Global Marketing

Session 17
Communication decisions
Today’s session
• The communication process
• Communication tools
• International advertising
strategies in practice
• Implications of the Internet for
communication decisions
• Social media marketing
• Viral marketing
The communication process
Communication tools
Advertising
 Advertising
Objectives setting:
• Increasing sales from existing customers by encouraging them
to increase the frequency of their purchases; maintaining
brand loyalty via a strategy that reminds customers of the key
advantages of the product; and stimulating impulse
purchases.

• Obtaining new customers by increasing consumer awareness

of the firm’s products and improving the firm’s corporate
image among a new target customer group.
 Advertising
Budget decisions:
• Affordable approach/percentage of sale: the most popular method, in
which the firm will automatically allocate a fixed percentage of sales to
the advertising budget.

• Competitive parity approach: involves estimating and duplicating the

amounts spent on advertising by major rivals.

• Objective and task approach: determining the advertising objectives and

then ascertaining the tasks needed to attain these objectives
 Advertising
• Disadvantages: • Advantages
• It uses historical performance rather than future • For firms selling in many
performance. countries, this simple method
appears to guarantee equality
• It ignores the possibility that extra spending on among the markets. Each
advertising may be necessary when sales are market seems to get the
declining, in order to reverse the sales trend by advertising it deserves.
establishing a ‘recycle’ on the product life cycle curve. • It is easy to justify in budget
• It does not take into account variations in the firm’s meetings.
marketing goals across countries. • It guarantees that the firm
• The ‘percentage of sales’ method encourages local only spends on advertising as
management to maximize sales by using the easiest much as it can afford. The
and most flexible marketing tool: price (that is,
method prevents ‘good money
from being thrown after bad’.
lowering the price).
• The method’s convenience and simplicity encourage
management not to bother investigating the
relationships between advertising and sales or
analysing critically the overall effectiveness of its
advertising campaigns.
• The method cannot be used to launch new products
or enter new markets (zero sales =zero advertising).
 Advertising
Message decisions (creative strategy)
• What unique selling proposition (USP) needs to be
communicated? What the communication is
intended to achieve?
 Implications for the choice of advertising medium, since certain media
can better accommodate specific creative requirements (use of colour,
written description, high definition, demonstration of the product, etc.)
than others.
• Standardization vs. Adaptation?
– Standardization implies a common message, creative idea, media and
strategy, but it also requires that the firm’s product has a USP that is
clearly understood by customers in a cross-cultural environment.
– Tactics of adaptation: adopting modular approach, adapting
international symbols and using international advertising agencies
 Advertising

Media decisions
–Result of a careful fit of local advertising objectives, media attributes and
target market characteristics.
–Types of media: traditional and digital
–Take into account:
• differences in the firm’s market objectives across countries;
• differences in media effectiveness across countries.
–Based on the following criteria:
• Reach. This is the total number of people in a target market exposed to at
least one advertisement in a given time period (‘opportunity to see’, or
OTS).
• Frequency. This is the average number of times within a given time period
that each potential customer is exposed to the same advertisement.
• Impact. This depends on compatibility between the medium used and the
message
 Advertising
Agency selection
 Advertising

Advertising evaluation
–Testing advertising effectiveness is normally more
difficult in international markets than in domestic
markets.
–Measures of advertising effectiveness: sales results
and brand awareness
–Independent variables to be tested against the sales
(dependent variable) might include the amount of
advertising, the media mix, the unique selling
proposition and the frequency of placement.
 Public relations

–Seeks to enhance corporate image building and influence favourable media

treatment.
–Is the marketing communications function that carries out programmes
designed to earn public understanding and acceptance.
–Involve both internal and external communication
–Target groups: employees, customers, distribution channel members and
shareholders
–Methods:
– contribution of prizes at different events;
– sponsorship of events (sporting, cultural, etc.);
– press releases of news about the firm’s products, plant and personnel;
– announcements of the firm’s promotional campaigns;
– lobbying (government).
Public relations
 Sales promotion

• a short-term effort directed primarily to the

consumer and/or retailer, in order to achieve
specific objectives:
– consumer product trial and/or immediate purchase;
– consumer introduction to the shop;
– encouraging retailers to use point-of-purchase
displays for the product (e.g., wall displays and
seasonal floor displays);
– encouraging shops to stock the product.
 Sales promotion

• Types of sales promotion:

– Price discounts.
– Catalogues/brochures.
– Coupons.
– Samples.
– Gifts.
– Competitions.
• Standardization vs. Adaptation?
 Direct marketing

• the total of activities by which products and

services are offered to market segments in one or
more media for informational purposes or to
solicit a direct response from a present or
prospective customer or contributor by mail,
telephone or personal visit.
• Methods: direct mail (marketing database),
telephone selling and marketing via the Internet
 Personal selling
–is used mainly to sell to distribution channel members and in business-to-
business markets.
–is also used in some consumer markets – for example, for cars and consumer
durable products.
 Personal selling
–The international sales force organization
 Personal selling
Type of international sales force
 Trade fairs and exhibitions
• A trade fair (TF) or exhibition is a concentrated event at which
manufacturers, distributors and other vendors display their products
and/or describe their services to current and prospective customers,
suppliers, other business associates and the press.
• Trade fairs can enable a company to reach in a few days a concentrated
group of interested prospects that might otherwise take several months to
contact.
• Potential buyers can examine and compare the outputs of competing
firms in a short period at the same place.
• Buyers can see the latest developments and establish immediate contact
with potential suppliers.
• TFs also offer international firms the opportunity to gather vital
information quickly, easily and cheaply.
International advertising strategies in
practice
Implications of the Internet for
communication decisions
 Social media marketing
• Social media: A group of Internet-based applications that allow the
creation and exchange of user-generated content. Examples are
blogs, YouTube, networking sites (Facebook, MySpace, LinkedIn,
Twitter, etc.), photo sharing (Flickr, etc.) and aggregating channels
(comparison sites, and so forth).

• Word-of-mouth (WoM): The sharing of information about a

product, promotion, etc. between a consumer and a friend,
colleague or other acquaintance.
– Consumers are much more trusting in friends and colleagues than
they are in TV advertising or corporate communication. WoM has
been shown to be up to seven times more effective than traditional
print advertising in brand-switching decisions .
– WoM and conversations can take place offline and online.
 Social media marketing
• The 6C model of social media
 Viral marketing
• Viral marketing: online word-of-mouth is a
marketing technique that seeks to exploit existing
social networks to produce exponential increases in
brand awareness.
• Elements of an effective viral marketing campaign:
1 Creating compelling content
2 Targeting the right audience
3 Campaign seeding
4 Controlling/measuring results
 Reading
Chapter 12
Summary
• The communication process
• Communication tools
• International advertising
strategies in practice
• Implications of the Internet for
communication decisions
• Social media marketing
• Viral marketing