Chapter 6

International promotion strategy

Communication is a major part of the international marketing activities. It is not enough
to produce and make available a product or a service, it is also necessary to provide
information that buyers need in order to make purchasing decisions. Communication
takes place through the promotional activity. The function of promotion at international
level is similar to that in a domestic market, as the firm communicates with its customers
and other different audiences with the objectives either to inform, to persuade or to
remind, in the attempt to achieve the corporate goals.
The international communication process
The elements of the communication process are the same in the international
communication process as in the internal communication process, with the only
difference that this time it takes place in two cultural contexts. The different cultural
contexts can increase the probability of misunderstandings, because the message is
encoded in one culture and decoded in another.

1. The communication process starts with the information source/sender that is the
international marketer who has a product about which wants to send a message. The
product message is conceived in the cultural context of the country of origin and is
conveyed to the cultural context of a foreign country. The product message should
contain information that reflects, the needs and the wants of the target market from the
cultural context of the foreign country where the customer is.
2. In the second step of the communication process, the message is encoded. The encoding
takes also place in the cultural context of the country of origin and symbols used to
encode the message are very important at this stage because, as we have already seen,
things have different symbols in different cultures.
3. The third stage of the communication process is to send the message through the
message channel. The media channel selection is very important, as channels are
selected in the foreign country and they have to reach the targeted consumer in order for
the communication to be effective.
4. In the forth stage of the communication process, the message sent through media is
decoded by the receiver in the cultural context of the foreign market. There are a number
of decoding problems that can appear. For instance, Pepsi’s “ Come Alive” was decoded
as “come out of the grave” in some cultures, due to bad translation.
5. In the fifth stage, at the receiver level, action is taken based on the decoded message.

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6. The company evaluates the results of its actions through a feedback system (marketing
research). Errors are to be identified at any stage in the communication process:
information source, encoding, media channel, decoding and corrected. This stage takes
place in both cultural contexts.
7. The last element of the communication process is the noise referring to uncontrollable
and unpredictable influences that can affect the process in any of the six stages (such as
competitive advertising, confusion). Noise is disruptive, cannot be controlled and comes
from one or another of the cultural contexts or from the interaction of the two cultural
contexts.

The international promotion planning process

International promotional planning involves the following steps:
1. Select target audience and positioning theme.
2. Set campaign objectives and the degree of worldwide standardization.
3. Determine the promotional mix.
4. Determine promotional budget.
5. Develop message strategy.
6. Decide on media strategy.
7. Assess effectiveness.

1 Select target audience and positioning theme

Target audience refers to the market segment: is it going to be a global segment or a local
segment?
Positioning refers to the image for each country: is it going to be global positioning or
local positioning?
The first step in the marketing planning process is to identify the market segment: who
are the consumers to whom the company will address the products?
The market segment the company chooses to serve is the target audience. To this
audience the company is going to send the messages. The issue that arises in international
marketing is: shall the company address to a global segment or not? Shall it choose the
audience according to the similarities and commonalities between consumers from
different countries?
The company has to set what is the positioning of its product for the international
markets, what is the image it wishes to transmit in different markets. The issue whether
does the company want to have a global positioning, to transmit the same image all over
the world or does it want to adapt to local markets, appears again. Usually global
positioning comes with global market segment

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2 Set campaign objectives and degree of standardization
Based on the chosen market segments and the positioning strategy selected, one should
decide over the degree of standardization at the promotional activity level. The
standardization may concern promotional objectives (to set unique objectives for all
countries), the promotional mix across countries (it can use the same tools everywhere or
not), its message (can use the same message everywhere or not), its media strategy (it can
use similar or different media means to transmit the message). The company decides over
the degree of standardization/adaptation of the promotional activities based on local
conditions of the market and the company’s objectives.

Possible promotional objectives can be related to brand awareness, improving perception

or promoting new services.

3 Determine the international promotional mix

After the company has chosen a market segment and the positioning strategy for the product,
after setting the promotional objectives of the campaign the company has to choose the
promotional mix, to choose the best means to fulfill the promotional objectives. A
company may use: advertising, personal selling (that it is also a distribution means), sale
promotions and public relations to promote its products.

