Pe s e w a Pr e s e n t a t i o n s
International Marketing Promotion
Key Points
• Advertising is a means of selling a product.
• Advertising writing is a complex process that
sometimes has very little to do with creativity.
• Advertising copywriters need to think about four
things in formulating copy: product, audience,
purpose, medium
• Research helps develop key facts, advertising
problems and advertising objectives.
Criticisms of advertising
•
Advertising adds to the cost of products.
– Part of what we pay for when we buy a bar of soap or a new car is the
advertising for that product. What if General Motors stopped spending
£2.9 billion a year on advertising and reduced the cost of its vehicles.
• Advertising helps sell inferior products.
– When you get down to it, this criticism says that advertising lies. It
convinces us that products are good when they aren’t. It convinces us to
buy an inferior product over a quality product because the inferior product
has been advertised more.
• Advertising creates needs and desires that we would not have
otherwise.
– We MUST have certain products that our parents were perfectly happy
living without. Advertising, it is argued, often creates these “needs,” which
aren’t really needs at all.
The Linear Model of Communication
• Sender
• Encoding
• Message
Feedback
• Decoding
• Receiver
NOISE
– Linear models of communication conceptualise the
relation between advert and individual consumer
Hedonic-experiential models
• Later models (HEM) adapted to include the
emotionality and fun (hedonism) of
consumption
• One popular hierarchy that included
emotionality is the cognition-affect-conation
model
Cognition-Affect-Conation
•
•
•
•
Or ‘Think-feel-do’
Cognition: knowledge about the brand
Affect: liking the brand
Conation: behavioural response to the ad
exposure
Polysemy in advertising
• The linear theories assume that there is little
room for ambiguity in advertising
• In fact, the presence of many potential
meanings within a given advertising text
(polysemy) permits us to engage intimately
and creatively with advertising
Ostensive and covert meaning
• (or text and sub-text)
• Many ads have an ostensive message that has a clear and
unequivocal message: buy this brand
• Ads also have secondary or covert meaning
– These covert meanings hint, suggest and imply; they do not say
– Advertising acquires its persuasive power by this characteristic: it is
able to use suggestive juxtaposition of text and image to hint at claims
that, made ostensively, would be rejected as preposterous or
inappropriate
‘Strong’ and ‘weak’ theories
• Theories of how ads work tend to focus on sales
responses to the neglect of the many other
communications and marketing objectives ad
campaigns can have
• Strong theories
– They try to link exposure to an individual ad to behavioural
change (e.g. purchase)
– They normally measure states that are assumed to be
intermediate to purchase such as recall, ‘liking’ (attitude),
or physiological response
Stages of the Negotiation Process
• The offer
– assess each parties’ needs and commitment
• Informal meetings
– trust-building among deal makers
• Strategy formulation
– review and assess factors to be negotiated
• Negotiations
– form, informal, short or long
• Implementation
Marketing Communications Strategy
Step 1
Assess Marketing Communications Opportunities
Steps in Formulating
Marketing
Communications
Strategy
Step 2
Analyze Marketing Communications Resources
Step 3
Set Marketing Communications Objectives
Step 4
Develop and Evaluate Alternative Strategies
Step 5
Assign Specific Marketing Communications Tasks
The Promotional Mix
• Advertising
– any form of non-personal communication
• Personal Selling
– the use of person-to-person communication
• Publicity
– non-paid, commercially significant news
• Sales Promotion
– Direct inducements of
extra value or incentives
• Sponsorship
– Promoting interests of company by association
The Promotional Mix
• Push strategies
– focus on personal selling, considered essential in
international marketing of industrial goods.
• Pull strategies
– depend on mass communications (advertising of consumeroriented goods) to reach target audiences over long
distribution channels.
• Integrated marketing communications
– coordinated use of a broad range of promotional tools to
reach a target market.
Communications Tools
• The choice of media is governed by the appropriateness media’s
target audience and its efficiency in reaching that audience.
• Business and trade journals
– Broad-based media
• Business Week, The Wall Street Journal
– Horizontal media
• focus on a particular marketing task
(Purchasing World)
– Vertical media
• focus on a particular market or industry (Trucker World)
– Directories and data services
Communications Tools
• Direct marketing
– Is intended to elicit immediate and measurable responses to
direct-response advertising, telemarketing, and direct
selling.
– Direct mail depends on acquiring mailing lists that target the
intended audience.
– Effective direct mailing require extensive planning of
materials, format, and mode of mailing.
• The Internet
– A presence on the Internet is a necessity that can expand
marketing communications world-wide with low costs.
Trade Shows and Missions
• Types of international trade events
–
–
–
–
Trade missions
Seminar missions
Solo exhibitions
Video / catalog exhibitions
• Magnitude: Over 16,0000
trade shows generate £30
billion in business annually.
Trade Show Participation
• Reasons for participation
–
–
–
–
–
–
Customer can examine the product.
Goodwill and contact cultivation.
Locating a trade intermediary.
