Imagine you are an organization trying to go global or expand. You have carefully planned how your business will enter the new market, have developed the right product, and believe you can offer it for a price that will be profitable. The next component of the global marketing mix involves communicating your offerings to the customer.
How an organization chooses to promote their products and services can have a direct and substantial impact on sales. There is much thought and consideration that needs to go into how dollars spent on advertising and promotions will convert into revenue for the company. This post will summarize the most important lessons to learn before creating, implementing and measuring your promotional strategy.
Advertising and Culture: Advertising to a great extent is a cultural phenomenon – – it can shape a country’s popular culture whilst at the same time a host country’s cuture may also influence the creation and effectiveness of a campaign. Major barriers to overcome when considering culture’s impact in advertising include language barriers and how ads related to culturally-sensitive issues like religion and politics. For example, Procter & Gamble ran into trouble advertising their Pert Plus shampoo in Saudi Arabia, where only veiled women can be shown in TV commercials. The company ended up having to show the face of a veiled woman, and the hair of another woman from the back. Not being aware of how your promotions fare different cultures can not only cause a negative response from your audience, but can even break laws.
Setting a budget: The money issues revolving around advertising and promotions are always present, and can be even more so in international markets, since decisions need to be made for each country your multinational business operates in. The most important questions to ask concerning spending include “How much should we spend” and “How should we allocate our resources across our different markets.” To answer the first question, a global marketer can rely on budgeting rules such as percentage of sales (setting budget as a percentage of sales revenues), competitive parity (use your competitor’s ad spending as a benchmark”, or objective-and-task (treat promotional efforts as a means to achieve the your stated objectives). The third budgeting technique is the most common, and is more effective at justifying each ad dollar spent. To answer the second question, global markets use three approaches to reach allocation decisions. Bottom-up budgeting is when each business location independently determines how much money should be spent within its market and request resources from headquarters. Top-down budgeting is the opposite, where headquarters set a total budget and split up the resources like a pie according to what they feel each country requires. A third, more common approach, occurs when decisions are made on a regional level, where each area develops a proposal and submits it to headquarters for approval.
Creative Strategy: When global marketers develop advertising and promotional campaigns, they need to choose between a standardized or adapted approach. A standardized approach can be considered a global campaign that is the same throughout countries. Some major advantages of a standardized campaign are achieving economies of scale in ad campaigns to reduce cost, maintaining a consistent brand image. Some major barriers to implementing a standardized ad strategy include: cultural differences garnering a negative or ineffective consumer response, advertising laws and regulations, differences in the degree of marketing development in the industry you are competing in, and the “Not Invented Here” syndrome. The NIH syndrome is when agencies or business subsidiaries reject using a standardized campaign simply because they did not invent or come up with the campaign.
Assessing global media decisions: Global Media decisions must also be a concern for the international marketer. The choices surrounding media buying may differ across countries. For example, in some countries media outlet decisions (choosing between print or tv ads) may be more important than the creative aspect of the campaign itself. For example, with Japan’s limited amount of advertising space, most businesses don’t care where they spend their ad dollars, as long as their products are creative enough to be noticed. As a global marketer, familiarize yourself with the best media channels in your market and the availability of these channels in general.
Ad Regulations: As previously mentioned, there are MANY foreign regulations that limit how, when and why you advertise in a specific country. Thoroughly research the laws in the country you operate in before developing a campaign. This will help to avoid legal implications as well wasting valuable time and money!
Choosing an agency: Companies develop their advertising and promotional campaigns differently. Some organizations have creative teams do this in-house, while others choose to use an agency for added expertise. Choosing an an agency may prove more efficient due to their understanding of the country and market they are doing business in. Over the years, there have also been large mergers and acquisitions that led to global media agencies. This gives marketers the option to hire one company can serve all of their markets faster and more effectively.
Other communication options: Remember that advertising campaigns are not the only component in the promotional mix. At a global level, it may be beneficial to use sales promotions, direct marketing, global sponsorships and events, mobile marketing, product placement, viral marketing and global public relations and publicity as well. In fact, advertising alone may not accomplish all of your promotional goals. It is hard to implement all of these other components, so understand which ones are most effective for your industry and within each country you operate in.
GIMC (Globally Integrated Marketing Communications): As mentioned previously, advertising is only one element marketers use to communicate with their customers. A GIMC is a sytem of active promotional management that strategically coordinates global communications in all of its component parts- both horizontally (from country to country) and vertically (promotion tools). What does this mean? Basically, GIMC is a way to harmonize your promotional and communication disciplines in all ways possible. Integrated campaigns coordinate all communication vehicles so that they convey the same idea to all prospective customers in a unified voice. GIMC is very difficult to achieve, but the ability to actually deliver has proven wildly successful for many global organizations. Because GIMC requires constant communication between country offices, headquarters and ad agencies worldwide, it is very difficult to find an agency that can collaborate on this level and deliver successfully.
Kotabe, Masaaki, and Kristiaan Helsen. Global marketing management. Hoboken, NJ: J. Wiley, 1998. Print.