978-0134129945 Chapter 13 Lecture Note Part 1

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CHAPTER 13

GLOBAL MARKETING COMMUNICATIONS DECISION I: ADVERTISING AND

PUBLIC RELATIONS

SUMMARY

A. Marketing communications—the promotion P of the marketing mix— includes

advertising, public relations, sales promotion, and personal selling. When a company

embraces integrated marketing communications (IMC), it recognizes that the various

elements of a company’s communication strategy must be carefully coordinated.

Advertising is a sponsored, paid message that is communicated through nonpersonal

channels. Global advertising consists of the same advertising appeals, messages,

artwork, and copy in campaigns around the world. The effort required to create a global

campaign forces a company to determine whether or not a global market exists for its

product or brand. The trade-off between standardized and adapted advertising is often

accomplished by means of pattern advertising, which can be used to create localized

global advertising. Many advertising agencies are part of larger advertising

organizations. Advertisers may place a single global agency in charge of worldwide

advertising; it is also possible to use one or more agencies on a regional or local basis.

B. The starting point in ad development is the creative strategy, a statement of what the

message will say. The people who create ads often seek a big idea that can serve as the

basis for memorable, effective messages. The advertising appeal is the communication

approach—rational or emotional—that best relates to buyer motives. Rational appeals

speak to the mind: emotional appeals speak to the heart. The selling proposition is the

promise that captures the reason for buying the product. The creative execution is the

way an appeal or proposition is presented. Art direction and copy must be created with

cultural considerations in mind. Perceptions of humor, male-female relationships, and

sexual imagery vary in different parts of the world. Media availability varies considerably

from country to country. When selecting media, marketers are sometimes as constrained

by laws and regulations as by literacy rates.

C. A company utilizes public relations (PR) to foster goodwill and understanding among

constituents both inside and outside the company. In particular, the PR department

attempts to generate favorable publicity about the company and its products and brands.

The PR department must also manage corporate communications when responding to

negative publicity. Important PR tools are press releases, media kits, interviews, social

media, and tours. Many global companies make use of various types of corporate

advertising, including image advertising and advocacy advertising. Public relations is

also responsible for providing accurate, timely information, especially in the event of a

crisis.

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LEARNING OBJECTIVES

1 Define global advertising and identify the top-ranked companies in terms of worldwide ad

spending

2 Explain the structure of the advertising industry and describe the difference between agency

holding companies and individual agency brands

3 Identify key ad agency personnel and describe their respective roles in creating global

advertising

4 Explain how media availability varies around the world

5 Compare and contrast publicity and public relations and identify global companies that have

recently been impacted by negative publicity

OVERVIEW

Advertising, public relations, and other forms of communication are critical tools in the

marketing program.

Marketing communications—the promotion P of the marketing mix—refers to all forms of

communication used by organizations to inform, remind, explain, persuade, and influence the

attitudes and buying behavior of customers and others.

The primary purpose of marketing communications is to tell customers about the benefits and

values that a company, product, or service offers.

The elements of the promotion mix are advertising, public relations, personal selling, and sales

promotion. Global marketers can use all of these elements, either alone or in varying

combinations.

This chapter examines advertising and public relations from the perspective of the global

marketer.

ANNOTATED LECTURE/OUTLINE

GLOBAL ADVERTISING

(Learning Objective #1)

The environment in which marketing communications programs and strategies are implemented

varies from country to country. The challenge of effectively communicating across borders is

one reason that global companies and their advertising agencies are embracing a concept known

as integrated marketing communications (IMC). Adherents of an IMC approach explicitly

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recognize that the various elements of a company’s communication strategy must be carefully

coordinated.

Advertising is none element of an IMC program. Advertising may be defined as any sponsored,

paid message that is communicated in a nonpersonal way.

Global advertising may be defined as messages whose art, copy, headlines, photographs, tag

lines, and other elements have been developed expressly for their worldwide suitability.

A global company possesses a critical marketing advantage with respect to marketing

communications: It has the opportunity to successfully transform a domestic advertising

campaign into a worldwide one.

Alternatively, it can create a new global campaign from the ground up.

Global campaigns with unified themes can help to build long-term product and brand identities

and offer significant savings by reducing the cost associated with producing ads.

The potential for effective global advertising also increases as companies recognize and embrace

new concepts such as “product cultures.”

