Imm unit-08 (promoting product internationally)

07/06/10 1
By :
Prof. Amit Kumar

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International marketing has become a major concern
for business schools to develop global strategies
to lead and sustain in the much expanded and
competitive arena. Liberalization thus catalyzing
market competition, poses challenge for the
managers in handling the rigors of expanding
global marketplace.
Syllabus aims at providing contemporary
knowledge & skills on issues of global
marketing management.
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Importance of this course
Global Marketing Management

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Course: Global Marketing Management
1. Framework of Global Marketing Management
2. Global Marketing Research
3. Decision Making in International Marketing
4. Foreign Market Entry & Export Marketing
5. Product Planning & Development
6. Global Pricing Strategies
7. Global Distribution System
8. Promoting Product Internationally
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Global Marketing Management

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Global Marketing Management Promoting Product Internationally

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Contents
• International Marketing Communication Mix
• Consumer Response Hierarchy Models
• Process of International Marketing Communication
• Marketing Communication Strategy
• Factors influencing International Communication Decision
• Major Tools for International marketing communication
 Advertising (Standardization Vs Adaptation)
 Sales Promotion
 Personal Selling
• Framework for International Product-Promotion Strategies
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Introduction
• Effective communication is crucial to a firm’s success in
international markets.
• In marketing terms, it is also referred to as the fourth P
(Promotion) of the marketing mix.
Firms convey a set of messages to the target customers
through a communication channel with the objective
to not only create favorable response for its market
offering but also to receive market feedback on a
regular basis.
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International Marketing Communication Mix
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Customer
Sales
PromotionAdvertising
Public
Relation
Direct and
Interactive
Marketing
Personal
Selling

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• Advertising is a paid form of communication carried out
through newspapers, magazines, radio, television and other
mass media by an identified sponsor.
• Sales promotion comprises short-term marketing measures
which stimulate quick buyer’s action and result in immediate
sale of the product.
• As a part of its image building exercise, a firm invests in public
relations. It may include sponsorship of sports and cultural
events, press release and even lobbying at government level.
• Direct marketing wherein a firm has direct interaction with the
customers.
• Personal selling involves direct selling by firm’s sales force
and is considered to be a two-way method of marketing
communication, which helps in building strong customer
relationships.
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Communication mix for international market is influenced by
the following factors:
• Market Size
• Cost of promotional activity
• Resource availability, especially finance
• Media availability
• Type of product and its price sensitivity
• Mode of entry into international market
• Market characteristics
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Consumer Response Hierarchy Models
AIDA Model
• In this approach the main
objective of the firm is to make
the customers aware of the
product and seek their attention
through effective marketing
communication, such as
effective advertising.
• The awareness would, in turn,
generate interest about the
product in the consumer
followed by the desire to own.
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Attention
Interest
Desire
Action

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Consumer Response Hierarchy Models
Innovation-Adaptation Model
• Developed by Rogers,
especially in reference to a new
product.
• An this model, a firm first
creates awareness and
generates interest before the
customer gets a chance to
evaluate it first hand.
• The firm gives a final trail to the
new product before it is actually
adopted by the customers.
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Awareness
Interest
Evaluation
Trail
Adoption

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Marketing Communication Strategies
Push Strategy
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Firm
Channel
Intermediary
End
Customer
Marketing
Communication
Product
Push
Marketing
Communication
Product
Push
• In push strategy, the promotional program is primarily
directed at the market intermediaries in the distribution
system. It aims to motivate the market intermediaries to
stock, promote and sell the products to the ultimate
customer.
• The tools used in this strategy include personal selling,
sales promotion and trade shows.

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Push Strategy
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Push strategy is usually found to be more effective
under the following situations:
• Lack of product differentiation
• Weak brand identity
• Low brand loyalty
• Difficulty in appreciating product benefits
• Industrial sales
• Lack of access to advertising media
• Low promotional budget
• Short and direct marketing channels
• Low wages (cost of employing salespersons is lower than
the advertising cost)

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Pull Strategy
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Firm
Channel
Intermediary
End
Customer
• The process of motivating the customers to buy the
product from the retailers through promotional
programmes.
• A retailer asks for a product from a wholesaler and the
wholesaler asks for the product from a distributor who
gets the product from the firm.
Marketing Communication
Product
request
Product
request

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Pull Strategy
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Pull strategy is more effective in the following situations:
• Perceived product differentiation
• Strong brand identity
• High brand loyalty
• High-involvement product category
• High promotional budgets
The techniques used full pull strategy include advertising and
sales promotion campaigns directed at consumers, such
as discounts, gift vouchers, samples etc.
In retail outlets where self-service is predominant, pull
strategy is more effective.

