intrnational enviornment

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Chapter 7:Chapter 7:

THE INTERNATIONALTHE INTERNATIONAL

ENVIRONMENT FORENVIRONMENT FORPROMOTIONPROMOTION

andandIMCIMC

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Cultural CommunicationsCultural Communications

Culture - Total Way of a People, the Social Legacy theCulture - Total Way of a People, the Social Legacy the

Individual Acquires from His or Her GroupIndividual Acquires from His or Her Group

Culture is Typically Invisible to Those Who are Immersed In It,Culture is Typically Invisible to Those Who are Immersed In It,

Making Communication Across Cultures DifficultMaking Communication Across Cultures Difficult

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Importance of International CommunicationImportance of International Communication

Complex Social, Political & Economic ChangesComplex Social, Political & Economic ChangesAffect International Communications Environment.Affect International Communications Environment.

International Developments Relevant to the Rise inInternational Developments Relevant to the Rise inInternational Commercial Communications:International Commercial Communications:

Development of Trading Blocs - May be Prelude toDevelopment of Trading Blocs - May be Prelude toa Rise in Nationalisma Rise in Nationalism

Loosening of Political and Economic ConstraintsLoosening of Political and Economic Constraints

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Importance and Rise of InternationalImportance and Rise of International

CommunicationCommunication (cont)(cont)

Liberalization of the Flow of Labor and Increase inLiberalization of the Flow of Labor and Increase in

movements of Peoples Across Bordersmovements of Peoples Across Borders Growing Size of Ethnic Groups From Elevated BirthGrowing Size of Ethnic Groups From Elevated Birth

RatesRates

Rise of Cultural Borders and Barriers even as EconomicRise of Cultural Borders and Barriers even as Economic

Barriers Begin to FallBarriers Begin to Fall

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Overcoming Cultural Barriers inOvercoming Cultural Barriers in

International PromotionInternational Promotion

Barriers to Creating Successful International PromotionsBarriers to Creating Successful International Promotions

EthnocentrismEthnocentrism Self-Reference CriterionSelf-Reference Criterion

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How Might ThisHow Might This

American Ad Be ViewedAmerican Ad Be Viewed

as Ethnocentricas Ethnocentric

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Overcoming Cultural Barriers inOvercoming Cultural Barriers in

International PromotionInternational Promotion (cont)(cont)

Cross-Cultural Research Helps Overcome BarriersCross-Cultural Research Helps Overcome Barriers Secondary Data - Data Gathered by Someone ElseSecondary Data - Data Gathered by Someone Else

for Some Other Purposefor Some Other Purpose

Primary Data - Specific Data Collection Unique to aPrimary Data - Specific Data Collection Unique to aPromotional SituationPromotional Situation Economic ConditionsEconomic Conditions Demographics CharacteristicsDemographics Characteristics ValuesValues Custom & RitualCustom & Ritual Product Use & PreferenceProduct Use & Preference

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Challenges in International AdvertisingChallenges in International Advertising

Creative ChallengeCreative Challenge

Media ChallengeMedia Challenge

Media Availability & CoverageMedia Availability & Coverage

Media Costs & PricingMedia Costs & Pricing Regulatory ChallengeRegulatory Challenge

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International MarketsInternational Markets

Prefer Different CreativePrefer Different Creative

ExecutionsExecutions

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Challenges in International Sales Promotion,Challenges in International Sales Promotion,Direct Marketing and e-CommerceDirect Marketing and e-Commerce

CHARACTERISTICES OF THE PRODUCTCHARACTERISTICES OF THE PRODUCT

Product Prevalence & UseProduct Prevalence & Use As Competitive Environment Becomes MoreAs Competitive Environment Becomes MoreComplex, Advertising Designed to DifferentiateComplex, Advertising Designed to DifferentiateBrands will Become More PredominantBrands will Become More Predominant

Products Moving into Growth Stage will Need to beProducts Moving into Growth Stage will Need to beDifferentiatedDifferentiated

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Challenges in International Sales Promotion,Challenges in International Sales Promotion,Direct Marketing and e-CommerceDirect Marketing and e-Commerce (cont)(cont)

LEVEL OF ECONOMIC DEVELOPMENTLEVEL OF ECONOMIC DEVELOPMENT All Forms of Production & Direct Marketing are Applicable inAll Forms of Production & Direct Marketing are Applicable in