An example is the globalization of beer culture, which can be seen in the popularity of German-

style beer halls in Japan and Irish-style pubs in the United States.

Similarly, the globalization of coffee culture has created market opportunities for companies such

as Starbucks.

Marketing managers also realize that some market segments can be defined on the basis of

global demography—youth culture, for example—rather than ethnic or national culture.

Global advertising offers companies economies of scale in advertising as well as improved

access to distribution channels.

Global Advertising Content: “Standardization” Versus “Adaptation”

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 is the

source of the message; the message must be encoded, conveyed via the appropriate channel(s),

and decoded by a member of the target audience.

Communication takes place only when the intended meaning is transferred from the source to the

receiver.

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Four major difficulties can compromise an organization’s attempt to communicate with

customers in any location:

1. The message may not get through to the intended recipient.

2. The message may reach the target audience but may not be understood or may even be

misunderstood.

3. The message may reach the target audience and may be understood but still may not

compel the recipient to take action.

4. The effectiveness of the message can be impaired by noise.

The key question for global marketers is whether the specific advertising message and media

strategy 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 believe that the era of

the global village has arrived and that tastes and preferences are converging worldwide.

According to the standardization argument, people everywhere want the same products for the

same reasons.

Advertisers who prefer the localized approach are skeptical of the global village argument.

They assert that consumers still differ from country to country and must be reached by

advertising tailored to their respective countries.

Global companies have embraced pattern advertising—the development of a basic pan-regional

or global communication concept for which copy, artwork, or other elements can be adapted as

required for individual country markets.

A global campaign will result in the substantial benefits of cost savings, increased control, and

the potential creative leverage of a global appeal.

A localized campaign will focus on the most important attributes of a product or brand in each

nation or culture.

As a practical matter, marketing managers may choose to run both global and local ads rather

than adopt an “either/or” stance.

The question of when to use each approach depends on the product involved and a company’s

objectives in a particular market.

The following generalizations can serve as guidelines:

Standardized print campaigns can be used for industrial products or for technology

oriented consumer products. Example: Apple iPhone.

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Standardized print campaigns with a strong visual appeal often travel well. Example:

Chivas Regal (“This is the Chivas Life”).

TV commercials that use voice-overs instead of actors or celebrity endorsers speaking

dialogue can use standardized visuals with translated copy for the voice-over. Examples:

Gillette (“The best a man can get”); GE (“Imagination at work”).

ADVERTISING AGENCIES: ORGANIZATIONS AND BRANDS

√ (Learning Objective #2)

Advertising is a fast-paced business, and the ad agency world is fluid and dynamic. New

agencies are formed, existing agencies are dismantled, and cross-border investment, spin-offs,

joint ventures, and mergers and acquisitions are a fact of life.

There is also a great deal of mobility in the industry as executives and top talent move from one

agency to another.

The 20 largest global advertising organizations ranked by 2014 worldwide revenue are shown

in Table 13-2.

The key to understanding the table is the word organization; most of the firms identified in Table

13-2 are umbrella corporations or holding companies that include one or more “core” advertising

agencies, as well as units specializing in direct marketing, marketing services, public relations, or

research.

Table 13-3 presents the rankings of individual agencies (agency “brands”) by 2014 worldwide

revenue. Most of the agency brands identified in Table 13-3 are full-service agencies: In addition

to creating advertising, they provide other services such as market research, media buying, and

direct marketing. The agencies listed in Table 13-3 are all owned by larger holding companies

Selecting an Advertising Agency

Companies can create ads in-house, use an outside agency, or combine both strategies.

When one or more outside agencies are used, they can serve product accounts on a multi-country

or even global basis.

Today, there is a growing tendency for Western clients to designate global agencies for product

accounts to support the integration of the marketing and advertising functions; Japanese

companies are less inclined to use this approach.

In selecting an advertising agency, the following issues should be considered:

Company organization. Companies that are decentralized actually allow managers at the

local subsidiary to make ad selection decisions.

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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 awareness does the company want to project?

THE CULTURAL CONTEXT

Smokers Fume About Limits on Tobacco Advertising

According the World Health Organization (WHO), 5 million people die each

year as a direct result of consuming tobacco products.

