CHAPTER – FIVE

International Promotion Decision

Promotion encompasses all efforts by an international firm to
enhance the desirability of its products among potential buyers. The
international marketer must choose a proper combination of the various
promotional tools - advertising, personal selling, sales promotion, and
public relations - to create images among the intended target audience.
The choice will depend on the target audience, firm's objectives, the
products or services marketed the resources available for the endeavor, and
the availability of promotion tool in a particular market.

I) Global Advertising
Communication experts generally agree that the overall requirements of
effective communication and persuasion are fixed and do not vary from
country to country. The same thing is true of the components of the
communication process: The marketer or sender's message must be
encoded, conveyed via the appropriate channel(s), and decoded by the
customer or receiver. Communication takes place only when meaning is
transferred.
 Four major difficulties can compromise an organization's attempt to
communicate with customers in any location:
a) The message may not get through to the intended recipient. This
problem may be the result of an advertiser's lack of knowledge about
appropriate media for reaching certain types of audiences. For example,
the effectiveness of television as a medium for reaching mass audiences
will vary proportionately with the extent to which television viewing
occurs with a country.
b) The message may reach the target audience but may not be
understood or may even be misunderstood. This can be the result of
an inadequate understanding of the target audience’s level of
sophistication or improper encoding.
c) The message may reach the target audience and may be
understood but still may' not induce the recipient to take the
action desired by the sender. This could result from lack of cultural
knowledge about a target audience.
d) The effectiveness of the message can be impaired by noise. Noise
in this case is an external influence such as competitive advertising,
other sales personnel, and confusion at the receiving end, which can
detract from the ultimate effectiveness of the communication.

 Generally, as a firm develops its advertising strategy at international

level, it must at least consider three factors: the message it wants to
convey, the media available for conveying the message and the
extent to which the firm wants to globalize its advertising effort
(whether to follow standardization or adaptation).
 At the same time, the international marketer must take into account
relevant cultural, linguistic, and legal constraints found in various
national markets.

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 Global Advertising Decisions
a) The Extension (Standardization) Vs Adaptation Debate: The key
question for global marketers is whether the specific advertising
message and media strategies must be changed from region to region
or country-to-country because of environmental requirements.
“Proponents of the one world, one voice" approach to global advertising
believes that the era of the global village is fast approaching and that tastes
and preferences are converging worldwide.

According to the standardization argument, because people everywhere

want the same products for the same reasons, companies can achieve great
economies of scale by unifying advertising around the globe.

Advertisers who follow the localized approach are skeptical of the global
village argument. Even Coca-Cola, the most global brand in the world,
records radio spots in 40 languages with 140 different music backgrounds.
Coca-Cola asserts at consumers still differ from country to country must be
reached by advertising tailored to their respective countries. Proponents of
localization point out that most blunders occur because advertisers have
failed to understand and adapt to foreign cultures.

Certain consumer products lend themselves to advertising extension. If a

product appeals to the same need around the world, there is a possibility of
extending the appeal to that need. The list of products "going global," once
confined to a score of consumer and luxury goods, is growing. Global
advertising is partly responsible for increased worldwide sales of disposable
diapers, diamond watches, shampoos, and athletic shoes. Some longtime
global advertisers are benefiting from fresh campaigns. Jeans marketer Levi
Strauss & Company racked up record sales in 1991 on the strength of a
campaign extended unchanged to Europeans, Latin Americans, Africans and
Australians. The basic issue is whether there is in fact a global market for
the product. If the market is global, appeals can be standardized and
extended. Soft drinks, Scotch whiskey, Swiss watches, and designer
clothing are examples of product categories whose markets are truly global.

As Kansu correctly notes, the controversy over advertising approaches will

probably continue for years to come. Localized and standardized advertising
both have their place and both will continue to be used. Kansu’s conclusion:
What is needed for successful international advertising is a global
commitment to local vision. In the final analysis, the decision of whether to
use a global or localized campaign depends on recognition by managers of
the trade-offs involved. On the one hand, a global campaign will result in
the substantial benefits of cost savings, increased control, and the potential
creative leverage of a global appeal. On the other hand, localized campaigns
have the advantage of appeals that focus on the most important attributes
of a product in each nation or culture. The question of when to use each
approach depends on the product involved and a company's objectives in a
particular market.

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 b) Selecting an advertising agency: Another global advertising issue
company’s face is whether to create ads in house, use an outside
agency, or combine both strategies. For example, Chanel, Benetton,
and Diesel rely on in-house marketing and advertising staffs for creative;
Coca-Cola has its own agency, Edge Creative, but also uses the services
of outside agencies such as Leo Burnett. When one or more outside
agencies are used, they can serve product accounts on a multi-country or
even global basis. It is possible to select a local agency in each national
market or an agency with both domestic and overseas offices. Today,
however, there is a growing tendency for Western clients to designate
global agencies for product accounts in order to support the integration
of the marketing and advertising functions; Japan based companies are
less inclined to use this approach. Agencies are aware of this trend and
are themselves pursuing international acquisitions and joint ventures to
extend their geographic reach and their ability to serve clients on a
global account basis.

