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Integrated Marketing Communications and
International Advertising
McGraw-Hill/IrwinInternational Marketing, 13/e
© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
Chapter
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Chapter Learning Objectives
• Local market characteristics that affect the advertising and promotion of products
• The strengths and weaknesses of sales promotion and public relations in global marketing
• When global advertising is most effective; when modified advertising is necessary
• The effects of a single European market on advertising• The effect of limited media, excessive media, paper and equipment
shortages, and government regulations on advertising and promotion budgets
• The communication process and advertising misfires
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Global PerspectiveBarbie Versus Mulan
• The original Barbie between Japan, Hong Kong and Hollywood• Major toy makers increasingly are designing 1 version globally
- Cable & satellite TV and internet- International retail giants – Wal- Mart, Toys “R” us, Carrefour
• Rapunzel Barbie launched in 59 countries at the same time. TV ad campaign in 35 languages around the world broadcasted at the same time+ web site+ games+ videos+ movies
• Action figures toys make up just 1% of the toy market in Germany, 5% in US AND 6% in UK
• Disney’s Jasmine in the Islamic world• Despite of Mattel IMC plan Barbie sales declined sharply in front
of the more ethnically diverse competitors’ products
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Las Vegas Loosing Its Exclusivity
• The gaming heritage• Resort industry• Dinning& Shopping• Competition from other
cities• Lack of a unifying idea
that could break through the clutter
• People love to come to Las Vegas to cut loose, have fun and do things they wouldn’t do back home
• R&R Partners “Only in Vegas” ads
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Using IMC To Market Las Vegas
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Creating a Unique Brand Identity for Las Vegas
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
*Click outside of the video screen to advance to the next slide
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Leveraging the popular commercials into IMC
• Marketing guerilla efforts around the Oscar and Grammy awards
• Sponsorships, PR& feature stories in CNN& National Public Radio, US Today, NY Times, WS journal and cover story in Time magazine
• Grand Marketer Award 2004• 37.4 million visitors• 89% occupancy rate
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Taking The “Only Vegas” Campaign in a New Direction
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Creating a Unique Brand Identity for Las Vegas
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
*Click outside of the video screen to advance to the next slide
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Point ofpurchase
Publicity
Publicrelations
Directmarketing
Interactivemarketing
Specialevents
Packaging
Salespromotion
Directresponse
Traditional Approach to Marketing Communications
MediaAdver-tising
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Contemporary IMC Approach
Point ofpurchase
Publicity
Interactivemarketing
Publicrelations
Directmarketing
Specialevents
PackagingSales
promotionDirect
response
MediaAdver-tising
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Defining IMC
IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. Don Schultz
IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. Don Schultz
The goal of IMC is to generate short-term financial returns and build long-term brand value.
The goal of IMC is to generate short-term financial returns and build long-term brand value.
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Demand for accountabilityDemand for accountabilityDemand for accountability and Measurement of Outcomes
Demand for accountability and Measurement of Outcomes
Recognized as a business processRecognized as a business process
Importance of relevant audienceImportance of relevant audience
Ongoing strategic business processOngoing strategic business process
Multiple relevant audiencesMultiple relevant audiences
A Contemporary Perspective of IMC
IMCNot just another
management fashion
IMCNot just another
management fashion
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Traditional compensationTraditional compensation Performance-based compensation Performance-based compensation Traditional compensationTraditional compensation Performance-based compensation Performance-based compensation
Media advertisingMedia advertising Multiple forms of communicationMultiple forms of communication
Mass mediaMass media Specialized mediaSpecialized media
Manufacturer dominanceManufacturer dominance Retailer dominanceRetailer dominance
General focusGeneral focus Data-based marketingData-based marketing
Low agency accountabilityLow agency accountability Greater agency accountabilityGreater agency accountability
Limited Internet availabilityLimited Internet availability Widespread Internet availabilityWidespread Internet availability
Media advertisingMedia advertising Multiple forms of communicationMultiple forms of communication
Mass mediaMass media Specialized mediaSpecialized media
Manufacturer dominanceManufacturer dominance Retailer dominanceRetailer dominance
General focusGeneral focus Data-based marketingData-based marketing
Low agency accountabilityLow agency accountability Greater agency accountabilityGreater agency accountability
Reasons for the Growing Importance of IMC
From Toward
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IMC and Branding
Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.
Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.
2005 Brand Value(Billions of Dollars)
1. Coca-Cola
$67.52
2. Microsoft
$59.94
3. IBM$53.38
4. GE $46.99
5. Intel $35.59
6. Nokia
$26.45
7. Disney
$26.44
8. McDonald’s
$26.01
9. Marlboro
$24.84
10. Mercedes
$21.19
IMC plays a major role in the process of developing and sustaining brand identity & equity by increasing the number of encounters between the consumers and the brand
IMC plays a major role in the process of developing and sustaining brand identity & equity by increasing the number of encounters between the consumers and the brand
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Intel’s Advertising Helps Build Brand Equity The Bunny People
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© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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AdvertisingAdvertising
Direct MarketingDirect Marketing
Interactive/Internet Marketing
Interactive/Internet Marketing
Sales PromotionSales Promotion
Publicity/PublicRelations
Publicity/PublicRelations
Personal SellingPersonal Selling
AdvertisingAdvertising
Direct MarketingDirect Marketing
Interactive/Internet Marketing
Interactive/Internet Marketing
Sales PromotionSales Promotion
Publicity/PublicRelations
Publicity/PublicRelations
Basic Elements of the Promotional Mix
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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’
• P&G “Arial Road Show” to the rural areas in Egypt • In markets with media limitations the percentage of the
promotional budget allocated to sales promotions may have to be increased
• Pepsi an Coke carnival truck in Latin America• Product sampling – Nestle rest- stop in France
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• Consumer-oriented• [For end-users]
• Trade-oriented• [For resellers]
Sales Promotion Tools
EventsEvents
Loyalty ProgramsBonus Packs Bonus Packs
efunds/Rebates Refunds/Rebates Contests/SweepstakesContests/Sweepstakes
PremiumsPremiumsSamplesSamplesCouponsCoupons
CoopAdvertising
CoopAdvertising
TradeShows
TradeShows
TrainingProgramsTrainingPrograms
POP Displays
TradeAllowances
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Introduce new products
Introduce new products
Get existing customers to buy
more
Get existing customers to buy
more
Attract new customers
Attract new customers
Maintain sales in off season
Maintain sales in off season
Increase retail inventories
Increase retail inventories
Tie in advertising & personal selling
Tie in advertising & personal selling
Enhance personal selling
Enhance personal selling
Combat competitionCombat competition
Introduce new products
Introduce new products
Get existing customers to buy
more
Get existing customers to buy
more
Attract new customers
Attract new customers
Maintain sales in off season
Maintain sales in off season
Increase retail inventories
Increase retail inventories
Tie in advertising & personal selling
Tie in advertising & personal selling
Enhance personal selling
Enhance personal selling
Various Uses of Sales Promotion
SalesPromotion
SalesPromotion
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Advertising Versus Publicity
AdvertisingAdvertising PublicityPublicity
TentativeTentative
LowLow
Low/Unspecified Low/Unspecified Uncontrollable Uncontrollable
GreatGreat
LowerLower
Measurable Measurable
SchedulableSchedulable
High/Specific High/Specific
HighHigh
SpecifiableSpecifiable
UndeterminedUndetermined
HigherHigher
LittleLittle
FactorFactor
ControlControl
CredibilityCredibility
ReachReach
FrequencyFrequency
CostCost
FlexibilityFlexibility
TimingTiming
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InterviewsInterviewsInterviews Interviews
FeatureArticlesFeatureArticles
SpecialEvents
SpecialEvents
PressConferences
PressConferences
NewsReleasesNews
Releases
FeatureArticlesFeatureArticles
SpecialEvents
SpecialEvents
NewsReleasesNews
Releases
Publicity Vehicles
PublicityVehicles
PublicityVehicles
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Public Relations
•When an organization systematically plans and distributes information in an attempt to control and manage its image and the nature of the publicity it receives, it is really engaging in PR.