A total of 172 countries are signatories to the Framework Convention on

Tobacco Control (WHO FCTC), which aims to reduce global tobacco

production as well as the consumption of tobacco products. The treaty

entered into force in February 2005.

In China, tobacco advertising has been banned from television and radio

since 1994; the ban also extends to newspaper, magazine, and cinema ads.

With a population of 1.3 billion people, including one-third of the world’s

smokers, China is a massive potential market for cigarette manufacturers at

a time when Western markets are shrinking.

A tobacco ad ban proposal was introduced in mid-1991 with the aim of

ful1lling the single-market rules of the Maastricht Treaty. The directive would

have prohibited tobacco advertising on billboards as of July 2001; newspaper

and magazine advertising was slated to end by 2002, with sports

sponsorship banned by 2003 (such “world-level” sports as Formula One

racing would be excluded until 2006). Not surprisingly, tobacco companies

and advertising associations opposed the proposed ban.

The European Commission justi1ed the directive on the grounds that various

countries had, or were considering, restrictions on tobacco advertising and

that there was a need for common rules on cross-border trade.

In 2012, the European Union was set to revise regulations; among the

proposals was the introduction of plain packaging. In December 2012,

Australia implemented some of the world’s most stringent anti-smoking

regulations.

In May 2015, government o<cials in the United Kingdom were set to vote on

similar legislation.

CREATING GLOBAL ADVERTISING

√ (Learning Objective #3)

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As suggested earlier in the discussion of the adaptation versus standardization debate, the

message is at the heart of advertising. The particular message and the way it is presented will

depend on the advertiser’s objective. Is the ad designed to inform, entertain, remind, or

persuade?

Moreover, in a world characterized by information overload, ads must break through the clutter,

grab the audience’s attention, and linger in their minds. This requires developing an original and

effective creative strategy, which is simply a statement or concept of what a particular message

or campaign will say. Advertising agencies can be thought of as “idea factories”; in industry

parlance, the Holy Grail in creative strategy development is something known as the big idea.

The big idea is that flash of insight that synthesizes the purpose of the strategy, joins the product

benefit with consumer desire in a fresh, involving way, brings the subject to life, and makes the

reader or audience stop, look, and listen.

Some of the world’s most memorable advertising campaigns have achieved success because they

originate from an idea that is so “big” that the campaign offers opportunities for a seemingly

unlimited number of new executions. Such a campaign is said to have legs because it can be

used for long periods of time. The print campaign for Absolut vodka is a perfect example.

The advertising appeal is the communications approach that relates to the motives of the target

audience.

Ads based on a rational appeal depend on logic and speak to the audience’s intellect.

Ads using an emotional appeal may tug at the heartstrings or tickle the funny bone of the

intended audience.

The selling proposition is the promise or claim that captures the reason for buying the product

or the benefit that ownership confers.

Effective global advertising may also require developing different presentations of the product’s

appeal or selling proposition. The way an appeal or proposition is presented is called the creative

execution.

Art Direction and Art Directors

The visual presentation of an advertisement—the “body language—is a matter of art direction.

The individual with general responsibility for the overall look of an ad is known as the art

director.

The art director chooses graphics, pictures, type styles, and other visual elements for an ad.

For example, Revlon used a French producer to develop commercials in English and Spanish to

communicate universal appeals and product benefits.

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The global advertiser must make sure that visual executions are not inappropriately extended into

markets.

EMERGING MARKETS BRIEFING BOOK

Localizing Ad Executions in China

A creative challenge presented to Ogilvy & Mather in China illustrates the relationship between

creative strategy, appeal, and execution.

The client, Coca-Cola’s Fanta, wanted a national TV ad that would communicate to consumers

that Fanta is an antidote to everyday pressures on Chinese youth. This was the overall creative

strategy; in other words, what the message should say. What type of appeal would be

appropriate?

Not surprisingly, soft drinks lend themselves especially well to emotional appeals; that was the

appeal Ogilvy & Mather preferred. The next step was to choose a specific execution. Soft drink

marketers often utilize slice-of-life and fantasy executions, usually injected with an element of

fun or humor.

As Jeff Delkin, Ogilvy’s regional business director in Shanghai, notes, for a U.S. ad, the creative

strategy could be executed with a teen’s fantasy or images of revenge on a mean teacher.