Highly Industrialized MarketsHighly Industrialized Markets

In Less Developed Countries - Lack of Wide Range ofIn Less Developed Countries - Lack of Wide Range ofConsumer Goods & Low Income Make Promotion a Non IssueConsumer Goods & Low Income Make Promotion a Non Issue Few Competitors Serve these MarketsFew Competitors Serve these Markets

Low Literacy Make Communication Difficult w/Print MediaLow Literacy Make Communication Difficult w/Print Media

Without TV, Radio & Newspaper, Direct marketing isWithout TV, Radio & Newspaper, Direct marketing isUnderminedUndermined

Unsophisticated Mail SystemsUnsophisticated Mail Systems


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LEVEL OF ECONOMIC DEVELOPMENT (cont)LEVEL OF ECONOMIC DEVELOPMENT (cont)

Newly Industrialized Markets Better Environment forNewly Industrialized Markets Better Environment for

Promotional Tools Must be Managed CarefullyPromotional Tools Must be Managed Carefully Consumer Income Rises More Consumer Goods areConsumer Income Rises More Consumer Goods are

Introduced and SucceedIntroduced and Succeed

As Media Proliferate, Sales Promotions and DirectAs Media Proliferate, Sales Promotions and Direct

Marketing can be Introduced Based on Market-by-Marketing can be Introduced Based on Market-by-Market AssessmentMarket Assessment

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STRUCTURE OF TRADE CHANNELSSTRUCTURE OF TRADE CHANNELS Highly Developed Distribution & Retailing Systems Trade Channel MembersHighly Developed Distribution & Retailing Systems Trade Channel Members

Demand Support or Carry Marketers BrandDemand Support or Carry Marketers Brand

Trade Allowances, Incentives, Point-of-Purchase Displays & SamplingTrade Allowances, Incentives, Point-of-Purchase Displays & Sampling

Must Have the Means to Handle Coupon Redemption or Premium DistributionsMust Have the Means to Handle Coupon Redemption or Premium Distributions

Less Developed Trade Channels May Not be Able to Use Traditional PromotionaLess Developed Trade Channels May Not be Able to Use Traditional PromotionaTechniquesTechniques

Fragmentation of Trade ChannelsFragmentation of Trade Channels Retailers - No Way of Handling CouponsRetailers - No Way of Handling Coupons Some Countries So Small May Not be able to Handle Point-of-PurchaseSome Countries So Small May Not be able to Handle Point-of-Purchase

Trade ShowTrade Show

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Challenges in International Sales Promotion,Challenges in International Sales Promotion,

Direct Marketing and e-CommerceDirect Marketing and e-Commerce (cont)(cont)

REGULATIONSREGULATIONS

Regulation of Promotion, Direct Marketing, andRegulation of Promotion, Direct Marketing, ande-Commerce Varies Widely Market-to-Markete-Commerce Varies Widely Market-to-Market Most Sales Promotion Tools are Legal Across EuropeMost Sales Promotion Tools are Legal Across Europe Sweepstakes are Either Heavily Banned or RegulatedSweepstakes are Either Heavily Banned or Regulated

in All European Marketsin All European Markets In Japan Value of Premium Offered with a ProductIn Japan Value of Premium Offered with a Product

is Limited to 10% of the Value of the Original Priceis Limited to 10% of the Value of the Original Price

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Promotions inPromotions in

International MarketsInternational Markets

Must be Researched forMust be Researched for

Regulation and LegalityRegulation and Legality

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Challenges in International Public RelationsChallenges in International Public Relations

COMPANIES HAVE LESS CONTROL OVER GLOBALCOMPANIES HAVE LESS CONTROL OVER GLOBAL

PUBLICITY RELATIVE TO DOMESTIC SITUATIONS,PUBLICITY RELATIVE TO DOMESTIC SITUATIONS,

AND NO CORPORATIONS ARE POWERFUL ENOUGHAND NO CORPORATIONS ARE POWERFUL ENOUGH

TO CONTROL A HOST COUNTRYS MEDIATO CONTROL A HOST COUNTRYS MEDIA

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Promotion Agencies Around the WorldPromotion Agencies Around the World

