Importance of International Advertising

Importance of International Advertising INTRODUCTION International business is taking different shades and is unavoidable today. This dynamic world is rapidly changing to the extent that it has been reduced to a â€Å"Global village†. This assertion is true in every sense because what happens in one part of the world has a rippling effect on some business transaction thousands of kilometers away. International marketing means to apply the principles of marketing in more than one country. International marketing involves the firm in making one or more marketing mix decisions across national boundaries. At its most complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe INTERNATIONAL MARKETING DEFINED â€Å"The performance of business activities that direct the flow of a countrys goods and services to consumers or users in more than one nation for a profit.† Others have defined marketing as â€Å"the creation and delivery of a standard of living† or â€Å"Producing what you can sell not selling what you can produce†. The AMA has defined marketing in two ways as â€Å"The performance of the business activities that direct the flow of goods and services from producer to consumer or user† and if we may add ‘in more than one country. Their latest definition is even more elaborate as â€Å"the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.†_ The venerable Philip Kotler defines Marketing as â€Å"a social and managerial process by which individuals and groups obtain what they need and want t hrough creating, offering, and exchanging products of value to others† across boundaries, if we were to raise it to the international scenario. International trade is a necessity for any 21st century company to remain buoyant in a ferociously competitive world. There certain key factors one has to note before venturing into a new market and these are the controllable factors (4 Ps, Product, Price, Promotion, and Place) and the uncontrollable variablessuch as the Political, Legal, and the cultural environment. IM is a stepping stone towards macro marketing unraveling the meaning of global business as to how that the world has been reduced to a small place where transactions done in a remote part of the world have some effect on the business transactions at another part of the world. The trend today is that World Trade is going â€Å"Global† and as such, the successful marketer should strategically think globally. The World economy has gone through different cycles and phases. At one time, The USA Multi National Corporations (MNC) reigned supreme and unrivalled. It is on record that the 20th century saw the world go into at least two economic depressions between the World wars. After the wars and eventual recovery of some poor economies, the USA other countries started thinking  Ã¢â‚¬Å"Global† in terms of trade. In order to regulate trade for sanity, efficiency and equity, various instruments were set in place to guarantee â€Å"free and fair trade† by different count ries. An association was set up to monitor and ensure fairness in trade, and thus the first General Agreement on Tariffs Trade (GATT) was set up  and later (1994) the World Trade organisation (WTO). INTERNATIONAL ADVERTISING International Advertising, generally speaking, is the promotion of goods, services, companies and ideas, usually in more than one country performed by an identified sponsor. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling, and sales promotion. Advertising is a cogent communication attempt to change or reinforce ones prior attitude that is predictable of future behavior. It can be viewed as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. It is also a business activity involving advertisers and the advertising agencies that create ads and buy media in different countries. The sum total of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values, and propagates certain values worldwide. International advertising involves recognizing that people all over the world have different needs. Companies like Gillette, Coca-Cola, BIC, and Cadbury Schweppes have brands that are recognized across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand the regional differences, hence it is important to understand the importance of international marketing. Organizations must accept that differences in values, customs, languages and currencies will mean that some products will only suit certain countries and that as well as there being global markets e.g. for BIC and Gillette razors, and for Coca-Cola drinks, there are important regional differences for example advertising in China and India need to focus on local languages. Just as the marketing environment has to be assessed at home, the overseas potential of markets has to be carefully scrutinized. Finding relevant in formation takes longer because of the unfamiliarity of some locations. The potential market size, degree and type of competition, price, promotional differences, product differences as well as barriers to trade have to be analyzed in order to advertise our product effectively in different countries BARRIERS OF INTERNATIONAL ADVERTISING CULTURE Culture is a problematic issue for many advertisers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each others presence without knowing exactly why. Communication is more difficult because cultural factors largely determine the way various phenomena are perceived. If the perceptual framework is different, perception of the message itself differs. It is a well known fact that the culture of a country influences the customer preferences. Customers are quite sensitive about cultural aspects depicted in advertisements. Advertising themes, incorporating social acceptance, mutual dependence, respect for elders, harmony with nature, use of seasons, innovation and novelty, distinctive use of celebrities. Some of the advertising blunders in international marketing are: Procter and Gamble 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 worked 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 believe that it is the giant peaches that float on a river that bring babies to the deserving parents. Subsequently, Procter Gamble changed the theme of the ad campaign to â€Å"expert mom†, a nurse who is also a mother theme. 