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Chapter 16

Integrated Marketing
Communications and
International
Advertising

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Learning Objectives
LO1 Local market characteristics that affect the advertising and
promotion of products
LO2 The strengths and weaknesses of sales promotions and
public relations in global marketing
LO3 When global advertising is most effective; when modified
advertising is necessary
LO4 The communication process and advertising misfires
LO5 The effects of a single European market on advertising
LO6 The effect of limited media, excessive media, and
government regulations on advertising and promotion
budgets
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Integrated Marketing Communications
 Integrated marketing communications (IMC) are composed
of advertising, sales promotions, trade shows, personal
selling, direct selling, and public relations.

• In many markets, the availability of appropriate communication


channels to customers can determine entry decisions.

• Product and service development must be informed by research


regarding the availability of communication channels.

• Once a market offering is developed to meet target market


needs, intended customers must be informed of the offering’s
value and availability.

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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.
 In markets in which the consumer is hard to reach
because of media limitations, the percentage of the
promotional budget allocated to sales promotions
may have to be increased.
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Sales Promotion: Specific Objectives
 Consumer product trial or immediate purchase

 Consumer introduction to the store or brand

 Gaining retail point-of-purchase displays

 Encouraging stores to stock the product

 Supporting and augmenting advertising and personal


sales efforts

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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

• Encouraging the press to cover positive stories about


companies

• Managing unfavorable rumors, stories, and events

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Samsung advertisement in Piazza Navona

© John Graham
The Baroque exuberance of the figure representing the Rio de la Plata seems
to be protesting the banality of the Samsung advertisement in the background.

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International Advertising
 Global mass media advertising is a powerful tool for
cultural change, and as such, it receives continuing
scrutiny by a wide variety of institutions.
 Advertising expenditures are generally cyclical, though
less so in relationship-oriented countries where
managers and regulators favor stability and long-term
performance.

 We are just beginning to understand some of the key


issues involved in international advertising, but our
knowledge will continue to be quite perishable as the
revolution continues.
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Exhibit 16.1
Top 20 Global Advertisers

Source: Advertising Age, 2014. Copyright © 2014 Crain Communication. Reprinted with permission.
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Exhibit 16.2
Top 100 Advertisers’ Global Spending by Category
2013 Percent Change Percent of
Category
(billions) from 2012 Total
Automotive $16.5 3.6% 11.9%
Retail 16.1 0.2 11.6
Telecommunications, Internet services, ISP 11.2 6.0 8.1
General Services 9.0 3.2 6.5
Food, beverages, candy 8.5 -1.2 6.1
Medicine and remedies 8.2 5.8 5.9
Financial services 7.6 -4.7 5.5
Personal care 7.1 2.1 5.1
Restaurants 6.3 5.3 4.6
Insurance 5.3 7.5 3.8
Source: Advertising Age, Crain Communication

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Exhibit 16.3a
Top Ten Advertisers - Russia ($ millions)

Source: From Special Report Global Marketing, Advertising Age, 2012. Copyright © 2012 Crain
Communication. Reprinted with permission.

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Exhibit 16.3b
Top Ten Advertisers - China ($ millions)

Source: From Special Report Global Marketing, Advertising Age, 2012. Copyright © 2012 Crain
Communication. Reprinted with permission.

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Basic Framework of
International Advertising
 Seven steps are involved:
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 based on what is required
to meet goals.
6. Execute the campaign.
7. Evaluate the campaign relative to the goals specified.
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Advertising Strategy and Goals
 Intense competition for world markets and the increasing
sophistication of foreign consumers have led to the need
for more sophisticated advertising strategies.
 In many cases, standardized products may be marketed
globally. But because of differences in cultures, they still
require a different advertising appeal in different
markets.
 Many companies are using market segmentation
strategies that ignore national boundaries.
 Others are proposing newer global market segments
defined by “consumer cultures” related to shared sets of
consumption-related symbols.
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Vehicular ads in London

© John Graham
© John Graham

These vehicular ads make an effective advertising medium even in a dense London
fog. Because most London cabs are black, the Snickers ad catches the eye immediately.

