Nestlé’s Nescafe International Advertising Strategy Argentina Germany United States Prepared By: Nicole Arena, Ryan Bowie, Domitille De Saint‐Exupery, Tony Majdalani, Hegai Smadi San Diego State University May 5, 2010 Table of Contents Selected Media ……………………………………………………………………………………………………Page 1 Nescafe’s International Advertising Strategy……………………………………………………...Page 1 Environmental Analysis Argentina………………………………………………………………………………………………..Page 2 Germany…………………………………………………………………………………………………Page 4 United States …………………………………………………………………………………………..Page 6 Recommendations and Modifications…………………………………………………………………Page 8 Works Cited………………………………………………………………………………………………………….Page 12 Appendix A1.Cross‐Comparative Table: International Advertising Strategy’s in Argentina, Germany and United States……………………………………………………………………………………………………………………. i A2.Environmental Analysis Table: Argentina, Germany and the United States………………………………………………………………………………………………………………………………… ii A3.Nescafe Advertisements : Argentina, Germany and United States………………………………… iii Selected Media The proceeding analysis of Nestlé’s Nescafe international advertising strategy is based on the following information. Media Outlet: Print Advertisements Media Year: 2009 Advertisements: Argentina: “Change the day, Start within” Germany: “Give Yourself a Break” United States: “The Smart Choice” Nescafe’s International Advertising Strategy Nescafe employs a “think globally, act locally” marketing strategy. According to Keegan and Green, “Nescafe Coffee is marketed as a global brand, even though advertising messages and product formulation vary to suit cultural differences” (438). Nescafe’s marketing campaign is global in the sense that the company uses the same symbols worldwide, such as the renowned coffee mug and Nescafe logo. However, Nescafe tailors its campaigns to suit diverse consumer attitudes and preferences. For example, marketing advertisements targeting different locations and regions often are different in terms of copy (message and language) and advertising appeal (rational vs. emotional). A detailed cross‐comparative table of is located in the appendix in section A1. The language is tailored to fit the home countries in all three ad examples (See Nescafe Advertisements Appendix A3): Spanish for the Argentine market, German for the German market, and English for the U.S. market. However, the Argentine ad uses the “tú” form instead of the standard Argentine “vos” (used for 2nd‐person “you”). This could allude to Nescafe using a pan‐regional marketing strategy for the entire Latin American market, instead of focusing solely on Argentina. Although some symbols and the logo are the same throughout the ads, the messages conveyed are focused on the specific region or country. Argentina’s message/tagline is “change the day, start within”, Germany’s is “give (offer) yourself a break”, while in the U.S. it is “make the smart choice”. Nescafe uses emotional appeals in the German and Argentine appeals and rational appeals in the U.S. market (see figure A1 in appendix). For the emotional appeals, Nescafe is trying to tug at the heartstrings of coffee drinkers. However, the specific appeals differ in that in the German ad is geared towards appealing to a person’s need for a break from his/her busy life, whereas the Argentine ad is focused on starting the day on a positive note with the help of a tasty coffee. The emotional appeals are similar in that Nescafe wants to be a part of their consumer’s day but it is positioned as an escape in Germany and as helpful pick‐me‐up in Argentina. In the United States, Nescafe employs a rational appeal. The company compares itself to Starbucks and positions itself as the “smart choice”, thus appealing to the consumer’s intellect and encouraging them to be logical in their choice of coffee. The U.S. ad is geared to those who are constantly on the go, i.e. busy individuals such as students and members of the workforce. The German ad is targeted towards an older audience, especially those that work for a living or have busy daily schedules. The Argentine ad is geared more towards younger professionals, such as Generation Y who has more modern attitudes, can read between the lines and need more visual stimulation to find ads appealing. Environmental Analysis Argentina Economics and Politics Argentina’s economy is one of the largest in South America. Historically, Argentina has been prone to economic instability and dramatic crises, occurring quite frequently during the past 30 years. Global marketers must be aware of these risks and plan accordingly. The type of government in Argentina is a federal presidential representative democratic Republic. According to Country Watch, Argentina is scores a 6 out of 10 due to factors such as political stability, economic risk, market conditions, and crime. In 2004 Argentina also received a score of ‐0.24 for political stability on a scale from ‐2.5(poor governance) to 2.5(high governance) showing that the country is on the verge of instability. Legal Although there are no specific regulations regarding advertising, there are segments pertinent to advertising that are mentioned in sections of various laws. For example, the Fair Trade Act stipulates a general prohibition of any misleading, deceitful, or inaccurate representations in advertising (Pardo). Also, the Consumer Protection Act requires marketers to provide the consumer with “exact, clear, and detailed information”, and prevents the marketer from