MKT 376 PROMOTION AND E-COMMERCE Lars Perner, Instructor 1 Global Promotion Promotion objectives Problems and opportunities in promotional transplantation

MKT 376 PROMOTION AND E-COMMERCE Lars Perner, Instructor 1

Global Promotion

• Promotion objectives• Problems and

opportunities in promotional transplantation

• Legal issues


Promotion: Strategic and Tactical Objectives

• Awareness• Trial• Attitude toward the

product– Beliefs– Preference

• Temporary sales increases

EmergingMarkets/New Products

Mature markets/establishedproducts


Tools in Integrated Marketing Communication• Advertising

– Media– Direct mail– Billboards– Other

• Sales promotion• Public relations• Distribution as promotion• Placements/endorsements


Advertising Prominence

• Higher income countries tend to spend more on advertising. However:– Some exceptions– Lower media costs in developing

countries may understate extent of use

• U.S. has especially high advertising spending.


Ad Spending vs. Income

Country Spending PC Income Ratio

U.S. $445.00 $35,610 1.25%

Canada $157.00 $21,930 0.72%

Argentina $76.00 $6,940 1.10%

Brazil $32.00 $3,070 1.04%

Chile $43.00 $4,590 0.94%

China $0.30 $890 0.03%

Hong Kong $419.00 $25,330 1.65%

India $1.20 $460 0.26%

Japan $262.00 $35,610 0.74%

Australia $246.00 $19,900 1.24%

France $157.00 $22,730 0.69%

Germany $230.00 $23,560 0.98%

Italy $118.00 $19,390 0.61%

Sweden $211.00 $25,400 0.83%

UK $252.00 $25,120 1.00%

Russia $0.02 $1,750 0.00%

Ad Spending vs. PC Income

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

$0 $10,000 $20,000 $30,000 $40,000

Per Capita Income

Pctg

. Ad S

pendin

g

Average=0.82%

Note questionable reliability of data and possible accounting issues.


Country Economic Growth vs. Ad Spending: No Clear Pattern

Economic Growth To PC Ad Spending Ratios

-10.00% -5.00% 0.00% 5.00% 10.00% 15.00%

Economic Growth

% In

com

e S

pent on

Advert

isin

g

2.0%

0.0%


Regional Media Tendencies

• India: Outdoor

• Europe: Print media; radio advertising avoided

• Television: U.S., China, Japan, Latin America (e.g., novelas)

• Movie going countries: Cinema advertising


Global Advertising

• International TV channels: CNN, SkyTel

• Magazines with regional editions: Time, Newsweek, Playboy, Cosmopolitan

• International newspapers: Financial Times, Wall Street Journal

• Internet


Advertising Budgeting Approaches• Percentage of sales

• Competitive parity

• Affordability

• Objective and taskCOUNTRYPRIORITY

COUNTRYPRESTIGE

GATEWAYPOTENTIAL

COMPETITIVEINTENSITY

GROWTHPOTENTIAL

CURRENTMARKET


Advertising (Agency) Processes

AGENCY ORIN-HOUSE

SELECTIONBUDGETING

OBJECTIVEDETERMINATION

CAMPAIGNEVALUATION

MEDIASELECTION

MESSAGECREATION


Promotional Tools

• In-store promotions

• Customers

• Cross-marketing

• Publicity and public relations

• Cause marketing

• Product placement

• Trade fairs


Constraints on Global Communications Strategies

• Language barriers• Cultural barriers• Local attitudes

toward advertising• Production/cost• Media availability• Advertising

regulations


Flops in the Transplantation of Advertising• Man and his dog• “A can a week is all

we ask”• “Follow the leader--

he’s on a Honda!”• Detergent ad• “Get your teeth their

whitest!”• Marlboro man in

Hong Kong


Symbolism

• Green: Health in U.S.; in Latin America, jungle (associated with danger)

• Marlboro man: freedom in U.S.; dusty, unappealing life in Hong Kong

• Perfume against raindrop: Cool, refreshing feeling to Europeans; symbol of fertility to some Asians


Cultural Dimensions in Advertising• Directness vs.

indirectness

• Comparative advertising

• Humor appeal

• Gender roles

• Explicitness

• Sophistication

• Popular vs. traditional culture

• Information content vs. fluff


Promotion as a Means of Positioning• How do people see advertising

and promotion efforts?• Promotion as a means to

communicate– benefits of product– use of product– product image

• Differences in desires by culture


Advertising Standardization: Advantages

• Economies of scale• Consistent image• Appeal to global consumer

segments• Conservation/maximum utilization

of creative talent• Cross-fertilization--moving

knowledge across marketsEssentiallyparallel to product/

positioning standardization


Disadvantages

• Cultural differences• Advertising and

promotional regulations• Market lifecycle stage

(maturity)• Local commitment to

campaign (“Not-invented-here)

Again, parallel to product/positioning standardization


Humor

• Humor appears to be a universal phenomenon

• However, there are great differences in form across the World

• “A can a week is all we ask” worked in U.S. but was seen as silly in Canada


Values

• Americans tend to emphasize individuals; in other cultures, standing out from the group may not be desirable

• Popular vs. traditional culture

• Perception of comparative advertising

• Eastern Europeans want more facts in advertising


Contrasting Advertising Perspectives (Aithison 2002)

• Western– “Atomistic”—broken

down to smallest component parts

– “Unique selling propositions”

– “How to”– Positioning– May be “dull and boring”– “Copy focused”

• Asian– Holistic– “Everything relates

to everything else”– How things “fit

together” and “relate”

– Visual and oral

Jim Aitchison, How Asia Advertises, New York: Wiley, 2002.


Advertising Content Comparisons

• American:– Individual benefit and pleasure (e.g.,

“Make your way through the crowd)

• Korean– Collective values (e.g., “We have a way of

bringing people together)


Legal Issues in Promotion

• Media allowed for advertising

• Comparative advertising

• Price promotions– coupons– premiums

Documents

MKT 376 PROMOTION AND E-COMMERCE Lars Perner, Instructor 1 Global Promotion Promotion objectives Problems and opportunities in promotional transplantation