Chapter 14 Global Promotion Strategies


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  • Now that we are at the end of the “4P story,” this is a good summary slide to remind the student how all of the “Ps” work together to insure a well-positioned marketing mix.
  • Some of the advantages of standardizing promotion: Companies can gain economies of scope and take advantage of production cost savings when advertisements and other promotions are standardized across markets. By focusing on a standardized promotion campaign, the company is able to spend more time, attention, and money on the campaign rather than these resources being fractured among several different national and even sub-national campaigns. Consumers now are exposed to a company’s promotions beyond their national boundaries, via travel, viewing global media, or the Internet. International organizational buyers are exposed to a company’s promotions beyond their immediate location through employee travel and information passed to them from the company’s other foreign locations. A standard promotion campaign helps build a strong brand image and avoids the confusion that can occur when individuals are exposed to different promotions in different countries.
  • Based on article: Andruss, Paula Lyon. 2000. “Running for the Border: Loyalty Programs Catch on in South America,” Marketing News , 4 December: 19.
  • Based on the article: Andruss, Paula Lyon. 2000. “Thais Sweet on Mom, ‘Love Campaign’: Go Nuts for Doughnuts” Marketing News , 11 September: 1. This was a Mother’s Day promotional campaign. Mother’s Day is set on the Queen Mother’s birthday. In Thailand there are parades and other events to commemorate the holiday. This was an integrated promotion campaign (refer to earlier graphic). It utilized a wide variety of promotions to communicate the same Mother’s Day, Buy Donuts Campaign. In-store promotions (customers invited come into the store and sign banner/love letter to Mom, sweepstakes/drawings for cash and prizes, in-store posters and leaflet advertising) Sales Promotion & Packaging - Buy 5 doughnuts for $1.86, and put in special Millenium Mom box PR (a sweepstakes – the winner and his mom do a lunch for underprivileged kids, movie stars and Prime Minister sign banner, banners strung together in national parade) Publicity – Media discussions about who signed banner and the parade This was a very successful campaign. Sales increased $373,000 above normal limits $207,000 in media coverage related to promotion Overall donut mkt share increased 14% from 10% and DD share increassed to 71% from 67%
  • Based on the article: Witwam, Bryce. 2003. “Gee Dad, Where Did That Come From?” Promo Magazine , 3 February: 15. Axe deodorant is positioned as a sexy brand. In Thailand, they co-branded with Durex, a condom manufacturer to execute an integrated promotion campaign (refer to earlier integrated promotions graphic). Integrated promotions used: Premium – deodorant was sold with a free condom attached to it Packaging Inserts – included in the packaging was a list of places to take a date, such as hip restaurants and clubs Flyers – condom-shaped flyers promoting the co-branded product were distributed at malls that were known to be major hang-outs of teenage boys Advertisements – particularly targeted advertisements in sports newspapers (targeting young males) This was a very successful campaign. 54% of target achieved in 3 months, Durex increase sales of 25%
  • Chapter 14 Global Promotion Strategies

    1. 1. Chapter 14 Global Promotion Strategies
    2. 2. The Marketing Mix A Well-Positioned Marketing Mix Targeted PLACE Targeted PRODUCT Targeted PROMOTION Targeted PRICE SPECIFIC SEGMENT
    3. 3. International Marketing Dilemma Promotion Standardization Promotion Adaptation versus
    4. 4. Integrated International Promotion Events & Sponsorships Advertising Trade Fairs Publicity Personal Selling In-Store Promotions Public Relations Direct Marketing
    5. 5. Promotion Standardization Advantages <ul><li>Economies of scope; production cost savings </li></ul><ul><li>Able to spend more time, attention and $ on campaign itself </li></ul><ul><li>Strong branding image, avoid confusion </li></ul><ul><ul><ul><li>Travelers </li></ul></ul></ul><ul><ul><ul><li>Viewers of global media </li></ul></ul></ul><ul><ul><ul><li>Internet </li></ul></ul></ul><ul><ul><ul><li>International organizational buyers </li></ul></ul></ul>
    6. 6. PRESSURES FOR PROMOTION ADAPTATION Written and spoken language differences Differences in symbolic meaning Differences in humor Product use and preference differences Lack of cross-cultural icons Value and norm differences Collectivism versus individualism Government regulation