using ads that intimidate the consumer. Comparative advertising, while historically prohibited, is now permitted so long as the advertisements are “truthful, accurate, objective, and referring to essential, substantial and verifiable qualities of the compared products or services, while not causing consumer confusion” (Richelet). Cultural Approximately one‐third of Argentina’s 40 million inhabitants reside in the Greater Buenos Aires conurbation, therefore making the city the center of public life. The people of Argentina are generally very family‐oriented; the family plays a major role in every day life and children typically do not move out of the parental household until their mid‐20s. A relatively individualistic country, Argentines pride themselves on being successful and, to a certain extent, being able to evade paying taxes. Argentines are some of the most creative people in the world, as evidenced by their award winning advertising industry. People are known to discuss advertisements in everyday life as well as expect ads to be top‐quality as well as creative. The Argentine people are highly emotional and are largely driven by their passion for family, food, romance, and success. Technology Argentina is ranked 22nd in number of mobile telephone users in the world and ranked 28th in terms of number of internet users (CIA). Users of both mobile phones and internet are increasing however, and present opportunities for advertising. As well the “Telecommunications Liberalization Plan of 1988” has encouraged foreign investment and growth within the industry (CIA). Germany Economics and Politics Germany is the fifth largest economy in the world and Europe’s largest in terms of PPP. One of its core competencies is its highly skilled labor force. Thanks to steady consumer demand and relatively high manufacturing exports, Germany crept out of the global recession in the second and third quarters of 2009 (CIA).Germany has a stable and viable economy that presents good demand potential and little economical risk. Germany is a federal republic administratively divided into 16 states. There are six main political parties and six influential political pressure groups (CIA). According to Country Watch, Germany scores 9 out of 10 in terms of political risk. Germany has a relatively stable political background and presents minimal political risk. Legal Previously, Germany had been very strict regarding its advertising legislation. However, recently there has been a trend toward legislative standardization between the EU members (CIA). This has a positive impact for marketers who target the German market. For example, since Germany decided to follow the EU directive 97/55/EC (“The comparative advertising directive”), the legal barriers of comparative advertising have become less restricted (e.g.: it is now legal to compare two different products as long as they reply to the same consumer’s need). There are still more limits on advertising than in the United States. Cultural The German culture is influenced by militarism, meaning that structure and order is very important in life. Germans are conscious of time and put an emphasis on promptness and perfection (Gannon 188, 192). They are forward thinkers concerned with the future due to their long‐term orientation (Gannon 190). German society is an individualistic and masculine culture which spurs competitiveness. Another facet of German culture is the importance of the privacy of home. The home is a place to get away from the outside world, where they do not have to be so serious (Gannon 187). Technology Germany is the 8th largest consumer market of cell phones and has the 6th largest number of internet users in the world (CIA). Germany also has the largest television market in Europe with 37.7 households. According to the CIA World Fact Book, Germany has one of the world’s most technologically advanced telecommunications systems in the world. This presents marketers with many opportunities and mediums to reach consumers. United States Economics and Politics The United States is a market capitalist country that has a market‐oriented economy (Keegan, and Green 45). Consumers and firms are key players in decision‐making. The government’s role both at federal and state level is to promote competition. The US has been in a recession since 2008, causing changes in consumer attitudes, which now place more emphasis on price and value rather than brand image. However, the US is still the largest economy in the world and its large consumer base presents enticing opportunities for marketers from around the world. The United States is a federal republic and provides its fifty states sovereignty over their corresponding territory as long as their state law doesn’t interfere with federal law. The president is elected by the people and has two major powers; chief of state and head of government. The US scored 9 out of 10 in terms of political risk, according to Country Watch, therefore presenting low to no political risk. Legal The United States is categorized as a common law country, but it also implements legislative and comprehensive law. According to an article by Cubitt, firms advertising or collecting consumer information online have to be careful not to violate legislation enforced by the FTC that was created and amended to protect the consumer against spam, internet fraud, phishing, and spyware. The US allows comparative advertising. In the US advertisers can explicitly name or