Global Marketing Professor

To start, do you know what market communications are?

Market communications can be defined as the means by which an organization attempts to inform and persuade customers about the products and services they sell. Market communication use marketing tools in order to promote or “communicate” a company to a market. This uses tools such as: advertising, direct marketing, branding, packaging, online presence, printed materials, PR activities, sales presentations, sponsorships, trade show appearances, and social media marketing.

The same goes for international market communications. Even though the meaning and the tools are the same, marketing communications in international markets must be conducted with caution and care. The new question is why should you proceed with caution and care? There are some key elements that companies need to keep in mind in order to communicate internationally. These include: know your market, know your target group, know the culture, know the current trends, and make smart media choices. If a company fails to take any of these listed into consideration, they will struggle successfully making their way into the international market.

It is important to have a framework.

Before a company can just start promoting their services or item to the world they need to set up their framework or game plan.

1. Determine Target Audience
2. Set Communication Objective
3. Develop Message
4. Pick Channels of Communication
5. Determine Frequency
6. Operate Within Budget

A company does not have to change their services or items in order to be successful in the international market. They just need to be smart about how they market.

Market Communication in Three Key Steps:

1. Determine your communication objective
2. Choose your message
3. Choose the marketing communications tool or tools that are the best fit

Determining a communication objective does not have to be a difficult task. The goals can focus on getting a markets attention, developing that attention into interest, and then turning that interest into desire. Therefore, consumers take action in buying your produce or services.

Choosing a message needs to focus on making sure that the company is understanding what information or connection the target audience is looking for. Remember it is important to realize the culture and trends of the country you are looking to sell to.

Choosing the best marketing tools depends on both the company and the market they are looking to sell to. If a company is looking to sell to a market that is heavily involved in social media, then it would be smart to use social media as a tool. Below is a picture showing different types of tools that can all be used to better help your international market communications.

International market communications is vital to the success of a company looking to go international.

Key Reminders:

• Know your company and your worth
• Figure out your target market
• Research your target market
• Pick proper marketing tools
• Utilize the culture and trends of that market!

“Never make predictions, especially about the future.”

Casey Stengel

Although this is a smart quote to follow by, especially with today’s growing trends and improving technology, there are plenty of brands to not only learn from, but to keep an eye on in terms of branding .

Forbes went with this idea when creating a list of “Brands to Watch in 2018” Rather than making a generic list, they decided to list companies, each of which were represented by each letter of the alphabet. If you would like to read about each of these companies, feel free to read the full article (link here) otherwise, we’re going to summarize some of the more popular “letters” for those of you who don’t care to read an entire alphabet’s worth of brands.

A → Before even reading this article, we wanted to predict for ourselves which companies would be represented for each letter; and A was one of the more difficult ones as it has so many contenders (like Apple, Airbnb, etc.). However, the top brand ended up being Amazon. This is largely due to the fact that the company is represented in numerous markets rather than just one. From groceries to cloud services to generic everyday products, Amazon had expanded its brand over the years and has the best potential to continue expanding in the following years.

B → Blue Apron is one of the many meal kit and food delivery services that has popped up over the past year or so. As millennials get increasingly busy and awareness about health and wellness when it comes to fitness and what we’re putting in our bodies continues to increase, these quick, easy, and healthy alternatives to typical grocery shopping or eating out has become the ideal solution. We suspect the popularity of these types of services will continue to expand and grow throughout the next few years.

F → Here, Ford and FedEx are some companies that originally came to mind; but the main brand here was (no surprise) Facebook. The company has made a comeback over the last couple of years with additional features such as the “Watch video” options and continuous acquisitions; but don’t take our word for it. The article clearly lays out the facts that “nearly 200 million U.S, adult users spend an average of 41 minutes a day on Facebook.” This alone proves that the brand has truly gained recognition, and when you consider its growth, can only imagine what the brand will amount to in the upcoming years.

M → For M, Forbes cheated jsut a bit, rather than naming the brand itself they named Tesla’s Model 3. However, because Model 3 is undoubtedly Tesla’s most popular model, we decided to let it slide. The company currently has over 50,000 pre-orders and continues to add on average about 1,8000 people a day. Of course, becasue of these massive numbers there are some major concerns about whether or not Tesla will be able to keep up with the major demand for model 3s as they currently are only able to produce about 1,000 models per week. Overall, as Tesla gets closer and closer to a fully auto-piloted vehicle being legal, demand and brand awareness is expected to continue on the upward slope it is currently on.