 In selecting an advertising agency, the following issues should be

considered:
 Company organization: Companies that are decentralized may want
to leave the choice to the local subsidiary.
 National responsiveness: Is the global agency familiar with local
culture and buying habits in a particular country, or should a local
selection be made?
 Area coverage: Does the candidate agency cover all relevant
markets?
 Buyer perception: What kind of brand age does the company want to
project? If the product needs a strong local identification, it would be
best to select a national agency.

c) The Message: The message of an advertisement refers to the facts or

impressions the advertiser wants to convey to potential customers. For
example, an automobile manufacturer may want to convey a message of
value (low price) and / or reliability (quality). The choice of message
is an important reflection on how the firm sees its own products and
services and how it wants them to be seen by customers. For example,
coca-cola believes that its products help consumers enjoy life, and its
advertising messages consistently stress this theme worldwide. Consider
the company’s today’s advertising logo of “enjoy the Coke side of life”.
Products that are used for different purposes in different areas will need
to be marketed differently. The country of origin of a product often
serves as an important part of the advertising message. For example,
among fashion-conscious teenagers and young adults in Europe and
Japan, USA, even in Africa goods are often viewed as being very trendy.
Thus, Jeans producers, among others, highlight the origins of their
products.
d) Medium: The medium is the communication channel used by the
advertiser to convey a message. A firm’s international marketing manager
must alter the media used to convey its message from market to market

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 based on availability, legal restrictions, standards of living, literacy
levels, the cultural homogeneity of the national market, and other
factors. In bilingual or multilingual nations, international marketers must
adjust their mix of media outlets in order to reach each of the country's
cultural groups. A nation's level of economic development may also affect
the media firm’s use. For example, in many less developed countries like
Ethiopia, television ownership may be limited and literacy rates low. This
eliminates television, newspapers, and magazines as useful media but
favors radio advertising. Price may also come into play. For ex, television
advertising is mostly very costly than Radio, newspaper ads. Legal
restrictions may also prompt the use of certain media. Most national
governments limit the number of television channels.
To sum up, to help deal with issues related to message and media, many
international marketers use multinational advertising agencies, which have
branch offices or affiliates in many national markets. International
marketers sometimes use local advertising agencies too.
e) Cultural Considerations: Knowledge of cultural diversity, especially
the symbolism associated with cultural traits, is essential when creating
advertising. Local country managers will be able to share important
information, such as when to use caution in advertising creativity. Use of
colors and man-woman relationships can often be stumbling blocks. For
example, white in Asia is associated with death. In Japan, intimate scenes
between men and woman are considered to be in bad taste; they are
outlawed in Saudi Arabia.

II)Public Relations and Publicity

Public relations consist of efforts aimed at enhancing a firm's
reputation and image with the general public. The consequence of
effective public relations is a general belief that the firm is a good corporate
citizen, that it is reputable and that it can be trusted. Ineffective public
relations can often lead to a public perception that the firm cannot be
trusted or that it carries little for the community. A significant part of the
public relations activity focuses on portraying corporations as good citizens
of their host countries. Public relations activity involves anticipating and
countering criticism. The criticism ranges from general ones against all
multinational corporations to specific complaints.

Thus, a company's public relations (PR) effort should-foster goodwill

and understanding among constituents both inside and outside the
company. PR practitioners attempt to generate favorable publicity, which,
by definition, is a non-paid form of communication. (In the PR world,
publicity is sometimes referred to as earned media, whereas advertising
and promotions are known unearned media.) PR personnel also play a key
role in responding to unflattering media reports or controversies that arise
because of company activities in different parts of the globe. In such
instances, PR's job is to make sure that the company responds promptly and
gets its side of the story told.

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The basic tools of PR include news releases, newsletters, press
conferences, tours of plants and ether company facilities, articles in
trade or professional journals, company publications and brochures,
TV and radio talk show appearances by company personnel, special
events, and homepages on Internet. As noted earlier, a company exerts
complete control over the content of its advertising and pays for message
placement in the media. However, the media typically receive far more
press releases and other PR materials than they can use. Generally
speaking, a company has little control over when, or if, a news story runs.
The company cannot directly control the "spin," slant, or tone of the story.