GLOBAL AGENCYGLOBAL AGENCY Will Know Marketers Products & Current Promotion ProgramWill Know Marketers Products & Current Promotion Program Agency may then Either Adapt Domestic Campaigns or Launch NewAgency may then Either Adapt Domestic Campaigns or Launch New

OnesOnes

Disadvantage is their Distance from Local Culture. ExportingDisadvantage is their Distance from Local Culture. ExportingMeaning is Never EasyMeaning is Never Easy

INTERNATIONAL AFFILIATEINTERNATIONAL AFFILIATE Set Up as a joint Venture w/Local AgenciesSet Up as a joint Venture w/Local Agencies Join Networks or Take Minority OwnershipJoin Networks or Take Minority Ownership

Benefits in this ArrangementBenefits in this Arrangement

LOCAL AGENCYLOCAL AGENCY Knowledgeable about Culture/Local MarketKnowledgeable about Culture/Local Market Have Well-Established ContactsHave Well-Established Contacts

One Problem-Less Standardization of Creative EffortOne Problem-Less Standardization of Creative Effort

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Standardized vs. Promotional Customized CampaignsStandardized vs. Promotional Customized Campaigns

STANDARDIZED CAMPAIGNS USE SAME APPEAL & CREATIVESTANDARDIZED CAMPAIGNS USE SAME APPEAL & CREATIVEEXECUTION ACROSS ALLINTERNATIONAL MARKETSEXECUTION ACROSS ALLINTERNATIONAL MARKETS

CUSTOMIZED CAMPAIGNS INVOLVE PREPARING CREATIVECUSTOMIZED CAMPAIGNS INVOLVE PREPARING CREATIVEEXECUTIONS FOR EACH MARKET A FIRM HAS CREATEDEXECUTIONS FOR EACH MARKET A FIRM HAS CREATED

A BRAND IS WELL SUITED FOR A STANDARDIZED CAMPAIGNA BRAND IS WELL SUITED FOR A STANDARDIZED CAMPAIGNWHEN:WHEN:

Communication Primarily Uses Visual AppealCommunication Primarily Uses Visual Appeal Communication is Culture-lessCommunication is Culture-less

Brands that are StandardizedBrands that are Standardized

Products have Global ReputationProducts have Global Reputation

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Certain Product LendCertain Product Lend

Themselves toThemselves to

Standardized CampaignsStandardized Campaigns

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Standardized vs. Promotional Customized CampaignsStandardized vs. Promotional Customized Campaigns

(cont)(cont)

ENVIRONMENT FOR STANDARDIZED PROMOTIONENVIRONMENT FOR STANDARDIZED PROMOTION

IS MORE FAVORABLE DUE TO:IS MORE FAVORABLE DUE TO:

Expansion of Global Communications MediaExpansion of Global Communications Media

Emergence of Global TeenagerEmergence of Global Teenager

Trend Towards Universal Demographic & LifestyleTrend Towards Universal Demographic & Lifestyle

TrendsTrends

Americanization of Consumption ValuesAmericanization of Consumption Values

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Challenges in Developing & ManagingChallenges in Developing & Managing

A Global Sales ForceA Global Sales Force

DEVELOPING A GLOBAL SALES FORCE CAN BEDEVELOPING A GLOBAL SALES FORCE CAN BEACHIEVED WITH:ACHIEVED WITH:

Expatriate PersonnelExpatriate Personnel

Local NationalsLocal Nationals

Third Country NationalsThird Country Nationals

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Challenges in Developing & ManagingChallenges in Developing & Managing

A Global Sales ForceA Global Sales Force

MANAGING THE GLOBAL SALES FORCEMANAGING THE GLOBAL SALES FORCE TrainingTraining

ExpatriateExpatriate

Foreign National PersonnelForeign National Personnel Training for Foreign PersonnelTraining for Foreign Personnel

Motivation & CompensationMotivation & Compensation Companies Must Consider CultureCompanies Must Consider Culture Guidelines Include Examining the Way Firms are CompensatingGuidelines Include Examining the Way Firms are Compensating

PeoplePeople High Tax-Rate Countries Sales Personnel Push for PackagesHigh Tax-Rate Countries Sales Personnel Push for Packages

instead of Direct Taxable Incomeinstead of Direct Taxable Income E.g., Cost of Living Allowances, Private School Tuition, etc.E.g., Cost of Living Allowances, Private School Tuition, etc.

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