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INTERNATIONAL MARKETING

Youssef Ishak ESL 31D Global Management Track January 2011

Under Supervision of:

Prof. Dr. Ahmed A. Shalaby

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Subject: Requirements for global marketing communications resulted in changes in the structure of the global

advertising industry. Discuss

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AGENDA• Global Perspective: Barbie versus Mulan• Sales Promotions in International Markets• International Public Relation• Integrated Marketing Communication (IMS)• International Advertising• Advertising Strategy and Goals• Global Advertising and the Communication Process • Media Planning and Analysis • International Control of Advertising: Broader Issues• Summary

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Global Perspective: Barbie versus Mulan

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BARBIE

• Girls didn’t care is Barbie didn’t look like them• Designing and marketing one version of Barbie

worldwide, this shift has led to a series of massive merchandise.

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MULAN

• Some toys, games, and animated characters do not cross national boundaries.

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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

• In markets with media limitations the percentage of the promotional budget allocated to sales promotions may have to be increased

• Product sampling

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International Public Relation

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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Integrated Marketing Communication (IMS)

- Advertising- Sales promotions- Trade shows- Personal selling- Direct selling- Public relations• Objective: the successful sale of a product or service

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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 market

segments selected.4. Select effective media5. Compose and secure a budget based on what is

required to meet goals6. Execute the campaign.7. Evaluate the campaign relative to the goals specified.

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Top 10 Global Advertisers ($ millions)

2006 2005 Advertiser Headquarters 2006 Percent Change

1 1 Procter & Gamble Cincinnati $8,522 4.1

2 2 Unilever London / Rotterdam 4,537 8.1

3 3 General Motors Detroit 3,357 -17.4

4 5 L’Oreal Paris 3,119 12.7

5 4 Toyota Motor Corp. Toyota City, Japan 3,098 9.1

6 6 Ford Motor Co. Dearborn, Mich. 2,869 8.5

7 7 Time Warner New York 2,230 -13.8

8 10 Nestle Vevey, Switzerland 2,114 0.2

9 8 Johnson & Johnson New Brunswick, N.J. 2,025 -13.2

10 9 Daimler Chrysler Stuttgart, German 2,003 -5.4

Note: Figures are in millions of U.S. dollars and are AA Data Center estimates.

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TOP 10 AD SPENDING BY CATEGORYIn measured media bought in 2006 and 2005

CATEGORY 2006 2005 % CHG % TOTAL COUNT

Automotive $22,195 $22,291 -0.4% 22.7 16

Personal care 19,526 18,394 6.2% 20.0 9

Entertainment & media 9,538 10,038 -5.0% 9.8 8

Food 7,793 7,638 2.0% 8.0 7

Drugs 7,707 7,376 4.5% 7.9 9

Electronics 4,023 3,800 5.9% 4.1 8

Soft drinks 3,916 3,941 -0.6% 4.0 3

Retail 3,576 3,355 6.6% 3.7 7

Cleaners 3,571 3,323 7.5% 3.7 4

Restaurants 3,553 3,375 5.3% 3.6 4

Figures are U.S. dollars in millions and represent the top 100 only. All figures are considered AA Data Center estimates.

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GLOBAL MARKETERS: Top 10 Global Marketers by Country – Egypt

Advertiser 2006 2005 %CHG

Mobinil 20.0 13.0 54.4

Vodafone 16.1 9.5 70.0

Pepsi Co 9.9 5.7 74.9

Ranin 9.4 3.1 203.1

National Bank of Egypt 8.4 7.7 9.5

Procter & Gamble Co. 6.2 2.7 132.8

Min. Finance 5.6 NA NA

Coca-Cola Co. 5.6 3.1 82.2

Talaat Moustaf Group 4.9 NA NA

Telecom Egypt 4.9 3.3 48.6

Pan Arab Research Center

Figures are U.S. dollars in millions.

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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.

• Balance between standardization of advertising themes and customization.

• Consumer cultures

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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- Yogurt

• Blue Diamond – 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

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Regional Segmentation

• Pan-European communications media highlighting need for more standardized promotional efforts

• Costs savings with a common theme in uniform promotional packaging and design

• Legal restrictions slowly being eliminated

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Global Advertising and the CommunicationsProcess

• 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”

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The International Communication Process

Cultural Context B

Competitive activities, other salespeople, confusion, and so on

Evaluation of communications process and measure of action by receiver

Action by consumer responding to decoded message

Encoded message interpreted into meaning

Advertising Media and/or personal sales force

Cultural Context A

Message Translated into Appropriate Meaning

Marketer with a Product

Encoding

Information Source

Noise

Feedback

Message Channel

Decoding

Receiver

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Legal Constraints

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

• Comparative advertising• Advertising of specific products• Control of advertising on television• Accessibility to broadcast media• Limitations on length and number of commercials• 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

• Existing perceptions based on tradition and heritages are often hard to overcome

• Subcultures• Changing traditions

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Media LimitationsProduction and Cost Limitations

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

• Examples of production limitations:- Poor-quality printing- Lack of high-grade paper

• Low-cost reproduction in small markets poses a problem in many countries

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Media Planning and Analysis

• Availability• Cost• Coverage• Lack of market data• Newspapers• Magazines• Radio and television• Satellite and cable TV• Direct mail• The Internet• Other media

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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.

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