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 the greatest. The ad backfired and offended the Muslims who regard only the God was great. LANGUAGE Translation from one language to another language is crucial in international advertising. The literal translation may fail to convey the desired message across the countries due to cultural factors. For instance the word yes means in low context in USA and Europe and in Japan it means I am listening to what are you saying, in Thailand it means Ok. So there is a difference in the language of different countries. Some instances of the translation blunders in international advertisement are as follows: Pepsi used the German translation of the slogan ‘come alive with Pepsi in its ad campaign in West Germany. However, the slogan when translated in German actually meant ‘come out of the grave with Pepsi and failed to generate any market response from the customers. General Motors translated its slogan ‘Body by Fisher to ‘Corps by Fisher in Belgium that offended many Belgium customers. EDUCATION The level of literacy plays an important role in deciding what advertisement tool and message should be used in international market. Market segments with lower 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 advertisement. GOVERNMENT REGULATIONS The regulatory framework of a country influences the advertisement strategy in international market. The government regulations in the following country relate to following issues: Advertisement in foreign language. Use of sensuality Comparative advertising referring to the competing product from rival firms Use of children as models Advertisement related to alcohol and tobacco Advertisement related to health and pharmaceuticals Some of the various regulations in various countries are: In Malaysia the Ministry of Information advertising code states that women should not be a principal object of an advertisement and should not be used to attract sales unless the advertisement product is relevant to women. The Ministry of Information in Saudi Arabia prohibits any advertisement depicting unveiled woman. Use of foreign words and expression when French equivalents can be used are prohibited in France. Portuguese law prohibits sex discrimination or the subordination or objectification of women in advertising. Norway prohibits any advertising that portrays men or women in an offensive manner or implies any derogatory judgment of either sex. Most Arab countries prohibit explicit depiction of sensuality. MEDIA LIMITATION Media may diminish the role of advertising in the promotional program and may force the marketers to emphasis the other elements of promotional mix. A marketers creativity is certainly challenged when a television commercial is limited to 10 showing a year with no two exposures closer than 10 days. In some African countries advertisers run boats up and down the rivers playing popular music and broadcasting commercial into the bush as they travel. INTERNATIONAL ADVERTISING HELPS IN: Remind customers and prospects about the benefits of your product or service Establish and maintain your distinct identity Enhance your reputation Encourage existing customers to buy more of what you sell Attract new customers and replace lost ones Slowly build sales to boost your bottom line Promote business to customers, investors INTERNATIONAL ADVERTISING CONCEPT International advertising is becoming increasingly complex; more and more local and international companies are competing for consumers who are increasingly sophisticated and demanding. International advertising is defined as the non personal communication by an identified sponsor across international borders, using broadcast, print, and or interactive media. It requires dissemination of a commercial message to target audiences in more than one country. Target audiences vary from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages spoken. How the advertising function is organized also varies. International advertising can be explained as the communication process that takes place in different cultures that varies in terms of values, communication styles, and consumption patterns. International advertising is also a business activity involving advertisers and the advertising agencies that create ads and buy media in different countries. It is also a major force that both reflects social values, and propagates certain values all over the world. The International Communication Process The international communication process involves using the entire promotional mix to communicate with the final consumer. First, the appropriate message is determined for the target audience by the advertiser. Next, the international sponsor (sender), usually represented by an advertising agency, encodes a message into words and images. The message is then translated into the language of target market and transmitted through a channel of media channels to the audience who then decodes and reacts to the message. Cultural barriers may hamper effective transmission of the message at each stage in the process and result in miscommunication. Art Direction Art direction is involved with visual presentation- the body language of print and broadcast advertising. Some types of visual presentation are universally understood. Revlon, for example, has used a French producer to develop television commercials, English and Spanish for use in the international markets. These commercials, which are filmed in Parisian settings, communicate the universal appeals and