International Marketing

“Toto, I don’t think we’re in Kansas anymore”

- Dorothy

Gary Burandt

Executive DirectorICOM

Why market abroad?

To expand sales opportunitiesTo retain domestic clientsTo stay competitiveTo take advantage of low labor costs

The Americans are late

No trading traditionBig post-war domestic market Too hard:

Different languages/cultures Complicated taxes, tariffs and currencies Distribution worries Distance (12% of Americans own

passports)

Go to easiest markets first

Typically Europe/Australia firstProven product acceptanceRight target audience profileBegin with distributors Own sales force comes later

World is not smaller, but it is a lot closer

CNN, MTV, ESPN, BBC, NBA & Disney providing global shared experiences

Maradona, Madonna, Mandela, GodzillaThe “Universal Teenager”

American Levi’s jeans Italian Benetton sweater British Doc Martins shoes Swiss Swatch watch Japanese Sony Walkman

Trend is to global agency network assignments

Better control of strategy, message & budgets

Simpler administration for client with a single point of contact at the agency

Can leverage global assignment for lower agency compensation

Hard to do with distributors, needs own sales force

Multinational Networks

Same name everywhereKnown nameCase historiesSet policies and proceduresAuthority to “make it happen”Perhaps a safer choice, for the

insecure

ICOM Independent Network

Stable managementDeep market understandingConnections social, politicalLow overheads, fast responseSpirit of a volunteer networkSome creative great workNo politicsLonger history than many multinationals

International approach follows company’s culture

Firm -Company HQ controls brand strategy, creative execution & MC budget

Flexible - HQ controls brand strategy, but creative execution can be localized. MC Budget shared.

Free - HQ allows brand strategy & creative execution to be determined locally. MC locally funded.

Examples

Firm Flexible Free

RolexMarlboroSingapore AirMost corporatecampaigns

ColgateCokeMcDonald'sEricssonVolvo

SonyFrito-layFordMost food & personal care

Trend is to Flexible approach

Firm - Insensitive to local market conditions. Locals hate it.

Free - Doesn’t build brands, can be wasteful of resources. Locals love it.

Flexible - Builds brands with local sensitivity to message delivery. Allows sharing of best practices. Compromise management with good communications.

Agency structure typically reflects client organization

Client Client CEO Worldwide MarCom

Director Regional MarCom

Director Local MarCom

Director

Agency Agency CEO Worldwide Account

Director Regional Account

Director Local Account

Director

What agencies need to do

Commit to international standards of service, process & communication

Assign a Worldwide Account Director and perhaps Regional Accounts Directors

Pick local Account Directors based on related experience and “chemistry”

What agencies need to do

Set and communicate clear, simple policy and procedures for running the business

Require concise monthly report from fieldHave a global meeting at least annuallyEstablish a bi-lateral formal performance

review system that works for both sides

What clients need to do

Communicate to field why there will be a new agency

Involve agency in the upstream planning

Keep a handle on the MC budgets as a form of control

Keep agency informed and introduced

Picking an agency

Budget size determines agency sizeLook for related experience:

Consumer Business to business

IMC capabilitiesInternational connections for expansionGood people chemistryLocal Agency Association can help

Globalization is hard

When the Client HQ makes a global agency change without telling the locals

When the locals love their old agencyWhen client uses agency to do the dirty

workWhen the agency’s caught in the middle

of the inevitable HQ vs. the field conflicts When agency politics get in the way

Trend is to IMC

Uses all communications disciplines to a single strategy across all audiences

More ways to help: PR, Direct, Promo,etcBuilds brands fasterLonger relationshipsA new way of working, needs even more

communications/involvement

Public Relations is local

PR needs a local practitioner with contacts and understanding of the media

Agencies either have this capability in-house or have an ongoing relationship with a PR shop to meet client needs

In some countries publicity is “bought” like advertising space … with a resulting lack of credibility

Direct & Promotion also local

Should compliment advertising message

Needs cultural understandingPrivacy/sampling laws differ by

country As do postal infrastructureAlcohol and tobacco very regulated

Media is changingThe trend in many parts of the world is to

“un-bundle” the media functionMedia-only companies (CIA/ Media Edge,

Zenith, Carat, etc.) are serving agencies and clients directly

They offer leveraged media discounts and research resources based on volume

Sometime they replace the media department, sometime just the buying function in an agency

Internet must be considered

Most important commercial medium since television

Traffic doubles every 10 weeksBuyers can search, compare,

question and buy all in a matter of minutes…from home or office

Can reduce the sellers and buyers costs

Media issues

Media used determined by: Target audience interests Local cultural issues Media options available Seasonality Budget allocations

Budgeting considerations

Speed of market awareness generally determined by level of spending

Spending must reach a threshold of awareness to make something happen

Better to spend enough in a few markets than too little in a lot of markets

Global Creative concerns

Keep it simple and visual Humor is great but is hard to doExecution should fit market, but core

brand values should be consistentShare international work frequently to

see what is working … and notDon’t allow the “Not Invented Here”

attitude

Moving creative across borders

Look for similarities beyond geography: Target audience demographics Religious/cultural Competitive set Pricing structure Distribution channels Category perception

Where to go for help

World Trade Centers US Council for International Business American Association of Advertising

Agencies US Department of Commerce,

International Trade Administration Office of International Trade, US Small

Business Administration International Advertising Association ICOM www.icomagencies.com