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IB 3880 – International Marketing

2010-2011

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14/03/2011

Warwick Business School

Dr. Madhumita Banerjee



Internationalisation Pricing: Case – Apple iPhone

Key issues in the case:

Product and brand positioning

Pricing strategy:

○ Price skimming followed by price reduction – pros and cons of this strategy

○ Price strategy for Europe

Extending the discussion – current scenario in the Smartphone market and international pricing decisions

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Catch up from last week...


http://www.youtube.com/watch?v=naBRz1Y0cc8

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2010-2011

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14/03/2011


Major decisions in international advertising

Creative challenges in international advertising

International advertising practices

Influence of Culture

Seminar:

Journal Article – Okazaki et al. (2010) –Seminar Groups 17 and 18

Group Exercise: International Advertising - Seminar Groups 19 and 20

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Session Agenda


Communication Tools

AdvertisingPublic

relations

Sales

promotion

Direct

marketing

Personal

selling

New Media

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Managing Advertising CommunicationUsunier and Lee (2009)

Problem to be solved

• Brand awareness

• Brand image

• Increase sales

• Provoke first trial/re-buy

• Build customer loyaltyTarget(s)

• Identify the target

• Socio-demographics

• Consumer habits

• How the product is used?

Creative Strategy

• Copy strategy

• Classical USP

• ‘Star Strategy’

• One or several creations

Communication Objectives• Let know

• Let like

• Let act (who?, how?)

Media Strategy• Availability of media

• Calculating the optimal

coverage of the audience

Implementation and Control• Agency/advertiser relationships

• Pre- and post-testing / evaluation

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Major decisions in International AdvertisingHollensen (2008)

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Objective Setting

• Communication Objectives

• Sales Objectives

Budget Decisions

• Percentage of sales / affordable

• Competitive parity approach

• Objective and task approach

Message Decisions

(Creative Strategy)

• USP

• Standardization vs. Adaptation

Media Decisions

• Reach, Frequency, Impact

• Types (TV, Radio, Web, Magazine…)

Agency Selection

• Local vs. International

Agency Evaluation

• Communication Impact

• Pretesting of print/TV ads

• Testing finished ad

• Sales Impact


International Advertising

Source: The Economist, Jan 4, 2011, www.economist.com

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International Media Planning

• Media landscapes vary

• Media costs measured differently

• Cost and effectiveness of media vary

• Media conditions vary too much for centralized planning and buying

• A media configuration successful in one market may not work in other markets

• Advertising or media agencies have proprietary media effectiveness tools to measure variety of means of communication by product category

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2010-2011

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Creative challenges in International Advertising

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Legal and Tax Considerations

Language Limitations

Cultural Diversity

Media Limitations

Production and Cost Limitations

Onkvisit, S. and Shaw, J. (2004), International Marketing: Analysis and Strategy, London: Routledge.

Cateora, P. and Graham, J. (2004), International marketing, London: McGraw Hill


Adaptation – Strategic AlternativesKeegan and Green (2011)

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Virtually no adaptation

Same advertising and promotion appeals

across countries

Strategy 2

Product extension

communication

adaptation

Strategy 4

Dual Adaptation

Strategy 1

Dual Extension

Strategy 3

Product

adaptation

Communication

extension

PRODUCTSame Different

CO

MM

UN

ICA

TIO

N

Different

Same

Adaptation of communication to

address different needs or

product positioning

Adapt the product to suit local tastes

Minimal changes to the communication

Adaptation of communication

and products to suit different

markets


International Advertising PracticesAdaptation and Standardisation

Adaptation versus Standardization

- Creative Elements

- Language

- Depiction of characters and situations

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Remember the Oreo Cookies advertising adaptation video?!

http://www.google.co.uk/imgres?imgurl=http://www.midlifegamer.net/wp-content/uploads/2010/03/German_flag.jpg&imgrefurl=http://www.midlifegamer.net/2010/03/playing-away-germany/german_flag/&h=366&w=606&sz=6&tbnid=X_KmT0Z10cBvCM:&tbnh=82&tbnw=136&prev=/images?q=german+flag&zoom=1&q=german+flag&usg=__q5Lut0t7QJUmuGlc6LdhTUGf5jA=&sa=X&ei=nbFATYarJsaChQe_lZmmBQ&ved=0CDUQ9QEwAg




2010-2011

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Celebrity Endorsement Degree of Adaptation

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Spot the Difference(s)

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Packaging as AdvertisingDegree of Standardization

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2010-2011

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Brand on the Web Degree of Adaptation

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Warwick Business School 18


2010-2011

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Cultural influence on advertising Sharing vs keeping for oneself

Portugal:

It is so good you have to share

Denmark:

It is so good you have to keep it

for yourself

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Brands are symbols

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Do great ideas travel?

• Most concepts do not travel

Not understood or

Misunderstood

Examples: freedom of choice, work where you want

L’Oréal: “Because I am worth it” changes into “because you are worth it” in Asia

• Some well-known, very strong brands can afford to develop strong advertising ideas and/or executions that do travel

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Video Case: Mini

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2010-2011

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To summarise..

All elements of the marketing mix (product, price, promotion and distribution) interact with each other and therefore any international marketing strategy has to address all elements as a composite whole.

The degree of standardisation or adaptation is determined by market characteristics, the cross-cultural transferability as well as the international marketing strategy pursued by the firm.

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Suggested Readings

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Dou Wenyu and Krishnamurthy Sandeep (2007), Using brand websites to build brands online: A product versus service brand comparison, Journal of Advertising Research, June, pp. 193-206

Okazaki, S., B. Mueller and C.R. Taylor (2010), Global Consumer Culture Positioning: Testing Perceptions of Soft-Sell and Hard-Sell Advertising Appeals Between U.S. and Japanese Consumers, Journal of International Marketing, 18 (2), 20-34

Zhang Shi and Schmitt Bernd (2001), Creating local brands in multilingual international markets, Journal of Marketing Research, Vol. XXXVIII, August, pp. 313-325


Seminar Exercise Article to read: Okazaki, S., B. Mueller and C.R. Taylor (2010)

Seminar groups 17 and 18

To discuss in class the key points of the Okazaki , Mueller and Taylor (2010) paper

Group Exercise: Seminar groups 19 and 20

Each group - Decide upon any multi-national brand (with the exception of Coca Cola, Pepsi, McDonalds, Burger King, KFC) and identify the advertising used to support that brand in at least 3 different countries.

The advertising used to support the brand can include TV advertising available on You Tube

Determine the degree of advertising adaptation and standardization for the brand across the three countries.

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Documents

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