The Growing Role of Public Relations in Global Marketing

Communications
Public relations professionals with international responsibility must go
beyond media relations and serve as more than a company mouthpiece;
they are called on to simultaneously build consensus’s and understanding,
create trust and harmony, articulate and influence public opinion, anticipate
conflicts, and resolve disputes. As companies become more involved in
global marketing and the globalization of industries continues, it is
important that company management recognize the value of international
public relations. One recent study found that, internationally; PR
expenditures are growing an average of 20 percent annually.

The number of international PR associations is growing as well. The new

Austrian Public Relations Association is a case in point; many European PR
trade associations are part of the Confederation Europeans des Relations
Publiques and the International Public Relations Association. Another factor
fueling the growth of international PR is increased governmental relations
between countries. Governments and organizations are dealing with broad-
based issues of mutual concern such as the environment and world peace.
Finally, the technology-driven communication revolution that has ushered in
the information age makes public relations a profession with truly global
reach. Faxes, satellites, high-speed modems, and the Internet allow PR
professionals to be in contact with media virtually anywhere in the world.

In spite of these technological advances, PR professionals must still build

good personal working relationships with journalists and other media
representatives as well as leaders of other primary constituencies.
Therefore, strong interpersonal skills are needed. One of the cost basic
concepts of the practice of public relations is to know the audience. For the
global PR practitioner, this means knowing the audiences in both the home
country and the host country or countries. Specific skills needed include the
ability to communicate in the language of the host country and familiarity
with local customs. Obviously a PR professional who is unable to speak the
language of the host country will be unable to communicate directly with a
huge portion of an essential audience. Likewise the PR professional working
outside the home country must be sensitive to nonverbal communication
issues in order to maintain good working relationships with host-country
nationals. Commenting on the complexity of the international PR

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professional's job, one expert notes that, in general, audiences are
"increasingly more unfamiliar and more hostile, as well more organized and
powerful . . . more demanding, more skeptical, and more' diverse."
International PR practitioners can play an important role as "brides over the
shrinking chasm of the global village.

III) Personal Selling

Personal selling is two-way, personal communication between a
company representative and a potential customer as well as back to
the company. The salesperson's job is to correctly understand the buyer's
needs, match those needs to the company's product(s), and then persuade
the customer to buy. Effective personal selling in a salesperson's home
country requires building a relationship' with the customer; global
marketing presents additional challenges because the buyer and seller may
come from different national or cultural backgrounds. It is difficult to
overstate the importance of a face-to-face, personal selling effort for
industrial products in global markets

The selling process is typically divided into several stages: prospecting,

pre-approaching, approaching, presenting, problem solving,
handling objections, closing the sale, and following up. The relative
importance of each stage can vary by country or region. Experienced sales
reps know that persistence is one tactic often required to win an order in
the market; however, persistence often means tenacity, as in "don't take 'no'
for an answer." Persistence is also required if a global industrial marketing
effort is to succeed; in some markets, however, persistence often means
endurance, a willingness to patiently invest months or years before' the
effort results in an actual sale. For example, a company wishing to enter the
Japanese market must be prepared for negotiations to take from 3 to 10
years.

Prospecting is the process of identifying potential purchasers and

assessing their probability of purchase. If Ford wanted to sell vans in
another country where they would be used as delivery vehicle, which
businesses would need delivery vehicles? Which businesses have the
financial resources to purchase such a van? Those businesses that match
these two needs are better prospects than those who do not. Successful
prospecting requires problem-solving techniques, which involve
understanding and matching the customer's needs and the company's
products in developing a sales presentation.

The purpose of the pre-approach stage is to gather information on a

prospective customer's problem areas. If a potential customer has a grocery
business, their needs in a van would be different from a customer who owns
a carpentry business. The sales representative would need to select the best
models of Ford vans collect the appropriate model specifications, and so on
to prepare for an effective presentation.

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The approach stage involves one or more meetings between seller and
buyer. In global selling, it is absolutely essential for the salesperson to
understand cultural norms and proper protocol. In some countries, the
approach is drawn out as the buyer-gets to know or takes the measure of
the salesperson on a personal level with no mention of the pending deal. In
such instances, the presentation comes only after rapport has been firmly
established.

Presentation and Problem solving tailor a presentation that

demonstrates how the company's product can solve these specific problems.
During the presentation, the salesperson must deal with objections.

Objections may be of business or personal nature. A common theme in

sales training is the notion of active listening; naturally, in cross-cultural
selling, verbal and nonverbal communication barriers present special
challenges for the salesperson. When objections are successfully overcome,
the salesperson moves on to the close and asks for the order.
A successful sale does not end there however; the final step of the selling
process involves following up with the customer to ensure his or her
ongoing satisfaction with the purchase.