specific advantages of Revlon products. By producing its ads In France, Revlon obtains effective television commercials at a much lower price than it would have to pay for similar –length commercials produced in US. Pepsi Co has used four basic commercials to communicate its advertising themes. The basic setting of young people having fun at a party or on a beach has been adapted to reflect the general physical environment and racial characteristics of North America, South America, Europe, Africa, and Asia,. The music in these commercials has also been adapted to suite regional t astes, ranging from rock and roll in North America to Bossa nova in Latin America to Africa. The international advertiser must make sure that visual executions are not inappropriately extended into markets. Benetton recently encountered a problem with its â€Å"United Colors of Benetton† campaign. The campaign appeared in 77 countries, primarily in print and on billboards. The art direction focused on striking, provocative interracial juxtapositions- a white hand a black hand handcuffed together, for example another version of campaign, depicting a black woman nursing a white baby, won adverting awards in France and Italy. However, because the image evoked the history of slavery in America, that particular creative execution was not in the U.S market 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 cautions in advertising creativity. Use of colors and man-women relationships can often be stumbling blocks. For example, white in Asia is associated with death. In Japan, intimate scenes between men and women are considered to be in bad taste; they are outlawed in Saudi Arabia. Advertising Communication System Advertising communication always involves a perception process and four of the elements shown in the model: the source, a message, a communication channel, and a receiver. In addition, the receiver will sometimes become a source of information by talking to friends or associates. This type of communication is termed word-of-mouth communication, and it involves social interactions between two or more people and the important ideas of group influence and the diffusion of information. An advertising message can have a variety of effects upon the receiver. It can Create awareness Communicate information about attributes and benefits Develop or change an image or personality Associate a brand with feelings and emotions Forms group norms Precipitate behavior Efficacy Effectiveness of Advertising on International Markets International Advertising as a Business Practice International advertising can also be explained as a business activity through which a firm attempts to inform target audiences in different countries about itself and its product or service offerings. In some cases the advertising message relates to the firm and its activities, i.e. its corporate image. In other cases, the message relates to a specific product or service marketed by the firm. In either case, the firm will use the services of an advertising agency to determine the appropriate message, advertising copy and make the media placement. Advertising has gone through five major stages of development: domestic, export, international, multi-national, and global. For global advertisers, there are four, potentially competing, business objectives that must be balanced when developing worldwide advertising: building a brand while speaking with one voice, developing economies of scale in the creative process, maximizing local effectiveness of ads, and increasing the companys speed of implementation. Born from the evolutionary stages of global marketing are the three primary and fundamentally different approaches to the development of global advertising executions: exporting executions, producing local executions, and importing ideas that travel. Advertising research is key to determining the success of an ad in any country or region. The ability to identify which elements and/or moments of an ad that contributes to its success is how economies of scale are maximized. Once one knows what works in an ad, that idea or ideas can be imported by any other market. Market research measures, such as Flow of Attention, Flow of Emotion and branding moments provide insight into what is working in an ad in any country or region because the measures are based on the visual, not verbal, elements of the ad MEASURING ADVERTISING EFFECTIVENESS Just as important as creating a strong marketing plan is following through on the results. How will you know which ads are working if you dont analyze the results? Check the effectiveness of your advertising programs regularly by using one or more of the following tests: Run the same ad in two different publications with a different identifying mark on each. Ask customers to clip the ad and bring it in for a discount or free sample. Or, if youre running an ad that asks customers to order by mail, put a code in your company address such as â€Å"Dept. SI.† By looking at the marks on the clipped ads or the addresses on the mail-in orders, youll be able to tell which ad pulled better. Offer a product at slightly different prices in different magazines. This has the added benefit of showing whether consumers will buy your product at a higher price. Advertise an item in one ad only. Dont have any signs or otherwise promote the item in your store or business. Then count the calls, sales or special requests for that item. If you get calls, youll know the ad is working. Stop running an ad that you regularly run. See if dropping the ad affects sales. Check sales results whenever you place an ad for the first time. Checks like these will give you some idea how your advertising and marketing program is working. Be aware, however, that you cant expect immediate results from an ad Especially with small ads—the type most entrepreneurs are likely to be running—you need to give the reader a