P → With this letter, we think Patagonia or Procter & Gamble, but lo and behold, Peloton took the lead with this letter. With the health and fitness trend booming, what better way to enter the industry than introducing a product that can help you get healthy on your own time all in the comfort of your own home. However, this would not have been as successful as it has become within the last few months if it wasn’t for the backing of SoulCycle and Flywheel, both of which are strong names within the fitness and health industry. These, in combination with its advanced technology, are the sources behind why this brand has extreme potential to continue its growth and only strengthen its brand name. In other words, keep your eyes on this as the months go by because this company has not only created a product, but a community — which is one aspect to strongly consider when wanting to build up your brand.

U →  Because there aren’t too many companies out there starting with the letter U, it’s no surprise that Uber is the top contendor. Although they’ve recently struggled with some major company culture issues, they’ve recently hired a new CEO, Dara Khosrowshai, to address those issues. If Khosrowshai is able to get these issues under control it is likely they will coninue on the successful path they’ve paved the past few years.

So although we believe Casey Stengel has some very sound advice when it comes to making predictions, we believe it’s still valuable to keep an eye on the top brands and ask yourself what is it that they’re doing that separates them from their competition? Creating a strong and memorable brand comes down to creating value that no other competitor is able to offer your customer. It is evident that all 26 of these companies have managed to accomplish this in one form or another.

What movies should invest for a return in international markets? The film industry, with each movie, essentially is like any individual company asking themselves that same question. One of the biggest, is there a demand for this product in other countries?

As we look at the past weekends box office numbers, we can see reinforcing of the ideas of what play well in foreign markets and what plays well in the US. Comedies don’t typically play well in foreign markets, as a lot of the jokes come from the language and culture they are made in. This was most definitely the case with What Women Want. It has grossed almost $40 million domestically and less than $3 Million Internationally.

Alita: Battle Angel is different, for several reasons. First, it is a non-US property to begin with. Coming from Japanese source material, it has already bridged the language and social boundary which is the biggest hurdle for any movie to do well internationally. The biggest hurdle for a puece like this, is to create recognition and appeal by the US market where it is not as familiar. Because it doesn’t seem like Alita has done this, mainly relying on the name of James Cameron (A Producer on the movie, not the director) which has typically served the studios well, with Titanic, Avatar, Terminator, Aliens, etc, it is banking on that.

As the Producers most like figured it doing well internationally, they still expected it to do more domestically. Unfortunately, because it hasn’t, it is heavily relying on the International markets to make them a profit. It has had a dismal $28 Million domestic opening weekend and (as of this writing) grossed less than $50 million, the foreign markets are different. The Producers opened the film first internationally. And it has served them well, having grossed almost $100 million. They are clearly pushing and focusing on the international market and have been for a while.

Since the movie’s production budget was $170 million (this of course does not include marketing or percentages taken out when revenue is received), it has a long way to go to make the owners a profit. The producers are no doubt working hard to make a strong opening in China (one of the largest foreign markets) and Japan (home to the source material) to help push it into the black.

What do you think these markets hold for it in the coming weekend? I will update this ending come Monday (Feb 25th)

In order to start a conversation about global marketing channels, it is important to first establish what they actually are.

Marketing channels refer to “the entire ecosystem required for getting products (tangible goods and intangible services) from the point of production to the point of consumption.”

Distribution channels fall within this description, but they are more specific, focusing on the “intermediaries through which the product passes until it reaches the end customer.” Here’s a quick little video explaining the types of distribution channels and factors for consideration for each of the different types:

To summarize, the three types of distribution channels are:

1. Direct to the Consumer

• This is typical for items with lower volume sales. It can be done through stores or shops owned by the manufacturer, as well as through online purchasing.

1. To the Consumer via Retailers

• This is when larger retailers purchase goods from the manufacturers, allowing manufacturers to focus more on production rather than the sales of their products.

1. To the Consumer via Wholesalers & Retailers

• This is when wholesalers make purchases from manufacturers in bulk, which are then resold in smaller quantities to other retailers (typically smaller businesses).