Table no. 6.1 Promotional mix tools

Advertising Personal selling Public relations Sales

promotions
Newspapers Sales presentations Annual reports Discount prices
Magazines Sales meetings Corporate Samples
Journals Telemarketing image Coupons
Directories House Premiums, gifts
Radio magazines “Bundle”
TV Press relations products
Cinema Public relations Competitions
Posters Events
Transport Crisis
management

Advertising
Advertising is defined as any sponsored, any paid communication of ideas, goods or
services placed in mass medium vehicle. Advertising always involves an identified

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 sponsor who pays for the advertisement and he is called the advertiser. In advertising,
message is communicated through mass media like radio, TV, newspaper, magazine,
direct mail, hording etc.
Consumers respond in terms of their culture, its style, feeling, value systems, attitudes,
beliefs, and perceptions. Thus, an advertisement must coincide with cultural norms if it is
to be effective.

One of most debated issues in international marketing is whether advertising should be

customized from country to country. One view is that adapted advertising should be used,
as the only way to achieve relevant advertising is to develop separate campaigns for each
country.
At the other extreme is the view that advertising should be standardized for all markets.
Standardized or global advertising is usually used:
 when the company addresses global market segments and it addresses similar needs
with similar messages,
 when it has worlds brands. Brands such as Coca-Cola, Pepsi-Cola, Mc Donald’s are
global brands that use the same name in the creative strategy everywhere in the
world,
 when the product is sold at regional level. For instance, in Europe many companies
practice pan-European advertising as media coverage across Europe expands and in
order to avoid confusion resulted from exposure to multiple messages and brands of
the same product
One way to standardize advertising is to use pattern advertising. Pattern advertising is a
compromise between standardization and adaptation. Pattern advertising reflects the
philosophy of planning globally acting locally OR thinking globally and acting locally.
Through pattern advertising, the company has a global advertising strategy (such as a
standardized basic message) that is slightly modified in order to meet local needs (small
modifications of the ad design or different media).

Challenges in International Advertising

 Language limitations.
 Cultural diversity.
 Media limitations.
 Legal and tax considerations.

Language
Language is one of the major barriers to effective communication through advertising.
Language translation encounters innumerable barriers that impede effective, idiomatic
translation and thereby hamper communication. This is especially apparent in
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 advertising materials. Communication is impeded by the great diversity of cultural
heritage and education which exists within countries and which causes varying
interpretations of even single sentences and simple concepts. In addition to translation
challenges, low literacy in many countries seriously impedes communications and
calls for greater creativity and use of verbal media. Multiple languages within a
country of advertising area pose another problem for the advertiser.

Therefore, solutions to avoid language mistakes are:

1. to involve a local advertising agency,
2. for English speaking audiences, use the English slogan world wide. Examples are
United Colors of Benetton; Coke is it or Always Coca-Cola; Pepsi – the choice of a
New Generation; Philips makes things better etc.,
3. to use of voice-overs that say an adapted local slogan.

2. Cultural diversity of markets can also represent a barrier towards global advertising.
Communication is more difficult in an international environment because things are
perceived differently due to cultural factors. If perceptions over the same thing are
different it means that messages received differ in different countries and cultural factors
should be taken into consideration.

3. Media limitations. Media are discussed later, so here we maintain only that limitation
on creative strategy imposed by media may diminish the role of advertising in the
promotional programs and may force marketers to emphasize other elements of the
promotional mix.

4. Legal considerations of every country can be an obstacle for global advertising, as

companies have to comply with national laws. The main domains that are regulated in
advertising and the major types of advertising regulations are the following:
 Comparative advertising
 Content of advertising message
 Advertising of “vicious products”
 Advertising towards children
 Advertising taxation
Comparative advertising refers to comparisons made between products in ads. Comparative
advertising can be explicit (when the name of the competitive product is mentioned in the
ad) or implicit (when products of competitors are not named and the competitive products
are only implied).
The content of the advertising message is also regulated in some industries in different
countries.