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Product Attribute and
Benefit Segmentation
 A market offering really is a bundle of satisfactions
(or utilities) the buyer receives.
• The primary function of the product or service
• Other benefits imputed by the values and customs of the
culture

 While usually agreeing on the benefit of the primary


function of a product, consumers may perceive other
features and psychological attributes of the item
differently.
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Regional Segmentation
 The emergence of pan-European communications
media is enticing many companies to push the
balance toward more standardized promotional
efforts.
 Companies strive for harmony in brand names,
advertising, and promotions across Europe.
• To avoid the confusion that results when a market is
exposed to multiple brand names and advertising
messages
• For reasons of efficiency

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The Message: Creative Challenges
 International communications may fail for a variety
of reasons:
• A message may not get through because of media
inadequacy
• The message may be received by the intended audience
but not be understood because of different cultural
interpretations
• The message may reach the intended audience and be
understood but have no effect because the marketer did
not correctly assess the needs and wants or even the
thinking processes of the target market
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Global Advertising and the
Communications Process
 An information source. Product message to
communicate
 Encoding. Conversion to effective symbolism for
transmission
 A message channel. Media that conveys the encoded
message
 Decoding. The interpretation by the receiver of the
symbolism
 Receiver. Those who receive the message
 Feedback. Information about the effectiveness of the
message
 Noise. Uncontrollable and unpredictable influences
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Exhibit 16.4
The International Communication Process

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The Power of Colors

© John Graham
© John Graham

Notice the Coke advantage at work—the red contrasts with the outdoor environment,
while the Cristal aqua blends more with the blue sky and trees.
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Red works!

© Tom Purslow/Manchester United via Getty Images

© Mark Baker/AP Images


David Beckham, in his Manchester United red and Formula 1 racecar driver Michael
Schumacher.
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Coke and McDonald’s black and white logos

© John Graham

© John Graham
The stadium pictured is in Buenos Aires, is popularly called La Bombonera, is officially
named Albierto Armano, is the home of the club team Boca Junior, and was the home
team for Argentina’s most famous futbol player ever, Maradona. The McDonald’s sits
adjacent to the city square in the old Inca Empire capital at Cuzco, Peru.
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Decoding Problems
 Errors at the receiver end of the process generally
result from a combination of factors:
• An improper message resulting from incorrect knowledge
of use patterns
• Poor encoding producing a meaningless message
• Poor media selection that does not get the message to the
receiver
• Inaccurate decoding by the receiver so that the message is
garbled or incorrect
• Bad luck
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Noise: A Disruptive Force
 Comprises all other external influences:
• Competitive advertising

• Other sales personnel

• Confusion at the receiving end

 It is frequently beyond the control of the sender or


the receiver.

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California Fitness Centers in Singapore

© John Graham
City streets in Singapore are alive with advertising. Obviously the image of
“bodyland” southern California sells well around the world.
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Legal Constraints
 Laws that control comparative advertising vary from country to
country in Europe.
 Comparative advertising is heavily regulated in other parts of the
world as well.
 A variety of restrictions on advertising of specific products exist
around the world.
 Advertising on television is strictly controlled in many countries.
 Internet services are especially vulnerable as EU member states
decide which area of regulation should apply to these services.
 Some countries have special taxes that apply to advertising,
which might restrict creative freedom in media selection.
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Linguistic Limitations
 Major barriers include:
• Different languages of different countries
• Different languages or dialects within one country
• Subtler problems of linguistic nuance, argument style,
vernacular, and even accent
 Abstraction, terse writing, and word economy, the most
effective tools of the advertiser, pose problems for
translators.
 Low literacy in many countries seriously impedes
communications and calls for greater creativity and use
of verbal media.
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Jamaica

© John Graham
The “true ting” in Jamaica is a grapefruit-flavored soft drink.
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Spain and China

© Denis Doyle/AP Images

Courtesy of GE
Giant bulls are posted on hillsides GE joined with the Chinese government
around rural Spain. in promoting a green Olympics.
Ironically, many folks around the world
see outdoor advertising itself as a kind
of pollution!
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Cultural Diversity
 “International advertising is almost uniformly
dreadful mostly because people don’t understand
language and culture.”
 Existing perceptions based on tradition and heritages
often render advertising campaigns ineffective or
worse.
 In addition to concerns with differences among
nations, advertisers find that subcultures within a
country require attention.
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Media Limitations
 Limitations on creative strategy imposed by media
may:
• diminish the role of advertising in the promotional
program
• force marketers to emphasize other elements of the
promotional mix

 Creative advertisers in some countries have even


developed their own media for overcoming media
limitations.

