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Communication Strategy Another critical element in the marketing mix is communicating the attributes of the product to prospective customers. A number of communications channels are available to a firm, including direct selling, sales promotion, direct marketing, and advertising. A firm's communications strategy is partly defined by its choice of channel. Some firms rely primarily on direct selling, others on point-of-sale promotions or direct marketing, others on mass advertising; still others use several channels simultaneously to communicate their message to prospective customers. In this section, we will look first at the barriers to international communication. Then we will survey the various factors that determine which communications strategy is most appropriate in a particular country. After that we discuss global advertising. Barriers to International Communications International communication occurs whenever a firm uses a marketing message to sell its products in another country. The effectiveness of a firm's international communication can be jeopardized by three potentially critical variables: cultural barriers, source effects, and noise levels. Cultural Barriers Cultural barriers can make it difficult to communicate messages across cultures. We discussed some sources and consequences of cultural differences between nations in Chapter 3 and in the previous section of this chapter. Due to cultural differences, a message that means one thing in one country may mean something quite different in another. For example, when Procter & Gamble promoted its Camay soap in Japan in 1983 it ran into unexpected trouble. In a TV commercial, a Japanese man walked into the bathroom while his wife was bathing. The woman began telling her husband all about her new soap, but the husband, stroking her shoulder, hinted that suds were not on his mind. This ad had been very popular in Europe, but it flopped in Japan because it is considered very bad manners there for a man to intrude on his wife.13 Benetton, the Italian clothing manufacturer and retailer, is another firm that has run into cultural problems with its advertising. The company launched a worldwide advertising campaign in 1989 with the theme "United Colors of Benetton" that had won awards in France. One of its ads featured a black woman breast-feeding a white baby, and another one showed a black man and a white man handcuffed together. Benetton was surprised when the ads were attacked by US civil rights groups for promoting white racial domination. Benetton withdrew its ads and fired its advertising agency, Eldorado of France. The best way for a firm to overcome cultural barriers is
to develop cross-cultural literacy (see Source Effects Source effects occur when the receiver of the message (the potential consumer in this case) evaluates the message based on the status or image of the sender. Source effects can be damaging for an international business when potential consumers in a target country have a bias against foreign firms. For example, a wave of "Japan bashing" swept the United States in 1992. Worried that US consumers might view its products negatively, Honda responded by creating ads that emphasized the US content of its cars to show how "American" the company had become. Many international businesses try to counter negative source effects by deemphasizing their foreign origins. When British Petroleum acquired Mobil Oil's extensive network of US gas stations, it changed its name to BP, diverting attention away from the fact that one of the biggest operators of gas stations in the United States is a British firm. Source effects are not always negative. French wine, Italian clothes, and German luxury cars benefit from nearly universal positive source effects. In such cases, it may pay a firm to emphasize its foreign origins. In Japan, for example, there is strong demand for high-quality foreign goods, particularly those from Europe. It has become chic to carry a Gucci handbag, sport a Rolex watch, drink expensive French wine, and drive a BMW. Noise Levels Noise tends to reduce the probability of effective communication. Noise refers to the amount of other messages competing for a potential consumer's attention, and this too varies across countries. In highly developed countries such as the United States, noise is extremely high. Fewer firms vie for the attention of prospective customers in developing countries, and the noise level is lower. Push versus Pull Strategies The main decision with regard to communications strategy is the choice between a push strategy and a pull strategy. A push strategy emphasizes personal selling rather than mass media advertising in the promotional mix. Although very effective as a promotional tool, personal selling requires intensive use of a sales force and is relatively costly. A pull strategy depends more on mass media advertising to communicate the marketing message to potential consumers. Although some firms employ only a pull strategy and others only a push strategy, still other firms combine direct selling with mass advertising to maximize communication effectiveness. Factors that determine the relative attractiveness of push and pull strategies include product type relative to consumer sophistication, channel length, and media availability. Product Type and Consumer Sophistication A pull strategy is generally favored by firms in consumer goods industries that are trying to sell to a large segment of the market. For such firms, mass communication has cost advantages, and direct selling is rarely used. But a push strategy is favored by firms that sell industrial products or other complex products. Direct selling allows the firm to educate potential consumers about the features of the product. This may not be necessary in advanced nations where a complex product has been in use for some time, where the product's attributes are well understood, and where consumers are sophisticated. However, customer education may be very important when consumers have less sophistication toward the product, which can be the case in developing nations or in advanced nations when a complex product is being introduced. Channel Length The longer the distribution channel, the more intermediaries there are that must be persuaded to carry the product for it to reach the consumer. This can lead to inertia in the channel, which can make entry very difficult. Using direct selling to push a product through many layers of a distribution channel can be very expensive. In such circumstances, a firm may try to pull its product through the channels by using mass advertising to create consumer demand--once demand is created, intermediaries will feel obliged to carry the product. In Japan, products often pass through two, three, or even four wholesalers before they reach the final retail outlet. This can make it difficult for foreign firms to break into the Japanese market. Not only must the foreigner persuade a Japanese retailer to carry her product, but she may also have to persuade every intermediary in the chain to carry the product. Mass advertising may be one way to break down channel resistance in such