Opportunity to meet government officials and decision makers.
Opportunity for market research and collecting competitive intelligence.
Exporters able to reach sales prospects in brief time period at
reasonable cost per contact.
• Reasons for not participating
– High cost.
– Identifying the “right” trade shows to participate in.
– Coordination.
Personal Selling
•
•
•
•
The most effective promotional tool.
Costs per contact are high.
Yields immediate customer feedback and sales results.
Keys to personal selling
– Salesperson’ has the ability
to adapt to the customer and
the selling situation.
– Salesperson must have a
thorough knowledge of the
product or service.
Levels of Exporter Involvement in
International Sales
Type of
involvement
Target of
Sales Effort
Level of
Advantage/Disadvantage
Exporter
Involvement
Indirect exports
Home-countrybased
intermediary
Low
+ No major investment in
international sales
- Minor learning from/control
of effort
Direct exports
Locally based
intermediary
Medium
+ Direct contact with local
market
- Possible gatekeeping by
intermediary
Integrated exports
Customer
High
+ Generation of marketspecific assets
- Cost/risk
SOURCE: Framework adapted from Reijo Luostarinen and Lawrence Welch, International Operations of the Firm (Helsinki, Finland: Helsinki School of Economics, 1990), chapter 1
Distribution Management
International Distribution
• The firm sells to its customers:
– directly through its own sales force.
– indirectly through independent intermediaries.
– indirectly through an outside distribution
system with regional or global coverage.
Channel Structure
• How to structure the distribution channels is
the most important long-term marketing mix
decision a firm may make.
• Channel structures are designed to manage
multidirectional (horizontal and vertical)
connections in:
• physical movement of goods and services
• transactional title flows
• information communications flows
Channel Configurations
Manufacturer
Manufacturer
Originator
Agent
Agent
Agent
Agent
Wholesaler
Wholesaler
Retailer
Retailer
Retailer
Retailer
Agent
Industrial
Distributor
Industrial
Distributor
Consumer
Industrial User
Consumer
Products
Industrial
Products
Agent
Agent
Consumer /
Industrial User
Services
Channel Design Considerations
• Customer characteristics
– What do they need, why, when, and how?
• Distribution culture
– The structural linkages and functional characteristics of
existing channels.
• Competition
– What channels does the competition use?
• Company objectives
– Determined by company objectives for market share and
profitability.
Channel Design Considerations
• Character
– The nature of the product impacts the design of the channel.
The channel must match the positioning of the product in
the market.
• Capital
– ... Describes the financial requirements for setting up a
channel system.
• Cost
– … is the expenditure incurred in maintaining a channel once
it is established.
Channel Design Considerations
• Coverage
– The number of areas in which a product is
represented and the quality of that
representation.
• Types of coverage
– Intensive
– Selective
– Exclusive
Channel Design Considerations
• Control
– The use of intermediaries, product type, and the marketer’s use of
power will determine the amount of market control.
• Continuity
– Responsibility of the marketer and is expressed through market
commitment.
• Communication
– Provides the exchange of information that is essential to the functioning
of the channel.
– Social, cultural, technological, time and geographical distances cause
problems.
Intermediaries
• Types of intermediary relationship
– Distributorship
– Agency
• Type of exporting function
– Indirect exporting
– Direct exporting
– Integrated distribution
Selection of Intermediaries
Agents
• Foreign (Direct)
–
–
–
–
–
Brokers
Manufacturer’s Reps
Factors
Managing agents
Purchasing Agents
• Domestic (Indirect)
–
–
–
–
–
Brokers
Export Agents
EMCs
Webb-Pomerene
Commission agents
Distributors
• Foreign (Direct)
– Distributors/dealers
– Import jobbers
– Wholesalers/retailers
• Domestic (Indirect)
–
–
–
–
Domestic wholesalers
EMCs
ETCs
Complementary marketers
SOURCES: Peter B. Fitzpatrick and Alan S. Zimmerman, Essentials of Export Marketing (New York American Management Association, 1985), 20; and Bruce Seifert and John Ford, “Export
Distribution Channels,” Columbia Journal of World Business 24 (Summer 1989): 16; http://www.usatrade.gov.
The Distributor Agreement
• Typical terms include
– Contract duration
• Typically short periods initially
– Geographic and customer boundaries
• Well-defined territories and channels
– Compensation
• Methods for determining payment amounts and how and in
what currency payment is to be made.
– Products and conditions of sale
• Products to be sold; terms and conditions of sales
– Means of communication between parties
Gray Markets (Parallel Importation)
Arguments for:
• The right to “free trade.”
• Consumers benefit from
lower prices.
• Discount distributors have
found a profitable market
niche.
Arguments against:
• Gray marketers take unfair
advantage of trademark
owner’s marketing and
promotion.
• Parallel imports deceive
consumers by not meeting
product standards or
expectations of after-sale
service.
The Solution to the Gray Market
Problem?
• A contractual relationship that ties businesses
together.