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TV advertising of the so called “vicious products” such as alcohol, tobacco is also regulated
in many countries. Also there are other types of products, besides the “vicious products”
that are also regulated in many countries. Pharmaceuticals are such products: in Austria
advertising for drugs is forbidden by law, in Denmark is forbidden advertising for non-
prescription drugs and in France prior approval of a government authority is needed to
advertise drugs.
Advertising towards children is another domain subject to regulations in some countries.
Examples are the following:
In Quebec, Canada TV stations are not allowed to air towards children and the same in
Sweden.
In Finland children cannot speak or sing the name of a product in a commercial.
In Italy commercials in cartoon programs are banned.
Advertising for war toys and games of chance are forbidden in Germany.
In some countries special taxes apply to advertising. The amounts designated to advertising
are supplementary taxed by governments.

2. Sales promotions
Sales promotions refer to a collection of short term incentive tools directed to consumers
and/or retailers that have the objectives to increase sales quickly.
A range of tactical marketing techniques designed within a strategic marketing
framework to add value to a product or service in order to achieve specific sales
and marketing objectives.
Sales promotion measures are temporary promotion methods. It is practiced as a catalyst and
as supporting facility to advertising and personal selling.
NEED FOR SALES PROMOTION
Marketers resort to sales promotion to meet the following needs:
(1) To introduce new product. (7) To supplement to the
advertising effort
(2) To overcome a unique
competitive situation. (8) To supplement to the
salesmen’s effort
(3) To exhaust accumulated
inventory (9) To persuade the salesmen to
sell the full line of products
(4) To overcome seasonal slumps
(10) To persuade dealers to procure
(5) To get additional customers more.
(6) To retain the existing
customers

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Sales promotion techniques

Technique Objective
Reduce price
Coupons Encourage trial or repeat purchase
Trade allowances Build distribution and increase orders
Price-offs Encourage repeat purchase
Add value or perceived value
Self-liquidating premiums Encourage trial or repeat purchase
Continuity premiums Reward users; encourage repeat purchase
Bonus pack Increase perception of value; convert trier into
Contests and sweepstakes user
Encourage trial purchase; draw attention to
other promotional messages
Provide information
Displays Draw attention to the product; provide
Special events information
Trade shows and exhibitions Draw attention to the product; provide
Product demonstrations information
Create presence in the target’s mind
Allow consumers to evaluate product without
risk; build distribution

Public relations
“A public is any group that has an actual or potential interest in or impact on a company’s
ability to achieve its objectives. Public relation/publicity refers to activities that are
undertaken to promote a company and/or its offer by planting news about it in media, not
paid for by the sponsor. Publicity differs from advertisement in the following ways:

While, in advertisement, the company, by and large, has control over how the message
will be used by the media, in advertisement, it has less control.

In publicity, the media is not paid for the presentation of the message, while in
advertisement, the sponsor bears the cost.

This promotion technique is particularly useful in countries where it is difficult or

impossible to buy commercial time offers. They include:

 Releasing news in media about the company, its plant, products, people, etc.

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 Delivering speeches about the company and its products, etc.
 Organizing special events such as news conferences, games, star nights, beauty contests,
etc.
 Sponsorship of civic and social service activities like maintaining a public park, planting
trees, free health checks, etc.

Public Relation tools Examples

News release Visits, competitions, openings
Special events Government, politicians, opinion leaders,
Lobbying pressure groups
Audio-visual presentations Video, audio cassettes, films, slides
Printed presentations Company newsletters, brochures, other
Corporate identity materials publications
Sponsorship Business cards, logos, stationary,
uniforms
Arts and sports

Personal selling
Personal selling takes place when a customer or a prospective purchaser is met in person
by a representative of the firm for the purpose of making a sale. Personal selling is
considered both a distribution tool and a promotional tool and when used adequately a
market research tool. As a promotional tool personal selling is the most expensive but it
is also very effective and flexible in the sense that instant feedback can be given. Personal
selling is recommended when the market is concentrated and when the products are
expensive (high unit value) or not frequently purchased.