•“The management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance”
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Corporate AdvertisingCorporate
Advertising Cause-related
MarketingCause-related
Marketing
PublicityVehicles
CommunityActivities
Public AffairsActivities
SpecialPublications
Special EventSponsorship
PublicityVehicles
CommunityActivities
Public AffairsActivities
SpecialPublications
Public Relations Tools
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International Public Relations
• Bridgestone/Firestone Tires safety recall & Throwing the blame • Global workplace standards• Building an international profile for new companies• Corporate sponsorships despite of their connections to advertising
- Tobacco companies using sports event sponsorships.- Coca Cola & soccer, Macdonald’s & Sidney Olympics 2000
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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The Growth of Advertising and Promotion
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Expenditure in Billions of Dollars
$0 $50 $100 $150 $200 $250 $300 $350
U.S. Advertising
U.S. SalesPromotion
AdvertisingOutside U.S.
2004
1980
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Top 20 Global Advertisers ($ millions)
• Insert Exhibit 16.1
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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 the market segments selected.
4. Select effective media.
5. Compose and secure a budget.
6. Execute the campaign.
7. Evaluate the campaign relative to the goals specified.
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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.- Increased costs, coordination of adv. programs, global image
• Balance between standardization of advertising themes and customization.
- Foreign or domestic agencies- Centralization or decentralization
• Gillete, the best a Man can get – umbrella statement but different brand names
• Consumer cultures as a base for segmentation
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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 in US, Japan and Africa - excellent pictures is the primary function
- Dannon’s yogurt - health in US and Pleasure in France
• Blue Diamond’s Almonds – 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
- In US “a can a week is all what we ask”, Canada considered it too silly . In Japan almond tofu and miso soup
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Regional Segmentation
• Pan-European communications media highlighting need for more standardized promotional efforts and harmony in brand names
• IBM pan-European promotional strategy- CIM• Costs savings with a common theme in uniform promotional
packaging and design• Eveready in Latin America 1 message campaign to 16 countries• Legal restrictions slowly being eliminated
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The International Communications Process
• Insert Exhibit 16.4
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Global Advertising and the Communications Process
• 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”
• Tooth paste for cavity reducing in US& breath control in Europe• Encoding Problems even with the right message – Is the perfume
effective against infertility in Africa?!!• Decoding problems – Pepsi “come alive”, Chevrolet NOVA
“doesn’t go” in Spain
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Legal Constraints
• Laws that control comparative advertising vary from country to country in Europe.
• Comparative advertising- Germany, Belgium and Luxembourg• Advertising of specific products - Pharmaceuticals• Control of advertising on television- Time and content• Accessibility to broadcast media• Limitations on length and number of commercials – In Germany
20 min between commercials and not more than 12 min/hour• 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
• General Mills instant cake in UK and Japan• Toyota Prado “rule by force” not a nice memory in China• Existing perceptions based on tradition and heritages are often
hard to overcome• P&G and the story of the bird delivering Pampers in Japan• Subcultures• Changing traditions and Coffee in Japan
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Media Limitations and Production and Cost Limitations
• Media limitations may diminish the role of advertising in the promotional program
• 10 showings /year with no 2 exposures closer than 10 days in Italy• Examples of production limitations:
- Poor-quality printing : Kodak in China- Lack of high-grade paper : Colgate - Palmolive in Eastern Europe
• Low-cost reproduction in small markets poses a problem in many countries – Coca Cola and Nestle using Feluccas Sails in Egypt
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Media Planning and Analysis – Tactical Considerations
• 10-50 commercial string sandwiches in Brazil• National coverage = 40-50 different media• Annual TV scheduling by August 30 in Germany• In Vietnam Newspapers ads limited to 10% of space and
5% of time on radio and TV
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Media Planning and Analysis – Tactical Considerations
• Availability• Cost• Coverage• Lack of market data - circulation& segmentation• Newspapers
- Number, paper shortage, ad space, editorials and advertorials
• Magazines
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Media Planning and Analysis – Tactical Considerations (continued)
• Radio and television• Satellite and cable TV• Direct mail• The Internet• Other media Cinema , Billboards etc.
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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.