implicitly refer to their competitors and emphasize similarities or differences, positively or negatively. Advertisers may state that their product is superior to the competition by making parity claims. The US is very open to competition and only requires that copyrights and trademarks be respected to prevent trademark infringement (Cleff). Cultural The United States has a fast‐paced society that is always in constant movement. This makes a “doing society” in which members are primarily interested in building and accomplishing goals (Gannon 263). This constant movement makes them very conscious of time and thus most Americans believe it is in limited supply; therefore a popular American phrase is “time is money”. This consciousness of time has also created the fast food lifestyle since Americans are monochromic, doing one activity at a time rather than several. U.S. society is aggressive and competitive and therefore many times pay is linked to performance (Gannon 254). The U.S. is also classified as the most individualistic nation, which means members identify one’s own interests and opinions first and make decisions accordingly. Individualism also effects U.S nationalism, which sometimes generates ethnocentric behavior (Gannon 270, 255). Americans also love to be entertained and are in constant search of new things to do and new media to consume. Technology In the United States innovation and modification are encouraged, which has lead to advancement in technology. The United States has more Internet hosts in the world and has the second largest amount of internet users. The US is also the third largest user of cellular telephones in the world (CIA). Since the United States is the global leader in technology, there are numerous opportunities for marketers to utilize new and innovative mediums in order to reach potential consumers. According to Nielsen, the average American watches over four hours of TV a day, and over 99% of households have at least one television. By age 65, an average person will see over 2 million commercials. On a given day, the average American will see 3,000 advertisements; the advents of ambient advertising and digital media distribution have both contributed to this increase. Recommendations and Modifications We believe that for the most part these advertisements do make sense when compared to the cultural factors of each specific country. However, there are some aspects that are not especially relevant and we have recommended some changes. The following recommendations may be applied in each specific country: Argentina Argentines believe that creativity is important in advertising; therefore it is a strength that the ad is relatively creative and is able to stand out from the clutter. The ad has an emotional appeal rather than rational; it seeks to associate drinking a Nescafe with having a pleasant day that coincides with your pleasurable coffee‐drinking experience. The ad also appeals to the Argentine’s individualistic nature, in that it is all about the consumer, i.e. the coffee drinker – it gives respite to the consumer’s need by being inside their head and brightening their own day even when the outside is gloomy. However, we do believe that this ad may in fact be too creative; in other words, an ad is only creative if it can sell the product – it can’t just be a piece of art. The tagline is too small and the viewer barely sees the coffee mug and could possibly not make the connection between the ad and the product (possibly creating poor brand recall). Nescafe’s use of the generic “tú” form in the ad could pose a problem in creating a connection between consumer and product. Since the “tú” form is hardly (if ever) used in Argentina, a simple fix to the tagline (“Cambiá el dia, empezá por dentro” instead of “Cambia el dia, empieza por dentro”) would not be costly and would help to give the ad a distinctly Argentine feel. Overall, we would suggest a lower‐context ad that places more focus on the product; the ad can be creative as long as the creativity doesn’t overshadow the product itself. Germany The German ad is relevant in many ways to different aspects of German culture. As Germans place great emphasis on structure and routine, Nescafe’s placement of the product as being used during a specific moment during the day (the “break”) makes sense. Germans are typically busy people; therefore positioning the product as a respite from the hectic daily schedule is well done; even the simplicity of the ad adds to the feeling of tranquility and getting away from the rigors of every‐day life. The ad positions the product in such a way that it is intended to give a feeling of comfort; this could remind the German consumer of the calmness and comfort that they feel while in their homes, away from the stresses of work or school. All of these factors contribute to the relevance of the emotional appeal employed in this ad. Germany is a predominantly masculine country and therefore it makes sense to use feminine hands, giving the viewer the feeling of comfort. However, the signature red coffee mug is conspicuously absent from the ad; although there is still a coffee mug, the missing red mug results in a failure to reemphasize a global brand symbol. If Nescafe is attempting to build a global brand, it should incorporate as many world‐renowned symbols as possible. Overall, we believe that the ad is effective notwithstanding a minor cosmetic change to the coffee mug color. United States Several factors