â€Å"getting to know you† period during which he gets to feel comfortable with your business. METHODOLOGY The manager needs to engage in situation analysis with respect to the market conditions that are operating at the time and to assess the consumer/market, competitive, facilitating agency, and social legal, and global factors that will affect decision making and the development of the plan. It is vital that the advertising plan be developed so as to mesh with and support the various components of the marketing and communications mix such as personal selling, pricing, public relation, and promotion. The advertising manager also needs to know the major areas of his or her planning and decision-making responsibilities. There are three areas of major importance: Objective And Target Selection, Message Strategy and Tactics, Media Strategy and Tactics. Consumer and Market Analysis; A situation analysis often begins by looking at the aggregate market for the product, service, or cause being advertised: the size of the market, its growth rate, seasonality, geographical distribution; the possible existence of different segments; and trends in all of these aggregate market characteristics. These semgentations are very important, specially understanding the fact that these should be very clerarly defined and not overlapping. Competitive Analysis Advertising planning and decision-making are heavily affected by competition and the competitive situation the advertiser faces. Having a competitive advantage is now the need of the day. The competitive advantage of the firm is what gives it an edge in the market. Competition is such a pervasive factor that it will occur as a consideration in all phases of the advertising planning and decision-making process. Competition is something that cannot be avoided by any firm at any cost, and a any lev el. The fact that competion is not only a detrimental factor but rather also an internal motivator; the firms are all ready to support it. A type of market structure analysis that involves the development of perceptual maps of a market, for example, attempts to locate the relative perceptual positions of competitive brands. Situation analysis should usually include an analysis of what current share the brand now has, what shares its competitors have, trends in these shares, reasons for these trends, what share of a market is possible for the brand, and from which competitors an increase in share will come. The planner also has to be aware of the relative strengths and weaknesses financial, production, and marketing of the different competing companies, and the history of competitive moves and objectives in the product category. IT shall give the firm a complete overview of the current prevailing conditions and where the firm currently stands. Also in certain cases it tells what the firm stands to gain and lose in the situation. The Marketing Plan Advertising planning and decision making take place in the context of an overall marketing plan. The marketing plan includes planning, implementation, and control functions for the total corporation or a particular decision-making unit or product line. The marketing plan must be extensively effective for any firms success. The marketing plan will include a statement of marketing objectives and will spell out particular strategies and tactics to reach those objectives. The marketing objectives should identify the segments to be served by the organization and how it is going to serve them. The segment, need to be properly differentiated. Externally every segment must be different and every segment must be homogeneous inside. The needs and wants of consumers on which the firm will concentrate, such as the needs of working men and women for easily prepared meals, are identified and analyzed in a marketing plan. The market plan can be made only when there are properly d efined market segments are not overlapping. At many such instances, where the firm is unable to properly desiccate the market, the firm stands to lose profits or market share, and even both. There are several marketing tools that can be used to help an organization achieve its marketing objectives. Most people are familiar with the â€Å"4 Ps† the marketing mix which includes product, price, place, and promotion. A marketing plan formulates the strategy and tactics for each of these. Message Strategy and Tactics The actual development of an advertising campaign involves several distinct steps. First, the advertising manager must decide what the advertising is meant to communicate by way of benefits, feeling, brand personality, or action content. Once the content of the campaign has been decided, decisions must be made on the best and most effective ways to communicate that content. Media Strategy Although there are many rules of thumb often used to decide how much money to spend on advertising, the soundest rules involve beginning with a detailed specification of what a corporation is attempting to accomplish with advertising, and the resources necessary. It is only when the job to be done is well specified that the amount and nature of the effort the amount of money to be invested in advertising can be really determined. STANDARDISATION VIS A VIS LOCALISATION Adaptation as a general tendency of the cross-national advertising literature The feasibility of ad standardization depends on variables related to the economic, technological, legal, social, and cultural environment. These factors together are known as the PEST factors which are very important for every firm. These are those external factors or conditions that the firm needs to adapt it with. These factors cannot be controlled by the firm and thus influence the firm extensively. Within a homogeneous environment advertising standardization is recommendable. If, on the contrary, environmental variables across markets are heterogeneous, customized advertising should