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Factor Influencing International
Communication Decisions
1. Culture
2. Languages
3. Education
4. Media Infrastructure
5. Government Regulation
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Culture
• Parker Pen Company successfully used the slogan ‘Avoid
Embarrassment- Use Quink’ in the US. The product was
marketed in Latin America with the Spanish translation ‘Evite
Embarazos -Use Quink’ of the above slogan that
unintentionally meant ‘Avoid Pregnancy-use Quink’ resulting in
an embarrassment for the company.
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Culture
• P & G showed an animated stork delivering Pampers diapers
in its ad campaigns in the US. The same ad copy was used in
Japan, only the language was changed. However, this ad did
not work in Japan. The subsequent market research revealed
that, unlike the Western folklore, storks, according to the
Japanese folklore, are not expected to deliver babies.
• On the contrary, Japanese people believed that it is the giant
peaches that float on the river that bring babies to the
deserving parents. Subsequently, P&G changed the theme of
the ad campaign to ‘expert mom’, a nurse who is also a mother
theme.
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Culture
• Muhammad Ali is immensely popular in the Middle east. One
of the car manufacturers used Muhammad Ali in its ad
campaign for the region. The ad theme was, ’I am greatest’.
The ad backfired and offended the Muslims who regard only
the God as great.
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Language
The word ‘yes’ is understood differently in different countries.
• In low-context societies, such as the USA and Europe, ‘yes’
means ‘yes’.
• But in high-context societies such as Japan, ‘yes’ means ‘I am
listening to what you are saying’ and it does not necessarily
mean ‘yes’.
• In Thailand, ‘yes’ means ‘OK’.
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Language
• Pepsi used the German translation of the slogan ‘come alive
with Pepsi’ in its ad campaign in west Germany. However, the
slogan when translated to German actually meant ‘come out of
the grave with Pepsi’ and failed to generate any market
response from the customers.
• General Motor translated its slogan ‘Body by Fischer’ to ‘Corps
by Fischer’ in Belgium that offended the Belgian customers.
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Education
• Literacy plays an important role in deciding what
communication tool and message should be used in
international market.
• Market segments with low level of adult literacy need to be
addressed by way of more audio-visual content rather than a
written message.
• It should be ensured that the visuals convey the desired
message rather than the text part of the communication.
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Media Infrastructure
• Availability of media, that varies widely, often influences the
advertisers options for using a particular medium.
• A cross country comparison of the share of advertising
expenditure on various mediums of communication is given:
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Print TV Radio Others Total
India 53 38 2 8 100
China 40 43 4 13 100
Mexico 28 57 15 0 100
Thailand 32 55 9 4 100
US 46 37 14 4 100
UK 59 29 5 7 100

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Government Regulation
The government regulations in various countries relate to the
following issues:
• Advertising in foreign language
• Use of pornography and sensuality
• Comparative advertising referring to the competing products
from rival firms
• Advertising related to alcohol and tobacco
• Use of children as models
• Advertising related to health food and pharmaceuticals
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Government Regulation
In Malaysia, the Ministry of Information’s advertising code
states that women should not be the principal object of an
advertisement and should not be used to attract sales
unless the advertised product is relevant to women.
Use of foreign words and expressions when French
equivalents can be used are prohibited in France.
Most Arab countries prohibit explicit depiction of sensuality.
The Ministry of Saudi Arabia prohibits any advertising
depicting unveiled women.
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Advertising (Standardization Vs Adaptation)
An international advertising firm may opt for a standardize
advertising strategy or may customize it depending
upon the needs of various markets.
• The arguments in favor of standardized advertising
campaign include economy of scale and uniform
projection of a firm’s image in global markets.
• The adaptation of advertising may be either due to
mandatory reasons such as regulatory framework or due
to competitive market response.
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Advertising (Standardization)
Using the same advertising strategy across the country is
termed as standardization. However, the extent or
degree of standardization varies.
• Ad with no change
• Ad with changes in illustration
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Ad with no change
• Some ad is used with no change in theme, copy or
illustration except for translation.
Benetton Group, the Italy-based global clothing retailer, uses
global advertising campaign with the same theme, ‘The
United Colors of Benetton’.
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Ad with change in illustration
• When ads use different models, generally local models,
for different countries but maintain the same ad copy and
theme, also considered as standardized advertising.
Virginia Slims, the worldwide market leader in women’s
cigarette, initiated a worldwide campaign in which it is
used local models in different countries.
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Universal appeals in international advertising are used in
following situations:
• Superior Quality (BMW uses the slogan ‘ultimate driving
machine’ worldwide)
• New Product/Service (Microsoft used sprinkler approach)
• Country of Origin (Brands which have a strong country
stereotype, emphasize on ‘made in …’)
• Celebrities (celebrities with universal appeal are engaged in
global product, Swiss watchmaker SMH promoted its Omega
brand with actor Pierce Brosnan after the release of James
Bond movie Golden Eye)
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Benefits of Advertising: Study be Nielson
In 2008, Nielson – a consulting firm, conducted a
global study covering 25000 consumers spread
over 50 countries across the globe.
The objective of the survey was to provide a better
understanding of consumer perceptions of the
benefits of advertising.
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Benefits of Advertising: Study be Nielson
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Benefits Global India
Advertising stimulates competition, which
leads to better products and lower prices
Agree
Disagree
68%
27%
81%
17%
Advertising contributes to the growth of the
economy
Agree
Disagree
72%
20%
77%
18%
Advertising provides useful information on
important issues in society, as safety & health
Agree
Disagree
63%
30%
80%
17%
Advertising often gets one’s attention and is
entertaining
Agree
Disagree
66%
29%
87%
10%
Advertising is important to fund sporting
events, art exhibitions and cultural events
Agree
Disagree
81%
13%
88%
10%
By helping companies succeed, advertising
creates jobs in those companies
Agree
Disagree
80%
14%
85%
10%
32