in the ad pertain to cultural factors that are significant and pertinent to American culture. Nescafe is promoting the visual of the individual packet in order to appeal to the typical highly individualistic American, as in this package is made “just for you”. Geared towards people that are on‐the‐go, the ad appeals to the American that is constantly moving and views time as indispensable and finite. Nescafe is making a copy‐cat ad similar to Starbucks; which appeals to the culture of competition and aggression typical of the US. The ad appeals to consumers going through the recession of 2009; its message is that Nescafe’s coffee is a better value, although it is not positioned as a prestige brand like Starbucks. As consumers trade down and become more focused on value, this ad would then appeal to those consumers. As consumers become more money‐conscious, Nescafe offers help to those customers that could potentially be “fooled” by Starbucks marketing campaigns (the “tall” is actually “small”). Nescafe is trying to reverse the notion that “you get what you pay for” by offering the same level of quality for a lower price. The rational appeal is relevant in this case, as the product (instant coffee) is not typically consumed in the US. There is no connection (emotional capital) linking instant coffee to American consumers and Nescafe therefore must provide rational reasons for consumers to buy the product. However, although we feel that in theory this strategy should work, our belief is that it fails to make its point effectively. Nescafe is essentially creating more advertising for Starbucks; when someone views the ad they still are reminded of Starbucks so it is giving their competition more advertising and exposure and therefore taking away from Nescafe’s publicity. Moreover, the whole point of this ad is that Nescafe is giving a better product at a lower price; this is in direct contrast to the American notion that essentially you get what you pay for. We recommend that Nescafe promote itself as a brand instead of trying to compete with nationally recognized and celebrated brands. Because consumers are relatively ignorant regarding instant coffee, we recommend that Nescafe educate the consumer about the advantages of instant coffee in order to build product category demand. Works Cited Argentina, Germany, and the United States. CountryWatch. 2010. Web. 1 May 2010. CIA World Factbook. Central Intelligence Agency. 2010. Web. 30 April 2010. Cleff, Evelyne Beatrix. "Effective approaches to regulate mobile advertising: Moving towards a coordinated legal, self‐regulatory and technical response." Computer Law & Security Report 26.2 (2010): 158‐169. Business Source Premier. EBSCO. Web. 30 April 2010. Cubitt, Emily. "US DMA welcomes anti‐spam legislation." Precision Marketing 19.6 (2007): 9. Business Source Premier. EBSCO. Web. 1 May 2010. Gannon, Martin. Pillai, Rajnandini. Understanding Global Cultures 4th Edition. SAGE Publications, Inc, 2010. Print. Herr, Norman. Television and Health. Internet Resources to Accompany The Sourcebook for Teaching Health and Science. Web. 20 April 2010. Keegan, Warren, and Mark Green. Global Marketing. Fifth edition. Upper Saddle River, NJ: Pearson Prentice Hall, 2008. Print. Morrison, Terri, and Wayne A. Conaway. Kiss, Bow, or Shake Hands. Second Edition. Avon, MA: Adams Media, 2006. 544‐54. Print. Pardo, Dámaso A. “Argentina”. Gala‐marketlaw.com. n.p., 2008. Web. 28 April 2010. Richelet, Ricardo. “Argentina”. Buildingipvalue.com. Richelet & Richelet, n.d. Web. 28 April 2010. Wentz, Laurel, and Charles Newbery. “Nescafé builds buzz using viral e‐mail effort”. Advertising Age 76.18 (2005): 24. Business Source Premier. EBSCO. Web. 14 April 2010. Appendix A1: Cross‐Comparative Table: Advertising Strategies in Argentina, Germany, and United States Visuals and Symbols Appeals & selling Language, Copy Creative proposition, creative Strategy, Taglines execution The ad is written in “Change the day, start Small red mug with Nescafe Emotional‐ shows the Argentina logo. Two open eye sockets which look out towards a stormy and rainy outside world, filled with darker colors. Meanwhile, inside the eyes is a Charlie and the Chocolate Factory‐like paradise, filled with lush gardens, vivid images of greenery and colorful flowers and butterflies. Germany Female Hands cupping a steaming mug of coffee. Coffee is foamed on the top, sprinkled with either chocolate or cinnamon. Gives the impression of softness and comfort, and alludes to a warm, comfortable environment. The colors are contrasted between a sharp black background and a light, attention‐grabbing focus point. Nescafe logo is located in the bottom right corner United States The copy is a significant eye‐
catcher, modeled after recent Starbucks ads in the same product category. There is also coffee‐filled the red mug, with a Nescafe logo alongside a “Taster’s choice to‐go” packet. The mug is a sharp red color, which contrasts the whitish‐