be favored. Its always preferred that the environment be homogeneous. Reviews of cross-national advertising studies, either regional or global generally conclude in favor of adaptation. Standardized advertising is hindered if the use of certain media or execution elements is restricted, for instance in countries such as Malaysia which prohibits the use of foreign models in advertising. In a similar w ay, a heterogeneous economic environment across countries makes advertising standardization more difficult. Advertising execution has to take into account the education, literacy, and income levels of target groups. The competitive environments as well as the actual life cycle stage of a product are further factors in favor of adaptation. The cultural environment is seen as the highest barrier against standardized advertising. Differing needs, traditions, consumption habits, religion etc. make the use of an identical advertising approach across markets difficult. Its still a matter of debate whether standardization or adaptation is better, as it is a very subjective term. The fact that adaptation allows for more creative freedom and standardisation a more restrictive environment, generally means can allow the advertisers to go for more focused approaches. On average, the cross-national advertising literature leans towards adaptation rather than standardization of advertising worldwide. Change over time Many studies point to the persistent need of ad adaptation. For instance, ananalysis of U.S. companies operating in Europe showed that, between 1963 and 1983, advertisingwas more resistant to standardization than product or brand policies. However, there are many arguments in favour of a trend towards advertising standardization, especially due to strong globalization over the last 20 years. A number of developing countries have been accessing the status of advertising intensive countries. China and India are a case in point for a dramatic change in the place of advertising in the overall business and consumer scene. Authors coming from the corporate world, either advertisers or agencies, have consistently argued in favour of ad standardization and the possibility of putting up a global message with localized communication . Furthermore, rapidly changing communication technologies (Internet ads, satellite TV) influence global advertising: media overlaps push companies to more standar dized advertising approach. Advertising standardization is increasing over time due the globalization trend. Adaptation to local contexts still needed Religion act as filters of advertising messages, transforming factual information into culturally interpreted meaning. Culture and local customs are positively related to adaptation recommendation Advertising strategy versus advertising execution The contents of advertising can be categorizes in to two categories as strategy and execution .Though there is some overlap between both the categories , advertising strategy comprises what is said and execution concerns more how it is said.Degree of adaptation increases over a continuum of four levels as : mission (long term, identity and vision of the communicator), proposition (campaign themes), creative concepts (how themes are translated in the language and cultures of the target groups) and execution. While mission and proposition can rather easily be globalized, execution will need much local tailoring. Influence of product category on the degree of standardization Of international advertising The type of the product have an influence on advertising standardization. Products which satisfies the universal needs have messages which mostly carries rather than context free information . Ads for certain product categories may be easier to standardize because they correspond to global (airlines, tobacco, banks,) rather than multidomestic industries (food, motor insurance,). IM LOVIN IT†: An International Motto We can take the example of McDonalds which have launched a new and for the first time global marketing strategy in Germany at the beginning. The campaign launched by the McDonald revolves around the motto, â€Å"Im loving it† and it is part of a new and broader marketing approach that McDonalds calls Rolling Energy. The company says this approach will restore the strength of the brand in the entire world, unify its messages and integrate all its marketing moves. â€Å"McDonalds realized that it can save money. To create a campaign of this sort, which is not individualized for each country and each market and which is going to use the same slogan, presumes a terrific cost savings that could have an impact on [McDonalds] accounting results.† Despite the benefits that this campaign offers, â€Å"it contains the risk of not being able to adjust to the peculiarities of each individual market†. â€Å"The value shared by the youths in different countries makes it possible today more than ever to create global campaigns with a same message†. Axe Chocolate-man Ad Banned Axe ad is a classic example of standardization vs. localization debate. Keeping in line suggestive advertisements being televised. The Indian government has taken strong objection to the AXE chocolate deodorant ad .Ministry of information and broadcasting has regarded the ad as indecent, vulgar and repulsive. It clearly reflects the importance of understanding cultural sensitivity in advertising. INTERNATIONAL ADVERTISING AS A SOCIAL FORCE When we consider it from the advertisers point of view, according to them the primary objective of advertisement is that the product or services which they are offering should be sold in the market. And in achieving the main objective of selling the product or services there are other profound consequences .Advertising puts an influence which is both persuasive and pervasive in nature. Through the selective reinforcement of certain language and values, and social goal, it acts as impor