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Production and Cost Limitations
 Creativity is especially important when a budget is
small or where there are severe production
limitations, such as poor-quality printing and a lack
of high-grade paper.

 The necessity for low-cost reproduction in small


markets poses another problem in many countries.

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Media Planning and Analysis
 The network effects of the burgeoning electronic
communication media—in the form of PCs, the
Internet, and mobile phones—influence not only
political events and responses to natural disasters
but also everyday life for everyone on the planet.

 The changes in media in the 21st century are


proceeding at a blinding speed.

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Tactical Considerations
 In international advertising, an advertiser must
consider the availability, cost, coverage, and
appropriateness of the media.
 The constant competitive churn among these media
makes for a tricky and dynamic landscape for
decisions.
 Effectiveness of advertising varies across media
types, cultures, and products.
 Local variations and lack of market data require
added attention.
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Lack of Market Data
 Verification of circulation or coverage figures is a
difficult task.

 Even where advertising coverage can be measured


with some accuracy, there are questions about the
composition of the market reached.

 Lack of available market data seems to characterize


most international markets.

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Newspapers and Magazines
 The newspaper industry is suffering from lack of competition in
some countries and choking because of it in others.
 In many countries, there is a long time lag before an advertisement
can be run in a newspaper.
 Separation between editorial and advertising content in
newspapers provides another basis for contrast on the international
scene.
 The use of foreign national consumer magazines by international
advertisers has been notably low for many reasons.
 Few magazines have a large circulation or provide dependable
circulation figures.
 Technical magazines are used rather extensively to promote export
goods, but as with newspapers, paper shortages cause placement
problems.
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Exhibit 16.5
Media Spending, US$/household, in Selected Countries
(average annual growth rate 2008–2013)

Country TV Radio Print Cinema Outdoor Online


World (11.4) 90 (1.7) 16 (-2.7) 60 (-7.4) 1 (4.1) 15 (-0.6) 45
China (21.3) 41 (15.2) 4 (6.5) 21 (6.9) 0.2 (10.4) 11 (8.8) 18
Japan (5.4) 304 (-1.4) 21 (-4.5) 143 (-7.4) - 79 (-5.8) 155
Australia (14.3) 445 (-0.6) 117 (-0.9) 378 (-9.8) 12 (0.0) 57 (0.6) 409
Russia (29.8) 72 (4.3) 7 (1.3) 14 (-7.6) 3 (13.8) 18 (-3.3) 32
Brazil (18.0) 154 (-2.6) 9 (5.6) 36 (-0.9) 1 (1.9) 6 (8.1) 12
Israel (3.2) 159 (-2.6) 19 (-6.6) 123 (-10.6) 3 (-1.0) 20 (-9.1) 89
South Africa (17.9) 104 (10.3) 33 (9.2) 72 (-1.0) 2 (-8.5) 10 (7.7) 6
Canada (14.4) 254 (-0.3) 117 (-0.2) 181 (-5.7) - 36 (0.3) 239
USA (12.7) 532 (1.4) 137 (-3.5) 333 (-10.5) 6 (4.1) 65 (1.3) 277
Germany (9.7) 130 (-0.6) 24 (-0.1) 281 (-4.5) 2 (-1.3) 25 (-1.5) 131
Source: Euromonitor, 2015.
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Radio and Television
 Most adults view television and listen to radio daily.

 Television and radio advertising availability varies


between countries.

 Some countries do not permit any commercial radio


or television.

 Several of the traditional noncommercial countries


have changed their policies in recent years because
television production is so expensive.
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Satellite and Cable TV
 Of increasing importance in TV advertising is
the growth and development of satellite TV
broadcasting.
 The expansion of TV coverage will challenge
the creativity of advertisers and put greater
emphasis on global standardized messages.