beige background. The color of text is alternated between brown and red. contrast between what life could be like without Nescafe (i.e. your world is dark and stormy). Pulls at the heartstrings of the real coffee drinkers; Nescafe is there to help those who need coffee to help them start their days. Dramatic in the use of contrasting colors‐ the ad looks more like a piece of art than anything else. Emotional‐ The ad conveys feelings of relaxation and calmness. The selling proposition infers that the user will be relaxed as a result of drinking Nescafe. The overall ad is very clean and not very busy, in that the viewer is not overpowered by numerous stimuli. The ad uses an emotional and psychological appeal, “those calm mom hands” that offer a sense of tranquility and relaxation. Rational‐ Argument that Nescafe has been around longer than Starbucks and therefore delivers a better product. The user will benefit from Nescafe’s experience in providing coffees without the frills and deception of Starbucks. Nescafe has copied the layout of the Starbucks ads but has changed the copy and cup. It is presented so that the viewer automatically focuses on the message in the text. Spanish, but the Spanish is not distinctly Argentine. The copy is not the focus of the ad, the print is very small and the viewer must search for it after taking in the visuals of the ad. within”. Drinking Nescafe will make your day better, even if the outside world seems to be bleak. Even if it seems like things aren’t going your way, Nescafe will make you feel better. The ad is written in German, using an artistic font. Copy is secondary to the image, in that it is off to the side and smaller, meaning the viewer will notice the image first and then look for the copy. “Give (offer) yourself a break”. Drinking Nescafe is a way to get away from the stresses and rigors of everyday life. Large, bold, all‐caps, stacked copy that encompasses over 50% of the ad space. The font size varies to enhance and highlight certain parts of the message. Written in English. The brown words in the text are all past‐
tense verbs, whereas the red words are adjectives. “Make the smart choice” – the strategy is to not be fooled by Starbucks; Nescafe makes and had made good quality instant coffees for a lot longer than Starbucks. They have the knowledge because they have been around a long time. Nescafe is not trying to pass off their coffee as a status‐prestige brand. A.2 Argentina Environmental Analysis’ Table: Argentina, Germany and United States Economic Political Legal Cultural One of the largest economies in South America. Rich in natural resources, highly educated workforce. Suffered a large‐scale financial meltdown in 2001, prone to economic crisis. Federal presidential representative democratic Republic. Scores a 6 out of 10 due to factors such as political stability, economic risk, market conditions, and crime. Germany Large export sales by capita, leader in machinery, chemicals, household equipment and vehicles. st
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Europe’s 1 economy and 5 at a world scale. Highly skilled labor force. No inflation. Good market potential, safe environment Federal republic administratively divided into 16 states. The executive branch of the power is composed of the chief of state, the head of government and the cabinet. There are six main political parties. Safe and stable government United States Market capitalist country. Individuals and firms allocate resources and production. Market‐oriented economy. Consumers and firms are the key players in decision making. Governments’ role is to promote competition. High‐income country. Postindustrial country. Democratic country. Government is a federal republic. Each state is sovereign. The president is; chief of state and head of government. The electoral college elects the president. Low political risk. Bureaucracy is small risk depending on region of the US. Technology Fair Trade Act stipulates a general prohibition of any misleading, deceitful, or inaccurate representations in advertising. Consumer Protection Act requires marketers to provide the consumer with “exact, clear, and detailed information”. Comparative advertising permitted so long as the advertisements are “truthful, accurate, objective, and referring to essential, substantial and verifiable qualities of the compared products or services, while not causing consumer confusion”. Advertising legislation is less strict than it used to be thanks to a trend toward standardization with EU members. Comparative advertising is now possible. Very family‐
oriented. A relatively individualistic country. Very creative. People are known to discuss advertisements. Highly emotional CONICET provides important education in fields such as science, technology, and product innovation. Expanded into new ways of advertising using techniques such as viral marketing. Produced a new form of advertising called fiat advertising. Influenced by Militarism, monochronic, Individualistic, Masculine, Long‐term Orientation, Privacy of home, Promptness , Perfectionists, Conscious of time Common law country, implements legislative law. 49 States adopted the UCC. Firms cannot send spam or use phishing or spyware to collect consumer information, it violates FTC. Conscious of time, Fast paced, Monochronic, Individualistic, Aggressive, Competitive, Like to be Entertained Nuclear family Excels in the fields of science and technology. Uses various sources of technological advertising that include audio, video, electronic media, radio, cinema, and mobile advertising. More resistant to innovative advertising techniques until they are actually proven to work. More internet hosts in the world and has the second largest amount of internet users. third largest user of cellular telephones in the world. Undisputed world leader in technology. A3. Advertisements Argentina 2009 ~Change the day Start within~ Germany 2009 ~Give yourself a Break~ United States 2009
~The Smart Choice~