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Personal Selling
The cost of personal selling can be very high. One extreme
case is the German software maker SAP, the world’s
leader in applications packages for client-server networks.
In the US, SAP America has removed the $140,000 annual
limit on sales commission, making it possible for a
salesperson to earn as much as $2 million a year- more
than what the company’s top German executive make.
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Sales Promotion
Sales promotion activities are constrained by local laws that
may not permit premiums or free gifts to be given. Laws in
some countries control the amount of discount given at
retail, others require permits for all sales promotions.
Belgium prohibits sweepstakes and, in Greece
coupling is illegal.
Export promotion by Govt. of India, cover several areas such
as production, quality control, export credit and finance,
and export incentives and assistance.
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Product-Promotion Strategy for
International Markets
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Straight
extension
Dual
adaptation
Product
adaptation
Promotion
adaptation
Don’t
Change
Promotion
Product
Promotion
Adapt
Promotion
Don’t
Change
Product
Adapt
Product
Develop
New
Product
Product
Invention

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Straight Extension:
• In countries where the product performs the same function
or satisfies the same needs and the conditions of the
product use are same, the straight or dual extension strategy
is used.
• The soft drink firm Coke and Levers for its Lux brand of soaps
use the straight extension strategy in international markets. The
same product is used with minor customization in marketing
communication.
• The leading beer firm Heineken uses a standardized product
and promotional approach the world over to maintain and
communicate the uniform product quality of premium beer.
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Promotion Adaptation:
• In countries where the product performs the different
function or satisfies the different needs but the conditions
of the product use are same, the promotion adaptation-
product extension strategy is used.
• Bicycles are cost-effective and affordable means of transport
for the rural population in low-income countries, whereas it is
the means for recreation and healthcare in high-income
countries.
• In low-income countries sewing machines are generally
perceived as a means to economize the household expenditure
on stitching, and are widely gifted in rural areas as a utility item,
whereas in high-income countries, sewing machines are
considered to be a recreational item.
•
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Promotion Adaptation:
• In countries where the product performs the different
function or satisfies the different needs but the conditions
of the product use are same, the promotion adaptation-
product extension strategy is used.
• In India, chewing gum is viewed primarily as children’s product
whereas it is considered to be a substitute to smoking in the
US. It is supposed to provide dental benefits in Europe while
considered beneficial for facial fitness in Far Eastern countries.
• Under such situations, no changes are made in the product
whereas the promotional strategy is customized so as to
address customers’ needs.
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Product Adaptation:
• In countries where the conditions of the product use are
different but product performs the same function or
satisfies the same needs, the product adaptation-promotion
extension strategy is used.
• The differences in electric voltage require product modifications
in electrical appliances marketed in countries like India and the
US. Under such situations, the promotional strategy remains
the same but the product modification is made depending upon
the customers’ need in different markets.
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Product Adaptation:
Around the world detergent is primarily used for washing and
clearing cloths. Nevertheless, the washing habits of the
people vary widely in various markets. Indian housewives
use lukewarm water whereas the French wash their cloths
in scalding hot water and the Australian use cold water.
Indian and the French generally use top-loading washing
machines while most Europeans use front-loading
washing machines.
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Dual Adaptation:
• In countries where the functions of a product and the need
satisfied are different and the conditions of the product use
are also different, a firm has to customize both the product
and the promotional strategies.
Clothing in the low-income countries serves the basic purpose
of physical protection whereas in high-income countries or
even in urban centers of medium and low-income countries it
symbolizes the personality and status of the user. Therefore,
a firm has to customize both product and its promotion.
•
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Product Invention:
• In case of product adaptation and the consumers do not
posses the necessary ability to pay for the product, new
product invention and development of new marketing
communication is required.
• In the rural areas in Africa, Asia and Latin America, the
buying power of the people is limited. Therefore, firms have
to develop technologies suitable to the target markets.
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Product Invention:
The conditions in Africa necessitated the firms developing
hand-powered washing machines for African markets.
Philips India introduced a hand wound radio in 2003,
primarily to address the needs of rural India where
the electrical supply is erratic and constant use of
batteries makes the radio expensive. The product has
done exceeding well in rural markets.
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Imm unit-08 (promoting product internationally)

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