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Drawbacks of Satellite TV
 Governments fear further loss of control over their
airwaves and the spread of “American cultural
imperialism.”
 Because of their ability to span a wide geographical
region covering many different country markets, a
single message is broadcast throughout a wide area.
• With cultural differences in language, preferences, and so
on, a single message may not be as effective.
 Most satellite technology involves some government
regulation that seldom works for long.
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Irish beer advertisements

© John Graham

© John Graham
© John Graham

Ireland is behind only the Czech Republic when it comes to per capita consumption of
beer.
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Direct Mail and the Internet
 A viable medium in an increasing number of countries
 Especially important when other media are not available
 Subject to some odd and novel quirks
 A meaningful way to reach their markets
 The Internet can reach a large portion of the business-to-business
market and is widely used in business-to-business communications
and promotion via catalogs and product descriptions.
 Beyond the control of undesirable information, issues such as pay-
per-view, taxes, unfair competition, import duties, and privacy are
being addressed all over the world.
 The Internet industry is lobbying for a global understanding on
regulation to avoid a crazy quilt of confusing and contradictory
rules.
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Exhibit 16.6
Top Ten Websites
(31.9 million visitors per month)

Source: comScore Media Metrix, 2012, online.


Reprinted with permission.
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Social Media
 Powerful marketing tools: social networking, blogs,
virtual worlds, and video sharing

 Consumer-generated content is having an impact on


brands (both positive and negative)

 Consumers from many different countries and


cultures can and do interact online

 At more than one billion users, Facebook dominates


social networking around the world
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Exhibit 16.7
Top 10 Social Media Users
Average Time Spent on Social Networking Sites, October 2011 (hours per user)

Source: Michael Jung, “Social Networking Is the Most Popular Online Activity,” http://www.thenewage. co.za/38836-1021-53-
Social_ networking_is_the_most_popular_ online_activity, December 26, 2011, online.
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Mobile Phone Applications and
Other Media
 As the number of mobile phones continues to explode
around the world, now over 7 billion, so do the number
of applications available to users.
 The top 1 percent of mobile phone users consume half of
the world’s bandwidth, and the gap is growing!
 Restrictions on traditional media or their availability
cause advertisers to call on lesser media to solve
particular local-country problems.
 The cinema is an important medium in many countries.
 Billboards are especially useful in countries with high
illiteracy rates.
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Pizza Hut and Diet Pepsi’s novel advertising

© Yuri Kochetkov European Press Agency/Newscom

© Tatsuyuki Tayama/Fujifotos/The Image Works


Not only do the Russians sell space for space tourists on their rockets, they also sell
advertising space! The Japanese beverage company Suntory promotes its products with
“Monitor Man” during a football match at National Stadium.
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Campaign Execution and
Advertising Agencies
 Just as manufacturing firms have become international,
so too have U.S., Japanese, and European advertising
agencies expanded internationally to provide
sophisticated agency assistance worldwide.

 Local agencies also have expanded as the demand for


advertising services by MNCs has developed.

 In most commercially significant countries, an advertiser


has the opportunity to employ a local domestic agency,
its company-owned agency, or one of the multinational
advertising agencies with local branches.
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Exhibit 16.8 World’s Top Ten Advertising Agencies
Agency Global Revenues Percent Change
2013 Headquarters
(parent) ($ billion 2013) from 2012
1 WPP Dublin $17.3 4.8%
2 Omnicom Group New York 14.6 2.6
3 Publicis Groupe Paris 9.2 8.7
4 Interpublic Group New York 7.1 7.0
5 Dentsu Tokyo 5.8 -9.4
6 Havas Suresnes, France 2.3 2.1
7 Hakuhodo DY Holdings Tokyo 1.8 -15.7
Alliance Data Systems
8 Irvine, TX 1.4 10.6
International
IBM International
9 Armonk, NY 1.3 74.3
Experience
10 MDC Partners Toronto/New York 1.2 6.1

Source: From Special Report Global Marketing, Advertising Age. Crain Communication.
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International Control of Advertising:
Broader Issues
 A study of a representative sample of European consumers
indicated that only half believed ads gave useful information.
 The non-Europeans praised advertising as a way to obtain
valuable information about products.
 European Commission officials are establishing directives to
provide controls on advertising as cable and satellite
broadcasting expands.
 Decency and the blatant use of sex in advertisements also are
receiving public attention.
 The assault on advertising and promotion of tobacco products
is escalating.
 Product placement within TV programming is another area of
advertising receiving the attention of regulators.
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Summary
 An IMC program includes coordination among
advertising, sales management, public relations, sales
promotions, and direct marketing.
 Global marketers face unique legal, language, media, and
production limitations in every market.
 The major problem facing international advertisers is
designing the best messages for each market served.
 Advances in communication technologies are causing
dramatic changes in the structure of the international
advertising and communications industries.
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