International sales force issues are really local issues in a foreign country. A company
may standardize the sales management approach for all countries or customize the sales
management approach for each country. However, in all situations the management of the
sales force in a multinational company, consists of the following steps:
1. Setting sales force objectives
2. Designing sales force strategy (size, structure, compensation)
3. Recruiting and selecting salespeople
4. Training salespeople

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 5. Motivating and compensating salespeople
6. Evaluating salespeople

1. Setting sales force objectives. They are derived from the objectives of the company.
The roles the sales force has to play in reaching the company’s objectives represent the
objectives of the sales force. They (the roles) state what the sales force is asked to do. For
instance, if the company has the objective:
 to provide customer with more understanding of the product, then the sales force
objectives will be to push for the publicity of the product,
 to enter the markets as low cost provider, then the sales force objectives will
concentrate on the sales volume, to expand market share.
The sales force objectives will determine the size of sales force, the structure of the time
spent by salespeople either for promoting new products and/or existing products or for
delivering customer satisfaction and increasing sales volume.

2. Designing sales force strategy. When setting its sales force strategy a company
addresses the following issues: structure, size and compensation.
Structure: What is going to be the structure of the sales force? Territorial, product or
customer centered? The structure of the sales force sets the responsibilities of each
salesperson. In a territorial sales force, each salesperson is responsible for a particular
geographic area. In a product sales force, each salesperson sells only one product or
product line. In a customer sales force, each salesperson is responsible for particular
clients.
The size of the sales force is usually calculated according to the number of visits necessary
per customer and the number of persons required to do the necessary number of visits.
Compensation: How to compensate the salespersons in order to motivate them to do a good
job?

3. Recruiting and selecting people. In order to recruit and select salespeople, a company
should decide:
 what it wants in its salespeople in every country, what type of skills and character
traits they are looking for,
 what will work best in an unfamiliar culture, because the skills required for success as
a salesperson, depend on the culture in which the sales take place,
 how to find and attract the people with the necessary skills.

The first decision the company has to take is whether to use local salespeople or foreign
salespeople. When choosing foreign people for a local sales force, the company may use
either expatriates (people coming from the country of origin of the company) or third

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 national countries (people working for the company and coming from a tertiary country,
neither from the home or the host country).

Expatriates are preferred when:

 products are highly technical,
 the selling requires extensive background of information and applications,
 (sometimes) to add to the prestige of the product in the eyes of foreign
customers.
The disadvantages of having expatriate selling personnel are:
high cost,
cultural and legal barriers,
a limited number of very good (and difficult to find) personnel willing to live abroad
(in certain countries) for extended periods.
Local nationals have the advantage that:
are more knowledgeable of the cultural and legal environment,
are better to get in unfamiliar distribution systems and referral networks.

Having local nationals as sales personnel has disadvantages as well:

there is the tendency of headquarters personnel to ignore their advice,
the lack of understanding of how home office politics influence decision
making,
the lack of qualified personnel (especially in emerging markets).

Third country nationals are expatriates from their own country, working for a foreign
company in third country.
Third country nationals are sought by multinational companies because:
they speak several languages,
they know the industry or the foreign country well,
sometimes in order to avoid double taxation.
When deciding what kind of sales force to use, the company has to take into consideration
the host country restrictions.

When selecting selling personnel the selection criteria must be localized because what it
makes a good salesman in one country might not do it in another one.

4. Training the sales force. The nature of the training depends on who is being trained, the
expatriates or the local nationals. Expatriates are usually trained on cultural sensitivity,
cultural orientation, customs, culture, history, foreign sales practices. Local nationals are
being trained about the company history and culture, its products, technical information
and selling methods. Normally, international sales training has to be adapted to the needs
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 of the local market. For high technology and highly standardized products, sales training
may be held at regional or international level, as technical aspects are more similar across
countries.
5. Motivating salespeople. The marketing and sales activities require highly motivated
employees regardless the location. In order to motivate the sales force in one country the
firm has to find out what motivates people in that country as there are national and
cultural differences in motivation. The company has to design appropriate compensation
systems. Financial compensation is one of the main motivators in all countries. But the
way financial compensation is awarded has to be adapted to each country.
6. Evaluating the sales force. The last step in the sales force management is the
evaluation. A company can evaluate its sales force through quantitative evaluation and
through qualitative evaluation.
Quantitative evaluation consists in measuring aspects such as sales, structure of sales
and increases in sales at company level and/or individual level.
Qualitative evaluation takes into account the knowledge the salesperson accumulated, the
manner of the salesperson and the opinions of customers (customer satisfaction), peers
and supervisors. Evaluation in international sales management provides useful
information for making international comparisons.