IV) Sales Promotion

Sales promotion refers to any consumer or trade program of limited
duration that adds tangible value to a product or brand. Sales
promotion laws and usage vary around the world but may consist of any of
the following: promotional pricing tactics, contests, sweepstakes and
games, premium and specialties, dealer loaders, merchandising
materials, tie-ins and cross-promotions, packaging, trade shows
(also known as exhibitions), and sponsorship. The EU, however, is
working to harmonize promotional tactics across its member countries. It is
considering "mutual recognition" that would allow a company to carry out
promotional activities in another country as long as that tactic is legal in the
company's home country. The tangible value created by the promotion may
come in various forms, such as a price reduction or a "buy one, get one
free" offer. The purpose of a sales promotion may be to stimulate customers
to sample a product or to increase consumer demand. Trade promotions are
designed to increase product availability in distribution channels.

The increasing popularity of sales promotion as a marketing communication

tool can be explained in terms of several strengths and advantages.
Besides providing a tangible incentive to buyers, sales promotion
also reduces the perceived risk buyers may associate with
purchasing the product. From the point of view of the company, sales
promotion provides accountability; the manager in charge of the promotion
can immediately track the results of the promotion. Moreover, some
consumer sales promotions, including sweepstakes and rebates, require
buyers to fill out a form and mail it to the company. This allows a company
to build up information in its database, which it can use when
communicating with customers in the future.

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V) Direct Marketing
The use of direct marketing is growing rapidly in many parts of the world
due to increased use of computer databases, credit cards, and toll-free
numbers, as well as changing life styles. Direct marketing is a system of
marketing that integrates ordinarily separate marketing mix
elements to sell directly to both consumers and other businesses; it
is used by virtually every consumer and business to-business category from
banks to airlines to nonprofit organizations. Because the customer responds
directly to the company making the offer, international considerations that
apply to communications, distribution, and sales have to be considered.
Direct marketing uses a wide spectrum of media, including direct mail;
telephone; broadcast, including television and radio; and print, including
newspapers and magazines.

The usage of direct mail, the most popular type of direct marketing, varies
around the world based on literacy rates, level of acceptance,
infrastructure, and culture. In countries with low levels of literacy, a
medium that requires reading is not effective. In other countries, the
literacy rate may be high, but consumers are unfamiliar with direct mail and
suspicious of products they cannot see.

The infrastructure of a country must be developed sufficiently to handle

direct mail the postal system must deliver mail on a timely basis and be free
of corruption. In addition to physical infrastructure, a system for developing
databases and retrieving appropriate target names and the tracking results
is necessary. In one former Soviet republic, merchants were resistant to
having their name and address publicly listed in the telephone directory.
They feared that the local "mafia" could readily use this information to
extort protection money from these.

Culture also plays a significant role in the decision to use direct mail. In
Thailand, the local astrologer plays an important role in many business
decisions. If the day that a direct-mail campaign is scheduled to begin is not
auspicious, the marketer may delay the mailing until a more fortuitous day
appears.

Database marketing uses extensive lists of prospects and relevant

demographic and psycho-graphic information to narrow target markets to
serious prospects and then to customize an offer to the prospect's interests.
This is essential not only for direct marketing but also for market research
and personal selling. Lists can be created in house from the company's
current customers, from responses to previous direct-marketing offers, or
from telephone or membership directories. These lists may also be
purchased from list brokers, companies that specialize in the acquisition
and sale of lists of prospective customers.

VI) Overseas Product Exhibitions

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One type of sales promotion that can be highly effective is the exhibition of
a product overseas. This type of promotion may be very important because
regular advertising and sales letters and brochures may not be adequate.
For certain products, quality can be judged only by physical examination,
and product exhibition can facilitate this process.
One very effective way to exhibit products abroad is to use trade
fairs. A strong feature of a trade fair is that prospects are in a buying
mood. Another advantage is that buyers are seeking out sellers at a
central location. Obviously, a trade show presents a much easier contact
situation for a salesperson because there is no travel to many diverse
locations to call on potential buyers.

An exhibitor should investigate whether it is worthwhile to use a carnet for

products that will be shipped or taken to the exhibition. A carnet is an
international customs document that facilitates the temporary duty-free
importation of product samples in lieu of the usual customs documents
required to bring merchandise into several major trading countries that is a
carnet is a series of vouchers listing the goods and countries involved where
the product will be exhibited.

VII) Sponsorship Promotion

Sponsorship serves purposes other than sales promotion. Sponsorship can
be used to increase awareness and esteem, to build the brand identification,
to-enhance the brand's positioning and sales, and to circumvent advertising
restrictions in some countries. Examples of global sponsorship are the
Olympics, the World Cup in Soccer, the English premier League, the
Spanish la Liga, the Italian serie A, The African Cup of Nation and
the Tour de France etc.

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