circumstances. Media Availability A pull strategy relies on access to advertising media. In the United States, a large number of media are available, including print media (newspapers and magazines) and electronic media (television and radio). The rise of cable television in the United States has facilitated extremely focused advertising (e.g., MTV for teens and young adults, Lifetime for women, ESPN for sports enthusiasts). With a few exceptions such as Canada and Japan, this level of media sophistication is not found outside the United States. Even many advanced nations have far fewer electronic media available for advertising. In Scandinavia, for example, no commercial television or radio stations existed in 1987; all electronic media were state owned and carried no commercials, although this has now changed with the advent of satellite television deregulation. In many developing nations, the situation is even more restrictive because mass media of all types are typically more limited. A firm's ability to use a pull strategy is limited in some countries by media availability. In such circumstances, a push strategy is more attractive. Media availability is limited by law in some cases. Few countries allow advertisements for tobacco and alcohol products on television and radio, though they are usually permitted in print media. When the leading Japanese whiskey distiller, Suntory, entered the US market, it had to do so without television, its preferred medium. The firm spends about $50 million annually on television advertising in Japan. The Push-Pull Mix The optimal mix between push and pull strategies depends on product type and consumer sophistication, channel length, and media sophistication. Push strategies tend to be emphasized:
Pull strategies tend to be emphasized:
Global Advertising In recent years, largely inspired by the work of visionaries such as Theodore Levitt, there has been much discussion about the pros and cons of standardizing advertising worldwide. One of the most successful standardized campaigns has been Philip Morris's promotion of Marlboro cigarettes. The campaign was instituted in the 1950s, when the brand was repositioned, to assure smokers that the flavor would be unchanged by the addition of a filter. The campaign theme of "Come to where the flavor is. Come to Marlboro country" was a worldwide success. Marlboro built on this when it introduced "the Marlboro man," a rugged cowboy smoking his Marlboro while riding his horse through the great outdoors. This ad proved successful in almost every major market around the world, and it helped propel Marlboro to the top of the world market share table. For Standardized Advertising The support for global advertising is threefold. First, it has significant economic advantages. Standardized advertising lowers the costs of value creation by spreading the fixed costs of developing the advertisements over many countries. For example, Levi Strauss paid an advertising agency $550,000 to produce a series of TV commercials. By reusing this series in many countries, rather than developing a series for each country, the company enjoyed significant cost savings. Similarly, Coca-Cola's advertising agency, McCann-Erickson, claims to have saved Coca-Cola $90 million over 20 years by using certain elements of its campaign's globally. Second, there is the concern that creative talent is scarce and so one large effort to develop a campaign will produce better results than 40 or 50 smaller efforts. A third justification for a standardized approach is that many brand names are global. With the substantial amount of international travel today and the considerable overlap in media across national borders, many international firms want to project a single brand image to avoid confusion caused by local campaigns. This is particularly important in regions such as Western Europe, where travel across borders is almost as common as travel across state lines in the United States. Against Standardized Advertising There are two main arguments against globally standardized advertising. First, as we have seen repeatedly in this chapter and in Chapter 3, cultural differences between nations are such that a message that works in one nation can fail miserably in another. For a detailed example of this phenomenon, see the accompanying Management Focus on Polaroid. Due to cultural diversity, it is extremely difficult to develop a single advertising theme that is effective worldwide. Messages directed at the culture of a given country may be more effective than global messages. Second, advertising regulations may block implementation of standardized advertising. For example, Kellogg could not use a television commercial it produced in Great Britain to promote its cornflakes in many other European countries. A reference to the iron and vitamin content of its cornflakes was not permissible in the Netherlands, where claims relating to health and medical benefits are outlawed. A child wearing a Kellogg T-shirt had to be edited out of the commercial before it could be used in France, because French law forbids the use of children in product endorsements. The key line, "Kellogg's makes their cornflakes the best they have ever been," was disallowed in Germany because of a prohibition against competitive claims.14 Similarly, American Express ran afoul of regulatory authorities in Germany when it launched a promotional scheme that had proved very successful in other countries. The scheme advertised the offer of "bonus points" every time American Express cardholders used their cards. According to the advertisements, these "bonus points" could be used toward air travel with three airlines and hotel accommodations. American Express was charged with breaking Germany's competition law, which prevents an offer of free gifts in connection with the sale of goods, and the firm had to withdraw the advertisements at considerable cost.15 Dealing with Country Differences Some firms are experimenting with capturing some benefits of global standardization while recognizing differences in countries' cultural and legal environments. A firm may select some features to include in all its advertising campaigns and localize other features. By doing so, it may be able to save on some costs and build international brand recognition and yet customize its advertisements to different cultures. This is what Polaroid did with the "Learn to Speak Polaroid" campaign (see the Management Focus for details). Pepsi-Cola used a similar approach in a 1980s advertising campaign. The company wanted to use modern music to connect its products with local markets. Pepsi hired US singer Tina Turner and rock stars from six countries to team up in singing and performing the Pepsi-Cola theme song in a big rock concert. The commercials are customized for each market by showing Turner with the rock stars from that country. Except for the footage of the local stars, all the commercials are identical. By shooting the commercials all at once, Pepsi saved on production costs. The campaign was extended to 30 countries, which relieved the local subsidiaries or bottlers of having to develop their own campaigns.16 |
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