There are a number of skills considered necessary for an international sales manager
Maturity: to be able to work more independently and to have the ability to make
decisions on their own without guidance from the home office.
Emotional stability: to be sensible to different behaviors from different countries, to have
considerable knowledge about the job, off the job and to know the local language and to
be able to handle interpersonal relationships.

Enjoy travel: two thirds of their nights are in hotel rooms, therefore they have to enjoy
travelling otherwise they get tired or/and bored quickly.
Positive look: to like what they do, their job, travelling, going internationally.
Flexibility: to be sensitive to habits of the market. Similarly is valid for the persons who
work at home for a foreign company.
Cultural empathy: to be open to the new, foreign customs (if some one is confused about
the environment is not going to be effective).

4. Determine the promotional budget

One of the delicate decisions that marketers face when planning their communication
internationally is about money. How much to spend on communication? How to allocate
resources across different markets?
There are a number of methods to set the promotional budget among which the most
important are:
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  Percentage of sale.
 Competitive parity.
 Objective-and-task.

As a percentage of sale, the company sets its promotional budget as a percentage of either
past or expected sales revenue.
Competitive parity. Through this method companies set their budgets by looking at
competitors’ spending and matching their amount.
The objective-and-task method is the most popular method. The budget is planned based on
the overall cost of fulfilling the company’s stated objectives, either market share, brand
awareness.

The way resources are allocated across countries is another important aspect of budgeting
promotion internationally. A few approaches can be followed by multinational companies

There is bottom-up planning: each country subsidiary determines independently how

much money to be spend within its market and requests the desired resources from the
headquarters.
At the other extreme is the top-down budgeting through which the headquarters sets the
overall budget and shares it among subsidiaries.
The regional angle method becomes the most commonly used and consists of each region
deciding over the resources needed to achieve its planned objectives and than proposing
it to the headquarters.

5. Develop message strategy

The next step in the promotional planning process is to develop the message strategy. At
international level the main decision to be taken is over the standardization/adaptation of
the message.

Merits of standardization Barriers of standardization

• Economies of scale • Cultural differences

• Consistent image • Advertising regulations
• Global consumer markets • Market maturity
• Cross fertilization • ‘Non-invented syndrom”
(NIH)

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 6. Decide on media strategy
After the company knows what the promotional budget is and what is the message it
wants to transmit, it has to establish what the media strategy is. Media objectives are
usually set and media performance is evaluated based on a number of aspects such as the
following
Reach. Refers to the number of individuals or households reached.
Frequency. Refers to the number of times a message is delivered to target audiences.
Continuity. Refers to the pattern of message delivery.
Size. Refers to the space or time unit employed.
When deciding over what media to use in international markets, the company has to
consider the following aspects:
Availability. In some countries there is too few advertising media (few TV stations, radio
stations and newspapers) and competition to get in these media is very high, therefore the
cost is high.
In other countries, there is too many advertising media (too many TV stations,
newspapers) so that a company cannot get effective national coverage at a reasonable
cost.
The cost of advertising media differ from country to country; it is usually negotiable and
advertisers can bring the cost of reaching a prospect down by using advertising agencies
with bargaining power that can buy more media space (for more client companies) at
lower pieces.
Coverage is very important when choosing an advertising medium. In international
marketing in many countries there is a lack of information regarding the coverage of
media (there is no one measuring how many persons read a certain newspaper or listen a
certain radio station).

Assess effectiveness
The last stage of any process is to evaluate, to assess the results obtained. For this purpose
the promotional activity has to be controlled and monitored permanently. The results will
be compared with the plan to check if the marketing (market share, sales volume) and
promotional (brand awareness) objectives have been reached. Corrections are introduced
if the evaluation brings out that there have been made mistakes.

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