Consumer criticism• Deceptive advertising• Decency and blatant use of sex• Self-regulation• Government regulations

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Summary

• An integrated marketing communications (IMC) program includes coordination among advertising, sales management, public relations, sales promotions, and direct marketing.

• Currently companies are basing their advertising strategies on national, subcultural, demographic, or other market segments.

• The major problem facing international advertisers is designing the best messages for each market served.

• The availability and quality of advertising media vary substantially around the world.

• Advances in communication technologies are causing dramatic changes in the structure of the international advertising and communications industries.