If you’d still like more information on marketing channels and channels of distribution, feel free to click here!

An Example

Take Apple, Inc. for example. Apple is known to be one of the most famous global brands, and despite having big name competitors such as Samsung, Dell, Sony, and Microsoft, it has maintained its significant presence in the market, continually capitalizing on the growing technology industry with its innovative products.

Apple has four main channels of distribution: most notably, perhaps, are the Apple Stores located in 25 countries all over the world. Second is Apple’s robust website, allowing for a strong online presence where customers can directly purchase products and get their questions answered. These first two channels of distribution would fall under the first category listed above, direct to the consumer, as there are no third parties involved. Often times this makes customers more comfortable with their purchases, as they are confident in the products they are receiving and the high quality brand name from which they are purchasing. However, not all Apple users prefer these methods, and as such, Apple has two more distribution channels, both of which would be considered the second method: distribution to the consumer via retailers.

Apple’s third distribution channel is through separate retailers such as Best Buy and Walmart, allowing the brand to further increase its presence in IT sales and sell in bulk to other companies. One of the main reasons this option is appealing to customers is because of the customer service; Apple Stores are notorious for long wait times, hectic lines, etc. However, third party retailers rarely experience that environment in stores, and it is almost always easier to get one-on-one help. Lastly, for its fourth distribution channel, Apple has agreements with telecommunications companies such as Verizon and AT&T, which allows customers loyal to these entities to maintain their service packages while using Apple products. Purchasing from these outside retailers is also often preferable if customers are looking to purchase older models of Apple products, as Apple Stores and the corresponding website often only hold the latest technologies they have to offer.

Through this we can see that various types of distribution channels often serve specific purposes, and companies must be deliberate in choosing channels that are most appealing to their targeted consumer base. Apple has managed to do this time and time again, and as a result it has remained competitive throughout the developed world, often leading the market in doing so.

Sources:

Initially, Netflix’s international expansion relied on a strategy of slow but steady development; expanding services to only a couple of countries each year. However, in response to an oversaturated U.S. domestic market, which has since attracted well-funded competitors such as Amazon and HBO; Netflix has decided to accelerate its global expansion strategy. During a speech at the 2016 Consumer Electronics Show on January 6th, Netflix CEO, Reed Hastings, announced that Netflix had expanded its internet streaming services to 130 new countries. This significant development has now made Netflix available nearly worldwide; opening up, for the first time, substantial new markets such as India, Russia, and Turkey. Almost instantly after this announcement, Netflix shares rocketed more than 6%.

(Red denotes areas served while black denotes areas not served)
Graphic provided by Netflix Inc.

Most noticeable from this global expansion is mainland China, which requires explicit government permission for distribution rights. However, Reed Hastings is optimistic that Netflix will be able to crack the Chinese market; stating that although it may take “many years”, Netflix has already begun building relationships with Chinese partners, possibly forming a future joint venture. Nonetheless, this crucial global expansion has since jumped Netflix’s base subscribers to 74.8 million; with 6.1 million more added only in the month March of 2016. Impressive new markets such as Russia and India will continue boost Netflix’s over all bottom line; as well as give Netflix the significant financial assets to be able to heavily re-invest in themselves, through original content and programming.

Central to Netflix’s product and marketing strategy is its acquisition and development of original content on an international scale. Netflix’s success is twofold; the first is acquiring new subscribers, through expansion of its global distribution network. The second is maintaining the subscribers they already have through new content. In recent years, Netflix has excelled in both ventures, boosting their overall revenue and then using it to create new original content with a global vision. Culminating with their docudrama “The Square”, which was nominated for an Academy Award, Netflix has since expanded into specials, miniseries, live action and animated films, full length TV series, and documentaries. Netflix has made quantity the key of its creative processes.
By developing their business strategy around an international focus, Netflix has been able to maintain their industry leadership. Through the years Netflix has painstakingly built on its foundations in order to create a market which revolves around them. Their international expansion to almost the entire world is a feat looked upon with envy by many of their competitors. Through its digital infrastructure and worldwide media network they have created, Netflix is poised to grow even more exponential in the next years, with the cracking of the Chinese video streaming market on the horizon.