    7. 7. Push versus Pull Strategies <ul><li>Pull strategy </li></ul><ul><ul><li>Focuses on the end-user or the buyer </li></ul></ul><ul><ul><li>Dependence on sales promotions and advertising </li></ul></ul><ul><ul><li>Advisable when product is widely used by consumers, channel is long, product is not complex, and when self-service is predominant shopping behavior </li></ul></ul><ul><li>Push strategy </li></ul><ul><ul><li>Focuses on the distributors of a product </li></ul></ul><ul><ul><li>Incentives offered to wholesalers or retailers to carry and promote a product </li></ul></ul><ul><ul><li>May resort to push when there is a lack of advertising media or difficulty transferring firm’s pull strategy in foreign markets </li></ul></ul>
    8. 8. Hindu Festival Attracts U.S. Marketers <ul><li>Kumbh Mela – festival draws 30 million participants, many from small towns </li></ul><ul><li>Western brands promote products </li></ul><ul><ul><li>Samples, billboard and poster advertising, and other sales promotions </li></ul></ul><ul><ul><ul><li>Encourage product trial </li></ul></ul></ul><ul><ul><ul><li>Incites word-of-mouth </li></ul></ul></ul><ul><li>Commercialization of ancient tradition? </li></ul><ul><li>Economic imperialism? </li></ul>
    9. 9. Personal Selling <ul><li>International selling </li></ul><ul><ul><li>Company sales force travels across countries and meets directly with clients abroad </li></ul></ul><ul><li>Local selling </li></ul><ul><ul><li>Company organizes and staffs a local sales force made up of local nationals to do selling in that country </li></ul></ul>When a customer is met in person by a representative of the marketing company
    10. 10. International Selling <ul><li>Purchasing behavior can vary country to country </li></ul>Decision Maker <ul><li>Who is the buying unit? </li></ul><ul><li>What role does each play in the decision-making process? </li></ul>Initiator User Gatekeeper Influencer Buyer
    11. 11. <ul><li>Buying criteria </li></ul><ul><ul><li>How products/vendors are selected may vary market to market </li></ul></ul><ul><li>Language </li></ul><ul><ul><li>Importance of knowing the local language </li></ul></ul><ul><li>Business etiquette </li></ul><ul><ul><li>How and when appointments and introductions are made, if gifts are presented, attending sales banquets and other social/business occasions </li></ul></ul>International Selling (cont’d)
    12. 12. International Sales Negotiations <ul><li>Negotiation style </li></ul><ul><ul><li>Japanese – least aggressive </li></ul></ul><ul><ul><li>French and Brazilians – most aggressive </li></ul></ul><ul><ul><li>Russia – zero-sum game </li></ul></ul><ul><li>Time orientation </li></ul><ul><ul><li>Longer in China versus U.S. and Europe </li></ul></ul><ul><li>Attitude toward final contract </li></ul><ul><ul><li>U.S. “get it in writing” culture </li></ul></ul>
    13. 13. Local Selling <ul><li>Role of local sales force </li></ul><ul><ul><li>Missionary sales force – Visiting clients together with local distributor’s sales force </li></ul></ul><ul><ul><li>Company-owned sales force – Company sales force ensures personnel have right training and qualifications and uniform price negotiations </li></ul></ul><ul><li>Foreign sales practices </li></ul><ul><ul><li>Nature of the interaction between salespeople and local customer can be different market to market </li></ul></ul><ul><ul><ul><li>Bausch & Lomb in Japan </li></ul></ul></ul>
    14. 14. Local Selling (cont’d) <ul><li>Recruitment </li></ul><ul><ul><li>Scarcity of skilled personnel </li></ul></ul><ul><ul><li>Differences in prestige of sales positions in different cultures </li></ul></ul><ul><li>Compensation </li></ul><ul><ul><li>Salespeople from different cultures may respond to motivation programs in the same way </li></ul></ul><ul><ul><ul><li>Rewarding volume, consistency, straight salary, etc. </li></ul></ul></ul>
    15. 15. What Makes a Great Salesperson? <ul><li>LOW CONTEXT </li></ul><ul><li>Preparation </li></ul><ul><li>Great product </li></ul><ul><li>Appearance </li></ul><ul><li>Enthusiasm </li></ul><ul><li>Self-confidence </li></ul><ul><li>Great closer </li></ul><ul><li>HIGH CONTEXT </li></ul><ul><li>Preparation </li></ul><ul><li>Great product </li></ul><ul><li>The “person” </li></ul><ul><li>Cultural awareness </li></ul><ul><li>Relationship oriented </li></ul>
    16. 16. Global Account Team <ul><li>Global account team – Services a customer in every country in which the customer operates </li></ul><ul><ul><ul><li>Siemen’s teams for Volkswagen & Ford </li></ul></ul></ul><ul><ul><li>Response to centralized purchasing within global firms </li></ul></ul><ul><ul><li>Information technology makes it possible </li></ul></ul><ul><ul><li>Price pressures </li></ul></ul>
    17. 17. International Trade Fairs <ul><li>Ideal for exposing new customers and potential distributors to a company’s product range </li></ul><ul><li>Very important for B2B sales in markets with underdeveloped media channels </li></ul><ul><li>600 trade shows in 70 countries each year </li></ul><ul><ul><li>Cologne Trade Fair </li></ul></ul><ul><ul><li>Hanover Fair </li></ul></ul>
    18. 18. Selling to Business and Government