However, in China it is not acceptable to challenge or undermine the position of authority

figures. The completed ad shows that drinking Fanta can create a fun experience in a classroom.

When a student opens a can of Fanta, oranges begin to rain down. The teacher catches the

oranges and juggles them—much to the delight of the students. Another example is a Nike

campaign created by Wieden & Kennedy in China. Nike’s “Just Do It” ads typically showcase

famous athletes and sports heroes and are legendary for their inspirational appeals. The selling

proposition is universal—Nike is a “cool” brand.

However, a localized execution of a Nike ad that featured Chinese superstar Wang Zhizhi did not

connect with consumers; they prefer to draw inspiration from the world’s best players rather than

a national star who has yet to prove himself in the global arena.

In 2006, Nike launched a new campaign that featured Chinese youth who had overcome personal

obstacles to excel at sports. Young people were encouraged to share their stories at Nike stores or

on a Nike Web site. Web site visitors were able to view short, 3- to 4-minute films featuring

Chinese youth playing sports in well-known locales. Shortened versions of the clips were used as

TV ads.

As Jesse Lin, Wieden’s managing director in Shanghai, said, “China’s younger generation is in

the midst of forming its own style, mixing together Chinese elements and influences they’ve

absorbed from the West, but they don’t think they need to learn from the West. Nike realized this

and wants to be a part of this new generation, rather than telling them what to do.”

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McDonald’s used a localized campaign for the Chinese launch of the Quarter Pounder sandwich;

ironically, the campaign came as the fast-food giant removed menu items such as an Asian-style

chicken or beef wrap with rice created to appeal to Chinese tastes. Beef is considered a luxury,

upscale item in China; beef also is perceived to boost energy and heighten sex appeal. In

Chinese, the word beef connotes manliness, strength, and skill. Television commercials for the

Quarter Pounder have sex appeal: They include close-ups of a woman’s neck and mouth

juxtaposed with images of fireworks and spraying water. The voice-over says, “You can feel it.

Thicker. You can taste it. Juicier.” The McDonald’s print ads also conveyed sexual innuendo.

One execution featured a “beauty shot” of a Quarter Pounder with an extreme close up of a

woman’s mouth in the background. The copy read, “Part of your body will be excited. You will

feel 100 percent of the beef.”

Copy and Copywriters

The words that are the spoken or written communication elements in advertisements are known

as copy.

Copywriters are language specialists who develop the headlines, subheads, and body copy used

in print advertising and the scripts containing the words that are delivered by spokespeople,

actors, or hired voice talents in broadcast ads.

As a general rule, copy should be relatively short and avoid slang or idioms. Languages vary in

terms of the number of words required to convey a given message; thus the increase of pictures

and illustrations.

It is important to recognize overlap in the use of languages in many areas of

the world (e.g., the EU, Latin America, and North America).

Capitalizing on this, global advertisers can realize economies of scale by

producing advertising copy with the same language and message for these

markets. The success of this approach will depend in part on avoiding

unintended ambiguity in the ad copy.

Advertising executives may elect to prepare new copy for a foreign market in

the language of the target country or to translate the original copy into the

target language.

A third option is to leave some (or all) copy elements in the original (home-

country) language.

In choosing from these alternatives, the advertiser must consider whether

the intended foreign audience can receive and comprehend a translated

message.

Anyone with knowledge of two or more languages realizes that the ability to

think in another language facilitates accurate communication.

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To be confident that a message will be understood correctly after it is

received, one must understand the connotations of words, phrases, and

sentence structures, as well as their translated meaning.

The same principle applies to advertising—perhaps to an even greater

degree. A copywriter who can think in the target language and understands

the consumers in the target country will be able to create the most effective

appeals, organize the ideas, and craft the specific language, especially if

colloquialisms, idioms, or humor are involved.

Cultural Considerations

Knowledge of cultural diversity, especially the symbolism associated with cultural traits, is

essential for creating advertising.

Use of colors and man-woman relationships can often be stumbling blocks.

Ads that strike viewers in some countries as humorous or irritating may not necessarily be

perceived that way by viewers in other countries.

Standards vary widely with regard to the use of sexually explicit or provocative imagery from

country to country.

Food is the product category most likely to exhibit cultural sensitivity. Thus, marketers of

food and food products must be alert to the need to localize their

advertising.

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