Lego Movie 2 opened this past weekend. After the success of the first film ($470 million worldwide). The second was projected to open domestically with, at the low end, $50 million. This did not happen. The foreign markets however, have held. This is what we will be talking about today.

When considering expanding internationally, questions often arise when it comes to logistics, costs, risks, infiltration and more. However, there’s a big issue that’s often overlooked when it comes to successfully taking your company international. That issue is successfully establishing a global brand. We personally feel that branding is one of the more important aspects of marketing that is often overlooked. Your brand is what tells your customers who you are and why they should care. For those of you that are unfamiliar and want to know a bit more about branding, we’ve attached a quick video that will give you a better understanding of what branding is so hopefully you get a bit more out of what we have to say later. 

We recently came across an article in the Harvard Business Review called “The Lure of Global Branding” (found here). In this article they conducted an interview of executives from 35 companies that have successfully created a Global Brand. From these interviews 4 components of becoming an effective brand leader came to light. Luckily for you, we’ve broken down these four components so that you better understand what it takes to establish yourself a global brand leader.Stimulate the sharing of insights and best practices.

1. Stimulate the sharing of insights and best practices

This involves having to research and learn from either a company’s own or another company’s past mistakes. This is especially important when considering entering a market in another country. Businesses must gain the knowledge about how to communicate to a target market from one country to the next. Although researching doesn’t sound like a difficult job, it is often challenging to find available information to gain the right amount of insight when planning a new project. However, having a healthy company culture in which employees are satisfied urges them to work more efficiently, gaining the information necessary to correctly implement projects. This all circles back to the company’s brand since employees are truly able to embrace the brand, thus able to understand the best tactics to communicate it to customers. Increasing employee satisfaction and understanding can be accomplished in multiple ways including formal organizational meetings, using intranets for immediate communication, conducting field visits, and fully sharing all company research along the way.  

2. Support a common global brand-planning process

A common mistake several larger companies make, is not having a cohesive brand planning process across all markets. This can lead to inferior marketing as well as a weakened brand. It is critical that the process includes an analysis of customers, competitors, and the brand. It is important that there is a mutual understanding of who they’re customer it is and which part of the brand the customer resonates with most. It’s also imperative that it’s well understood who your competitors are and how you differentiate yourself in comparison to the competition. Lastly, and personally we think most importantly, is having a strong understanding of the brand itself. This includes the company’s heritage, values, core competencies, strengths, weakness, and vision. In order to successfully compile a strong global branding planning process, it’s critical that a well-established and cohesive brand is understood across all markets. Often times, when it comes to marketing, you aren’t trying to sell your product, you’re trying to sell your brand.

3. Assign managerial responsibility for brands in order to create cross-country synergies and to fight local bias

When a company decides to expand its market, its internal teams become reluctant to accept other previously used strategies of similar markets. In other words, teams struggle to understand other cultures and company structures when expanding their brand and, therefore, impede any potential progress of creating a successful brand in a new market. This reluctance is the research that generated four possible configurations to take responsibility for a company’s global brand leadership: brand management team, brand champion, global brand manager, and global brand team. As long as these four groups accomplish their own tasks first and then coordinate with one another to come to one cohesive brand decision, the company will be able generate a more confident internal workforce. xecute brilliant brand-building strategies

4. Execute Brilliant Brand-Building Strategies

In order to successfully execute brilliant brand-building strategies it’s important to ensure you have a strong global brand leader. A global brand leader is faced with the tedious challenge of balancing global strengths while still recognizing local differences. In order to truly have brilliant brand building you have to go beyond just advertising. A strong brand-building path with also include local sponsorship, promotions, increased retail presence, and more in order to translate that global brand image to the local culture.

At the end of the day, it’s likely that there are several competitors offering similar, if not the exact same products. What differentiates you from the competition is the story behind your product. What makes you different? What do you believe in? What is your purpose? These are the questions that need to be answered and portrayed in a unified front across all markets. It is critical to start with a global brand image that is filtered down from a global image to specific countries. This allows a company to start with a strong core for their brand while still allowing for tweaks that better fit each individual country ultimately leading to the establishment of a strong global brand!

Sources:

https://hbr.org/1999/11/the-lure-of-global-branding