    19. 19. <ul><li>Search phase – Purchaser utilizes media and business contacts to search for vendors </li></ul><ul><li>Prequalifying phase – Purchaser requests documentation from potential bidders </li></ul><ul><li>Formal bids – Bidders provide written statement of how they will solve purchaser’s problem and their price </li></ul><ul><li>Selection – Purchaser makes choice </li></ul><ul><ul><li>Performance bond – A guarantee that the company will pay certain specified damages if job not completed in accordance with specifications </li></ul></ul>Bidding Process
    20. 20. Consortium Selling <ul><li>Consortium – Group of firms that share a certain contract or project on a pre-agreed basis but act as one company toward the customer </li></ul><ul><ul><li>Share the risk </li></ul></ul><ul><ul><li>Enhance competitiveness of turnkey projects </li></ul></ul>
    21. 21. Sales Promotion <ul><li>Add value to products in order to stimulate consumer purchasing and/or channel cooperation </li></ul><ul><ul><li>Coupons, sweepstakes, gifts, reduced-price labels, free goods, double-pack promotions, in-store displays, slotting allowance </li></ul></ul>
    22. 22. Sales Promotion (cont’d) <ul><li>Country-to-country differences exist </li></ul><ul><ul><li>Cultural norms </li></ul></ul><ul><ul><ul><li>Taiwanese consumers prefer coupons to sweepstakes; Malaysians and Thais prefer sweepstakes to coupons </li></ul></ul></ul><ul><ul><li>Government restrictions and regulations </li></ul></ul><ul><ul><ul><li>Japan’s limitation on value of promotional gifts attached to products is of the 10% product’s price </li></ul></ul></ul>
    23. 23. Sports Promotions and Sponsorships <ul><li>Sports events increasingly covered by global media </li></ul><ul><ul><li>Olympics, World Cup </li></ul></ul><ul><li>Sign space </li></ul><ul><ul><li>Must have logo or brand worth exposing to global audience </li></ul></ul><ul><ul><li>Take into consideration popularity of certain sports and the segments they attract </li></ul></ul>
    24. 24. Olympics Versus the World Cup <ul><li>Soccer is favorite TV sport in 24 out of 34 countries surveyed by Ipsos-Reid Corporation </li></ul><ul><ul><li>250 million registered soccer players and 1 billion spectators worldwide </li></ul></ul><ul><li>World Cup sponsors get good deal! </li></ul><ul><ul><li>Pay $20 million - $50 million </li></ul></ul><ul><ul><li>Get rights to World Cup marks, behind-the-scenes access, 2 on-field ad boards in 20 stadiums </li></ul></ul><ul><ul><li>Year-long run-up to event </li></ul></ul>
    25. 25. Telemarketing <ul><li>Can be used to solicit sales and to offer enhanced customer service to current and potential consumers </li></ul><ul><ul><li>Efficient telephone system required </li></ul></ul><ul><ul><li>Telephone numbers must be easy to obtain  phone books don’t exist in every country! </li></ul></ul><ul><ul><li>Government restrictions and regulations </li></ul></ul>
    26. 26. Managing Word-of-Mouth <ul><li>Cultural differences in product recommendation references </li></ul><ul><ul><li>Individualistic cultures versus collectivist cultures </li></ul></ul><ul><li>Buzz marketing – Marketing activities undertaken to stimulate consumer discussion of the product </li></ul><ul><ul><li>Good buzz and bad buzz </li></ul></ul>
    27. 27. Public Relations <ul><li>Marketing activities that enhance brand equity by promoting goodwill toward the organization </li></ul><ul><ul><li>May be necessary to defend brand against bad publicity </li></ul></ul><ul><ul><li>PR campaigns can go wrong if not managed correctly </li></ul></ul><ul><ul><ul><li>Philip Morris in Czech Republic </li></ul></ul></ul><ul><ul><ul><li>Nestlé’s baby formula in developing countries </li></ul></ul></ul>
    28. 28. Growing Importance of Promotions in Developing Countries <ul><li>Shift from mass to target marketing </li></ul><ul><ul><li>“ No one’s ever spoken to them personally before.” </li></ul></ul><ul><li>Role of collectivism </li></ul><ul><ul><li>Local partners </li></ul></ul><ul><ul><li>Message </li></ul></ul><ul><li>Appropriate adaptation </li></ul><ul><ul><li>“ Talk to someone about a trip to Tahiti and you may lose them. But talk about supermarket coupons for groceries and a TV or stereo, then you’ve got more attention.” </li></ul></ul>
    29. 29. Dunkin’ Donuts “Love” Campaign in Thailand <ul><li>Mother’s Day campaign </li></ul><ul><ul><li>Good cultural fit with Thai importance on family, Queen Mother, etc. </li></ul></ul><ul><li>Integrated promotion campaign </li></ul><ul><ul><li>In-store promotions </li></ul></ul><ul><ul><li>Sales promotion and packaging </li></ul></ul><ul><ul><li>Public relations </li></ul></ul><ul><ul><li>Publicity </li></ul></ul><ul><li>Very successful! </li></ul>
    30. 30. Axe & Durex Co-Branded Campaign in Thailand <ul><li>Axe is positioned as a sexy brand; co-brands with condom manufacturer </li></ul><ul><li>Integrated promotion campaign </li></ul><ul><ul><li>Premium </li></ul></ul><ul><ul><li>Packaging inserts </li></ul></ul><ul><ul><li>Flyers </li></ul></ul><ul><ul><li>Advertisements </li></ul></ul>